Factoring in growth

It?s not just about cost benefits. Cloud mitigates the risk of hardware failure, too. If only service providers could earn more trust in the sector

Being young has its advantages. Take the Mumbai-based India Factoring and Finance Solutions, for instance. Founded in December 2009, India Factoring has young employees – the average age being 31 years.

“Our top management falls in the 31-40 age bracket. So you see, our entire office is internet-savvy and it was very easy to explain the benefits of virtualisation to the management,” says Abhijit Burse, vice president, India Factoring and Finance Solutions Pvt Ltd.

In fact, Burse stresses, when the company decided to have its own data centres, it visualised them in the virtualised environment itself.

The company provides factoring and forfaiting services in finance and value-added service to business entities within the country.

The company currently has 80 IT users, has its own mail servers and ERP system with DVR application, as well as SAP and Oracle. All of these, including the backup servers, are virtualised.

“This is one of our biggest IT achievements as we are running at least 15 virtual servers onto physical hardware,” says Burse. He reveals that it has saved the company 13 server hardware.

And it’s not just the cost of the hardware that has converted into savings for the company. There are savings in terms of power, cooling and maintenance.

“Apart from that, since we have started using virtual servers and just two physical severs, the risk of hardware failure is mitigated,” says the company vice president.

In case of a downtime, the company has the option of migrating servers to the working ones, thus making sure the functions remain operable.

“If we look at a load-balancing structure, we would have required 20-25 physical severs,” he reveals.

For a young company like India Factoring, cloud becomes an ideal solution for other reasons, too. From the viewpoint of IT infrastructure, it becomes possible to take the scalability solutions for granted. Not having to invest in infrastructure for future use, but which may be currently lying idle, means not having to block capital at a stage of the venture when being frugal goes a long way.

“With less physical infrastructure, we need limited manpower to use it, thus justifying costs further,” stresses Burse.

He gives another example: the company is considering a document management system that it will start using in the next couple of months. It would cost anywhere between Rs 35-40 lakh, considering just the hardware requirement. But since the company has opted for cloud, it will have to pay just Rs 5,000 per user. Burse also says that the company will turn to internet cloud once the security issues are done away with.

Talking about security issues, Burse feels that although the services are offered by big companies that have generated a considerable amount of goodwill in the sector, sadly the services in India are rolled out by its partners and/ or franchisees.

“Support and security from these smaller companies is not up to the mark and that is a big reason why people are eyeing cloud suspiciously,” he feels.

There is not enough trust between the franchisee and the customer company when it comes to data security. The way out? Burse stresses that service providing companies should approach prospective customers directly or, at the very least, partner with biggest companies that are more specialised and have earned trust from people in the IT sector.