In my last blog, CFOs, Information, and IT, I wrote about why IT is important to the CFO, and what the CFOs today need to understand about IT.
The Cloud is a hot topic for many in IT today. This is an important topic for CFOs to be understand, because as I mentioned in my previous blog, CFOs today need to be aware of ongoing changes in IT and the impact it can have on them.
What is the Cloud?
“The Cloud” is short for “Cloud Computing”, which Wikipedia defines as the delivery of computing as a service rather than a product, where shared resources (software and data) are provided to computers and devices over the internet.
To get a better understanding of the options when it comes to the Cloud, I went to my fellow CFO Intellectual Exchange Network member Laura Mikovsky, HANA Solution Partner at SAP.
Mikovsky explained that there are 2 options when it comes to the Cloud.
Software as a Service (SAAS) – this is a licensed (per user) model, hosted by a solution provider.
Infrastructure as a Service (IAAS) – this lesser known Cloud solution is more appropriate for larger companies. Essentially, the company is responsible for managing and installing the applications and data they use on remote computers and storage that is running remotely.
“It is important for an organization to define which option is best for them.” says Mikovsky.
What are challenges that CFOs face with the Cloud?
To find out what these challenges were, I spoke with Yehuda Cagen from XVand Technology in Houston. Cagen’s company services small and mid-sized companies in Texas and around the US. Cagen says, “There are two types of challenges CFOs face with the Cloud. The first is that they know what the Cloud is, but are not sure where to start. The second type of CFO isn’t sure what the Cloud is, but their problems can be solved in the Cloud”.
What are some of the benefits of the Cloud?
Less worrying about IT – Cagen quotes one of his CFO clients who, after implementing a Cloud solution from ISUtility, said “I don’t talk about IT anymore”.
Cost and Cash Effectiveness – Paying per user allows for paying for what you need and use, as well as spreading IT costs over a period of time, without making an upfront investment in hardware and implementation. SAAS counters the ongoing uncontrolled costs of upkeep on an IT system installed on premises.
Self-Service – Mikovsky says the working with the Cloud allows the business user to have more control over their IT needs, and be less reliant on the IT department. (This is good news for anyone that has ever waited for IT to deal with a mission critical finance technology issue).
The Mobile CFO – The Superstar CFO: After the Crisis published by CFO Publishing in partnership with SAP, refers to The Mobile CFO. Most CFOs will admit that a lot of work does not happen at the office anymore. Having access to their data and information in the Cloud allows a CFO (and the finance team) to be more mobile, and possibly more effective.
Disaster Recovery and Business Continuity – Stuff happens. Earthquakes, hurricanes and other natural disasters can have a strong negative impact on a business. Moving to the Cloud can allow for a business to continue in unfortunate times. Cagen recommends looking at how this impacts the business, as well as how potential Cloud providers are set up to ensure this continuity.
There have to be downsides to the Cloud. What are they?
Implementation risks – “Garbage in, Garbage Out” applies. We have all seen the impacts of a bad implementation. Becoming involved with the needs analysis and planning of implementation should lead to reducing implementation risk when it comes to the Cloud.
Security – Finance people are often able to better understand what they can see. Not having your computers and systems on-site can feel uncomfortable to a CFO. If the computer equipment is all locked up in a room, CFOs feel more secure. But this may not necessarily be the case. It is possible to have better security off-site than on. Asking the right questions can lead to better sleep patterns – at least about IT. Cagen recommends that CFOs put their potential Cloud providers in the hot seat and ask them the tough questions about security.
Backup Recovery – Systems work. Most of the time. Sometimes they fail. Ensuring recovery via testing of backups is critical to any system implementation. The Cloud is no exception.
As CFO, you should not expect to be an IT expert. Understanding key IT concepts, such as the Cloud, will allow you to understand how you can better access the data and information you need to make more appropriate decisions.
Have you moved some or all of your systems to the Cloud? How has the Cloud impacted your finance team and organization?
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