How cloud-based technologies can provide the flexibility your business needs in today’s economy Featured

8:00pm EDT August 26, 2010

We all know that opportunity favors those who are prepared. However, preparation is only part of the equation. Another is being flexible enough to act on unforeseen challenges or opportunities quickly and effectively.

You have probably heard that cloud computing is a way to save money, but have you thought about how it can provide your business greater agility?

“Flexibility is the primary reason for the ‘cloud imperative’ — the necessity to strategically adopt cloud-based software applications for your business,” says Mark Swanson, the CEO of Telovations Inc., who has been working with the cloud since before it was even called the cloud, starting one of the first companies that focused on cloud computing over a decade ago.

Smart Business spoke with Swanson about the cloud imperative and why the cloud should be every business’s “Plan B.”

What do you think is the biggest benefit of switching to cloud-based offerings?

Most business owners don’t think of this, but the real value of cloud-based offerings isn’t so much in the advanced technology or the cost savings, but in the flexibility that it offers your business. Because cloud-based technologies can be implemented and decommissioned quickly, with little or no capital outlay, managers can try new ideas and execute them without the fear of failure. It essentially lowers the cost of failure, helping to change the culture of a business to one that is more willing to try new things. The flexibility of cloud-based offerings allows your business to be much more nimble and aggressive and, ultimately, develop a mindset for success.

Have you seen a correlation between the use of the cloud and its applications and a company’s flexibility?

Absolutely. No one can argue that the pace of business isn’t dramatically faster than it was 10 or 20 years ago. Markets are more volatile, information flows faster and product life cycles are much shorter. Take a look at the cell phone industry for example. Product life cycles have gone from years to literally months. Businesses must always be on their toes in order to keep up with the pace of business today. If they aren’t able to move when something is hot and then move on when it starts to cool off, they won’t be market leaders.

Companies that are successful today are the ones that are able to adapt to changing markets. The beauty of using on-demand software or infrastructure in the cloud is that it gives you that flexibility to move in any direction, at any time, without any disruption.

As an example, the company Matrix Healthcare, a Telovations client, has experienced explosive growth over the past three years. They seem to always be entering new markets, adding new employees and expanding their service offerings. They started with just a handful of staff members a few years ago and are now up to almost 100 employees. As a result, they have been named among the 10 fastest growing companies in Tampa Bay for three years in a row. Because they chose a cloud-based communications infrastructure, the company has added new, state-of-the-art call centers with little effort and cost. Had they decided to go with a traditional fixed, on-premise PBX phone system, it would have taken months and thousands of dollars to have been constantly changing their infrastructure to support that growth. They have been able to move faster as a result of the benefits of the cloud’s flexibility.

What about the cloud allows businesses to be more aggressive?

I will go back to my point about cost of failure. If the cost is low, you are willing to take on more risk. That means you can be more aggressive and attack new market opportunities before your competitors. In the case of Matrix Healthcare, they have moved and expanded their corporate offices and added satellite offices in new markets as they recognized opportunities in those areas. If it doesn’t pan out, our model allows them to give back their communications equipment and services and reduce their bill back down to previous levels. Because they have a cloud-based phone system, their communications infrastructure never held them back or became a burden for them by sitting in the closet while they pay down a lease. Essentially, it made it easier for them to be so aggressive and move quickly.

Why do you view the cloud as a business’s Plan B?

We all know that in business, nothing ever goes exactly as planned. You know something is going to change, you just don’t know what, so you really can’t come up with a solid Plan B right now. Since almost every conceivable business application is now available as-a-service, when something changes, the flexibility of those on-demand offerings makes it easy to quickly establish and implement a Plan B.

For example, if the contract you won just got pushed back six months, you can just say my Plan B is to tell my cloud vendors, ‘My start date is no longer on Monday but in six months,’ and it won’t cost you a thing. Since the cloud is your Plan B, you just make the adjustments when Plan A doesn’t work out. The cloud gives you flexibility and, essentially, being flexible should be every business’s Plan B.

MARK SWANSON is CEO of Telovations Inc. Reach him at mswanson@telovations.com.