Gartner analysts (http://www.gartner.com/) recently published a paper “Lessons Learned From Cloud in Manufacturing Industries” sharing experiences from companies in Aerospace & Defense (A&D), Medical Devices, and Automotive industries that have been piloting solutions for product lifecycle management (PLM), manufacturing operations management (MOM) or supply chain management (SCM) in the cloud or SaaS (Software as a Service). Some of the lessons most applicable to information technology initiatives for regulated industries like A&D and Medical Devices are listed below.
Gartner analysts point out that the cloud and SaaS offerings have a lot of potential benefits in the near future as they enable new collaboration paradigms inside the company and with partners, but they warn that “cloud for cloud’s sake” approaches will probably not yield much benefit. They expect cloud technology to further mature over the next two years and conquer some of the current constraints.
Four of the lessons learned and risks identified in their research:
#1 – Higher Costs
Many users of cloud solutions expect reduced costs, but do not necessarily get it. Cloud strategies can end up costing more than in-house solutions. For example, applications that perform a lot of
calculations can end up increasing infrastructure as a service (IaaS) costs—especially during high demand periods.
#2 – Integration and Workflow Constraints
Many multitenant applications offer one-size-fits-all integration and workflow options that might not suffice for your organization. Integration interfaces and workflow rules required between
enterprise applications (including CAD, PLM, MOM, QA, ERP, and SCM) to support your organization’s business processes might not be supported by the current crop of cloud offerings.
Just because an application is moved to the cloud does not guarantee that collaboration options are automatically improved. Applications have to be redesigned to take advantage of new collaboration paradigms enabled by the cloud.
#3 – Security Concerns
Most security risks with cloud-based solutions are overhyped. There were no reported breaches among the surveyed companies and the data is secured behind firewalls as it would be with an in-house server strategy.
However, current cloud solutions (a) lack ITAR (International Traffic in Arms Regulations) support inhibiting use by many A&D manufacturers, and (b) require 25%-50% higher implementation costs to meet GxP compliance requirements for additional logging, auditing, archiving, and nonrepudiation controls.
Some manufacturers have expressed a desire to keep data assets behind their own firewalls and use the cloud as a collaboration platform. This requires re-architecture of business processes and
applications.
#4 – No Quicker Startup Time
Even though the application is quickly available and users can quickly be added, the implementation of a new cloud solution still needs upfront planning and many of the same steps required in any implementation project. Implementation projects, regardless of cloud or on-premise architecture, require the same level of project management to be successful. Organizations receive the most benefits when they can re-engineering business processes to take advantage of a new solution, and these efforts will take considerable time and resources.
If you have access to Gartner reports, I encourage you to download and read the full report.
References:
“Lessons Learned From Cloud in Manufacturing Industries”, Hagemeyer, Koslowski, Halpern, Scheibenreif, and Shanler, Gartner, 2014
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