Reaping the Benefits of Cloud Computing
In times gone by everything was on paper. It wasn’t practical to copy incoming correspondence. Documents issued were often in triplicate, with at least two copies kept internally in different files and locations.
Along came on-premise computing, initially to automate processes like sales invoicing, then management information, plus other benefits such as electronic document management and workflow for incoming correspondence. Improvements in telecoms meant multiple sites could be networked, and remote access given to staff and selected business partners. In each case only if you could afford it.
Yes there’s been dozens of hi-profile cases of failure of on-premise systems, in selection, implementation or administration. There’s also plenty of cases that don’t get reported. For example I was discussing a computer audit report with the IT director at a well known electronics company some years ago when all three warning lights lit up on the mainframe room’s wall. He barely flinched, but someone had cut through the datacomms and network cables when replacing the voice system. All contact had been lost with the warehouse, the worldwide network, and even terminals in the same building. Business stopped. The easiest sale of a disaster recovery planning exercise ever!
Best Practice in On-Premise Computing
Over the years “best practice” with on-premise computing has developed so risks can be managed sensibly and cost-effectively. Indeed I can’t think of a case of on-premise failure that isn’t due to not following “best practice” in selection, implementation or administration. That includes failure of part of the procedures, of which failure of an untested backup is probably the most common. There is always a residual risk. But as for any insurance, insurers will typically insist on applying best endeavours, i.e. best practice, to keep risks to a minimum.
The Benefits of Cloud Computing
Along comes cloud computing, which for most of us is applications in the form of SaaS (Software as a Service, formerly known as Application Software Provision, ASP). This can provide several significant benefits, including:
- Contingency, back-up and recovery facilities that are far superior to what is typically achieved in many organisations. (However I’ve heard of at least one IT outsource specialist who has suffered from backup failure.)
- Remote access and other functionality that is far cheaper than could be achieved in-house. In many cases that opens up new possibilities that are not affordable on an in-house basis, for smaller and larger organisations alike.
- Easier to pilot-test and quicker to acquire than on-premise systems (though training, data conversion and other aspects of implementation will be similar for a system of similar complexity and ease of use)
- Reduction of in-house administration, reducing hassle and cost
Handling Pitfalls and Risks of Cloud Computing
However cloud computing introduces new pitfalls and risks, which if not adequately covered stops us benefiting from the cloud either now or if something goes wrong later. “Best practice” is still in its infancy and evolving, and the imminent launch of the Code of Practice from the Cloud Industry Forum (CIF) is a great step. However by necessity the Code suggests what aspects need to be covered by providers, not necessarily how to do so, and will continue to evolve.
There are also aspects which are in the end-users court, such as duplicating internet access with a second method.
One issue that crosses my mind is going concern in audit reports. Detailing key risks has long been a disclosure requirement when listing on a stock exchange, and very often appears in business plans where money is otherwise being raised. Dependency on one customer or supplier is an issue, as of course is dependency in key areas on computing, be it on-premise or cloud.
The production of CIF’s Code highlights what I have felt about the cloud industry for some years:
- That only the better players are suitable for business critical applications. This is especially true if the end-user organisation is so dependent on the system that the organisation’s very existence may be at stake. In the on-premise world, loss of the receivables information has been shown likely to trigger collapse. As people become dependent on cloud systems for more and more of their operations, that risk widens.
- Usage would increase if end-users could be more confident about the issues, to the obvious benefit of the industry
So How Can This Forum Help?
This forum is called a “discussion group”. We shouldn’t forget the benefits of the cloud, which of course is why we’re interested. But I see this forum as a place to discuss, and discussion is inevitably around issues that concern people. I hope the end result is an increase in the use of cloud computing, when we can adequately address the issues.
People will always take risks, whether it is not wearing a car seat belt, not insuring a house, or cutting corners with computing. That’s up to you, but better to know that there is a corner.
I was an early adopter of cloud computing, over 10 years ago. Fingers have been burnt. My own involvement in this forum is much more about self-training, with marketing only a bonus. I have been asking questions where I’m looking for better answers, and several tips and useful insights have emerged. I want to more safely use cloud computing in my own businesses, and more happily recommend cloud computing to clients, subject to the providers for a specific app.
How individual providers address the issues raised in this Forum is therefore an opportunity for them to show their competitive advantage, as some have usefully done in earlier discussions. Or otherwise it’s an opportunity for providers to better understand their customers’ concerns, and think how they can improve their offering or the way it is portrayed.
Over To You
So without needing to focus on any one issue, now’s a chance to discuss how we as end-users and providers want to use this Forum. An opportunity to let off steam, if you wish.
A side-issue is that when I took over the manager position, we wanted to develop this Forum into industry and other apps rather than just those relevant to accounting practices. This is because a lot of the issues are generic across all apps and sizes of business. But recent responses suggest there are specific issues for practitioners that possible justify a separate Forum. I’m happy to start a new one with a wider remit, with perhaps a practitioner running the existing one.
Your views welcomed, with of course the usual professional courtesy should there be any disagreement. Debate is good!