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Does cloud computing cause disintermediation?

The role of powerful intermediaries at ERP is level is that they could act as guarantors of performance or SMEs who suggest a logical approach to the cloud.

The word 'intermediation' continues to be important. One may think of a bank when this word comes to mind, as they find intelligent uses for funds and are often capable of supporting the social programs of governments by de-risking their portfolios through diversification.

However, to the consumers of IT solutions, intermediaries are systems integrators, implementation partners and the like. They may not possess the principle-supplier’s knowledge and R&D capacities, but they can invest into gaining a better understanding of a customer’s business problem – the understanding being wide in scope (covering many functions) and scale (international locations etc) – with masses of business consultants that they may employ.

So, does cloud computing cause disintermediation?

Well, if you go with the oldest marketing lesson – “thou shall not eliminate middle men” – cloud computing would just restructure intermediary business. To answer this question, we must get into the details of the delivery.

Also read: Cloud is elastic can accommodate more items

Cloud ERPs (such as Ramco’s RODE) promise the full power of the ERP – complete with its documents, best practices and integration capacities. The scale of use is no limitation. What would be the role of powerful intermediaries at this level? They could act as guarantors of performance or SMEs who suggest a logical approach to the cloud.

The ERP is also expected to deliver statutory compliance. Using the native models and the extension tools, SI could undertake guarantee compliance at all times.

This is a potent service, given the huge number of legislative zones in the world and the frequency of changes. The difference is that given the multi-tenancy technologies, SI may have to make changes only once before all subscribers benefit from the change. Thus, there is a reduction in scale of work that needs to be done and added degree of freedom for the consumer.

The next set to consider is that of industry templates. Traditional ERP solutions cover practically every kind of a transformational industry. In services, traditional ERPs cover missing parts through partner solutions or customization.

Thus, Cloud ERPs cover manufacturing adequately and lend a powerful opportunity for intermediation in services and other nascent industries. Intermediaries may choose to integrate the cloud ERP with industry-specific solutions or use the elastic data models of cloud ERPs to develop a tightly integrated, componentized solution, where components move together as a herd, increasing usability and maintainability.

Lastly, no organization is bereft of singular capacities or idiosyncrasies. These may be exploited for profit, it is argued in popular management literature. This is where the intermediary’s role really reaches top of the rung intermediation.

Co-creation (intermediary and customer) is one means that may be used to create unique processes and integrate with the elastic ERP. With a view to enabling the organization in new and powerful ways, studying business requirements, conflicts, and decision making choices at a granular level can help customers gain a solution that wraps itself to their business more powerfully.