When will loyalty embrace the cloud?

Dec 24 2012, 16:24 IST
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SummaryThe advent of cloud based services model has given rise to some questions among loyalty professionals regarding the actual definition of the word ‘cloud’ and its impact on loyalty programmes.

CRM software to corporates, Amazon started providing cloud computing power and storage, Google and Microsoft offered cloud private email services. Oracle and SAP joined the fray with Oracle OnDemand and SAP Business by Design. Gartner predicts faster growth for cloud based services in the coming years than traditional software sales.

The biggest benefits of cloud based services are lower costs, ease of use, high availability and minimal need of an in-house technical team to manage the technical aspects of the software. Therefore, there is a universal desire among providers as well as user companies to search for appropriate use of the ‘cloud’ model to reduce cost of IT in corporations as the global IT usage continues to expand.

It is in this context that the question arises –can we use loyalty software on the cloud? Will it deliver the same benefits that are often quoted for other cloud services?

The biggest benefit of the low cost of ‘cloud’ services results from scale of usage. Low cost is a result of multi-fold number of users sharing the same software, hardware, technical support, maintenance etc. Many customers who run loyalty programmes have utilised the ‘sharing model’ in a limited way through their outsourced service provider who services many other customers.

ITC Infotech, as a leading Oracle partner, has implemented Siebel Loyalty enterprise system for many airlines, hotels, and coalition loyalty programmes, readying them for possible future ‘sharing model’ as and when the customers feel confident to move to such a model. One of ITC Infotech’s customers is using Siebel Loyalty with multiple customer programmes in a single instance thus benefiting its customers from such a ‘sharing model’.

However, most loyalty programmes will not be able to move to a pure cloud service because of the following reasons: Loyalty applications of today are digitally integrated with tens and hundreds of in-house applications and partner applications. Such integrations can be complicated and need monitoring. Imagine the integration nightmare if ten loyalty programmes of ten different companies are brought on to a single application. Let us then extend the analogy to further hundred or thousand customer companies sharing a single loyalty software on the ‘cloud’. This is the sole reason why loyalty cannot move to real cloud anytime soon.

There are new technologies being implemented for integrating systems on the Web. However, such systems will require the applications connecting to the loyalty system to be Web-enabled for integration.

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