Is the Cloud Ready Yet? Let’s Ask the Accountants

This is a guest post submission from Hunter Richards, who blogs about online accounting software. The original article has a survey which asks whether or not accountants are recommending the cloud. It’s located here: Is the Cloud Ready Yet? Let’s Ask the Accountants.

–

Technology enthusiasts have long praised the cost savings and simplicity of cloud computing, but accounting firms may still require convincing. I tracked down some professionals to ask about their impressions of the cloud. There are a few remaining doubts, but current trends suggest that all of these doubts will soon be alleviated.

“I’m a firm believer in [the cloud] – I really am,” says Carolyn Duffy, who directs business advisory services for Hein & Associates. “But if I had some special legacy system, I would have to look at the integration issue.”

Concerns from accounting firms about integration—or software customization, cost or IT services quality—should grab software makers’ attention, given accounting firms’ history of influencing clients’ software-purchasing decisions. The list of concerns may initially seem troubling for cloud adoption, but vendors are quickly releasing new services and products that ease these doubts.

Customization
“If you have a secret sauce in how you want to handle some orders or how you handle your pricing, then often times the cloud might not be the best way to do that,” says Doug Wiescinski, a partner at accounting firm Plante & Moran.

Accountants often cite customization problems as a reason to avoid the cloud, but software vendors such as NetSuite and Intacct have already gotten the message and have built customization tools. As more of these hit the market, the process could be easier in the cloud than it’s ever been for on-premises systems.

Data Integration
“Every additional outsourced app brings another set of steps to go through to create and delete accounts and a new ID and password for the employee to have to remember,” says John Neall, chief information officer of accounting firm UHY. “That may not seem like a lot. But when you multiply that by the number of apps that employees are required to run, it becomes very time consuming just to maintain operations.”

Cloud applications have typically offered limited application programming interfaces (APIs), middleware and other integration tools that are widely available for on-premises systems. But a number of new middleware offerings, such as Informatica, SnapLogic and Dell’s Boomi, are beginning to fill the void with mature APIs and other products – so integration is also becoming more convenient.

Cost
“The pricing models [of the cloud] have been inconsistent,” says David McDonald, a senior managing consultant at BKD, another accounting firm. “Usually, once you get to the five-year range, your TCO is higher for the cloud versus on-premise. And you own nothing.”

Some accounting professionals warn that cloud systems can incur a higher total cost of ownership (TCO) than on-premises alternatives, despite its ability to save money with lower up-front costs. But the on-premises approach is often not an option for smaller firms without the up-front cash for professional IT resources. The nature of smaller, recurring payments actually empowers these businesses to use software when it’s otherwise impossible.

IT Staffing
“The added benefit of a team of [in-house] IT professionals that care about the business” can be much more valuable than services from “a vendor hosting thousands of other clients,” says UHY’s Neall.

Accountants also recommend comparing outsourced IT services with the value of a dedicated in-house team. Businesses have a love-hate relationship with IT, so they may prefer to shift that function to the software vendor; this concern is unlikely to have a major deterrence effect.

Software selection is never easy, but moving to the cloud is looking better and better. If accounting firms’ current hesitations are any indication, then the doubts about cloud computing are more vulnerable than ever.

Is Twitter Worth It?

Earlier this year, it seemed that all anyone talked about in the media was this great little tool called Twitter.  Predictably, I was very skeptical of what seemed to be “herd” mentality.  As a CPA, what good could this site do for my brand?  Could it bring me clients?  Could I connect better with my clients?  Colleagues at Symmetry Software seemed to think this was merely a fad and that it would pass with time.  So began my experiment.

What potential benefits are there?

• Recognition of financial expertise in an organized community
• Increased awareness of my brand, AskCPASam
• A chance to interact with other financial professionals
• A way to connect to people I would not normally find
• New way to discover trends in opinions towards the economy
• Through plug-ins, my website content is updated as often as I “tweet”

What I found was a place where spammers routinely “follow” me. The picture attached to the profile of these spammers is often explicit and very embarrassing if anyone decided to see who was following me.  This requires constant monitoring of this group to ensure that it stays professional.  Of course, this means even more work.

Many of my current clients who signed up for Twitter and followed me used the service for a couple weeks and then never came back.  I believe many of those accounts have been removed for inactivity.

While I have certainly connected with individuals outside my normal circles, they have been other financial professionals with whom I share ideas and opinions and new stories.  I post notices when there is a new blog topic and direct folks to my website.  Therein lies the biggest weakness of Twitter.  While it is a community of sorts, it is a community of small attention span.  I have but 140 characters to promote a message.  That message stays within the confines of that platform.  I want my clients, both current and prospective to come to my site and see articles that contain my complete thoughts on a subject.  This is simply not possible in the Twitter platform.

