Bread in the Clouds?There is little doubt that cloud computing will continue to present challenges to finance teams for some time to come in terms of understanding and embracing the full scope of both the opportunity it presents, and how that can be fully leveraged.

It is, however, high time for PSOs to think about shifting their accounting functions into the cloud. Oh and perhaps redesign the website, fix the leaky tap, and put shoes on their children while they’re at it.

"Cloud accounting software makes it easier to get ‘closer’ to what may be a sprawling, complex organisation,

delivering a clear picture of, and control over, its finances as a whole."

While the average Public Sector finance function has hardly been quick on the uptake when it comes to cloud-based accounting software, the benefits are now making it increasingly difficult to ignore…

The design agency with the rubbish website. The plumber’s house with the leaky taps. Those poor, long-suffering, shoeless cobbler’s children. It’s not as though the public accounting function’s slowness of cloud uptake is without precedent.

So why exactly have the finance departments of so many PSOs seemingly remained stubbornly earth-bound when it comes to the adoption of cloud-based accounting software? Especially when other organisations – including plenty of other slower-moving Public Sector concerns – have been busy launching themselves cloudwards with comparative abandon? And when the benefits seem so clear?

Rationalised, capex-based financing has long been understood as one of the key benefits of shifting the certain business functions to the cloud. And then there are the ongoing austerity measures continuing to place PSOs under pressure to do more with less, and the mounting external scrutiny and expectation that public agencies must provide greater accountability and value for money.

Against such a backdrop, the chance to shift to a more advanced, compliant, intuitive accounting system – and at lower cost – surely ought to appeal. Why then, has finance itself been pretty laggardly?

Certainly the benefits are becoming increasingly difficult to ignore.

The cloud and accounting software are very nearly the perfect match. Quite apart from the fact that cloud-based accounting software is scalable, cost effective, and easy to use, it carries all manner of operational and logistical efficiencies that ought to have Public Sector finance heads watering at the mouth.

It enables remote and increasingly mobile finance teams to work from anywhere with an internet connection, eradicating the need to maintain spreadsheets or installing static related applications in a single geographical location.

Cloud software’s inherent automation drives more efficient invoicing and payment processes too; removing the need for manual debtor tracking and chasing and the like. Similarly, in harness with HR and Payroll, it can be configured to generate and disseminate payslips and other documents automatically, further cutting down on labour intensive and often costly manual alternatives.

Automated feeds allow teams to keep track of the organisation’s balance sheet in real time, and give them an array of reporting options that will provide accurate, up-to-date visibility over the PSO’s financial position. On a minute by minute basis if necessary.

In short, online accounting software makes it easier to get ‘closer’ to what may often be a sprawling, complex organisation, delivering a clear picture of, and control over, its finances as a whole.

Cloud accounting software also tends to be more and intuitive and easy to use than ‘fixed’ alternatives, making accounting practices much easier for those who may be less accustomed to formalised procedures. This makes transitioning to innovations such as user and employee self-service much faster, easier and more viable.

Then there are the arguments around upgrades and scalability. Software updates are typically part and parcel of the monthly subscription while, unlike with ‘static’ desktop licensing models, scaling to accommodate more (or less) usage is seamless and virtually instantaneous in the cloud.

And all this is without the compelling headline savings that can be made through potentially enormous reductions in costly IT infrastructure, data centres, heat and light and permanent headcount.

What’s the big problem then? Based on all this, it has to be a no-brainer, right?

Well no, not quite. And yes, absolutely.

What it all comes down to is the intrinsically risk averse nature of the average accounting function. Particularly the average public-sector accounting function, which, in turn, will commonly be surrounded by an institutionally risk averse wider organisation.

Concerns about cloud utilisation have traditionally revolved around perceived data security and ‘control’ worries, and this alone is generally quite enough to have public finance heads running for the hills.

There have been other question marks too. As regards possible supplier ‘lock-in’. Control and knowledge of where particular datasets actually reside. Hidden or at least non-transparent costs. Uncertainty over future pricing. Supplier longevity.

As today’s informed commentator now knows of course, most if not all of these issues have either fallen into abeyance or out of mind altogether.

Cloud services are now generally considered to be not less but more secure than their data centre-based counterparts. Especially those delivered by the cloud giants. These are firms who can afford to invest in the very best, world class security and recovery systems and who, to make a subtler point, frankly can’t afford not to.

Most of the other concerns listed have been similarly debunked or side-lined as the cloud market, and the suppliers that populate it, have grown in maturity and introduced appropriate checks and balances around contractual small print, and service delivery, control, and management processes.