Moving to the Cloud While Retaining Your Investment in People, Process and Business Knowledge
When businesses consider moving their information technology to the “cloud”, the problem is often approached with a thought that things will have to change dramatically in order to achieve a fully online working model. In many cases, business owners are left believing that any business use of cloud technologies is the equivalent of changing software and systems over to SaaS solutions, enabling the much-desired anytime/anywhere working model. What too many businesses aren’t being told is that there are a variety of ways to move to the cloud, and changing software and systems isn’t necessarily a prerequisite.
The benefits of a cloud computing model are many, with mobility and managed service being the most obvious. Less evident are the potential cost savings, because the subscription approach to paying for IT services may, on the surface, look like an equivalent or even higher cost over time. What isn’t being factored in to the cost (savings?) is the potential to improve processes and increase productivity. These benefits are often achieved simply due to a centralized management and access approach, and are not necessarily attributable to the adoption of new software tools.
For many businesses, the cloud is the right answer for deploying and managing IT and should be considered first, before changing out the software and tools in use throughout the organization. This approach has been widely adopted by businesses using Microsoft Exchange messaging solutions, where in-house Exchange servers are being replaced by outsourced Exchange providers and users experience the same functionality but with far better uptime and protection. The same approach is working for businesses electing to move their in-house business software and systems to the cloud, engaging with application hosting providers to install and manage existing desktop and network applications and to secure business data on the host. Users are able to access their native desktop applications via the cloud, allowing businesses to retain their investments in people, processes, and business knowledge.
Purists may contend that hosting of desktop applications is not truly “cloud”, but the terminology is far less important than the benefits businesses can achieve with a hosted application approach. For most folks, the “cloud” refers to Internet-based solutions and software delivered as a subscription service. When desktop applications are deployed on remote servers and the environment is managed and protected by the service provider, it is pretty much a cloud solution.
Particularly as Microsoft and others continue to move away from packaged all-inclusive solutions for local installation, small businesses are finding that the cloud, hosted applications and remote access provide the answers to a variety of business IT problems. Even more, those answers are being provided affordably, with a simplicity of setup not previously available, and with higher levels of service than was reasonably available with localized IT.
Information technology professionals at all levels are now recognizing that their small business and enterprise clients can experience many benefits with a cloud hosted and managed IT approach. It doesn’t take a comprehensive application or process overhaul to begin improving internal IT operations for the business. It makes no sense for a business to give up investments in training, process development, and people knowledge in exchange for a centrally managed and remotely accessible system. Rather, the smart business takes the steps to solve the real issues of IT management and mobility while allowing users to continue performing their tasks and doing business as usual – only better because the IT is now working for them.
The popularity and proliferation of online applications and cloud computing solutions for business has transformed how organizations manage activities, people and resources. The Internet-connected marketplace has introduced both opportunity and challenge for businesses of all sizes, and much of this focus has been placed on the management and control of digital documents and data.
Electronic document management has been commonly used in professional services business for many years, yet has not always been viewed as an essential technology to apply in the context of organizing and structuring the processing of the document. As clients of these professional firms continue to generate and utilize a great deal of paper documentation and written information, firms continue their reliance upon paper files, shared drives, and other more traditional methods of organizing the work, and storing or controlling access to documents. However, key trends in the industry are causing these approaches to be increasingly burdensome for professional service firms, including:
Need to support multiple offices, geographically disbursed team members, and mobile workers and devices
Increasing use of email as a primary tool for collaboration
Introduction of new risk elements accompanying new technologies
Increasing numbers of forms and document types coming from clients
Rising expectations of clients and increased market competition
Growing need for businesses to increase earnings and profitability with fewer resources
Increasing requirement for knowledge management supporting sustainability, creating the ability to retain and reuse best practices and work produced
Advances in the design and underlying technology supporting many document management solutions today have delivered great capability to firms adopting electronic document management approaches.
Benefits of implementation include the ability to create a centralized, searchable documents base which includes all client-related content, including email communications as well as documents and data files. Easy search, access, collaboration, and re-use of information are enabled, and complete audit trails may be retained. Electronic document solutions also reduce physical document storage needs, reducing costs associated with managing and storing paper files, and can better serve business disaster recovery and continuity initiatives.
