cloud computing for cpas: what your client will ask you
TRANSCRIPT
• Financial ManagementMicrosoft Dynamics GP, Microsoft Dynamics SL, and Intacct
• Customer Relationship ManagementMicrosoft Dynamics CRM
• Collaboration, Workflow and AnalysisMicrosoft Office SharePoint Server and SharePoint Online
• Data Integrations, Reporting, and AnalysisMicrosoft SQL Server and Microsoft Reporting Services
• Budgeting and ForecastingMicrosoft Forecaster
• Application and Network Infrastructure ServicesOn-Premise Network and Cloud Services Engineering
• Cloud ServicesOffice 365 Online, Lync, SharePoint Online
• Strategic Infrastructure ConsultingOutsourced CTO Services
• Staffing ServicesTemporary and Full-Time Dynamics GP, SL, NAV and AX Staffing Services
Plus End User Education and Dedicated User Support
� Why All The Hype about Cloud Computing?
� What Are The Economics of Cloud Computing?
� What Are Some Of The Compliance and
Security Issues of Cloud Computing?
� What Should Your Client Consider When They
Enter Into Cloud Contract?
� They use some cloud services now and they will use
more in the future
� They are exploring some options and plan to use cloud
services in the upcoming year
� They don’t use cloud services
� They don’t know what “cloud computing” means
CFOs have a strong desire to change their organizational
role within their company to that of business accelerator,
rather than a score keeper …
Current Role
Score Keeper
30%
Gate Keeper
30%
Provider of
Analysis
32%Business
Accelerator
8%
Score Keeper
4%
Gate Keeper
4%Provider of
Analysis
29%
Business
Accelerator
63%
Desired Role
Source: Armanino McKenna, “The CFO Evolution – 2011 Benchmark Survey Results”, Dec 2010
… however, inefficiency in the accounting function often
thwarts the desire to focus on business leadership activities
motivating their need to switch financial management
solutions
Top Issues for CFO Organizations
Other
Managing investments
Implementing a new ERP system
Improving controls and compliance
Improving finance and accounting business processes
Improving information provided to managers in the organization
Improving operational business processes
Managing cash and budget
3%
4%
5%
9%
16%
20%
20%
23%
Source: Armanino McKenna, “The CFO Evolution – 2011 Benchmark Survey Results”, Dec 2010
Source – March 1st - CFO Magazine – Kim Girard; http://www.cfo.com/article.cfm/14557408/c_14557613
Source – March 1st - CFO Magazine – Kim Girard; http://www.cfo.com/article.cfm/14557408/c_14557613
Virtualization
Hosting
Cloud Computing
1. Service-based: “well defined” service interface
2. Scalable and elastic: key benefit, scales up/down
3. Shared: pooled to meet multiple client needs (virtualized)
4. Metered by use: determined by client’s use (Servers = CPU,
Storage = Meg, License = User)
5. Uses Internet technologies: Internet identifiers, protocols
Source: Gartner June 2009 “Five Refining
Attributes of Public and Private Cloud Computing”
Delivering on all
five attributes
increases the
value of the
service to the
client
Example Companies currently offering Cloud
(but are not limited to):
• Amazon Web Services
• Google , IBM
• Intacct, Microsoft, Salesforce.com
Cloud Hybrid Continuum
� On-premise product resale
• On-premise product re-sale, product related services, etc.
� On-premise hosted
• Hosting, platform, solution, or data resides on-premise
� Off-premise hosted
• Hosting, platform, solution, and data resides at third party
� Private Cloud Computing
� utilizes servers, storage, software and Cloud tools to build private customer Clouds behind your firewalls
� Public Cloud Computing
� encompasses three main concepts: pay-as-you-go, on-demand and on the Net.
Cloud Computing:
� Software as a Service
� SaaS vendors (e.g., Intacct, Salesforce.com and Office 365) supply the application on a recurring revenue basis, often priced by user by the month.
� Platform as a Service
• PaaS delivers development servers/environments and tools as a service, for example Microsoft Azure.
� Infrastructure as a Service
• IaaS is essentially the virtualization of the data center enabling the on-demand purchase of storage and server capacity, for example Amazon or Rackspace.
