LED Source LLC, a company that sells lighting store franchises to entrepreneurs, encountered several difficulties when it attempted to implement cloud tools designed to handle franchisees' records keeping operations. The biggest problems popped up when the company tried to integrate various data types from diverse cloud-based applications.
The effort showed LED Source that cloud computing initiatives, while promising and potentially cost-effective, can be hamstrung by the need to update applications, swap out software packages and integrate data between cloud and on-premises systems. The cloud software being implemented must also be flexible enough to meet the special needs of individual lighting store franchises.
Franchise operations can range from sub shops like Subway or oil-change chains like Jiffy Lube International to barbershops like Supercuts or cleaning companies like Servpro Industries. Each industry must cater to computer users with different skill sets.
Franchisees of LED Source, a lighting provider focused on light-emitting diode products, use fairly sophisticated cloud-based financial software products to feed reports to on-premises systems at the firm's headquarters in Wellington, Fla., said Dean Ernst, the company's director of marketing and social media.
Ernst and his colleagues swapped out NetSuite ERP software at the franchise locations with a combination of Intuit's QuickBooks and Salesforce.com's Sales Cloud software, while continuing to use NetSuite back at the headquarters. One of the biggest challenges associated with the project was finding software that could handle cloud data integration tasks, Ernst said.
LED Source decided to remove NetSuite at 15 locations because the software was simply "too much for the typical franchise" to handle, according to Ernst. A typical franchise uses about five employees, and systems there had to be simple to use and maintain.
"NetSuite is a great tool and we still use it in the corporation," Ernst said. "But we started getting feedback that franchisees would like to use what everyone else used in small business: QuickBooks."
Cloud drives planning
It's important to LED Source to make cloud computing work, Ernst said. To grow quickly and efficiently, the company wants to reduce the need for in-house IT as much as possible.
"We have been a cloud-based company since we started in 2005, and when we launched the franchise system in 2010, we wanted to be sure to keep it in the cloud," said Ernst, who sees the cloud as a route to supporting as many as 150 franchisees within the next three years.
A growing number of residences and commercial establishments are turning to light-emitting diode technology to gain greater energy efficiency -- and LED Source's main business goal is to capitalize on that trend. The company believes that cloud computing technologies -- and the data integration efforts that go along with them -- will give it greater agility and help it achieve its business goal. "We wanted to make sure applications hosted in the cloud are talking with each other. From a franchise perspective, we have to know what franchisees are selling for royalty purposes," said Ernst, who helped oversee the organization's cloud transformation. "We also have to look at metrics. A lot of minor things can add up to a big problem. We can give franchisees feedback on what is working at other locations."
Building from Scratch
LED Source conducted a lengthy search for data integration software to link Salesforce, Quickbooks and NetSuite applications, but they were having a difficult time finding the right fit. Ernst had just about given up when his team encountered Scribe Software's online data connection tools, Scribe Online.
The software was able synchronize customer data in the QuickBooks and Salesforce.com systems. It also allowed LED Source to on-board new franchises with reusable data integration maps. LED Source also found Scribe's interface relatively easy to use.
The visual design environment for Scribe Online was actually inspired by Scratch, a programming language for children that came out of MIT Media Labs. The source code of Scratch is based on Squeak, a programming dialect created from Smalltalk-80, a well-known programming language.
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With the varied sources, integrations and hosts involved in the LED Source cloud system, collaboration is important. During the process of launching the QuickBooks implementation, Ernst said he learned that cloud applications require a lot of teamwork across different organizations and vendors' offerings.
"Anytime you try and do something new and innovative, there are challenges. Finding the right team took time," Ernst said. His advice to others considering a cloud project is simple: Do your homework. "Due diligence in advance saves money and headaches," he said.
LED Source's challenges are likely to confront others. The need to carefully consider new integration requirements for cloud applications is likely to grow, according to Dana Gardner, president and principal analyst at Interarbor Solutions.
"Effectively combining data and analysis across applications and processes, regardless of where the apps and data reside, is [now] a fundamental requirement of businesses," he said. "It will be both more difficult and urgent as cloud and mobile uses increase."