[IMGCAP(1)] It's time for businesses to get out of the IT business and become more strategic and I'd like to explain why.
The product Go to My PC is still used in many businesses even though it has become outdated.
It was designed to allow people to sign into their office PC from places besides the office, and is aggressively promoted in the media. This tool may sound like "wow" technology, but hold the enthusiasm. In fact, it is the antithesis of what current technology is able to do for businesses.
To illustrate, consider what this technology represents and then we'll look at cloud computing, and how it differs.
Here's one scenario to consider:
My company is not in the IT business but you wouldn't know it. We actually manufacture shiny widgets for aerospace. With growing competition, globalization of our offices, and tightened governmental budgets and compliance regulations, our profits are lower on every sale. This is compounded by the growth of our IT spending, year over year. It seems that IT is the one department that is immune from cost cutting.
It also seems to be an ever-growing fixture in our organization, enabled by the fact that they are not shy about telling us that they are the keepers of all our secrets. My company is spending too much time on maintaining and growing an infrastructure of IT staff and everything that comes with it. From a security perspective, I find it odd that to do my work I have to be tethered by internet to my desktop at the office. This means that my PC has to stay on all night.
Does this sound familiar to you? Moreover, should businesses really be perpetuating outdated technology that assumes the comfort of having all your eggs in one "on a desk" basket called "my PC?" Unless you're in the IT business, maybe it's time to consider getting out of the IT business?
Here, in my view is the same company after switching over to cloud computing:
We all just received bigger bonuses this year. Our CFO told us that even though we're competing with international companies in the aerospace widget business, our profits have grown this year as we've streamlined our processes and improved our governmental compliance. We accomplished this in large part due to our cross-department teams working collaboratively to improve our business.
In the course of doing so, we adopted some very prudent technology practices and adopted a wider use of Cloud Computing. Our IT department is less than half the size of what it was last year, and our on-going cost of IT and software maintenance is one-third of what it was last year. What I particularly appreciate is that I'm no longer interrupted by our IT folks doing upgrades to the servers, software or my desktop when I am trying to get my work done. Now I can focus more on my work, worry less about when the next interruption will happen. I love using the Internet to run software that works in my browser and feels like Google, Amazon and other familiar tools that I run on my tablet when I'm away from the office.
Recently I was working at home using our new cloud computing software tools, and my computer hard drive crashed. Everything was lost except the work I was doing at the time of the crash because the data wasn't stored on my machine. Everything was there, just as I left it. When I started again from my son's PC I was able to pick up right where I left off.
This can be one of your clients; a business that has improved changes to process and technology. Migration to this kind of business model isn't simple and it isn't always a happy process; but it is a growing trend among businesses everywhere as improvement, control and better profitability become increasingly important.
Let's look at facts that help demonstrate why cloud computing has enabled businesses to become better at what they do and be more profitable at the same time.
Businesses that focus more on what they do best are usually better than their competitors. People are connected to the internet all the time, and as a result the lines between being connected to work and to personal matters seem to be blurred. Cloud Computing seamlessly fulfills this need.
IT spending comprises costly hardware, vendor products and services, and most importantly, IT personnel. As most of these expenditures become more costly, they also involve headaches that impact all areas of the business, and thereby take a business' focus off of its core raison-d'etre.
IT is among the most ill-managed areas of most businesses. This is because most CFOs and CEOs are not IT wizards.
Cloud computing - particularly in the form of Software as a Service (SaaS - or, software delivered by a publisher via the internet browser), is becoming wide-spread, and represents a way to make businesses less dependent on IT, and more focused on its core mission.
Using SaaS solutions allows CFOs to budget for the use of technology as they do for rent or electricity. This is because SaaS is paid for based on how much of it a business uses, similar to a utility.
SaaS products include software upgrades, maintenance and (a promise of) secure computing environment - all for one, fixed monthly or annual fees they charge. And, with most SaaS products, you're always running the current version of the software, without having to perform manual upgrades at additional cost and hassle.
Keep in mind that security should always be a concern. In most cases, having employees work from a SaaS environment is safer than the security provided by in-house networks and labor-heavy IT departments. It only takes one rogue internal IT staff to delete all of a business' confidential data, trade secrets, and financial and personnel records.
CEOs and CFOs of growing businesses really don't like to be held hostage by anyone, but frequently they feel this way by their IT leaders. SaaS products can be managed by business managers that oversee their use in a company, rather than by the IT department.
Technology should be seen as a way to enable employees to do their work more effectively. SaaS products are often the most advanced in terms of functionality and beneficial processes for the tasks that they are intended to handle.
It is proven that SaaS products deliver large company-level process and functionality such as financial reporting and customer marketing at a fraction of what it would cost to implement and support similar technology in-house on in-house servers.
We are often asked how a business should move to the Cloud. One bite at a time is often the best way, kind of like the "elephant-eating" scenario we've all heard. We recommend advising to start with an assessment of what business processes you most need to manage your business and then determine if there are options available in the SaaS marketplace to help you accomplish these processes. Then you should determine if the SaaS options can provide greater functionality and benefit, regardless of the technology, in comparison to your existing computing tools.
Additionally you should have clients consider the cost of switching to a SaaS solution as it compares to keeping your existing solution. After all of this if you determine that SaaS provides the better options, you may find it is a good time to begin migration towards a SaaS solution.
Finally, the security of reputable SaaS products is more often far stronger than the security of software and information that you host in your server rooms.
As you consider how you can improve your clients' efficiencies, effectiveness and bottom line, consider how cloud computing and in particular, SaaS, can help you get there sooner and more securely. Cloud is real, it's popular with employees and it reduces a business's risk profile in many ways. Most importantly, it allows a business to think more about its mission and less about IT.
Bob Green CPA.CITP is a Partner at the regional CPA firm SingerLewak and its technology consultancy SingerLewak Systems