Slash Finances: 4 Ways Cloud Solutions Cut Your Logistics Expenses

Logistics companies that are yet to use cloud solutions in their operations are throwing away money. By using out-dated, disparate, or company-owned solutions, your business is setting its finance department on fire. The availability of online-based programs and the demand to streamline operations from manufacturer to consumer should be enough for logistics firms to reconsider their options.A better motivation though is saving money. CFOs should understand how the cloud impacts operations and expenses. Here are some ways cloud-based logistics software can help your company cut your expenses.

Upfront Expense – Infrastructure Investment

It's hard to convince finance to spend on IT infrastructure considering it is 1) a major upfront investment and 2) a monthly recurring expense. Let's talk about the first part of the problem. For a company that's looking to cut its expenses, it will not help if it shells out a massive amount of money to purchase the equipment needed to set up IT infrastructure – infrastructure necessary to run the operations management software. Cloud solutions, on the other hand, won't require you to purchase or update hardware. Providers shoulder that expense.

Recurring Expenses – Power

Data centres are among the biggest consumers of electricity on the planet. They run 24 hours a day, seven days a week without rest. They require redundant power to keep the servers functioning. They also need electricity to maintain cooling. By not using cloud-based logistics software and opting to set up your own infrastructure, you are effectively agreeing to spend more money each and every month on utilities. Go for the cloud and avoid this recurring expense.

Recurring Expenses – Manpower

Here's a factor that is often overlooked when weighing between cloud and local software solutions for logistics operations. If you choose to set up, upgrade, or keep your own IT infrastructure, the company would need to hire a whole engineering team dedicated to the maintenance of the IT infrastructure. A data centre will have at least two layers: the physical layer and the IT layer. This means you need engineers and technicians to maintain the physical layer, which is space, power, and cooling. On the IT side, you have the cabinets, racks, and servers, among others. On top of all of this, you need a data centre manager to oversee everything. Cloud solutions allow you to skip this huge overhead because the provider is in charge of the infrastructure maintenance. You are in charge of your own business: logistics.

Recurring Expenses – Consumption

The amount of data you can store and use is fixed when you have a data centre. It depends on the hardware you have installed. If you want to increase your data consumption, you need to reinvest and purchase more servers. Those servers need racks and cabinets, as well as space, power, and cooling. When your use of the logistics software grows, you need to reinvest again. But what happens when demand drops? You still need to maintain the same amount of hardware, leading to a waste of power and manpower hours. With dedicated servers for rent, you can increase or decrease the servers you require but it would take time, depending on availability.

Consider using cloud solutions for your logistics business today. You can cut your upfront and recurring expenses, as well as streamline your operations.

Learn more about the author: James Gasket