Essential guide to cloud computing for accountants
It is no secret that large organisations have led the way in terms of Cloud Computing. However, with the widespread proliferation of fast, reliable internet connections, smaller practices are increasingly taking advantage of an ever-wider range of hosted applications over the cloud.
So what is Cloud Computing? Accountants may be confused as to what Cloud Computing entails and how it can help them in their daily lives. ‘Cloud Computing' is the use of computing resources and applications provided as a service over the internet on a pay-as-you-go basis.
There are many reasons for the continued appeal of Cloud Computing. Running a traditional IT infrastructure for all but the smallest of practices requires significant expertise and effort. For many small and medium-sized practices, resources are far better focused on core activities contributing directly to the bottom line.
Key benefits for your practice
Adapt to change:
- An oft-quoted strength of smaller practices is their ability to react and change swiftly in response to changing market conditions and customer demands. That agility can be hampered by a complex and inflexible IT infrastructure.
Supply and demand:
- Using a hosted application over the Cloud model, with key applications accessed on demand and paid for as they are used, allows resources to be beefed up in growth areas and cut back where demand has abated. Similarly, as new employees join the practice, they can easily be added to the system. As others move on they can be quickly, easily and securely removed.
Cost-effective:
- A key financial benefit is the reduction in capital expenditure. Traditional software and the hardware needed to run it are expensive, and must be paid for en-bloc, on installation. In a Cloud environment, there is no capital outlay. Server resources and application usage are paid for through a fixed monthly subscription charge. As well as simplifying budgeting, this makes for a more favourable tax situation, with the monthly subscriptions being accounted for as revenue items, not capital expenditure.
On-going savings
There are on-going savings to be made, too. The Cloud host is responsible for data protection, resource provisioning, patches, updates, user administration and server maintenance. Which means the business can redeploy resource previously allocated to these tasks, improving return on investment and, often, employee morale.
As well as the cost savings, data security is critical. In typical small and medium sized practices, that have several Pc's and a server tucked away in the corner of the office, there would probably be one person responsible for maintaining them and ensuring backups are taken. How many times has it been heard that the day after a failed backup the server goes down and the practice loses crucial data. With a Cloud host all the IT infrastructure is sited in a secure data centre. The risk of malicious attack, damage from malware, or other data loss is dramatically reduced.
Smaller businesses keen to sign up
With so many benefits it is perhaps not surprising that increasing numbers of small and medium-sized businesses are adopting Cloud Computing. According to recent research, more than one third of them are already using hosted applications over the Cloud, and of those which are not, over half plan to start doing so in the next twelve months, this represents a quite remarkable rate of take-up.
A key enabler for this rapid and accelerating rate of adoption is that deploying a hosted applications strategy over the Cloud need not be an 'all or nothing' affair. The vast majority of practices using hosted applications - even the largest ones - have done so in a staged fashion, targeting first those areas where the greatest benefits were to be realised. The ability to approach the technology in this way is extremely attractive, as it enables practices to test the hosted approach in one area, assessing the benefits it brings, before committing further areas.
The 5 "must have" qualities of any Cloud services provider
Choosing the right company will provide you with the service, quality, value for money and the peace of mind you need.
1) Competence & Expertise
The ability to listen and understand your specific needs and requirements - combined with a sound, demonstrable understanding of the technology - is essential to ensure that you receive the best possible advice and service. Credentials in the form of accreditations must be checked, and references should be taken up to endorse technical, quality and competence.
2) Proven Track Record
Expect suppliers to provide evidence of experience in the form of testimonials and references that demonstrate the capabilities of the company, reducing your risk on selection.
3) Planning
The key to the successful delivery of your requirements is adequate planning and preparation, even at short notice. Look for evidence of previous projects that are similar in size and scope to yours. Setting realistic expectations ensures that services may be provided on time and on budget. Expect regular progress reports.
4) Response
You should expect the following commitment from your supplier for all of your Cloud Hosting requirements, large and small:
- Honest, free advice
- Service - expect your supplier to deliver, every time
- Management - accessibility and consistency are paramount
- Taking responsibility - your supplier should be expected to perform as part of your team, and not hide behind other contractors
- Develop a relationship based upon trust and total commitment to your project
5) Value for Money and Guarantees
You should receive a clear, comprehensive description of works covered under each quotation and just as importantly any that are not covered. Guarantees are your peace of mind, demand meaningful safeguards against failure to deliver what is agreed.
Summary of benefits
The market is becoming increasingly interesting, however, with the arrival on the scene of a range of high value-add applications, such as CRM, Accounts, Payroll and Collaboration suites. Moving to a Cloud Computing model can help organisations of any size take advantage of these technologies.
Medium sized organisations or SMBs are often frustrated with the difficult decisions they have to make in respect of their future IT infrastructure requirements. These organisations are fully aware that they require a sufficient level of technology to be able function effectively, but are often unable to bear the capital costs that go with setting up and maintaining the technology. This frustration can be alleviated by moving some or all of their requirements to the Cloud.
If circumstances change, practices using Cloud based solutions, have the flexibility to increase, decrease and even terminate service contracts within reasonable timescales. This ensures that any organisation can adjust cloud resources as it expands and contracts, therefore always maximising return on investment.
If you would like to know more about Cloud Computing for the accountancy and finance profession then contact one of our experts on 01635 234100 or e-mail us at info@perceptive-online.com
February 2010