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When It Comes to Accounting, Cloud Computing Benefits May Overshadow Challenges

The cloud presents CFOs with an opportunity to improve productivity, open up lines of communication throughout the company, and make employees more efficient. However, many CFOs are fearful of moving accounting to the cloud, and they have good reason. There are several concerns that can stem from the migration to an online storage solution, but the question is: Do the benefits of the cloud outweigh the challenges that stem from implementation and integration?

Is the Company Ready to Embrace the Cloud?
CFOs must make sure their company has been planning the migration to the cloud for quite some time before shifting processes to an online storage solution. According to research from KPMG, business process realignment must accompany the transition to the cloud to avoid the complexities that often occur when companies try to move processes from an on-premise deployment to a virtual infrastructure without much thought to the big picture.

"One of the most important lessons uncovered by this research is that business process redesign needs to be done in tandem with cloud adoption if organizations hope to achieve the full potential of their cloud investments," said Rick Wright, global cloud enablement program leader and a principal with KPMG in the U.S. "Executives have found that simultaneous process redesign is central to addressing the complexities that often arise in the implementation and operational phases of cloud adoption."

Don't Invest in the Wrong Cloud Infrastructure
During his address at the recent Proformative webinar "What's Stopping CFOs from Moving Accounting To The Cloud?", Bob McAdam, vice president of finance at Dynamic Communities Inc., talked about how he knew his company was ready for the cloud when the company wanted to upgrade its enterprise resource planning and customer relationship management systems, which were in a hosted environment. McAdam viewed the cloud environment as the next step for his company.

"If you bite off more than you can chew, it's going to come back and get you later, so assess your resources, assess your needs, and determine what makes sense for your organization," said McAdam. "These are complex technologies, and you need to roll them out carefully."

When deciding on a cloud environment, CFOs must not act with haste. Before making any decisions, much research is needed, as well as conversations with professionals who are already using the cloud, said Greg Pierce, vice president of Tribridge Concerto Cloud Services, during the Proformative webinar. 

"You need to be able to trust your cloud provider, and if you have somebody that you've worked with in the past, and they are able to provide a cloud solution, that's a really good place to start," said Pierce.

Are the Cost Savings Real?
Many executives who begin using the cloud boast about its ability to allow their organizations to save money that can be directed toward process improvements. A cloud switch moves companies way from long-term contracts with providers, letting them pay only for the server capacity they use and only when they need it. Plus, it may alleviate some need for man-hours. While that will result in a cut in IT expenses, before beginning a cloud deployment, businesses must research the total cost of ownership for their virtual infrastructure. Understanding the costs for software, hardware, maintenance, and storage capacity are all vital for maximizing cost savings. 

"Moving the cloud meant not having to invest in infrastructure, or networks, or datacenters," said McAdam, when discussing some of the ways his company was able to procure funds since its cloud deployment.

Accounting Is Made Easier in the Cloud
CPA firms have avoided client accounting services in the past years, as it was seen as more bothersome and unprofitable than helpful to the company as a whole. But now, by moving accounting services to the cloud, firms are jumping at the chance to add to their customer base, according to a recent report written by Geoffrey Moore, tech consultant and bestselling author of "Crossing the Chasm."

Similarly, CFOs can see a similar result when moving their accounting systems to a virtual infrastructure. By becoming digital, and using innovations in technology, businesses are able to automate certain processes that make budgeting and forecasting much easier than in the past. With accounting in the cloud, business applications can be deployed to improve the performance of the finance sector as a whole.

"The key to capitalizing on this new set of opportunities is to free up professional time to devote to such analytics, to use that time to determine the key performance indicators for your client's business, and to work with the business intelligence software to develop simple dashboards that make performance factors readily visible," said Moore.

The migration to the cloud proves to provide several advantages to firms that are managing their books via web-based processes. While it might be problematic at the outset, investing in a virtual infrastructure may prove to be worthwhile.

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