Pillar 6: Technology – The Cloud – Part 2

pillar6-part2

The series is from Chartered Accountant, consultant and author, Jeff Borschowa, from his book, 8 Pillars for Exponential Business Growth. The series is focused on how to find new and better ways to integrate innovation and technology to enhance the customer experience and improve efficiency in the accounting process.

Part 2 – Core Benefits of Cloud Computing

Cloud solutions can provide greater security. However, the real benefits usually revolve around availability, cost effectiveness, flexibility and scalability.

Cloud providers will usually have a written guarantee to demonstrate that their systems will be available. Most offer some variant of 99.99% “up time”. You can even get greater up time, usually measured by another 0.009%, if you are willing to pay higher fees. It all comes down to how much down time will impact your business.

Cloud solutions are cost effective, flexible and scalable, because you can often pay only for what you need. If you need five users, you pay for five users. If you add a sixth user, you pay for one more. Cloud solutions are built on large-scale hardware, so they can easily accommodate the addition or removal of team members on your side. We will focus more on costs in the next section, virtual versus physical servers.

Virtual versus physical servers
A lot of small businesses have spent considerable time, energy, and money getting physical servers set up and customized to meet their business needs. A physical server usually brings with it costs that may not always be included in the initial budget:

• Up-front costs – including setup, installation and customization.
• Ongoing costs – including regular maintenance, updates, and upgrades.
• Capital costs – additional costs to upgrade existing work stations to interact effectively with the server.
• Upgrade costs – costs to enhance server performance should the business expand and add users.

The costs can be significant and are usually heavily weighted up front. On the other hand, a virtual or cloud server has a predictable cost structure. You select the resources that you require and you pay a set monthly fee for those resources. No surprises, no unforeseen expenditures, completely predictable. From a cash flow perspective, this is a major benefit for many small businesses. Virtual servers are also scalable, as you can add more computing resources as needed, often without any down time to the server.

You will note a bias in this series towards virtual servers. I have seen many businesses burdened with expensive information technology systems and related maintenance costs. Maintenance can be a significant component of a server’s cost and you really have to hope that your information technology person knows what they are doing. With a virtual server, maintenance is included in the cost. Because the information technology people are maintaining a large number of servers, the cloud providers can hire the right specialist to do things, as opposed to the generalists that are currently working on our local servers.

Examples of cloud technology
The following are a few examples of cloud technology that support the 8 Pillars by helping your business improve efficiency, and reduce your operating costs:
• Zoho Books (https://www.zoho.com/books) – accounting package.
• Zoho CRM (https://www.zoho.com/crm) – Customer Relationship Management software.
• ShareFile (http://www.sharefile.com/) – alternative to a customer portal, allows you to share data securely over the Internet.
• ProWorkFlow – www.proworkflow.com – project management and tracking software.
• GoToMyPC (http://www.gotomypc.ca/) – remotely access your computer through the Internet.
• DocuSign – www.docusign.com – tool to manage digital signatures.