I sat down with Michael Rösch, COO of POOL4TOOL, to chat about cloud computing. With a lot of buzz about the impact of the cloud on business, it was a chance to get a perspective, as well as a few hints and tips, from someone who has been at the coalface of procurement cloud services for the past 15 years. Michael has been at POOL4TOOL since 2000, becoming COO in 2012, and has worked on projects with German giants like Behr, Hansgrohe, Heidelberger Printing Presses, Carl Zeiss and ThyssenKrupp Presta in that time.

Charlotte: The burgeoning benefits of cloud computing to businesses are well-known. It's enormously flexible, instantly scalable, continuously updated and accessible with just an internet connection. It's a simple question, but an important one: how are cloud-based solutions benefiting procurement organizations specifically?

Michael: Procurement can benefit from procurement cloud applications because they have a lot of best practices: specifically supplier integration and content. These cloud applications have a lot of experience with SRM projects and use that to build all those techniques and all that information into the software. That's the reason why a customer can benefit from that information.

C: When POOL4TOOL emerged in 2000, it was the only procurement software provider to really pay attention to the cloud concept. How did this help P4T develop differently to other companies in the market?

M: There are two main ways cloud has shaped our business. First of all, because we don't need to focus so much on delivering the product to our customers at their data centers, we have more resources to concentrate on developing the product. This is definitely a benefit in cloud computing compared to a traditional licensing business. The second thing is that it enables POOL4TOOL to be an all-in-one supply collaboration platform with a module concept. You can start very easily with one or two modules, like SRM or eSourcing, and later on, you can add for example supplier ratings and other modules like supply chain management. You only pay for what you use.

C: A top concern for businesses is keeping data secure. How is cloud security developing?

M: Cloud security is a very important term right now. Encouraged by our automotive customers, we started on ISO27001 certification in 2008. ISO27001 means that all our internal processes and the processes of our partners have to follow some very concrete standards when handling customer data to keep it as secure as possible. One of the criteria we have to fulfill is performing penetration tests - from our customers, as well as internally. Only if we do that on a regular basis can we keep our certificate. Also, the German market is developing rapidly and they are very precise and very critical when it comes to data security so they have their own certificates or audits, for example the German Federal Data Protection Act Paragraph 9 audit, which we have to perform with all our direct partners, like our data centers and our infrastructure supplier.

C: People often make the pun about cloud computing that the "sky is the limit." The cloud is already a paradigm shift. Where is it going to take us?

M: Cloud computing will make a lot of sophisticated algorithms and data analysis tools available and affordable to smaller companies which were previously too expensive for them. These smaller companies will definitely gain from this so larger companies with completely different financial resources have to start fearing smaller companies if they can just rent big data and algorithms from a cloud computing provider at a low price, because this could lift their business in a very short time. Making technology affordable will build a new market standard and benefit business as a whole.

C: Finally, do you have any tips for procurement organizations with solely on-premise solutions thinking about venturing into the cloud?

M: There are some dos and don'ts. They need to think more outside of the box - traditional companies have everything in-house and there is a change of paradigm if they open themselves to cloud computing. At first, there is fear and trepidation, so they need to get in contact with similar businesses who are already open to cloud computing and learn from their experiences and the challenges they are facing. Also, their IT infrastructure has to be made fit for cloud computing because there are completely new challenges. This is more a matter of integration of other systems than building up new services internally. From an IT security standpoint they need to decide which data can be kept in the cloud and which data has to be kept internally. They should also structure an Information Security Management System and appoint an information security officer to be part of all the decisions they make in terms of cloud computing.

What's also crucial is internal security awareness. Eighty percent of all attacks come from internally so, when implementing cloud, a company needs a very good understanding of what data security means and train all their employees to handle data correctly, from the CEO all the way to part-time employees, because they are the weakest point of this whole chain. Only with a high level of awareness can you handle data correctly.

C: Thanks for the chat!

M: Any time!

Cross-posted from procurement.world