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Enterprise Resource Planning (ERP) systems like SAP, Oracle, or JD Edwards have been influencing business processes for the last three decades. At one point, however, the market was overly saturated, as corporate-wide systems like ERP were only affordable for large companies. For small and medium enterprises, ERP systems were unaffordable, and the value added (i.e. costs saved) through their use debatable.
With cloud technology in the mix now, ERP systems have moved to the cloud. SAP S/4 HANA, for instance, is an offering that runs on the cloud, seemingly providing the most powerful type of information system to businesses large and small. With all technological advances, though, the grass is not always greener. In his blog post about the pros and cons of cloud ERP, Forrest Burnson gives a comprehensive overview what factors should enter the decision-process when a company starts considering adopting cloud ERP systems.
Bitcoin, the digital currency, has taken the world of financial transactions by storm. Its decentralized nature cuts out the typical financial intermediaries like banks or brokers, and is used directly between the trading parties. As such, it is not only used for purposes like enabling trade and financial transactions in areas where this is not possible, such as some emerging economies; it is not only useful to link people to trade that have not been able to even get a bank account to do so; it has also notoriety as the go-to currency for illegal activities via the Dark Web, such as gun or drug trade.
Foregoing its ambiguous nature, bitcoin can become (or already is) a powerful new financial reflection of trading that is not limited by barriers or financial intermediaries. From an accounting point of view, its decentralized nature begs the question how these are recorded, and how these records can be trusted. The answer is blockchain, a distributed database of of a continuously growing set of records (blocks) that are difficult to be tampered with, and that are clearly identified as to who and when did the transaction. In this blog post by Karlin Lillington, she describes the blockchain idea, and how this system of ledgers might supplant the traditional financial transaction system using financial intermediaries.
In past blog posts, we have often talked about the impact of cloud technologies on businesses, especially small and medium ones. The anytime-anywhere access to information and data, the enabling of the paperless office, the real-time response rates and collaboration possibilities are (to put it simply) almost endless! In this blog post by Nicholas Pasquarosa, he details how accounting firms might change if they themselves move their operations and processes to the cloud. Not only does it support flexibility and speed of operations, but enables a direct link with their customers, especially if they are also “in the cloud”.
Accountants have an inherent interest in corporate data, and as such, its security and privacy. In our book, we write about the newest technologies, including cloud computing, where we claim that the cloud can provide a measure of security to companies that the companies themselves would be unable to garner. However, not always is the newest technology the only way to go – in this article on BBC Tech, the author explains how the good old floppy disk, in spite of swan songs having been sung for decades by now, is still alive and kicking. Why is that? Why do organisations like the Pentagon or manufacturing companies keep using this seemingly outdated format? In short, the floppy disk has proven age-resistant, nigh impossible to hack (unless it is lost and found by unauthorised third parties), and usually found in systems that are very cumbersome and costly to update.
So it is one thing to appreciate the newest of technologies, but one should never forget or discard the old ones! As accountants, we should not forget that – for some businesses, it might be better to stick with the old.
When peers refer to “the cloud” in cloud computing, it often seems a vague and intangible concept. It seems “the cloud” is a place somewhere around us, above us, or far away, that does not have shape, size, or touch. However, the cloud is very much tangible, as this blog post by Emily Anne Epstein shows – instead of a fluffy white shape, the cloud is very much made of cables, servers, and housed in entire buildings.
We have often stated in this blog that the role of the accountant is changing. This change is heavily driven by new achievements in technology like cloud computing that enable anytime-anywhere access to decision-relevant data. At the same time, businesses acquire a plethora of data about their customers – so much data that professionals need the knowledge, skills and tools to excavate what is relevant, and what is not. As accountants, we should be in the middle of this “data excavation site”, handling this data mine to discover its treasures. This ACCA article argues that the finance profession (including accounting) needs to extend its reach and apply its core skills of gathering, manipulating and providing relevant information to a much larger data set. To enable accountants to do so, they will need to be the link between the IT department running the tools that enable real-time analytics of big data, and the business that needs to make sense of the results and put it in a strategic context. This will add skills to accounting that include data analytics and software engineering, leading to a hybrid role of accountants in the future.
Here is a good example of two companies that use SaaS and PaaS in a strategic partnership to provide a new cloud accounting offer to businesses. SAGE is a provider of accounting software, already offering cloud-based products in their portfolio. In this particular case, however, they decided to enter a partnership with Salesforce that provides a strong PaaS, using the unique capabilities of the Salesforce platform to improve their product.
All to often, when it comes to cloud risk, there is no clear distinction between data security and data privacy. Accordingly, they are often used synonymously or all-encompassing. As this post by Brian Anderson details, this is not the case. Data security comprises of concepts and instruments that are put in place to ensure that sensitive data is not accessed, modified or taken by unauthorised parties. Data security instruments are therefore data protocols, access level rights, firewalls and even antivirus software that picks up on trojans or key loggers that may enable a third, unauthorised person to access data that they should not. At the same time, data security ensures that the data is reliable, integer, available and confidential.
Distinct from that is the concept of data privacy that details the adequate use of sensitive data. Companies in the UK, for instance, are required to follow the Data Protection Act that requires companies to use sensitive data fairly and lawfully, for limited, specifically stated purposes, and in a way that is adequate, relevant and not excessive. At the same time, the information embodied in the data needs to be accurate, kept for no longer than is absolutely necessary, handled according to people’s data protection rights, kept safe and secure, and not transferred outside the UK without adequate protection. Therefore, data security protocols need to be in place to ensure the privacy of sensitive data, mostly customer-related data. Often, companies are criticised on how they treat the data they are supposed to protect. Facebook, for instance, has been heavily criticised (and even sued) for their data security protocols, impacting the data privacy of their users’ personal data.
To summarise the relationship between data security and data privacy, data security is the means to ensure data privacy. They are certainly not the same, but typically come together.
On June 5, 2014, the Guardian offered a live online Q&A session on the question “Could your small business benefit from using cloud services?”. Although 9 months old, it is very enlightening to read the comments of users at the bottom of the page. Cloud experts, providers and users discussed the benefits and drawbacks of the cloud on small businesses, and the main themes that emerged revolved around the well-known issues of security, privacy, performance improvements, cloud hosting and content editing, as well as the “next thing on the cloud”. It is worth a read even 9 months on.