While today’s electronic document management solutions may address many of the challenges involved in working with large volumes and varieties of documents and data, there are few solutions on the market which address fundamental issues relating to document processing workflows and how they are impacted by various business or data-driven events, or by the availability of people or resources to facilitate the process.
The growing problem facing businesses today is the volume and variety of information which must be organized, processed and archived. The market is sold on the idea that electronic communications and record keeping will simplify things, but the reality is proving otherwise. Businesses are hoarding information at unprecedented rates and with the ability to collect and generate increasing volumes of digital data, businesses have not simplified their information processing, they have only created a greater need.
Generating and collecting data is not the issue created, nor is ultimately the archival and storage of the information. Rather, the problem created is in organizing the work related to processing this ever-increasing volume of documents and data.
Businesses dealing with documents and transaction-based activities should not only attempt to structure workflows necessary to support the various processes, but must also seek to normalize as much as possible, developing a consistent and methodical approach to the work which results in predictable and consistently high quality service delivery.
The efficiency gained through this structuring and standardization of the work allows the professional services firm to achieve a greater level of profitability for outsourced processing engagements, which are often viewed as low-margin and low-profit activities.
Creating and keeping a competitive edge is critical to building a successful business. Developing a plan, monitoring the plan to make sure the business remains on target, and setting goals for growth and profitability are foundations of business success. But great strategy and detailed planning cannot ensure success because the economy and business environments are unpredictable; no amount of planning is a guarantee that bad things won’t happen and the business won’t experience challenges. On the other hand, regularly monitoring small business performance data can reveal trends and indications that things are not going as expected, and provide a basis for making the decisions necessary to get the business back on track and regain the competitive edge.
Business owners must be prepared to make adjustments as conditions change, acting on decisions made based on business performance data. Whilebusiness analytics are more important than ever, with businesses facing volatility in financial markets and increasingly globalized competition, finding a way to approach the matter is often the biggest barrier. The growing difficulty – the increasingly expanding problem facing business owners and their advisors – can be distilled down to three particularly noticeable trends.
The volume of data flowing into organizations is already high and is increasing.
The data is complex
The data lacks similarity (data is disparate)
The volume of information flowing in to businesses is already high, and is increasing steadily. With all the data collection applications and tools available, and as the business seeks to gain more information and intelligence from more sources, the volume of information gathered by businesses has increased at astounding rates. Technology has adapted to this need, allowing businesses to gather than store vast amounts of data. To be of value, however, the data must be analyzed tofind the answers to questions posed. What technology is only now beginning to address is the complex and disparate nature of the collected data. Coming from varying sources and in equally varying formats, data must be “normalized” and related for it to make much sense.
More Users
More business decision makers in more job roles and functions are getting involved
More people approaching the problem with their own “brand” of analysis
In a very small business, decisions are generally made by the owner. This is most often due to the fact that the owner is the person who not only knows what’s going on in the business, but is generally the one doing a lot of the work. As businesses grow and bring in personnel to manage various functions, these managers become decision-makers. Decisions are made in businesses at all levels, and as management layers are compressed, those “closer to the action” are being handed more responsibility for the decisions impacting their areas. Without a comprehensive and company-wide framework for data analysis and reporting, these individuals and workgroups find ways to capture and analyze the data they feel is pertinent to their requirement and within their own realm.
Less Time
Timeframe for making decisions is shrinking, and is shrinking at an “alarming” rate
The “velocity” (rapidity of motion) of business is increasing
It may be that, in some businesses and markets, certain decisions don’t have to be made with any great speed. Businesses or markets of this type are tough to find these days because the Internet, information technology and connected systems have all but eliminated the effects of time and distance. Just about everything in business today moves at a rapid pace, and that means that business decisions are often demanded on-the-spot, providing little time for detailed consideration and working through the problem. Without the tools and data providing meaningful real-time visibility into business performance, decision-makers may be able to act fast but not wisely, and are most frequently guided by their “gut feel” as to what the right move is.
