Should your firm be in the cloud?
By now – whether you practicing as an accountant in the public, private, education or government sphere – you have undoubtedly been hit from all sides regarding the benefits and advantages of cloud computing. Have you ever questioned this advice? Have you ever asked yourself: Should I really be on the cloud?
The PC revolution
Think back, it wasn’t that long ago that the personal computer was first introduced into accountancy. I witnessed first-hand how the information technology explosion of the 80's changed my firm and our profession forever.
When first introduced, the personal computer revolutionised the way we processed work throughout our profession. The days of seven and fourteen column pads were slowly disappearing as we used early spreadsheet applications to work up trial balances, financial statements and cash flows projections. Early word processing applications allowed us to prepare, update and revise financial statements and other reports quickly and easily.
The introduction of the PC also allowed us to become extremely productive. The PC significantly cut down on the amount of time spent on engagements by allowing us to pro-forma spreadsheets and reports from those previously prepared.
As vendors that serviced our space began to deploy PC-based applications to meet demands, we started to witness the migration of work from off-site datacentres to the CPA firm itself. No one area was more impacted than tax preparation. The days of an accounting firm filling in grid sheets and waiting hours or even days to receive the completed return from the service provider were over.
Soon after PCs began to proliferate throughout our profession, the internet went through a similar growth period. Early versions of web browsers allowed accountant to access and research information and made us more productive.
With the explosion and growth of the internet, vendors began to realise that its infrastructure allowed for greater flexibility in application delivery.
However, although the internet provided 24/7 access to a significant amount of information, many in our profession were concerned about the security surrounding private and confidential client information. Primarily, most were concerned about the unknown - the unknown being where data was stored and what controls were in place to ensure that data could not be compromised.
As time passed, financial institutions, on-line retailers, credit card companies and others began to use the internet as their primary channel to reach consumers and store their confidential and private information. With this came rules and regulations by nearly every country regarding the protection of consumer private and confidential data.
It wasn’t long before our profession also began to embrace the internet as a place to access information and store data. The "cloud computing" era has arrived and is here to stay!
So, should you be in the cloud?
No, let me rephrase that… Absolutely Yes.
Just as our profession embraced the PC as a necessary business tool, the cloud is no different. The explosion of the reach and power of the internet is undeniable. Tapping into the enormous network in the cloud allows sole practitioners to utilise the same platforms and applications as the largest firms in the world. The days of having a competitive technological advantage due to size, are over!
Is the cloud a more “cost effective” way of doing business?
I would argue no!
The cloud model, if done right, simply allocates those technology-spending dollars differently. Instead of investing in an infrastructure with a life span of three-five years, the cloud model takes those dollars and spreads them fairly equally over your contract life with the cloud provider.
When we speak about cloud computing it helps to understand it in terms of what it means today. Today, cloud computing can be generally broken down as:
- Software as a Service (SaaS)
- Platform as a Service (PaaS)
- Infrastructure as a Service (IaaS)
Meaning of cloud computing today
Software as a service
Description = To utilise the service provider's applications running on a cloud infrastructure
Example today = Accounting/ERP - Intacct
Platform as a service
Description = To deploy onto the cloud infrastructure consumer-created or acquired applications created using programming languages and tools supported by the service provider
Example today = Multi-use platform with integrated development environment - Netsuite
Infrastructure as a service
Description = To provision processing, storage, networks, and other fundamental computing resources where the consumer is able to deploy and run arbitrary software
Example today = Hosting & backup - Amazon web services
In addition, as the cloud model matures and as there is a heightened awareness of security breaches and compromises of personal and confidential information, interest in the ‘private cloud’ model is growing.
The private cloud model, simply put, places the cloud under the control of the firm. In a standard private cloud model, the firm dictates where the application and data are stored. Under this model, the application and data are generally stored in a datacentre under the direct control or supervision of the firm.
We have made tremendous progress in our profession thanks to the internet and cloud computing. Putting the benefits of social networking aside, most firms today utilise this model for tax preparation, engagement management, practice management, research, client collaboration and data management, including storage of data and delivery and receipt of data from clients and other third parties.
There’s no better time than now to get up to speed and take advantage of the benefits of cloud computing within your own practice. Leveraged properly, cloud computing can improve cost-effectiveness and help grow your practice.