“Digitalisation in retail” – with well over 10 million hits on Google, this is certainly a popular search term for many retail companies, also in view of the current wave of transformation. Scrolling through the various results, topics such as digital stores, scan & go or AI-driven shopping experiences immediately come to mind. It is certainly right and important to constantly adapt the shopping experience, whether in the B2B or B2C environment, to the target group in a future-oriented way using the appropriate technologies. Companies are attaching great importance to value chains and optimising the associated processes.
However, if you are expecting this article to provide new insights into the above trends, you will be disappointed. What follows is more of a look behind the scenes: An efficient and forward-looking company is not only concerned with increasing sales by, among other things, improving customer satisfaction, but also with analysing and optimising internal processes to reduce internal (operating) costs. This raises the question of whether Cloud or On-Premises solutions are right for your business. The following article addresses all these issues.
Frequent drivers of internal company processes
The most common drivers for scrutinising internal company processes include:
Legal requirements
The implementation of e-invoicing obligations, GoBD, cash register security regulations and the Supply Chain Act is prompting companies to adapt familiar processes to new legislation, sometimes at short notice. It is important to recognise that the implementation of such complex issues can result in changes to day-to-day operations and the strategic direction of the company. Specialist and technical preparatory work and prerequisites must be carried out and created for the successful implementation of legal standards.
Shortage of skilled labour
The shortage of qualified specialists and IT staff in particular causes an overload for existing employees, who often must take on additional tasks, which impairs the quality of work and reduces employee satisfaction and has a negative impact on efficiency and focus on core tasks. Due to the additional lack of IT specialists, companies will be increasingly reliant on external (trusted) service providers and partners in order to guarantee the current infrastructure, including with regard to security issues. This issue is a matter of strategic and technological orientations, and as such requires intensive consultation.
Flexibility and scalability
To maintain competitiveness in a constantly changing business environment, retail companies need to implement a flexible and scalable strategy for process optimisation and automation. It must be possible to integrate new technologies into the existing infrastructure as easily as possible and without media disruption. Such a strategy will also prepare companies for external changes in the business environment.
Introduction of a company-wide ECM platform to increase efficiency and reduce costs
ECM systems are designed to optimise the document and information management processes of retail companies. Cloud solutions offer a flexible and scalable platform that enables companies to manage their data centrally and access it from anywhere. This is particularly beneficial for companies with distributed locations or a mobile workforce.
Operating form: On-Premises vs. Cloud solutions for companies
Considering the maxim ‘spoilt for choice’, companies must consider a range of strategic questions regarding their IT infrastructure. Current trends and long-term (unavoidable) developments must also be factored into this decision. The fact is clear: cloud solutions for companies and the use of AI will significantly change working methods. The decision of whether to adopt a cloud-first, on-premises, or hybrid strategy (combining both forms of operation) depends on the specific circumstances of each company.
A comparison of Cloud solutions for companies and On-Premises
The fundamental differences between the operating systems can be viewed schematically below. Many software providers do not present their on-premises solutions exclusively as a pure software licence purchase, with so-called subscription models also becoming increasingly popular. Under these models, on-premises licences are made available as a rental, offering companies more flexibility in terms of actual usage and the resulting requirements, as is also the case with cloud solutions for companies. However, the contents described in the comparison with on-premises products, such as hardware, resources, etc., remain the same.
Cloud solutions for companies
- Infrastructure: Provided by the software vendor.
- Hardware: Internet and internet-enabled end devices.
- Data storage: Encrypted data and document storage in hyperscaler data centres.
- Investment costs: Project costs and software licences.
- Running costs: Recurring software licences.
- Software operation: Automatic updates of the software solution and thus a guaranteed current version status and utilisation of new functions.
- IT resources: Not necessarily required by the customer.
- Scalability: Automatic scaling depending on the payload.
- Flexibility: Need-based adjustment of licences actually required (sometimes monthly) pay-per-use approach.
- System failure: Reduced downtime due to guaranteed availability.
- Project start: Quick project start due to multi-tenant approach can be booked and used directly.
On-Premises
- Infrastructure: The entire infrastructure must be provided by the customer.
- Hardware: All hardware (e.g. servers) must be provided.
- Data storage: Data is stored on the customer’s own servers.
- Investment costs: Higher investment costs due to additional hardware, project expenses and software licences.
- Running costs: Maintenance and support for one-off software licences.
- Software operation: Ensuring software operation by the customer’s internal IT department, resulting in higher IT costs for the customer.
- IT resources: Provided by the customer or by a service provider and paid for additionally.
- Scalability: Scaling within the scope of the available IT infrastructure.
- Flexibility: Purchased licences remain in place regardless of actual usage.
- System failure: Reliability depends on the infrastructure set up.
- Project start: Slower project start due to the provision of the infrastructure and basic installation of the software.
Conclusion: On-premises or Cloud solutions for businesses
The fact is that digitisation is an issue that affects us all and should not be neglected due to the external factors and benefits mentioned above. A long-term view of the systems currently in use should also be constantly reviewed in terms of their future flexibility and adaptability. The development of digital structures and processes is essential for the long-term survival of a company.
The question remains as to which form of operation is the best choice. It is not possible to make a general statement about this, as many individual factors play a decisive role. The current IT landscape, available (specialised) resources, hardware capacity and strategic direction all influence this choice. However, cloud solutions offer several advantages over on-premises solutions, including scalability, flexibility and resilience.
Need a practical example? Schmitz Cargobull migrated 60 million documents and around 17 terabytes of data to the cloud in 3 months and shares its story below:
What is certain is that the future lies in the development of enterprise cloud solutions and AI technologies. Even large, leading software vendors such as SAP will sooner or later offer only cloud services. It is therefore important to lay the foundations for the future now, to get to grips with the subject and ultimately to be one (decisive) step ahead of the competition.
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