By Colin Williams
The Transport, Logistics and Distribution sector produces around 6% of New Zealand GDP and the success of the sector has implications for thousands of workers and businesses around the country. It allows the goods to get to our stores or direct to our homes and is fundamental to our economy being able to function.
Distribution companies are responsible for the flow of products from producers and manufacturers to consumers. Among the biggest challenges for distribution companies is reducing operating costs. System up-time and resilience of services is critical and margins can be slim.
When it comes to IT expenditure, cost has to be minimised without cutting any corners. So how can a business involved in distribution achieve better operational performance from IT while reducing costs?
The IT challenges
Some of the common technology challenges for a distribution business include:
- Multi-branch locations – some may also be remote and difficult to service from an IT standpoint
- 24/7 operations – systems need to operate around the clock and end-users need to be supported
- Competitive environment – IT needs to be strategic to enable added value for customers, with a focus on improving efficiency and process excellence
Typical IT costs for medium sized businesses include:
- Server Infrastructure ownership, maintenance and support
- Desktop PCs/Laptop ownership, upgrade, maintenance and support
- Licensing compliance
- Wide Area Network, including firewall and IP Transit
- Backup/Disaster Recovery systems
- Labour costs such as IT managers, support staff, outsourced providers
When it comes to meeting infrastructure requirements, New Zealand businesses traditionally build their own "enterprise deployment" of servers and desktops on the Microsoft platform. This will include:
- Physical servers with a storage area network (SAN)
- Identity Service (Active Directory)
- Email/Messaging (Exchange)
- Collaboration (SharePoint)
- File and Print services
- A transactional business system (usually requiring SQL Server, Oracle or another relational database)
- Reporting/Business Intelligence system
- Desktop PCs and Laptops with 3 - 4 year refresh cycle
- Management software for managing devices/laptops
Each of these products and services require architecture, design, implementation and on-going operational support. Each service can also be scaled to have higher resiliency or performance. Infrastructure and support of software requires different skills and experience.
The fact is that there is a very high cost of ownership of Information Technology, which has a high starting point. To explain, the cost per user for hardware and software will start very high and gradually decrease as the business gets larger. Meanwhile the cost of hardware and software may decrease with size, but the support costs may go up dramatically as the business expands into more sites and adds complexity.
The other challenge is that the total cost of ownership further increases if you look closely at risk mitigation and protection against hardware failure, fire, power failure or network resilience. Keeping a multi-branch business running efficiently is not easy and is in general an expensive exercise.
How Lucidity can help
The hard costs associated with inefficient or improperly designed IT infrastructure are certainly obvious and challenges that Lucidity seeks to address.
Lucidity’s managed cloud services include its flagship Managed Desktop service, a remote desktop approach delivering a proven IT solution that works really well for distribution businesses. As a virtual platform that eradicates the need for on-site servers, it removes dependency on local PCs and liberates staff to work from anywhere.
As a Gold Microsoft partner, Lucidity supports Microsoft’s cloud services, including Office 365 combined with Managed Desktop as a hybrid cloud approach, if required.
We are also experienced in hosting a range of ERP/Line of business systems – examples include Dynamics AX, MYOB Exo, Oracle and SQL Server based database systems.
Benefits of Lucidity’s managed cloud services
- On-site servers are no longer required. Our clients’ data is securely stored on Lucidity’s top of the range servers, housed in professionally run and secured data centres, that are automatically protected with dual power feeds, generator backup, air conditioning and 24/7 security.
- Centralised, virtual desktops. We deliver all our services from our data centres. Each user connects securely to their desktop over the internet and this simplifies the infrastructure requirements at our clients’ sites. The need for expensive and unreliable Wide Area Networks is removed with the result of more flexible staff working, as well as reduced support and lower costs.
- IT delivered as a Service. Our clients pay for what they use. There are no more licensing compliance issues (or risks) as this is all bundled in on a per user basis, and for our clients who have seasonal workers, we increase or decrease costs on a month by month basis.
- Efficiency through scale. Our platform is shared, which allows for a scalable approach and greater IT efficiency. It means that our clients are eliminating the waste and non-scalable approach that comes with owning their own hardware.
- Automated IT processes. We have set up automated systems meaning that specific IT processes can be set up quickly for users and in many cases they can now make changes to their set up that they previously couldn’t do.
- Back up as a Service. Many businesses don’t have adequate backups – backup of data is included as part of our service. We keep two copies - one near production data and one in a secondary data centre in case of disaster. We monitor and look after these so our clients don’t have to.
- 24/7 IT support services. We can support nearly everything remotely - our helpdesk can provide New Zealand international cover around the clock. If support staff are needed on-site, we can deploy remote contractors.
- Controlled and measured costs. Our clients are in control of costs – for example, changing storage utilisation, or headcount will dictate the invoice, not a fixed monthly fee. We provide a detailed breakdown of IT costs with the possibility of department or site level invoicing, if required.
- Work from anywhere. Without the need for a VPN or being located on-site, our Managed Desktop solution offers secure access via the internet – this means that your work desktop and applications are now available to staff wherever they might be working – whether at home or on the road or overseas.
Your next move
Lucidity’s managed cloud services are helping organisations in the distribution sector (and many other industries), reduce IT costs and increase efficiency on multiple levels by optimising their infrastructure, improving workflow and improving the resiliency of their IT operations. Many of our clients report ROI and cost savings of over 30%.
For Lucidity to provide the full benefit of managed cloud services, a deeper dialogue is required to explore and identify specific business needs. The topics in my blog are general, but with further engagement, Lucidity can assess and relate more directly to your organisation’s specific IT needs.
CONTACT US for an assessment of your current IT set up.