By Jim Morris
Outsourcing certain IT infrastructure and services to the cloud continues to increase in popularity as companies manage to tighter financial margins, face increasing budgetary pressures, and look for efficiencies across their business operations. Rapid deployment and scalability, along with a more predictable cost structure, are key benefits driving adoption of cloud-based solutions.
Managed file transfer (MFT) is a key business enabler that allows companies to automate and audit the exchange of business information. MFT solutions also support secure exchange of large files that cannot be shared using standard e-mail systems. The emergence of MFT solutions predates the current growth of cloud-based services. Therefore, integration of enterprise MFT capabilities and cloud-based hosted services, also known as hosted MFT, is a relatively recent development that provides an attractive alternative for businesses seeking higher operating margins.
In addition to providing scalable, and often elastic, capabilities for a pre-determined and predictable expense, subscription or “pay as you go” solutions help businesses avoid large upfront capital expenditures. Hosted solutions also give companies access to important expertise and skillsets without the need to hire full time employees. In addition, organizations are looking to automate manual or inefficient processes, consolidate automated transactions, and eliminate inefficiencies–all aimed at lowering their total cost of ownership.
How companies measure their return on investment for outsourcing MFT (and other IT solutions) to the cloud is getting lots of attention and is evolving quickly. The discussion is a hot topic with many professionals weighing in on the subject, including a recent article by Mark Skilton at CIO magazine. Mark does a great job of outlining a scorecard approach that organizations can use to gauge the success of their efforts.
Regardless of how you measure the ROI around your organization (because each organization is different, of course), it’s important to employ top-down planning to maximize your potential upside for outsourcing MFT. I’d like to explore a couple of ideas with you.
Organizations set the stage for maximum cost savings by keeping an enterprise-wide view of business information exchange needs, across departments and even with business partners. Many enterprises have adopted piecemeal solutions for their business data exchange. It is not uncommon to find products from multiple vendors and even homegrown ftp server solutions, usually with inconsistent security implementations, uneven reporting and logging, and inefficient support processes. Considering a move to a hosted model provides an excellent opportunity to understand your current infrastructure and to establish a baseline from which you can measure your specific upside potential for outsourcing. It can be quite eye-opening to capture the actual ongoing expenses of your business data exchange infrastructure (software, hardware, etc.), especially when you consider the cost of the people necessary to support it. Many companies will look to multiply their cost savings by consolidating business data infrastructure as they outsource. Even if your organization is only looking to outsource specific functions or capabilities, you can at least see the total upside from a corporate perspective.
In addition, enterprises are able to optimize their cost savings and efficiencies by targeting an optimal operations mix for allocating business data between on-premises and hosted platforms. Let’s be realistic. Even with the media attention regarding the cloud, most companies are taking measured and incremental steps towards managed MFT, continuing to meet some information exchange needs with on-premises solutions while outsourcing the others.
The key is to determine the right business mix of on-premises versus hosted solutions to maximize efficiencies. For instance, aggregating the data exchange needs of multiple smaller trading partners into a rolled-up outsourcing arrangement could really make sense and eliminate a lot of “marble chasing.” By consolidating solutions, you can free your staff from managing the disparate needs of a long list of small partners. Many times, this is a quick return on investment that sets the stage for consideration of additional outsourcing. You may continue servicing your larger partners with on-premises solutions, or can scale to a cloud-based offering built for larger data volumes, number of transactions, etc.
To varying extents, the cloud is in all of our futures. The key is to determine how to best plan for and operate in an environment that necessarily is evolving to include increasing hosted infrastructure and services. At GlobalSCAPE, we are actively helping companies evaluate and plan for a successful migration to hosted secure information exchange solutions, with a clear eye on ensuring a significant return on investment.
