Thursday, March 24, 2011

Advantages of Cloud Computing– Part XVIII – Business Analytics

Discussions about automation would not be complete without mentioning processes that allow a business to feel the pulse of their on-going operations in a timely fashion. As pointed out earlier, retailers do not suffer from a lack of data. Data is coming in from everywhere, but the question is always, ‘where is it now?’ Data not acted upon immediately, quickly gets lost, misplaced, or intentionally or unintentionally destroyed.

A typical convenience store might generate between 70,000 and 80,000 sale’s transactions per month. That equates to a twenty-store operator producing around eighteen-million sale’s transactions in a single year. Have you ever tried to load eighteen-million transactions into an Excel speadsheet? Forget it, you can’t. You would need to go through several steps of aggregating the data in multiple stages before you could ever hope to end up with something that resembles anything that will help you make decisions.

‘Virtualization’ provides for infinite storage of data. For example, our system has access to 250 large IBM i5 computers running DB2 and keeps our clients’ data safe, secure and available 24/7. As clients’ data requirements grow, we simply acquire more resources from areas already available in The Cloud. Each client pays a small amount for the resources they use. As the need for data storage expands, more resources are added to the network, keeping ahead of the projected requirements so extra storage is always available when it is needed. A one-store operator does not use the same resources as a 4,000 store operator, but both the one-store company and the 4,000 store company have the same resources available.

The same is true with regards to computing power. The allocation of processing power is continuously and automatically monitored and adjusted for maximum speed.

All of this flexibility causes clients to quickly forget about issues like equipment upgrades and processing speed. When you buy a new appliance for your home, you don’t have to call the electric company and request another thirty-amps of service to support the new device do you? Why should you have to buy another disk drive when you need more storage? It’s an obsolete technology that is being re-engineered to more closely resemble how we operate in our daily lives.

As I have said often, desktop computing is a transitional technology that bridged the gap between ‘time-sharing’ in the seventies to Cloud Computing in the 21st Century. It’s simply the normal progression of technology taking place right before our eyes.

With it, the topic of Business Analytics becomes more easily understood. The progression of technology occurs in steps. Interstate highways would have seemed ridiculous before the invention of the automobile, as no one attempted to suggest exit ramps for horse and buggies. As a consequence, as I talk about managing a single candy bar as if it were the only item you had to sell, it doesn’t make any more sense that exit ramps for horse and buggies if you don’t understand the concept of highways.

The period of progression between technologies is the time when a company is most susceptible to the effects of change –both good and bad. Walmart’s implementation of Retail Link caused great misery for K-Mart as they failed to make the transition, whereas Target saw the threat and began to make changes in their own system which allowed it to compete.  Cloud computing didn’t happen yesterday. Visionaries have awaited this event for decades, while others have yet to recognize the severe consequences that will come about as a result of ignoring it.

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