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Cloud computing is the practice of using a network of remote servers hosted on the Internet to store, manage, and process data, rather than a local server or a personal computer.

There are various forms of the cloud – private and public – and an organisation's use of it will depend upon its assessment of the risks involved. There are many players in the market and the risk profiles vary according to who you use.

Cloud providers offer a number of services which are typically classed as 'as a service' solutions. These include:

  • Software as a service
  • Infrastructure as a service
  • Network as a service
  • Platform as a service.

Each of these are expanding areas and have their own use cases for organisations.

Implementation challenges

  • Unsuitable and poor-quality data – data you upload to the cloud needs to conform with the system and be of suitable quality. To work with your platform, it needs cleansing, uploading and testing.
  • Hidden costs – cloud is sometimes viewed as a one-off cost, but users can run into additional expense (e.g. training, change management). If a poor decision is made regarding dimensions, you face very high costs later.
  • Data governance and location – when implementing cloud, you need to identify a large number of data owners and establish appropriate governance, to manage access. Also ensure what can and cannot be shared internationally. This requires interpretation of regulations that exists and executing/implementing.
  • Vendor stability – investigate the vendor thoroughly. Consider its stability and future direction. Insist on face-to-face meetings and get everything in writing. Another option is to divide services between different cloud vendors to avoid too much dependency on one provider. Consider how you use escrow agreements to protect your access to critical software.
  • Integration across the enterprise – there are different cloud solutions for HR, procurement and marketing, so it can be a challenge to integrate the finance solution or provider with these. There may also be a need to personalise systems.  
  • Ensuring storage is accessible and secure – businesses will need to get advice/assurances on data protection; there is likely an additional requirement to train and coach staff about best security practice.

Potential benefits of the cloud

In our research our respondents identified the following benefits from the cloud:

  • Cost savings - after the up-front investment, cloud offers lower maintenance cost (less need to maintain systems or to invest in physical space) and reduced capital expenditure, as everything is done by a third party. Cloud has 'infinite space', but businesses only pay for what they use.
  • Leading by example - cloud systems make it easier for finance people to take the lead around what good management information looks like, such as by providing the ability to tag invoices with other information.
  • Augmented employees - cloud provides a back-up 'safety net', so employees can restore or access works in progress, making it more efficient than legacy systems. It also allows them to work from anywhere
  • Security - come have concerns about the security of cloud, but others believe it offers best practice security. The service provider has an obligation to have problems repaired or upgraded, which also cuts the cost of upgrading security over time
  • Agility - implementation times for cloud are short; the technology is 'universally acceptable' across different systems. Cloud also makes it easier for teams across the globe to work on the same project in real time.

About ACCA lead author, Clive Webb

Further reading