By Raef Lawson, Ph.D., CMA, CPA, vice president of research, IMA
Some metaphors are perfect, enabling you to conjure up a precise image in your mind. Other metaphors: not so much. If you’re confused by the term ‘the cloud,’ you’re not alone. But ‘the cloud’ is easier to understand than you think – and it has the potential to reshape the business and accountancy profession over the next decade and beyond, according to a recent report from ACCA and IMA, Digital Darwinism: Thriving in the Face of Technology Change,
In the early days, ‘the cloud’ was simply a metaphor for the internet. As this evolved from a network that connects millions of computers into a network of interactive computing platforms, the metaphor evolved too.
Organisations of all kinds now supply and use a growing range of cloud-based IT resources ‘as a service’ rather than ‘as a product’. Physically remote software applications, computing power, and data storage can be accessed online from fixed and mobile devices, providing benefits that can include:
- 24/7 access
- ability to scale up and down to meet demand
- reduced up-front costs
- pay-as-you-go charges based on consumption
- lower management overheads
- reduced maintenance costs
- rapid implementation times
- easier data-sharing and collaboration.
As with many types of technology, levels of adoption vary across geography, industry, size and type of organisation, and profession. In our profession, accountants are already exploiting different types of cloud and cloud-based services. For example, systems for bookkeeping and accounting were among the first software applications available as online services.
There are two types of cloud deployments – public and private – and each brings its own challenges. A recent survey of IT professionals (IDG Enterprise 2013) found that private cloud deployments outnumbered public ones. That’s likely the result of concerns over public cloud resources, including data security, privacy and sovereignty, and the transmission and storage of data outside national boundaries. Many of these concerns are driven by regulations, such as the UK Data Protection Act and the US Patriot Act.
There are other areas where public cloud services and their consumption-based, pay-as-you-go approach can create challenges for accountants and their organisations. For example, lack of integration between systems and their associated data can be a barrier to efficiency. Other concerns range from the expectation that IT systems will be (because they are online) available at all times to the widespread misconception that pay-as-you-go is always the most cost-effective way to resource IT.
Despite these and other challenges, most organisations will continue to access IT resources using both traditional and cloud-based systems well into the foreseeable future. What’s more, the ACCA and IMA research found unanimous agreement on the significance that cloud computing will have as it becomes increasingly adopted by accountants and the finance function; some 72% expect this to happen during 2014-2015.
You can read more about this and other technology trends that are impacting the accounting profession by visiting the ACCA and IMA website, www.roleofcfo.com.