Innovating any kind of business isn’t about just adopting the latest technology, it is how you use the technology to streamline processes and create cost benefits that make your business innovative.
The cloud has introduced convenience, accessibility and easier management to businesses everywhere. For a business with a strong on the road staff compliment, the cloud has enabled staff, from any web-connected device to log-in and access mission-critical applications.
Mobility is just one advantage of the cloud; shifting resources to the cloud can bring increasing cost savings.
Increasing productivity does mean decreasing costs
Modern cloud software is built for any size business – from inventory forecasting to selling and ordering to accounts. Today’s technology can and probably do already handle the crucial business functions in your organization. Utilizing cloud-based technologies will enable more powerful technology and bring in cost benefits.
Cloud technologies provide secure and on-demand access to real-time data. Many businesses have realized that migrating to cloud technology has decreased costs with the burden of maintaining systems fading away.
Often when businesses move from on-premises servers to the cloud they not only reduce physical space, but also electricity and maintenance fees. Physical Servers require hardware, and hardware frequently becomes outdated which means additional costs of replacing said hardware. Migrating to the cloud can result in a 16% reduction in operational costs.
CapEx vs OpEx
CapEx refers to capital expenditure which includes fixed assets such as physical servers and hardware. OpEx refers to operational expenditure which includes day-day incurred expenses to make the business operational. The trend is that businesses are moving to an OpEx model as it just makes business sense. Capital Expenditure tends to decrease in value as servers and hardware become outdated and lose value over time. OpEx is usually tax-deductible as it is considered a short term cost. Cloud Applications follow an OpEx model as they usually follow a subscription-based cost model.
What’s more, CapEx spending often requires a major up-front investment. Consider the costs involved in setting up on-premises server farms, software licenses, and buying industrial equipment outright. With cloud software and a simple subscription fee, these costs can be minimized and streamlined—money that can be reinvested back into the business.