No matter what their industry or line of business, today’s enterprises share many common goals. To gain advantage over their competitors, companies want to increase revenues through top-line growth and improve profit margins, helping to pad operational cash and funding that can be reinvested in the organization.
Another priority is to enhance customer satisfaction, which boosts loyalty and increases new sales. Companies also strive to reduce costs, especially those related to IT operations, and improve the performance of IT operations. For example, relying less on legacy tools and traditional outdated technologies can free up money for other business areas.
Yet a recent IDC report, “Custom Applications Powered and Enabled by Cloud Computing,” says that meeting these goals is not without challenges. When asked to identify the greatest impediments to executing their corporate strategy, 43% of respondents cited focusing the right people and resources on their strategic initiatives. Due to budget restraints and daily operational requirements, it can be difficult for organizations to acquire the highly skilled personnel and budget needed to build, maintain, and augment in-house customized software applications.
In addition, 36% cited the lack of alignment between business needs and IT capabilities. Keeping older in-house built applications current and developing enhanced functionality can be a struggle, especially given the rapid pace of business process change.
Reduced IT complexity, minimized cost and risk
To become more nimble and cost-efficient, many companies are beginning to deploy cloud-based IT solutions. According to IDC, nearly 50% of organizations have adopted software as a service (SaaS) and more than a third have embraced platform as a service (PaaS). Another 20% plan to deploy PaaS in the next 12 months.
These high adoption rates stem from the fact that cloud solutions deliver proven business value. In a recent Oxford Economics study, 75% of leading companies said they use the cloud to “innovate at the pace of business and meet rapidly changing market needs in real time.” Organizations that use cloud software report 2.5X higher profits than their peers, and 81% of surveyed executives say that cloud solutions increase collaboration across the organization.
However, standardized cloud solutions are sometimes less effective at supporting highly transformative or unique business processes. “While packaged cloud applications have their advantages – such as speed to deploy, standardized processes, and consumption-based pricing – they can be limited not only in supporting highly unique and differentiated processes but also in application customization flexibility,” writes Pete Marston in the IDC report.
In fact, many standardized cloud solutions lack the deep, business-critical functionality of traditional on-premise solutions. Without unique, competitively differentiating software extensions, 42% of organizations in the Oxford Economics study worry that the continuity of essential business processes is put at risk by cloud adoption.
What is the best way for companies to realize both the functional richness of on-premise software and the speed and cost-effectiveness of cloud-based solutions?
Tailored cloud applications and extensions
Leading users of cloud technologies often rely on application development services to tailor packaged solutions and develop new enterprise-specific applications. Some 48% of organizations surveyed by Oxford Economics view the development of new applications as a key driver to business innovation and better business outcomes.
By using application development services from a trusted partner, enterprises can realize several benefits that help them differentiate themselves against the competition. These benefits include:
- Faster end-to-end process execution, through increased automation and the ability to map software to actual business processes
- More effective resource utilization, with decreased time spent on in-house application development
- Reduced application maintenance costs, by offloading responsibility for application upkeep to cloud service providers
Application development services for the cloud can support business innovation, competitive differentiation, and growth – all with subscription pricing. Properly deployed, these services can help companies accelerate innovation, reduce IT complexity, and speed time to market.
To better understand whether cloud is the right choice for your business goals, look for a vendor willing to help you assess your needs and match them with potential technology solutions. In addition, seek a trusted partner skilled at quickly and cost-effectively extending existing cloud solutions or developing new applications that meet your unique and -critical business requirements. Your business goals may be similar to those of your industry colleagues and competitors, but sometimes those competitively differentiating aspects require technology tailored to address the specific needs of your enterprise.
Ready to learn more about using tailored cloud applications to speed innovation? For more information about application development services for the cloud from SAP, visit us at www.sap.com/customdev.
Source: IDC InfoDoc, sponsored by SAP, “Innovation in the Cloud: IT’s Next Big Success Story,” April 2014.