Category: financial reporting

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The Cloud Makes Time Travel Possible: Hosted applications can deliver immediate business benefits

The Cloud Makes Time Travel Possible: Hosted applications can deliver immediate business benefits

In an article published on CIO.com, author Kevin Fogarty describes how moving to a cloud IT approach proved to be a highly beneficial and strategic decision for an on-site diesel fuel distributor.  The focus of the article was on how existing software and processes were enabled by centralizing them in a cloud hosting environment, and not by replacing them with new subscription-based applications.

For many businesses, this is the secret that nobody’s talking about: you can have the benefits of “the cloud” without having to radically change everything you have and everything you do.  Retention of knowledge assets is critical to business continuity, and moving existing systems and process to platforms where they can be leveraged to greater business advantage is a way to do that.  With centralization of systems and services, information can be processed far more efficiently than before, eliminating delays and improving cash flows dramatically.  Time is money, and the cloud helps businesses spend less of both.

“A lot of the invoices have to go out every day by certain times, so third-party accounting companies can do their thing for the fleet owners.” The setup sounds like a classic for any overhyped business-process-automation system, but Daniel Abrams and other Diesel Direct managers weren’t interested in managing their business using sophisticated business systems that require more motivation, money and technical staff than Abrams was willing to use or pay for.”

The initial benefit is being able to use the products already in place, just from a more secure and redundant location, but when you begin to consider the positive ramifications of reducing the time between delivery and invoicing, billing and payment receipt, or customer demand and product supply, you rapidly realize that the cloud means much more to the business than just another way to run software.

“Those changes save Diesel Direct both money and time. Rather than running reports and invoices all night Tuesdays, for example, the additional capacity lets the company run those resource-intensive processes during the day rather than overnight. That gets critical work done faster and more accurately than a process left to complete itself unattended.”

In short, the cloud makes time travel possible, because the result is available almost immediately upon completion of the task.  It’s kind of like getting your expense check as you walk off the plane in your home town, because you reported all your expenses in real time as they were incurred (snap a picture of the receipt at the bar, and like that).

Yet most business owners and IT managers for small and mid-sized businesses are being told that the cloud is best applied when innovation is required, and should be reserved for NEW things, and not thought of as a way to improve the status quo with existing or legacy architecture.

“It’s not unusual for mid-sized companies to come to depend on cloud services, according to James Staten, vice president and principal analyst for Forrester’s Infrastructure and Operations practice.

It is unusual for them to be more concerned with infrastructure than with applications, he says.”

With affordable and secure application hosting services being widely available for small and medium businesses, owners and managers no longer have to look to new solutions just to enable mobility, remote access, and a fundamentally stronger and better-managed system.  Legacy applications can be hosted and delivered, extending their useful life as well as the value of the development and intellectual property, and giving customers capabilities not readily available with local implementations.

“Diesel Direct can’t accomplish anything if its minimal IT infrastructure is offline for any length of time.

Abrams, worried about storms taking out his business as well as the power, didn’t know what technical solution he wanted until Callow “described for him what an enterprise infrastructure looked like,” Callow says.

“They didn’t need one, didn’t want one, but they did want the security, the reliability of a redundant IT infrastructure,” he says. “The most effective way to get that at the lowest possible cost is the cloud.”

Among the greatest benefits of outsourcing application delivery to a cloud hosting provider are the increased monitoring and security, application of best practices, and high levels of system fault tolerance and recovery capabilities offered.  While business subscribers focus on features and functionality of the application, the real focus for hosting providers is the platform – and the management and security of it.  This behind the scenes work offers tremendous business benefit to subscribing customers, but is often not the focus when discussing overall benefits of a cloud computing approach in the context of Software-as-a-Service, which is where many smbs focus their investigations.  As an alternative, businesses who may seek to adopt hosted solutions for their existing applications and software frequently do so for reasons of security and redundancy, not recognizing that their business processes may likely experience significant improvement, as well.

“Enterprises might have the luxury of making strategic decisions about cloud or other technology,” Golden says. “In mid-sized companies things are very tactical. No cloud evangelist is going around the refueling industry saying ‘there are ways to solve this problem.’ “Companies make tactical decisions to solve their own problems and, five or 10 years later, we’ll all wake up and realize we’ve changed the way we do everything,” Golden says.”

Make Sense?

