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Cloud and Managed Services – Cost savings opportunities for Canadian Accounting firms

Filed Under (Technology Trends) by Jag Barpagga on 03-03-2014

From Prince George, BC to Charlottetown, PEI small and mid-sized accounting firms have reaped many benefits from adopting managed and Cloud based technology services. The Canadian Professional Accountants of Canada says Small and Medium Practices (SMPs) have many opportunities to cut costs with the Cloud. Direct and indirect cost savings have included:

  • Flexible information availability regarding user/infrastructure location, elasticity to support peaks and valleys in demand
  • Minimal IT management resources required to install, upgrade and maintain applications
  • Information management personnel can be a strategic division of the firm, not just a contact center
  • Ease of use, increased adoption of solution, device and platform agnostic, browser or mobile app interfaces to information
  • Reduced energy utilization

These benefits are all significant and compelling enough on their own to warrant adoption of Platform as a Service (PaaS), Infrastructure as a Service (IaaS) or Software as a Service (SaaS) models or other utility-like computing models. These five key cost savings advantages  contracting with a Canadian Managed Services Provider or Cloud solutions provider; particularly one that specializes in applications, business practices, workflows and information management strategies specific to accounting firms. Since cloud computing is a service, the fees paid are tax deductible and do not need to be capitalized and depreciated for tax purposes

1.       Reduced technology overhead savings – The most obvious cost savings for Canadian accounting firms by adopting managed or Cloud services is the reduced hardware, software and possibly connectivity savings. Fewer servers, storage devices, and possibly lower cost network hardware and cabling. Reduced services costs for implementing database, web server, and middleware software. Reduced training costs and shorter learning curves tend to result from Cloud solutions especially. Upgrades are handled by the Managed Services or Cloud provider, as are responsibilities for test, development, fail-over, and disaster recovery environments. Virtualization solutions can enable server and data center consolidation, and firms can establish hybrid on premise/managed/Cloud technology information management strategies for mission critical, sensitive, operational and non-essential applications in the organization. Existing systems can be maintained where required, and day-forward outsourcing processes may work in some circumstances where companies feel there may be compliance issues if legacy systems are decommissioned. With the right governance, executives or other employees can be empowered to work from home or customer locations, use their own hardware, or access selected applications with lower cost PCs, tablets, and smartphones. Hardware refresh cycles can be extended, and other capital cost technology expenditures can be reduced. The benefits of Cloud and Managed Services will be discussed at the 2014 Canadian Conference on IT Audit, Governance and Security in March.

 2.       Energy, HVAC and network utilization savings – Managing servers and data centers incurs high costs to power, cool, and connect the servers to an accounting firm’s network. Firewalls, intrusion prevention systems, routers, switches and storage devices all demand a vast amount of power and cooling to run continuously to support a law firm’s technology demands. By adopting managed or Cloud solutions, you will have a lower demand for electricity, temperature regulation for machines is not as critical, and users that can work from home or remotely will not tax your network resources with requests, they can leverage the public internet and secure application log in to the services/Cloud provider. Energy and cooling costs are recognized as key Cloud savings opportunities.

3.       Administration savings – Have you considered the time and energy your staff takes to track and renew maintenance and support contracts? The effort that your IT staff spends to configure, select, and procure hardware and software? Or take care of administrative IT duties like password resets, remote user support, and license/subscription provisioning? Also add hardware and software asset management. These administrative and support tasks can be very resource intensive, add little value to your business, and can greatly impact employee productivity. By partnering with a Canadian services provider, you can free up your staff across departments such as Finance, IT and other firm executives from having to spend time away from their core duties to address these items. The services provider can provide remote user support, monitor networks to alert for problems after hours, and they can interface with hardware and software vendors on your behalf. Knowledge of savings opportunities such as multi-year contracts, usage based or alternative licensing models can help an accounting firm find cost savings that they wouldn’t otherwise discover without the close relationship that a Value Added Reseller/Services provider can have with application vendors that you already may be working with such as Microsoft, Sage, Intuit and Citrix. Don’t miss tax deadlines, filing requirements or client expectations due to hardware or software outages that could have been remedied with managed services. CPA Practice Advisor offers a great review of available CFO cloud platforms that offer these savings.

 4.       Strategy definition and error avoidance savings – Jumping into Cloud or managed services with both feet without guidance can lead to high risk and delays in realizing the advantages of the Cloud. Contracting directly with Cloud vendors, engaging with multiple “niche” clouds without developing a game plan can lead to vendor lock-in, incompatible systems, and missing opportunities of solutions that are not suited to accounting firms. Engaging with a services provider that has worked with firms like yours before, and established repeatable strategies is a wise choice. You might be able to preserve some of your existing infrastructure, eliminate redundant investments, and/or avoid getting sold a solution that isn’t suited for a firm of your size and requirements. Partnering with a services provider that develops a relationship with your firm can identify areas of opportunity, risk, overlapping priorities and efficiencies that might otherwise be unknown by a technology vendor that doesn’t know your firm or the subtleties of Canadian accounting firms. Last year, the first purely online chartered accounting firm, LiveCA launched targeting entrepreneurs and small business.

 5.       Productivity gains and document related efficiencies– You might have experienced interruptions on your network, with upgrades to your systems or gaps in productivity due to power or telecommunications outages. Cloud solutions streamline communications, reduce printing, and reduce paper consumption as written in this article by TechVibes. Managed network services providers can ensure your systems are up to date, protected and available for users. In case of a power outage in a building, users that can move to their home office, a customer location or a coffee shop and get back to productivity can help your firm maintain satisfaction with your clients, and avoid missing deadlines or milestones.

Industry media such as the CPA Advisor has been addressing the opportunities and possible pitfalls of accounting firms jumping into Cloud computing for years. Brian Austin, CPA Advisor of Public Relations writes

“Even better, imagine not losing even a day after a laptop crashes, but picking up right where you left off from any replacement device. When you think about it that way, it’s evident that Cloud, SaaS, and mobile technologies help you earn back time – now that’s money!” – We couldn’t have said it better ourselves!

 

 

 

 

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