If I were to find a lead on a potential client, there is no good way to contact them and qualify whether or not the lead is legitimate.  This is the anonymous nature of Twitter.

Perhaps you can tell by now that I have become an “unfan”.  Through Facebook and LinkedIn, I can post the same information and reach an audience that I have built of friends and acquaintances who know me.  I can still have my blog articles summarized in posts on those platforms.  Twitter is simply too unprofessional and limiting at this point in its life for me to really see upside potential.  Perhaps future upgrades will help.

I invite your comments.  Perhaps this will be discussed again in the future from another perspective.  Who can tell what way the technology will go.

A Quest For the Cloud

Recently, when my laptop started growling like a hungry bear, it became obvious that it was time for a new laptop.  Not only does this mean I have to research all the different available features, and compare prices from different vendors, I must transfer all my programs over to this new machine.  Unfortunately, many of the programs I used on the old computer with Windows XP, no longer work under Windows Vista.  This is so very frustrating.  Earlier this year, I wrote on the topic of Cloud Computing.  My New Year’s Resolution (which may carry into next year) is to find cloud-based or internet based alternatives for as much as possible. I am a bit of a computer geek anyway and over the years have developed quite a stash of tools for working on various types of projects.

• personal finance – Microsoft Money
• web page creation – Dreamweaver
• tax preparation software – TaxAct
• photo editing – PhotoImpact
• text editing – EditPad Lite
• office programs – OpenOffice
• desktop publishers – PrintMaster
• music slow down software – Transkriber
• password manager – AccessManager
• backups – local external hard drive

For personal finance, I found Buxfer.com to be the easiest.  It allows direct import of all Quicken and Microsoft money files as well as .csv formats if needed.  Using a cloud based solution lets me access my financial data anywhere.

For web page creation, free programs like Drupal and Joomla allow more than enough flexibility for most people.  My blog is created using WordPress which is more free software that allows me to write and post with no software requirement other than a web browser.

Tax preparation, desktop publishing and text editing are a challenge that I don’t know if I can overcome.

Office programs can be replaced by Google docs for simple items.  However, more complex documents simply need a full computer-based editor to work properly.  I imagine this is the next level of innovation coming soon.

My password manager was a big problem.  Whenever I travel, I either need to keep a 2nd copy of my passwords within that program, or be completely out of touch.  The solution is clipperz.com which is a free online password manager.  You can always download a read-only version of your data as a backup in case you have no internet access.

For backups, I use mozy.com.  While not free, it is cloud-based and stores your data (encrypted) offsite in case of a calamity.

Photos can be stored on Flickr.com, picasa.com, smugmug.com or shutterfly.com for free and allow you to share with whomever you choose.  Photos can be edited and fixed using Picnik.com.

The point of this post? If you can find ways to move applications into the cloud, you will find that you don’t need as much computer and it’s much easier to switch between them.  You even have access to your data wherever there is internet access.

Web-based or Computer-based?

Cloud computing is all the rage these days in many different industries.  What is it?  Essentially, it is moving applications and data off the local network or computer and storing it remotely on someone else’s server real estate.  Why is this a big deal?  There are competing schools of thought on this subject.  Truly it is not a new concept.  There has always been the in-house vs. out-source debate.  Cloud computing is just a fancy name for outsourcing.  When a company outsources a portion of their business, a certain level of control goes with it.  Is it safe to do this?

How about some examples?  In a post earlier this year, I gave a list of computer and web-based checkbook/budgeting software packages.  If you install locally, you have control over access to the programs.  However, if you are not at your computer, you have no way to know what is in the program.  If you used a web-based package, you could simply find a computer with internet access and log into your account to see how you are doing.  You can be at a friend’s house, at a conference, or at work and still access it. Someone else takes care of backing up the data so you are not stuck in the case of a hardware failure.

Other examples of outsourced data include:

• Content Management Systems (CMS) for web development rather than an html editor
• Google Docs for spreadsheet and word processing tasks rather than Office
• Gmail/Hotmail/Yahoo for email rather than a local client that downloads all your mail (Outlook)
• Photo storage like Flickr, Shutterfly rather than local storage
• PaycheckCity.com for paycheck calculations rather than PayBreeze
• Mozy for backups rather than tapes and external drives that are not always stored offsite
• Picnik.com for photo editing rather than Photoshop or Paint Shop

There are many other programs that exist.  Feel free to post comments with your examples.

However, as I experienced the other day, what happens if the host or remote computer holding your data goes down?  What happens if your internet access goes down?  There is certainly a risk to the hosted idea, but I think the greater availability of access to the data outweighs these risks.  It’s also much easier to switch computers if you don’t really have anything of value stored locally.  It’s also safer to discard the old hard drives if you know there is nothing personally identifiable on them.