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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.
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.
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.
Infographics are all the rage these days, and a quick Google search reveals that there are many on cloud technology out there. The nice people of Geeky Globe have published a very detailed infographic that summarises the history of computing all the way to the cloud in a very comprehensive manner – it’s worth printing out and pinning it to the wall.
The cloud security provider Databarracks has published a Cloud terminology handbook that is available after registering for it (it is free!). It provides a very brief but comprehensive explanation of various cloud terms (old and new), such as BaaS, hypervisor or a fourth cloud deployment model after public, private and hybrid cloud – the community cloud. This white paper is a good resource to have.
I have to admit – I am a massive comic book fan. Have been for the major part of the last 37 years, and will continue to do so because – well, why not?
As a young bloke, I was often unable to get my hands on the latest Batman or Spider-Man outing, and getting access to the original English versions was nigh impossible in Austria back in the 1980s. It got better with the likes of Amazon to order these comic books online, but a struggling genre was re-awakened by an adequate cloud-app based offering of comic books old and new ready to read immediately on tablets and computers. Although the old-school comic book reader in me was cautious at first (“It’s not the same unless it’s printed!”), I have to admit that it has its benefits. A well-adapted online comic book that for instance allows zooming into individual panels is quite a nice thing to use.
Here is an interesting article about the market leader in this segment, Comixology.
Sage (a leading provider of accounts software) have recently extended their most popular product to the cloud. And they have done to in a way which seems to address a lot of concerns.
My experience of cloud accounting software is that while it is functional and easy to use, it does lack some of the capabilities that desktop accounting software offered. What Sage appear to have done is taken their best product for SME – Sage 50 – and retained the best of both worlds. The news release at the link above suggests a new product, Sage Drive, allows the user to retain the desktop functions but store data in the cloud. This has several advantages. First, the sharing capabilities of the cloud are available once the data is stored there. Second, existing functions are maintained and this may particularly suit the accountant users. Third, it may ease some security concerns accountants often mention with the cloud. From my understanding, only the data is cloud hosted. Some desktop software is still needed to make sense of the data.
Technological change has impacted and shaped society for ages – from the first use of a tool to the first abacus up to steam power and the computer. That is nothing new, and I have yet to find the person to contest it.
Hand in hand with technological change came the craving to codify information generated – arguably, the quicker the technological change, the more information generated. That means information about EVERYTHING. One of the main drivers was undoubtedly IT and computer technology, but only since the world wide web became fast and affordable to the masses (and businesses), the flow of newly generated information and data is mind-blowing. According to Nick Bontis from McMaster University in Hamilton, Canada, everything we know and wrote down on a stone, papyrus or in a Word document – or as he calls it “cumulative codified information base” doubled every 30 years when evaluated in the 1930s, every 7 years in the 1970s, in the future we can expect that everything we know and wrote down doubles every 11 hours (Bontis, 2011). Even from our own experience as part of the world wide web, email and social media we can tell that we have no way of keeping up even with everything that lies in the sub-set of “interesting to me”.
Now it is safe to say that businesses have always produced massive amounts of data, from ledgers in the 15th century to customer data used and employed by the likes of Google, Amazon or Facebook. Data from transactions, patterns in customer behaviour, market reactions, costs and prices – it goes on and on. The assumption is thus not far-fetched that businesses as part of our culture and society are at least not slower in codifying new information.
To managers, that information is key to decisions they need to make on various bases, from daily, short-term to strategic, long-term ones. In order to do this – and so we learn and teach and assume – the management accountant is the role that is responsible in order to gather, process and provide this decision-relevant information to the managers. Looking in any textbook, however modern, shows that this is still the basic assumption what the management accountant is and does.
(Continued in part 2)