Cloud Innovative Model

Have you ever wondered why Cloud is not only driver of business, but is also an innovative operating model?

It is a fact that the true disruptive power of Cloud lies in its ability to drive new business as well as operating models. It is this rapid scaling of new capabilities displayed by this technology that has made it an innovative operating model that every businessman/businesswoman wants to use. More importantly, the development of such application has made possible for new entrants in the ruthless world of business to provide consumers with completely new value propositions as well allow them to disrupt the existing value chain in ways that were unseen, and which seemed impossible to do at one point. However, apart from new businesses it must also be noted that the current industry players can also make use of this technology by mainly inventing new cloud-enabled products. Here is then presenting a few factors explaining ‘Why’ this digital tool can serve as an innovative operating model that helps drive business.

1. The use of Cloud-enabled Business model: 

 When it comes to business model innovation, its basic nature is such that it is indeed very difficult to predict especially with regards to specificity. Moreover, in many studies conducted several themes have emerged that truly throws some light on cloud’s potential as an innovative operating business model. They are as follows:

a. Cloud services and delivered products:   

It has been discovered that when leveraged the cloud delivery model can help augment not only a product that exists but also in offering a completely new one. The type of innovations included in such cloud-enabled services and products include QR codes that offer value-added product features such as ‘Scannable’ recipes on a Progresso soup can right to a completely new service such as iTunes music store.

b. Cloud services/products and rapid positioning of brands: 

Due to the viral nature of Cloud-based networks, when used a well planned and executed digital campaign can reach consumers far and wide. This means that this feature of this technology can be effectively used by a new business to attract customers and create a brand, as well as by existing businesses to reposition their brand value. For example, Dollar Shave Club established an entirely new business model for shaving products, which included a launch of an entertaining promotional YouTube video that became a trending story on Twitter and lead to signing up of 18,000 customers. On the other hand, Old Spice through the use of a series of online viral videos featuring a new ‘Old Spice Guy’ character rapidly managed to change the perception of a 75-year-old brand in the mind of the young consumers.

c. Cloud technology and its direct-to-consumer impact:   

The use of Cloud technology also allows companies in some product segments to directly engage with customers in terms of the transaction. For example, Procter and Gamble (P&G) offer consumers a wide range of products through what is known as the P &G eStore. These days many other brands have also begun using such initiatives on a more frequent basis.

d. Cloud providing alternative retail methods: 

 In the digital age that we live in today consumers are increasingly making use of online stores to shop that too at low prices, making the use of cloud technology a perfect alternative retail method. Retailers such as Best Buy have already started experimenting with what is known as the ‘endless aisle’ concepts to increase direct engagement with the customer via a variety of online platforms.

2. The use of Cloud-enabled operating model:

 It has been found that with the rapid development of technology we have witnessed these days it certainly seems the best time to make use of Cloud solutions. This is because when made use of this type of technology helps a business to deliver non-core functions efficiently that too with less focus laid on management attention and with a reduction in overhead and total costs. Furthermore, there is a lot of potential in using Cloud solution specifically in consumer goods companies to drive areas such as merchandising, marketing, and analytics that in turn would help stimulate sales.

In other words, there exist at this moment in time the golden opportunity for companies to expand their use of business partners and outsourcing providers. Unfortunately, though, perceived complexity and risk involved in establishing cloud-based partnerships have so far served as a major hurdle in its widespread usage. The good news, however, is that landscape for cloud-based technology possess a lot of potential and seems to be evolving and growing. Many business leaders have already begun viewing social networks like Facebook and Google as inevitable partners. This is because these partners have the unique ability to understand the customers need and thereby reach out to them accordingly. It is for this reason that cloud-based operating model has found favour with a lot of new businesses, especially in the small and high growth enterprises segment.

The major benefit for these companies is the cost flexibility and fast scalability that cloud technology provides. For example, US-based retailer 3balls.com as a start-up quickly became the popular and leading seller of golf equipment on eBay. As a result of its rapid financial growth managing its wealth became a challenging task. And so, to resolve woes related to financial management 3balls.com adopted a subscription-based F & A platform solution that was delivered from the cloud. This platform used then provided an on-demand scale for growth that required no investment in IT infrastructure, which eventually helped 3balls.com to acquire increased back-office productivity by 25%. It also helped in reducing the time spent by the retail company on reconciling accounts and running financial reports from 12 hours a week to four hours per month. More importantly, it is the continuous availability and emergence of cloud-based ERP solutions that help large enterprises benefit from cloud-enabled IT applications.

3. The use of Cloud technology and enrichment of shopping experience: 

Cloud technology when used by retailers and their brand partners can help them create a differentiated as well as value-added retail shopping experiences for consumers. It is this explosion in cloud technology development that has created opportunities for innovation in the traditional store shopping model. As of today, there is a lot of piloting and experimenting going on with regards to the development of Cloud-based technology. So, much so that this has led to many traditional retailers across consumer segments attempting to explore innovative concepts such as digital fitting rooms, dynamic displays expanded aisle kiosks, VIP concierge applications and even same-day home delivery.

The major reason for this is simply the fact that most of these cloud-based software possesses a lot of promise when it comes to creating a more dynamic and differentiated shopping experience for the customer. The best example of a cloud-based technology application that provides a consumer for a great shopping experience is Aisle 411, which helps shoppers locate products in online stores, manage a shopping list, and connect via social media and earn rewards. It also on the back-end helps gather useful insights on consumer behaviour (shopping habits) which is shared with participating brands and retailers.