I recently answered a question about the “disadvantages” of the cloud on an accounting and finance forum. As a cloud solution provider, I’m actually very enthusiastic about cloud services – I see the benefits to our customers and the potential for even more benefits in the future. However, I’m also in a good position to play Devil’s advocate on this topic, having heard some of what can go wrong in the cloud, and having learned a great deal from my company’s experience in this area. Still, the benefits of the cloud delivery are strong enough that I think “trade-offs” more accurately describes what I’ve seen than “disadvantages.”
As there are with most things in life, there are certainly trade-offs to consider related to operating in the cloud. If you’re interested in achieving the great benefits of the cloud, you should be fully aware of the trade-offs involved, so that you can establish an agreement that optimizes these trade-offs as best fits your company. For example, let’s take a look at three of the major benefits of running in the cloud – simplification, availability, and ease of upgrades – and what the trade-offs may be for those benefits.
One of the primary drivers for cloud business applications is simplification. Most system users have, at some point in their career, been told by their IT department that some seemingly simple thing can’t be done due to technology, resource availability, scheduling, or some other factor. In these situations, who hasn’t thought, there must be an easier way to get things done? The decision to move to the cloud may be seen as a way to focus on your company’s core competencies and to outsource non-strategic functions, or as a way to free up your internal IT staff for more high value-add tasks, or simply an acknowledgement that a good cloud provider generally has more expertise and infrastructure to leverage. Whatever the driver is, I couldn’t agree more that the idea of turning on applications as a service and letting the cloud provider take care of the behind-the-scenes IT functions is very compelling.
The trade-off here is some loss of the control that you naturally have when everything is managed and run in-house. For example, you may have less control related to direct data access, or the ability to extend applications through integration and optional extended analytics or reporting capabilities. Most cloud providers simplify systems to make the solutions easier to use and support. If you’re in a situation where strategic benefit can be gained through extending or modifying the application, you may find that – while most cloud providers do have optional services to support additional functionality - they often come at an unexpected and outrageous cost. The solution? Make sure that: 1) the cloud solution that you choose is a very good fit for your industry; 2) negotiate for flexibility if needed; and, potentially, 3) budget for a private/public hybrid environment.
The second great benefit of the cloud is availability – the cloud makes remote access available and highly efficient for a cost that most internal IT organizations simply cannot beat. If you open a remote office, your IT staff is now supporting multiple locations. If you open an overseas office, your IT staff is now supporting multiple time zones. If you have a single office that’s full of road warriors or remote access users, you are now supporting an extended enterprise. The cloud is designed to be accessed from wherever you are, on multiple devices.
The trade-off is that your system performance will be more dependent on your network performance. If you have survived on small network pipes to date, and your engineering team decides to download large design files every morning, then system performance will decrease. If it isn’t already a priority, it soon will become a priority to actively manage networks and connectivity to the outside world. The solution? If you’re moving from in-house applications to cloud-based applications, it’s important to consider the quality and quantity of your network pipes, and make the appropriate changes to update/upgrade.
Finally, the cloud offers the promise of easier upgrades. The concept of easier, no-hassle upgrades appeals to almost everyone. The trade-off here is the short shrift often given to user acceptance testing (UAT) – a process that is both required for Sarbanes-Oxley compliance, and a best-practice when your organization reaches a level where mission-critical systems should be reviewed as part of good change management. Without a UAT option : 1) changes to functionality can occur before your team is trained; 2) errors could be found after you’re already live; 3) your provider may give you a UAT option that fits their schedule rather than your team’s availability; or 4) your provider may avoid significant feature enhancements in order to simplify their own upgrade cycles. The solution? If your cloud solution provider does not provide or offer a UAT process, negotiate one before you buy.
If you carefully weigh the pluses and minuses of in-house applications versus cloud applications, you’ll be better equipped to avoid the possible pitfalls. Not only will your decision to “cloud or not cloud” be easier, but it will be much more obvious which cloud providers can best support your needs.
by Tensoft, Inc