Driving Small Business Analytics
Business decision makers are now recognizing the need to know more about the business and how it is operating and competing in order to effectively address the choices and decisions faced each day. The cause for this recognition may be due to variable elements, but the conclusion reached was the same: good business decisions require business analytics to support them.
Not surprising was the report finding – that the majority of small business owners felt pressured to adopt a business analytics solution primarily due to the fact that “critical business decisions rely too much on “gut feel”. Surprise! Other drivers listed were lack of visibility into operational metrics, the growing number of people in the business who want analytical capability, the business’s inability to identify and act upon business opportunities, and having less time to make decisions.
Steps to Get There
As with any business project, there are “degrees of success”, and the ultimate success of a business initiative requires that all parties be on board with it. Businesses who recognize a need to improve their analytical capability, but who do not then empower their systems, processes and people, will not achieve the same result as those who do.
Focusing on the business data, it is important to address both the volume and disparity by creating formal data management practices and policies, and implementing systems and processes which assist with the intelligent capture and storage of business information. Simply retaining the data is not useful; it must be presented and applied in a meaningful manner for it to become useful as decision-supporting information. The value of the information increases dramatically when it becomes truly useful to the business. Additionally, by empowering a broader framework for data collection and analysis, businesses extend the “intelligence” to others in the organization, supporting individual and workgroup efforts to make better decisions for their respective areas of responsibility. Of course, if the information is not provided in a timely manner, its value is reduced if not eliminated (hindsight may be 20/20, but that doesn’t help you see where you going to step next). Any approach to building business intelligence should leverage connectivity and integration to provide a timely delivery of complete information how and when it is needed.
What’s the Proven Benefit?
source: article
The obvious benefit of business analysis is that business owners are provided with data to help them understand more about the business operational and financial performance. The real and proven benefit is that the information provides a basis for gaining insight into trends and conditions which impact performance, and which support making the necessary decisions which facilitate improvement in various business areas.
The highest level of proven benefit, according to the Aberdeen Group report, was achieved by those businesses who embraced the requirement to know more about the organization and operation, and who implemented a focused effort at building business intelligence.
Fast Facts: Best-in-Class SMBs Achieved 24% year over year increase in new customer accounts sold compared to 12% for the industry average, and 11% for the laggards.
These organizations which achieved the greatest improvement operated from real data rather than being guided by gut and emotion, enabled the entire organization to participate in the development of organizational and business intelligence, positioned themselves to identify and act on new business and market opportunities, and ensured that those who must make decisions have the information and insightful data to support making the right ones.
Philosophy of Process Improvement: Today’s CFO Focusing on Operations
There are a great many methodologies and approaches to “making businesses better” through process improvement. From SixSigma to Continuous Process Improvement to Total Quality Management – all describe methods of measuring performance and outcomes to return intelligence oriented towards improvement. Many of these approaches are generally applied in manufacturing businesses, because in manufacturing it’s easier to see where processes may be flawed because the process works with tangible elements. Making corrections in a process can improve the performance of that process by reducing errors or increasing efficiency. The truth of the matter is that every business is like a manufacturing business, and applying measurements to the various processes the business performs can reveal the secrets to improving not only process performance and product quality, but resultant profitability.
A recent article on CFO.com titled Operations Take Center Stage, author David McCann discusses how some CFOs are improving business profitability and performance by delving deeper into operational areas of the business, and not remaining focused squarely on accounting and finance issues.
“Operations is the key to everything,” says Larry Litowitz, finance chief at SECNAP Network Security, a secure Internet-services provider. “That orientation is found most at manufacturers, but it should be at every company.”
Fiscal and financial matters are important to every business, but focusing on accounting for the end-result of business activities assumes that the work leading to the result is useful and effective. As more attention is paid to conservation of cash, reduction of expenses, and overall profit improvement, CFOs are necessarily moving deeper into the operational aspects of the business to uncover potential not previously addressed. In some cases, the move is more a function of self-defense and necessity than desire, as businesses increasingly compress spending on management, merging the functional roles of CIO, COO and CFO.
Increasingly, CFOs may find themselves taking on operational tasks whether they want to or not. At larger companies, the steady waning of the chief operating officer position has resulted in more operational responsibility for CFOs, recruiters say. In 2000, 47% of the 669 companies included in either the Fortune 500 or S&P 500 had COOs; in 2012, only 35% did, according to executive-recruiting firm Crist Kolder’s 2012 “Volatility Report of America’s Leading Companies.”
