Executive Briefings

Virtual Data Platforms Reduce Costs and Improve Sustainability

As managers face increasing pressure from stakeholders to make supply chains eco-friendly, companies are on the hunt for new and inexpensive tools, partners, or processes that can improve the sustainability of their operations. But according to a new study, one solution may already exist: Cloud computing could improve supply chains' environmental performance while also cutting costs.

Virtual Data Platforms Reduce Costs and Improve Sustainability

When firms move their data from in-house servers to the cloud, they can save money on maintaining IT infrastructure and storage. Hosting applications, information and networks on the cloud, typically through a third-party service at a much lower cost than a physical setup, also allows companies to quickly analyze and disseminate data, loop in partners and scale their technology needs to accommodate changing budget and business requirements.

But little empirical evidence exists of cloud computing’s impact on a firm’s economic and environmental record. Aiming to fill the gap, the authors surveyed 247 CEOs, managers and IT specialists at U.S.-based firms about the extent to which they used cloud computing. The companies operate in industries up and down the supply chain, including manufacturing, retail and distribution. The authors interviewed employees in multiple levels of the companies to get feedback on both big-picture financial returns and the hands-on experience of using cloud computing.

Because the costs of environmental initiatives are often cited as the biggest impediment to implementation, the authors sought to determine whether firms could balance the finances relating to their sustainability efforts via the cloud. They found that firms’ use of the cloud was associated with sales growth, operating earnings and improved return on assets and investments.

On the sustainability front, companies’ application of the cloud also typically led to reduced costs — firms spent less on materials, waste treatment and disposal, and they consumed less energy.

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When firms move their data from in-house servers to the cloud, they can save money on maintaining IT infrastructure and storage. Hosting applications, information and networks on the cloud, typically through a third-party service at a much lower cost than a physical setup, also allows companies to quickly analyze and disseminate data, loop in partners and scale their technology needs to accommodate changing budget and business requirements.

But little empirical evidence exists of cloud computing’s impact on a firm’s economic and environmental record. Aiming to fill the gap, the authors surveyed 247 CEOs, managers and IT specialists at U.S.-based firms about the extent to which they used cloud computing. The companies operate in industries up and down the supply chain, including manufacturing, retail and distribution. The authors interviewed employees in multiple levels of the companies to get feedback on both big-picture financial returns and the hands-on experience of using cloud computing.

Because the costs of environmental initiatives are often cited as the biggest impediment to implementation, the authors sought to determine whether firms could balance the finances relating to their sustainability efforts via the cloud. They found that firms’ use of the cloud was associated with sales growth, operating earnings and improved return on assets and investments.

On the sustainability front, companies’ application of the cloud also typically led to reduced costs — firms spent less on materials, waste treatment and disposal, and they consumed less energy.

Read Full Article

Virtual Data Platforms Reduce Costs and Improve Sustainability