J

The company in the article could be just like yours.  You don’t have to adopt new software and systems to benefit from the cloud.  How could your business change, if you could remove the problems of time and distance?

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One-Write System Revolutionizes Accounting

One-Write System Revolutionizes Accounting

These guys had the right idea, they just didn’t have the cloud.

It’s amazing how much time and energy continues to be spent on duplicate data entry and re-keying information generated by one system into another.  Human-based data entry is prone to errors, takes time, and carries with it the burdens of employee costs and resources.  It is a problem that businesses of all types have battled for years, but new solutions are available, and many of them are enabled via great software, the Internet and the cloud.  You see, the cloud – which is the term popularly applied to all of the interconnected “things” on the Internet – creates the path of communication which allows data to be passed to a variety of applications or systems, allowing for seamless collection, integration, and aggregation of business data.

EDI (electronic data interchange) standards have existed for quite some time, and in recent years these methods have expanded to include a variety of platforms and more open “standards-based” approaches.  Even in the small business world, business owners using traditionally limited software products are now able to enjoy sophisticated extension and integration of their applications, largely enabled and facilitated by cloud technologies and software-as-a-service offerings.

To provide a really simple example of the problem: when an individual writes a check, that check must be recorded in a variety of places and for several purposes – to record the expense and to record the reduction of funds in the account, etc.  When a product is sold to a customer, inventory is relieved, sales are increased, accounts receivable or cash is increased, costs of goods sold are experienced, and customer activity is captured.  All of this information must be recorded and the activity accounted for throughout the financial and operational systems, and can represent a tremendous burden if not automated.

One of my clients, to provide an example, sells computer parts through an ecommerce website.  Orders from this fancy website are emailed to their order operators, who then turn around and re-key the orders into the ERP system.  Because of the number of orders to enter on a regular basis, there are two different operators working in the department – both of them responsible for making sure website orders make it into the “real” operational system.

By implementing a single software solution which could take automatic transaction file exports from the ecommerce system, format them and import them into the ERP system, the company was able to reduce personnel costs, improve accuracy and timeliness of data entry, and increase customer satisfaction. If we look closely at the need to use different pieces of business information in different ways, we begin to recognize the size and complexity of the problem and the true value of these integration solutions and automation tools.

Automation takes technology, but technology doesn’t have to be complicated.  A better pencil is technology, and we figured that one out pretty well.

OK, maybe our concept of what is complicated has changed a little bit.  Remember the One-Write checkbook systems?  It was pretty cool, and truly innovative.  You put the check on a little pegboard thingy, and when you wrote the check, the check register was “automagically” filled out for you.  Amazing.  Sounds pretty simple, but take a look at the description of this innovative, highly technical device, and tell me that it wasn’t at least a little intimidating at the time. But we got used to it, didn’t we?  Maybe even liked it?

Make Sense?

J

Accountant’s Apparatus 

RECORD KEEPING SYSTEM AND METHOD EMPLOYING PLURAL FORMS AND CO-OPERATING REUSABLE ADHESIVE STRIP

United States Patent 3661407

Two different, but related form sheets are provided for use in sequence by different departments. Each form sheet has two separate pluralities of headings thereon, one for each department. Each form sheet has also one or more strip receiving spaces extending transversely across both pluralities of headings thereon. A plurality of strips of re-usable, adhesive backed writing material are provided, each strip being of a size to fit onto, and to extend the entire length of, one of said spaces. With one of the strips adhesively applied to its space on a first form sheet, data entries are made on the strip by the originating department in register with each of the headings of the first plurality thereof. The strip is then peeled off and forwarded to a follow-up department, where the strip is adhesively applied to one of the spaces provided on a second form sheet and entries are made on the strip by the follow-up department in register with each of the headings of the second plurality thereof. The completed strip is then peeled off of the second form sheet and returned to the originating department, where it is adhesively reapplied to its previous space on the first form sheet for billing and filing as a permanent record of the complete procedure.”

 And then came the portable edition for all you mobile business executives, because portability and mobility was (is) essential.