Some accounting professionals may believe that they don’t have the skills and experience to suggest changes in operational areas of their client businesses. I would suggest that logic and reason are generally the prevailing factors supporting process improvement – reasoning that is often developed through simple observation. Taking the time to understand what the business is doing at each level, and then actually observing those activities and accounting for their effectiveness and error rate, is how professionals can spend quality time in the business and uncover hidden profit potential.
Litowitz says CFOs can influence operations at a range of companies, including service-oriented businesses. “It’s really no different. The work is a set of activities,” he insists… “All these activities can be analyzed, controlled, and measured against a predetermined standard,” says Litowitz. And just as on a manufacturing floor, efficiency generates profit, justifying the CFO’s involvement.
Accounting professionals in the United States have recognized for some time the value of offering what many refer to as “high level” services to their clients. For the accounting professional and the client business, consulting regarding strategy and growth represented value for both parties – guidance for the business client and profitable service for the accountant. However, as the economy began to decline and businesses tightened their belts, accounting professionals around the world recognized the opportunity and the need to return to focusing more on client operations and not simply on strategy and growth.
A recent article on CFO.com discusses the results of a survey performed by the ACCA (the Association of Chartered Certified Accountants), discussing how accounting professionals around the world are adjusting their approaches to accounting – adjustments at least partially fueled by global economic difficulties.
“There has been a little bit of a shift following the economic crisis. Pre-crisis there was a lot more focus around growth,” says Lyon. As the recession hit, Lyon says, global CFOs began to immediately question “What’s my cash position from day to day? What’s happening to my costs? What’s happening with my controls?”
Such anxieties may have triggered a shift back to the basics. “The CFO is a key adviser to the strategic (decision makers); that’s not in question. But there is a balance to be had in these times. That balance is around cost management and certainly managing risks,” says Lyon. “Finance as a function has been slightly brought back into focus.”
I would suggest that shifts in the approaches by accounting professionals are (at least in part) due to the various impacts of economy, technology, and globalization. There have always been different types of accounting professionals, with some focusing on management issues and others on strategy. Today’s accounting professionals must find a way to find a balance while addressing holistically the needs of the business client. This belief is also in line with the findings of the survey:
The complete finance professional 2013 summarises our thinking on why businesses need finance skills and capabilities across the entire finance value chain. We also recognise that this new environment requires finance professionals to bring a much broader range of finance skills to the table. The challenges faced by finance functions in supporting businesses are not constrained to a particular accounting or finance discipline. To strive to become world class, finance functions must excel in a broad range of capabilities, from supporting businesses to manage risk, developing effective strategies for growth, driving financial insight, continuing to maintain appropriate levels of control across the organisation as well as ensuring its statutory and regulatory responsibilities are met.
There are a lot of US accounting professionals out there who once approached their clients with a “holistic” service offering, focusing both ON and IN the business. Today, competitive pressures are driving professionals to re-engage with their clients in deeper operational roles, combining cost and cash management with guidance on growth and sustainability. It’s kind of like going back to the good old days of the full-service accounting office, and that’s a good thing for businesses.
In a previous article entitled The Psychology of Small Business IT Adoption, I discussed Icek Ajzen’s Theory of Planned Behavior and how a number of researchers applied it to the process of small business IT adoption. The concept, which ended up proving to be true, was that IT adoption by small businesses is a function of a number of fairly well-defined elements, and is not so much defined by specific types of businesses or the business leaders. The elements which lead to the act of business IT adoption (as well as adoption of other services, I’ll bet) can be identified and addressed by the potential provider of the product or solution ahead of time, making the possibility of actual adoption much greater.
Knowing how your prospective customer will approach the decision-making process is important, and getting a little insight ahead of time never hurts. Particularly when a lot of customers don’t actually reveal their thinking, it can be tough to know where to begin. You’ve been there before – you’re making your pitch and asking questions, but are getting nothing in return. Sometimes it’s “deer in headlights”, and they are simply overwhelmed. Other times they’re thinking about things you’re not telling them… but they’re not letting you know you’re not telling them. Dead air, and then a lost opportunity.
