Many people have used cloud computing without realizing it.
For example, anyone with a Hotmail or Gmail account is already ‘in the cloud’, as the software and data are stored remotely and are accessible from any computer, not just the user’s.
Cloud-based software or applications offer a number of potential beneﬁts for small to medium-sized businesses (SMEs). For example, the cloud alleviates the need for businesses to store and manage data and maintain computer hardware.
With cloud-based applications, an SME could in theory operate from a single computer with a standard modem providing an internet connection, without being connected to a server or having speciﬁc software installed on the computer.
The cloud also offers access to data storage, email systems, customer relationship management applications, accounting and ﬁnance solutions and productivity tools. Models allowing a user to pay a monthly fee for access to a cloud-based application are becoming more prevalent.
Recently, there have been major developments in accounting and bookkeeping applications, with software providers such as Xero, MYOB, and Reckon (QuickBooks) developing products that allow SMEs access to their accounting packages online. This means SMEs can manage their bookkeeping, accounting and ﬁnancial needs without the IT infrastructure that would have been necessary in the past. In most cases these applications allow remote access from any smartphone or tablet with an internet connection, not just a PC or laptop.
One advantage of this approach is that communication and decision-making become far more efﬁcient, and at a reduced cost. Gone are the days of reconciliation and data entry before ﬁnancial decisions can be made. Now the banks feed electronic banking information directly into software, and transactions are identiﬁed, matched and reconciled in real time.
This enables business owners and managers to better focus on their businesses’ performance and ﬁnancial metrics rather than the processing of entries and collation of data.
However, the potential beneﬁts of cloud applications need to be balanced and assessed against the risks they present. The most obvious issues include: Where is my data stored and who can access it? Does the software provider have data recovery and backup procedures? In which country is the provider’s servers located and under whose law is the data protected? What security measures have been put in place by the software provider, including ﬁrewalls, virus protection, and hacking protection?
These areas must be considered before any decision is made to move sensitive business and ﬁnancial information into the cloud. SMEs should carefully consider their use of cloud-based applications to take into account the risks and beneﬁts as part of their overall IT and business strategies.
This is a slightly amended version of an article written by Aaron Murden of HLB Mann Judd. It has been shortened to make it suitable for web publishing.
The idea of ‘cloud computing’ is to use the internet to access software rather than physically installing it on a computer. It is sometimes also called ‘Software as a Service’ (SaaS).