� Potential Cost Savings
� Lower Capital Costs
� Internal Operational
� Scalability
� Telework Potential
� Business Continuity
� Upgrades/Service Packs
� Frees up IT for strategic goals and revenue
Lower Upfront
Infrastructure Costs
Long Term Rental and
Management Costs
Ranked Highest:
� Lower up-front infrastructure costs
� Rapid deployment of applications
Source: Info-Tech Research Group
N = 123
On-Premises Cloud Computing
Ongoing Costs Ongoing Costs• Ongoing burden on IT
• Maintain/upgrade
hardware
• Maintain/upgrade network
• Maintain/upgrade security
• Maintain/upgrade
database
• Apply Fixes, Patches,
Upgrade
• Downtime
• Performance tuning
• Rewrite customizations
• Rewrite integrations
• Upgrade dependent
applications
• Subscription fee
• Training
• Configuration
Source: Yankee Group Decision Note Technology Analysis
� Avoid upfront software costs
� Reduce IT budgets for operations
� Ease deployment and infrastructure expenses
� Leverage an alternate pricing structure
� Accounting for internal costs on premise
� Internal labor
� Physical hosting costs (power, cooling, security)
� Hardware replacement and maintenance
� Updates and patch management
� Team management/training
� Licensing
� Skillset best fit
� Backup and disaster recovery
• Even when companies no longer have direct control over their IT
systems,
• They remain responsible for
ensuring that services outsourced
to third-party providers meet
performance and stability targets
• That these services remain in compliance with all applicable
laws, regulations and contracts.
PriceWaterhouseCoopers Technology Forecast, “How CFO’s Should Audit the Cloud Balance Sheet.” Baya, Myers
� Can we be Sarbanes-Oxley compliant with an ERP system in the cloud?
� Are we more or less compliant in the cloud with our own standards?
� Who in our organization is responsible for setting the policy for the data compliance?
1. Banking1. Banking
2. Payroll2. Payroll
3. Credit Card3. Credit Card
8. Health Records8. Health Records
5. Sales Data5. Sales Data
6. Tax Filing6. Tax Filing
7. Web Mail7. Web Mail
Category Description of Data in the “Cloud”
4. Financial Mgt4. Financial Mgt
• Online Banking
• Employee Payroll Information
• Credit card transactions
• General Ledger
• Most business data is already outside of the business immediate infrastructure.
• Key is to make sure controls are in place vs physical control of data.
Extent of Market
• CRM – contact data
• Tax Return Processing
• Yahoo, Google Email accounts
• Universal health records
• 80% of consumers use online banking
(200 million plus accounts)
• Payroll bureaus house all data. Over 2
million small businesses outsource payroll
• Consumer credit card data available
online
• Over 250K small businesses use web based General Ledger
• Salesforce.com has over 50,000 businesses using their service
• IRS Data
• Millions of returns done online
• 55% of CPAs maintain an account
• Major initiative
View of the ERP components in the Cloud
Despite the concerns about security, 58% of organizations that have adopted the cloud say it
has had a positive effect on their security
Negative Effect
No Effect
Positive Effect
Online Snapshots (up to 512)
Disk-based Recovery
Tape-based Backup
Data Protection Manager Disaster Recovery
with offsite replication & tape
Data Protection Manager
� Determine the lowest risk location for your data to protect it
� Review best practices of cloud computing vs. local internal IT
� Leverage the cloud disaster recovery planning
� Uptime guarantees
� Service-level agreement penalties
� SLA penalty exclusions
� Security
� Business continuity and disaster recovery
� Data privacy conditions
� Suspension of service
� Termination
� Liability
1. Planning and provisioning
• Number of users, baseline usage, growth rates, etc.
2. Negotiation of Terms
• Many vendors will negotiate terms for larger contracts
3. Review Service Level Agreements
• Ask about uptime and availability
4. Data Protection, Business Continuity
• Ask about alternative connectivity and backup planning
� Why All The Hype about Cloud Computing?
� What Are The Economics of Cloud Computing?
� What Are Some Of The Compliance and
Security Issues of Cloud Computing?
� What Should Your Client Consider When They
Enter Into Cloud Contract?
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