Accounting Today - September 27 2010

Cloud computing, and specifically Software-as-a-Service, offers competitive advantages to your firm by making it more agile or nimble in the way it offers solutions to help clients with their accounting, tax and other issues.

Here’s one way to look at it: Which would you rather do business with — a company that helps its customers operate more efficiently, or a company that offers little flexibility and few ideas for future growth? Although this is a rhetorical question, we all know there are providers who do not care about changing their outlook, or, more than likely, do not know how to go in a new direction because they do not have the smarts, or leadership, to figure it out.

In terms of the accounting profession, think of the firm that is mired in old ways of doing business — the one without any kind of client contact other than just prior to busy season. This is the firm that offers little to its clients other than functioning as a processor of basic information.

Conversely, firms using software solutions from providers whose infrastructure is based on the cloud or outside the firm’s physical walls demonstrate their forward-think-ing ability to be nimble or agile in the way they help clients solve problems.

So here’s the question stated a different way: How much is it worth to your firm to be more agile?

It would be negligent not to ac-

The true TCO of the cloud

Numbers are only part of the cost

By DaviD Lahey anD TayLor MacDonaLD

Determining the true cost of ownership (Tco) of cloud computing isn’t always about the numbers. although firms want to know the out-of-pocket cost for a new or updated technology, determining true cost actually has more to do with the ability to adapt to new processes than it does with adding up the numbers.

knowledge that any conversation about the TCO of the cloud must focus on the hard numbers, but the numbers do not tell the whole story. Following are several concepts that must be considered to determine the “true cost.”

TCO CONCEPTS

TCO is all about understanding the entire financial impact of a technology through its lifecycle, so it does not matter if the software is updated and maintained by the provider or physically located on a firm’s own server.

Instead, firms will want to know
how cloud computing makes them
more efficient by looking at the im-
pact on the bottom line. For exam-
ple, did the firm maximize its non-
billable time by letting the provider
maintain the latest version of the
software, rather than installing and
maintaining it themselves?

LOOKING AT SOLUTIONS

To find the best resource, start by looking at the components of your business management solutions that are easily and effectively managed on the cloud, such as customer relationship management or bill payment, then look for these three traits:

1. The technology was built for the cloud, rather than an on-premise desktop application that was updated to work over the Internet.

See TCO on 23

David Lahey is executive vice president of Speed Tax, where he manages sales, marketing and related activities. Taylor Macdonald is vice president of channels at Intacct Corp.