[IMGCAP(1)]As tax and audit season approaches, it’s a good time to look at the benefits of cloud computing, and more precisely, how accounting firms can optimize use of the tremendous wealth of data available to them in the cloud.
The cost efficiencies in faster collection and analysis of critical data – via the cloud – are an attractive proposition for any business but how do we get there?
At the heart of cloud computing is Software as a Service (SaaS) technology, which enables data to reside in the cloud. Accounting and financial services firms are moving more data to the cloud as they see the inherent benefits. Forrester Research estimates the total SaaS software market to reach $75 billion by 2014, driven by enterprises’ increasing use of smart computing applications for everything from business intelligence to financial management systems to risk management.
Enterprises want to access this financial management data quickly and, when required, in real time. For both internal and outsourced accounting and financial services, ease of data access is of paramount concern. One example would be if you wanted to pull in data from three different cloud applications -- perhaps contracts in Salesforce, invoices in NetSuite, and subscription details in Zuora. In order to analyze contract compliance, ease of reporting on this data is absolutely critical.
Fortunately, SaaS technology is evolving so that it is now possible to retrieve data from these disparate sources in the cloud, without either tedious manual processes (think CSV downloads into Excel) or implementing a time consuming and expensive-to-build data warehouse. This new approach is called cloud data virtualization. It enables enterprises to connect instantly to their cloud application data at a fraction of the cost, delivered in a cloud-based model.
Cloud data virtualization enables intricate analytic reports to be developed far more quickly, across multiple cloud applications, with fresher data. Enterprises are increasingly making use of this connection technology for better reporting and management.
For example, a controller at an enterprise software company needs to reconcile contracts in custom fields in Salesforce.com with invoices in their cloud-based financial management system to meet audit compliance. Previously, they executed a 2011 audit that took months by the finance team and auditors to adequately reconcile invoices with contracts. After an implementation of cloud data virtualization – which took less than two days - the 2012 audit was completed without delays or challenges.
Another example is an accounting practice which is focused on supporting franchisors. The firm previously downloaded data from each franchisee’s accounting system into Microsoft Excel and then had to manually aggregate it to create franchisor level reports. This task required multiple full-time resources to complete on a monthly basis, with no ability to provide real-time snapshots of business operations.
Using cloud data virtualization, the accounting practice has been able to automate the delivery of the franchisor reports, reducing the cost by fifteen times, while improving service levels, including increasing the frequency of reporting.
Cloud data virtualization enables enterprises to access data from where it resides in the cloud, eliminating the need to first move the data into a warehouse. The data stays where it is and, via cloud-based solutions, can be used to generate reports and analytics containing data from one, or from multiple hosted applications. The advantage is that this can be accomplished without additional IT work or costly hardware and software investments. The ROI on using cloud data virtualization is realized immediately, as opposed to a payback that can easily take two years to realize, given the significant upfront costs of data warehousing.
As the accounting industry continues to transition to the cloud, now is the time to explore advancements such as cloud data virtualization, in order to put cloud-based systems in place, from the start, that will result in optimum performance and ROI.
Ajay Singh is CEO of Elastic Intelligence, developer and marketer of Connection Cloud, a PaaS (Platform-as-a-Service) product enabling real-time access to SaaS data.