Boiling it all down to a fairly simple explanation, businesses adopt IT because there is a conscious plan to do so, and that plan is supported by a belief that the solution will do good things for the business, the solution is a recognized (if not expected) approach, and the business believes it has adequate resources and capability to effectively handle it. It’s all about:
Intent,
the attitude towards adoption,
belief of expected outcomes and their value,
expectations and the motivation to comply with them, and
evaluating barriers and the adequacy of resources to overcome them.
Intent
The first and most important element is intent, a conscious plan to get or do whatever it is. If the customer has no plan to get the item and sees no need for it, then the barrier is pretty high. However, if the need can be created, and the customer can be driven to believe they need to get the item, then there is intent. Now they’re looking for you and not vice versa. Consider that the Snuggie wasn’t “something” until folks were told that blankets simply weren’t good enough any more for lounging around (they don’t have sleeves!). Once people believed there was a problem, they pursued finding the solution.
The attitude towards adoption
Next, what’s their attitude towards getting the item? Sometimes people go looking for things they don’t think they can actually get, and often they know they need something but don’t think the solution is even out there, so they have a jaded viewpoint from the start. A prospect with a positive attitude and who wants to actually find a solution is far better to work with than one who has already determined that you can’t help them. Sometimes all it takes is a good listener to help create a positive attitude and make someone willing to tell you how you can help them.
Belief of expected outcomes and their value
Now, what does the customer think they will get from the deal? Will the solution actually solve problems or create new ones, and are the perceived problems to be solved big enough to really worry about in the first place? Small businesses tend to be very cash conscious, wanting as much value as possible for any expenditure. Further, most small businesses don’t let go of their cash easily and certainly not for frivolous purposes, so a successful sale is often supported by the customer’s belief that they will get a real solution and benefit – something of value which will be realized, and that is important enough to deal with sooner rather than later.
Expectations and the motivation to comply with them
It is interesting how many small businesses go shopping for products or solutions that they don’t actually intend to purchase or adopt. Sometimes they just want to be able to say “we’re looking in to it”, even if they aren’t and don’t plan to, and sometimes they have a business requirement that they don’t want to have to meet due to cost or complexity or whatever. Let’s say a business has customers complaining about unresponsive or bad support, and how they should have a ticketing system to help track issues better. Maybe the customers have the right idea: maybe the business should have a ticketing system (the business provides support and ticketing systems are considered a support service industry norm). This is the expectation. Let’s also say the business uses a CRM solution to handle support, and they believe it handles things just as well as a separate “ticketing” solution. Just because there is an expectation (customers want ticketing system), it doesn’t mean the business is motivated to comply (CRM does just fine). Expectations come in many forms and from many sources – customers, vendors, employees, contractors, the government and regulatory… on and on. Expectation and motivation to comply are both high when it comes to legal and regulatory issues, as these things can be tied directly to money and cash and risk. In other areas, it may not be as easy to identify or address. The best way to look at this issue is to try to understand what the business is doing now, whether the approach works or may be materially improved in servicing their business and model, and whether or not the business recognizes an immediate need to make the change.
Evaluating barriers and the adequacy of resources to overcome them
The final and perhaps most important factor in SMB adoption of IT is the simple belief that it can be done. Done at all, I mean, not just done “affordably”. My dad taught me that it’s not a bargain if you can’t afford it. Now, this doesn’t mean that there aren’t times when a business needs to bite the bullet and extend itself to become better. But any small business in this position is a tough sell, simply due to real resources and capability. No matter how much a business may know it needs something, if it really can’t do it, or believes it can’t – it won’t.
When businesses consider moving their information technology to the “cloud”, the problem is often approached with a thought that things will have to change dramatically in order to achieve a fully online working model. In many cases, business owners are left believing that any business use of cloud technologies is the equivalent of changing software and systems over to SaaS solutions, enabling the much-desired anytime/anywhere working model. What too many businesses aren’t being told is that there are a variety of ways to move to the cloud, and changing software and systems isn’t necessarily a prerequisite.
J
Cooper Mann Consulting 