ACT422, SECTION 1
Cloud computing is the storage and access of data over the internet instead of the usual hard drive. It has become a thriving market for providers of cloud services and it is projected to generate a staggering 500 billion dollars by 2020. The cloud is basically another word for the internet. The rise of cloud technology means that businesses and individuals can share work and personal data across the global in a secured way. According to Forbes magazine's financial council contributor Lee Reams “we're already experiencing incredible leaps in tech; bots and cloud accounting solutions make it easier than ever for small business owners to manage their accounting and bookkeeping tasks with the efficiency that only their larger counterparts formerly enjoyed”(8).
There are multiple benefits of cloud computing which is why its' use has grown exponentially in the last decade. Among these benefits is fast implementation if you choose to use it. For individuals this is relatively easy and can be as simple as utilizing the desired app, however, for large business it may take a few days or weeks to have the applications set up to the companies specifications. Another is the cost component; there are usually no upfront fees for things like licensing, integration and consulting. This reduces the capital expenditure that could be incurred and oftentimes companies can eliminate these costs all together by paying a monthly installment fee for their use of the cloud software service. The other desirable feature is the instant scalability available when using cloud-based apps, this means that individuals and companies can change the number of users on their applications to fit their needs, and they will not have worry about capacity issues. Expanding capacity to fit demand is as simple as contacting the cloud service provider, which is better than investing in an expensive hard drives to do so.
Reduced maintenance costs is also another advantage to take into consideration. Without the use of the cloud, a company's IT department may spend days updating their systems to meet new specifications. But, with the cloud this process is eliminated, which means that the staff has more time to focus on completing other business functions. Perhaps the most important benefit is the ability to access cloud applications anyway on any device, and with better security than would be available on computers with the data stored inside. In the event that company computers are lost a security breach for the company is a concern, but with the cloud only individuals with the necessary security clearance can access the data. The cloud service provider monitors this to ensure that security is at high levels.
Security is a factor that many business invest a lot of capital in, so there has been some speculations about how safe the cloud is. With this in mind providers like Salesforce “ is aware that the confidentiality, integrity and availability of our customers' data is critical to their business processes and our own success. With our tiered approach to cloud security we protect the most important data, in which we monitor our application, systems and processes continuously and optimized so that they meet the increasing demands and safety requirements”(2). These qualities are integral parts that service provider work to maintain and improve.
Companies can choose various methods to implement cloud technology into their business. They include; Software -as-a-service (SaaS ), that is when a company subscribes to an application it accesses over the internet. Then there is Platform-as-a-service (PaaS), where the business creates its own custom applications for use by everyone in the company. And lastly, there is the Infrastructure-as-a-Service (IaaS), where providers like Amazon, Microsoft, Google, and Rackspace provide the backbone that can be rented out by other companies.
Many businesses are opting to use the PaaS route because it allows developers and business users to build apps with codes and development tools all accessible on the cloud. This is cheaper than creating the app in-house because of the low setup costs. This means that apps can be created faster. it's a great option for companies that are already outsourcing other aspects of their business process like recruitment and marketing.
In 2015, PricewaterhouseCoopers became the first big consulting firm to partner with a cloud provider like Salesforce. The collaboration with Salesforce worked at the intersection of business and technology to bring innovative solutions to its consumers. This alliance has enabled Pwc to provide greater value for its clients through its' consulting service offerings. Pwc works in various industries to help businesses reach their potential, one of its clients; a Health and Dietary Service provider wanted to migrate their Sales cloud to a Not-for-profit one, and searched for a solution to cope with their increasing volume of website call requests. To solve this problem, Pwc worked with the client using Sales and Marketing Cloud. The business migrated from its existing Sales cloud and integrated to Facebook lead forms using Lead Capture for Salesforce. “The solution delivered fully functioning Sales Cloud instance, fit for purpose, with integration to Marketing Cloud. The new Salesforce instance aligned with business processes, and the transition to lightning gave the sales team renewed engagement with Salesforce”(4).
Following this, other accounting firms followed suit. In October 2016, BDO announced a worldwide strategic alliance with Microsoft, intended to combine technology and service to transform their clients businesses. Through the alliance BDO launched BDODrive. Which provides real-time mobile view of a company's performance and access to employees that can provide in-depth analysis on the data, as well as help the business to find opportunities and implement strategies for growth. BDO also has a partnership with Inuit QuickBooks to achieve a similar objective for its smaller business clients(9).
It is important to note that these partnerships did not only work to the benefit of the consumers but it provided each party with increases in revenue because they charged additional fees for the premium service and also demand increased in the new service offering. Customer satisfaction improved retention and expansion of market share.
The price for the cloud various depending on the provider and the specifications required by the company in need of it.
Above is Amazon's AWS database migration service pricing. AWS is supposed to help you move to a new database easily at low cost. This is offered on-demand, so Amazon will charge the company by the hour only for the capacity used during the transfer. This reduces the cost implications attributable to planning, purchasing, and maintaining hardware, which makes the migration process fast and inexpensive. “AWS Database Migration Service also supports continuous data replication. You have the option of enabling Multi-AZ which provides a replication stream that is fault tolerant through redundant replication servers”(10). As shown in the table above location has an impact on the cost of the service, it is about $5.935 more expensive per hour to use the r4.16xlarge instance migration service in Paris than in North Virginia. Other cloud services provided by Amazon like data storage often contain a fixed rate multiplied by the gigabytes used as shown below.
The gradual migration of businesses to cloud computing has affected the field of accounting as evident in how Pwc applied the services offered by Salesforce to help its clients to solve problems. So not only do accountants have to be knowledgeable in their area of expertise, they need to know the numerous IT technologies that are available via the cloud. The impact of cloud computing doesn't only affect data storage but also business processes for example invoicing, which can now be scanned with mobile devices and its automatically uploaded into the cloud accounting system like Invoicera that can then generate other relevant information that the business owner can use. With programs like this real-time financial information is accessed quicker. In turn, clients will also expect to have immediate access to balance sheets and other documents. Accountants can leverage this demand by offering more services to suit this growth (5).
The graph below shows that about 95 percent of business are using some sort of cloud services. Understanding how to make the cloud more efficient is another thing that an accountant should consider. The cloud has grown in complexity and if not utilized properly it can be risky for a business, because implementing the cloud solution may be costly and lead to loss of time and resources (6).
As the functions usually performed by accountants are being done faster with automated solutions available on the cloud. Critiques question its impact on the job market, however “We're already seeing a displacement of jobs in the accounting industry through outsourcing and robotic process automation, among other trends, yet the role of traditional accountants is expanding well beyond simple reporting measures”(7). The Genpact Research Institute analyzed data from 1120 LinkedIn users with prior accounting job histories and found that one third currently hold positions unrelated to the field. The pie chart below shows the various areas that accountants can work, which demonstrates that despite loss of certain accounting positions due to technological advancements in the cloud, accountant have the ability to work across organizations in various roles; from human resources to supply chain management (7).
Cloud computing will continue to grow as people figure out new innovative ways to apply technology to improve efficiency and profitability in the world of business. This will have an effect on consumers, accountants and business owners alike. This might lead to greater competition as companies fight to gain market share through thorough application of the latest data analytical tools via the cloud. The IT field will experience a growth in job opportunities as evolving businesses will require professionals that are able to analyze the vast data available to help them achieves their objectives. Data analytics courses or a degree will help accountants to be well equipped for the job. Ultimately, “what the cloud accounting revolution really enables isn't a future where accountants are out of a job, but a very real and valuable opportunity for accountants to help their business clients in ways that were not available even five years ago”(8).
...(download the rest of the essay above)