This post is one of a series originally written for the Sage Business Experts blog
We all hear constant talk about “the cloud” and how it is the future for business software systems, and there are plenty of opinions around the security aspects and whether it is the right or wrong path to follow.
However, I think it is clear that the world is moving increasingly online, and that it will soon reach a point where it becomes entirely normal to work in “the cloud”, and the more traditional, in-house IT infrastructures will begin to disappear, certainly for the small to medium enterprise.
Partly, this will be driven by cost-savings – hardware can be costly and requires significant capital outlay. Some business may prefer a monthly revenue expense instead. In my experience, the cost argument with regard to cloud computing (which is that it is cheaper) holds water if you cost traditional hardware and licence costs on a three-year replacement cycle.
Of course, if you hang on to your investment until it falls over, you can get a lot more than three years out of it, but there are associated costs of staffing, support and downtime that may serve to offset some of the savings, as well as potentially impacting on your service levels.
So the cost argument is a matter of interpretation and individual circumstances, to an extent. What is beyond doubt is that there is a major cultural shift taking place in the business world, and cloud computing is an integral part of the process.
Moving your core business systems online can massively reduce complexity – it can take away the need for an in-house IT department or the reliance on external advice or support. If you have little or no IT experience, it can take away a lot of worry. The chances are that you have set up a business to sell your goods or services, and not to get bogged down with technology.
All the data security, backing up and software upgrades and licences are usually taken care of by the provider, so you have no administrative concerns either. This is the one point I would make about security – you can virtually guarantee that your data in the cloud will be more secure than your data on the traditional server in the corner of your office. Not only is the data mirrored across multiple disks, in many cases, but it is backed up regularly and the servers are monitored constantly for issues.
Business continuity or disaster recovery is another compelling reason to consider moving online. If you lose access to your cloud system, you tend to find that it is a connectivity problem which will be fixed after a few hours at worst – either the provider has a server problem (usually fixed in minutes as opposed to hours) or you have lost your internet connection. In the latter case, you have the option of relocating to connect up again and you can log back in and carry on working – very little data, if any, has been lost.
If a traditional server fails, you have to obtain and configure a replacement machine, reinstall all the software and recover data from a backup. Not only will this take a day or more to sort out, but you will have lost all data entered since the last backup, so that could be up to a day’s work as well. From a business continuity standpoint, online services are hard to beat.
The biggest contributory factor to the culture shift I mentioned earlier, however, is the ability for collaboration, remote working and opening aspects of your system up to business partners of one sort or another. This can transform the way in which you work.
Businesses can choose to share their accounting data with their accountant, for example – many online accounting systems have an ‘accountant login’ that enables professional partners to run off the reports that they need to generate the accounts, without giving them access to other parts of the system.
Equally, it is sometimes possible to allow your customers or clients access to parts of the system – for project management or customer service reasons, for example. Clients can post their own support requests, and follow the process of them, or see their order history – all sorts of options exist, depending on your line of business.
Because moving systems of any sort is a big step, it does need careful planning. Financial systems in particular need to be treated with care – for instance, plan a period of parallel running between the old and new systems. At least a full quarter would be my recommendation.
It’s also an opportunity to tidy up your data – make sure all your names and addresses are up to date and correct, as far as is possible, and plan not to migrate over redundant data. I quite often see businesses decide upon a cut-off date, so they migrate across only (say) a year’s order data, but they bring across every customer record they have and not just the ones that relate to the migrated orders. This just results in an address book half full of redundant data before you even start!
Finally, one of the great opportunities that online software provides is that of enhancing the system further down the line by utilising modules and add-ons. Make sure, therefore, that you do your homework and check that the system you buy into has some potential. Either it is a modular system that can build into a full enterprise system as you need it to, or it’s a core system with plenty of tried and tested add-ons, or one that integrates with other cloud systems.
So you may start with accounts, and then want to expand into CRM, project management or email marketing – whatever the potential requirement, make sure that the system you buy into has the potential, otherwise you will just need to move again in order to find an accounts system that does integrate with a CRM at some point! It’s not difficult to do this research, as the cloud providers know that these integrations are major selling points, so they are usually quick to advertise them.
The cloud is an especially good place to look if you are a startup, as it can save you from making some very expensive mistakes with technology investments – you don’t need to make the capital outlay and if the business changes direction or even fails, you are not left with an IT infrastructure that is either unfit for purpose or not required at all.
Whatever you do in terms of cloud computing, don’t be frightened off by it. There is a huge amount of jargon, as there always is in IT, but the concept is simple. There is a real opportunity to transform your business if you already have some history, or to start off on the right foot if you are a new business.
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