“Pocket-size one-write checkbook

United States Patent 4332400

A wallet-sized checkbook particularly suited for use in conjunction with a one-write check record keeping system wherein an entry is made on a journal page simultaneously with the writing of a check. The checkbook enables records of checks written in the field to be subsequently transferred directly on to a one-write journal page. The book comprises a cover having an interior pocket and a writing surface fastened at one end to the inside of the cover. A data sheet of coated release paper overlies the writing surface and releasably carries a series of ink-receptive strips adapted to receive ink from a carbon strip extending along the reverse side of a one-write check. A check is positioned on top of a selected strip on the data sheet by a series of pins which project through pre-punched holes in a widthwise margin of the check. Indicia on the opposite margin of the release paper cooperate with the pins to assist in the check-positioning function. Thus, data written on the front of the check is transferred via the carbon to the underlying strip which can be subsequently peeled from the release sheet and applied at the appropriate line of a journal page to provide an accurate record of the field-written check.”

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The Cloud is Not the End of ERP

With the emergence and general acceptance of “cloud” technologies and services, many in the information technology industry have begun to wonder if the traditional approach to enterprise software – the ERP solution – is nearing its useful life.  Is this the end of ERP?  Well, the hype sometimes becomes the reality, and businesses are moving in droves to software-as-a-service to find the cost and efficiency benefits promoted in the sales materials, and they’re finding them.  Look at Sage’s acquisition of Intacct as an expression of increased focus on cloud-based solutions. This activity around the cloud and cloud-based software-as-a-service represents a major change in how people access and consume information technology and business services, a change that’s being driven by the huge momentum of the overall growth of “cloud”.  The market is moving to a customer-centric subscription model, where the legacy approach was more in tune with the “purchase it once and use it forever” mentality, and customer relationships were largely centered on upgrade cycles.

“As an economy and a culture, we are rapidly moving away from owning tangible goods and, instead, gravitating towards becoming members of services that provide us with experiences  – such as listening to a song, using a car, watching a movie or collaborating with our colleagues.

Of course, this cultural transformation has profound implications for business models. Why? Success is no longer gauged by counting how many units of your product you have sold. Rather, success is measuring how many customers are using your service on a recurring basis and how successful you are monetizing those recurring relationships.”

Forbes.com guest post written by Tien Tzuo http://www.forbes.com/sites/ciocentral/2012/02/09/the-end-of-erp/

While it sounds like the cloud is the right approach for everyone, looking at the variety of real business situations in the market suggests that, as always, one size does not fit all, and more “traditional” ERP solutions may well continue to be the right foundation for many enterprise operations.  Particularly when considering that many businesses already significant investments in platforms and infrastructure, software and data integrations, and operational process support, cloud software solutions may not provide the necessary functionality to support existing business.  Further, integrations that may be available and supported with legacy systems are often not available with cloud-based counterparts, while different integrations based on cloud standards may be present.

For smaller businesses and those in emerging markets, subscription-based IT models may make more sense, especially as popular traditional software makers have introduced their cloud-based counterparts which will likely incorporate the features or functionality of their legacy systems, while taking advantage of the capabilities introduced through cloud integration and interoperability standards.  Strong consideration should still be given to “traditional” ERP solutions, however, as there may be a level of stability, usability, or process support desirable by the business.

Utilizing these traditional ERP systems does not mean eliminating the potential for the business to benefit from cloud solutions.  Rather, cloud platforms and hosting solutions, as well as cloud-based integrations and extensions, are enabling mobility and collaboration around legacy systems, delivering cost and efficiency benefits just as significantly as those who have adopted a full-on “cloud” approach.

“It also makes sense to explore “edge” investments. […] there are significant innovation opportunities outside of core operations. Look to take advantage of the ERP platform’s capabilities in these spaces. Or implement low-cost, smaller-footprint solutions – even if on an exploratory basis. If they are fully adopted later, you can integrate them into the ERP backbone and expose standardized data and processes to the edge.”

from Deloitte’s Tech Trends 2011 report titled “the end of the “Death of ERP” 

So, what does this mean for your business?  It means you need to consider all the possibilities.

First, evaluate cloud-based options, and balance features with cost, time-to-value, and operational requirements.

Then, selectively innovate.  Figure out which areas of the business give you a competitive differentiation and innovate in those areas.

The traditional thinking, which is in line with the traditional ERP approach, is that all of the business functionality has to be incorporated into a single platform solution.  This is certainly no longer the case, and businesses are finding that they now have an ability to take advantage of the benefits of their existing systems while extending and innovating through the use of cloud services.