The events of 2020 ushered in a new era of business software. With an almost overnight shift of strategic priorities and an instant need for flexibility, businesses around the world adopted cloud-based software and SaaS solutions almost overnight.
The disruption caused by the pandemic was a major accelerator of cloud-based software, with video conferencing and live chat among the top categories (1). The shift to Cloud started long before 2020 and businesses who have pulled their cloud strategy forward are now unlocking a wide range of benefits from increased productivity and a better work/life balance for employees to reduced overheads and higher profit margins.
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Beyond achieving the digital flexibility required for today’s hybrid and remote working environments, businesses in every sector have embraced cloud technology to enhance both effectiveness and efficiency:
Working more effectively has become the main driver for cloud adoption, as it enables businesses to quickly and easily access real-time data, revealing insights that can inform decisions such as where to allocate resources, and sales and marketing spend.
Investment in analytics-centric SaaS models will rise by 23.3% by 2022 (2). Taking a more analytical approach will become a central component of many service-based software platforms, making data-driven decisions all the more powerful for anyone looking to get ahead of the competition (3).
Perhaps one of the most obvious advantages of the Cloud is the efficiency enabled when businesses no longer rely on on-premise data storage. Online automated services take significant pressure off of operations and enable businesses to reduce people costs. Subscription-based SaaS solutions make managing software costs much easier and provides greater flexibility over closing contracts.
Though no business has gone unaffected by the sudden priority shifts caused by the pandemic, those in several key industries have even higher motivations for adopting cloud-based software and SaaS solutions. While each of these industries unlock unique benefits when adopting SaaS, many are also faced with unique challenges.
As one of the most dynamic and innovative industries, it’s no surprise that cloud technologies have been widely adopted within financial services.
According to the Bank of England, 40-90% of banks’ workloads globally could be hosted on public cloud or SaaS environments within a decade (4). From the ability to rapidly scale processing capabilities to providing always-on banking services, there are almost limitless ways financial businesses have been using the cloud beyond managing the pandemic.
However, the more cloud technology they adopt, the more complexity they face when it comes to complying with regulations from governing bodies such as the PRA, FFIEC, DORA, and FCA.
Whether it’s maintaining visibility and access of data, mitigating the risks of data loss, or ensuring their cloud providers are managing risks that may compromise service, financial businesses must balance many factors to stay compliant.
The manufacturing industry is going through a digital revolution. Adoption of cloud technology in the industry is expected to grow to 88% over the next 3-5 years (5), with other technologies such as IoT and A.I. set to become increasingly prevalent. Factories are now a hive of hi-tech activity with digital technologies enabling improved productivity and smarter decision-making.
But reliance on these software solutions can become problematic in the event of unplanned downtime caused by third-party providers. For example, should a SaaS application provider drop their service, the resulting impacts can cause severe disruption and in worst cases even halt operations. Unplanned software downtime is one of the largest causes of lost productivity and revenue and can cost industrial manufacturers an estimated $50 billion each year - so it’s essential they proactively find ways to reduce it as much as possible (6).
Similar to the world of manufacturing, the transport and logistics industry is using the cloud to facilitate the digitization of the supply chain. The latest annual MHI Industry Report revealed that 59% of supply chain leaders across the industry are already using cloud technology. And over the next 12-24 months, cloud technology is anticipated to grow to 81%, followed by 90% in the next three to five years (7).
But perhaps the biggest challenge associated with those shifts is the threat posed by IT outages to supply chains. The impact of a drop-in service of critical cloud-based applications can cause significant disruption to supply chains, so logistic providers and those transporting goods have an even greater need to ensure their software is resilient. Other advanced technologies such as IoT-connected vehicles could also be impacted, so businesses must do everything they can to reduce their vulnerabilities and manage the risks associated with reliance on the cloud.
Many of the businesses operating in these sectors would have most likely turned to third parties to supply their cloud software. This shouldn’t come as a surprise, since 71% of businesses report that their third-party network contains more vendors than it did three years ago (8).
But as businesses rely more and more on these solutions, they start to become operationally critical. The pandemic taught us to expect the unexpected, and this includes disruption to the very applications that were put in place to enable more agility.
Yes, cloud-based software and SaaS solutions have been instrumental in the survival of many businesses. But how would businesses cope if access to these now-critical applications were disrupted? How would they recover the application and data?
Ultimately, the dependence on remote cloud-based infrastructure and external SaaS solutions requires measures to prepare for third-party disruption, as well as mitigating the operational and financial impacts of downtime.
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