Many heads are better than one or why a multi-cloud strategy is a good solution in logistics and supply chain

#Article
#Software Development
#High Tech
April 19, 2022 5 min read

A multi-cloud strategy is becoming a key trend. According to the IDG Communications 2022 study, 74% of organizations use more than one public cloud provider. It may sound expensive – and it is – however, it all pays off in a long-term perspective.

Statistically, nearly 90% of the companies across the world are already on the cloud leveraging various deployment models like public/private/hybrid options offered by cloud providers but one of the recent trends in cloud computing is going with multi-cloud deployments
Praveen Kancharla,
VP of Technology at Innovecs

Main use cases of a multi-cloud strategy in logistics and supply chain

Organizations dealing with transportation and logistics may turn from a single-cloud to a multi-cloud strategy because of many reasons. Here we want to define the most widespread use cases.

Global Clients
Global logistics companies deliver goods everywhere. They have clients distributed in different geographies and choosing a cloud vendor based on location proximity may be a viable choice to increase performance, speed of delivery, and customer loyalty.

M&As
PwC says that the volume and value of a logistics M&A deal in 2021 increased 11% and 84% accordingly. Turning to different cloud providers helps companies avoid issues with data consolidation and processes synchronization.

Expertise diversity
Logistics companies manage numerous in-house processes and multiple clouds can help with it. For example, Google Cloud is good for analytics (inventory accuracy), Microsoft Azure works well with sensitive processes as it is careful with updates (order fulfillments), and AWS is just easy to use (Jack of all trades).

AI/ML Products Development
Building AI/ML products from scratch to keep all supply chain participants synchronized is expensive. To reduce costs, companies can use different cloud vendors with their ready-to-use components. For example, Azure, IBM, and AWS provide dedicated hardware as well as specific datasets for AI/ML products.

Benefits of adopting a multi-cloud strategy in logistics and supply chain

Let’s uncover some of the most crucial benefits such a strategy can provide to logistics and supply chain businesses.

Flexibility and disaster recovery
For logistics and supply chain companies, flexibility is extra important as customer demands can change fast and unpredictably because of economic and personal reasons. Companies need to sync their transportation processes with clients and stay resilient to changes.

Having one cloud provider does not offer much flexibility. Having two or more does. Compared to using a single provider, multi-cloud strategy adoption helps avoid flexibility limitations, data loss, and service downtime.

Technological innovations
Among the most popular technologies that logistics and supply chain businesses are now looking to integrate are RPA, ML, Digital Twins, Blockchain, etc. Using the services of a single cloud provider imposes many limits and integration takes time and effort instead of bringing profit.

Why not take the best from each cloud vendor you prefer and accelerate technological business innovation? For example, there is an AWS Step Functions tool for workflow automation, or you can use Azure Machine Learning solutions to build data models and work with supply chain data. Explore and use the best solutions.

Increased infrastructure performance
Having multiple offices globally, logistics and supply chain companies suffer from ensuring the same level of speed and performance everywhere.

For example, Microsoft Azure and AWS have different availability zones. Azure has many data centers in many regions providing wide geographic coverage. However, AWS – having lower coverage – sets more than one data center in one region to ensure higher availability there. So, choosing a specific provider for a specific region is a smart decision.

IT compliance
Logistics and supply chain companies access sensitive user data, like names and addresses. They need to be very careful with such data and stay compliant with local data regulations. For example, there are GDPR and CCPA that require companies to store user data in specific locations. Using the services of different cloud vendors that have servers in particular locations, companies can ensure their compliance with the regional data laws.

Challenges of adopting a multi-cloud strategy in logistics and supply chain

We would also like to describe some of the challenges that can come across in adopting this strategy.

Management complexity
There are a lot of participants in the supply chain. Adding more of them will be challenging as the company will need to integrate new processes into its well-functioning workflow and try to fit the pieces together efficiently. This may relate to user access controls and authorization issues. Managing multiple clouds is hard, like having more than one kid in a family. However, such a strategy brings much value in the long-term perspective.

Cloud management expertise
Every cloud provider has its own management process, APIs, and portals. Dealing with one cloud vendor is easier as it does not require your team to manage different infrastructures, learn new technologies, familiarize yourself with new interfaces, and more. So, get ready to spend time educating your IT teams to achieve profitable outcomes. Or you can outsource people with specific cloud expertise to make it easier.

Costs
Paying for the services of one cloud provider is cheaper than for two or more. That’s logical. Most public cloud providers offer volume discounts, where prices are reduced as customers buy more of a particular service. It becomes more difficult for an organization to qualify for those discounts when it doesn’t concentrate its business on a single cloud provider.

Security concerns
Going multi-cloud, you must ask yourself “How to make your cybersecurity policy that you have at your company level work for different cloud providers?”. The problem is that the same cybersecurity algorithm may not be applicable to all clouds. Thus, your task will be to come up with a multi-layered security approach when working with several clouds hosting environments.

Conclusion

Despite of all these challenges, adopting a multi-cloud strategy offers many advantages for supply chain and logistics companies. Making a decision on the need for a multi-cloud environment and developing a strategy around it requires a lot of experience and expertise. At Innovecs, we have multiple years of experience in building cloud solutions on all major cloud platforms and we are committed to meeting the needs of customers.

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