Artificial intelligence has dominated technology headlines in recent months, temporarily putting cloud computing on the back burner, attention-wise in any case. However, as the dust settles on pandemic-era remote work policies, and companies reassess their operational strategies and return to work appetite, it's crucial to remember that cloud technology remains a cornerstone of modern business success. This is for reasons beyond the video conferencing, document sharing and collaboration functionality that got us through the pandemic.
The evolving landscape of work and technology
During the height of the Covid-19 pandemic, cloud computing emerged as the technology hero, enabling unprecedented business continuity in a suddenly remote world. Before that, it was certainly important, and was often discussed in the context of startups gaining a competitive edge by being "cloud-first", with traditional businesses warned not to fall behind. The pandemic is what put the cloud on the agenda for many, if not all, businesses.
For better or for worse, many companies are making 180-degree turns on remote and hybrid working today. Notably, Amazon, UPS and Dell have announced a complete return to the office, with PWC, IBM and even Zoom tightening up their hybrid culture. But, as these companies adjust their remote work policies (we’ve yet to see how successful they will be), the cloud's strategic importance hasn't diminished. In fact, it's more critical than ever.
The enduring case for cloud
The arguments in favour of cloud adoption remain compelling, with, in the face of increased cybersecurity concerns, enhanced security at the top of the list.
1. Enhanced security
Cyber-attacks are on the rise in terms of frequency and severity: malware, phishing and ransomware have all increased this year. Yet too many businesses still think they can provide the best protection for their data and systems compared with cloud providers. This has long been a myth, and the reality is that most organisations can't match the security resources of major cloud providers. The cloud giants – Microsoft, AWS and Google – spend millions on their infrastructure and R&D every year, and are supported by global teams. This is something an individual IT team just can’t replicate.
One of our clients recently lost primary and backup data to an on-premises hack. If they had already migrated to the cloud, they would have had enhanced protection, geographic redundancy for their data, and, in the case of an incident, rapid recovery of data and systems, ensuring business continuity and protecting their reputation.
2. Automatic upgrades and advanced capabilities
Cloud services keep software current without the hassle and expense of manual upgrades. All users are always running the latest version of the software, enhancing safety and functionality without the time lag or cost of consultants. Often, you'll find yourself with new, advanced capabilities without even realising it.
3. Cloud economics
The financial benefits of cloud computing are clear. Software as a Service (SaaS) shifts IT spending from capital expenditure to operational expenditure, allows for easy scaling, and eliminates the need to over-provision resources "just in case". Tech is moving so fast that significant changes come with an incremental price tag: we’ve just doubled our cloud capacity for a 5% increase in our bill, and were able to upgrade our infrastructure without leaving expensive, redundant hardware behind.
Why some companies still hesitate
Despite these clear advantages of the cloud, some organisations still cling to on-premises solutions or even revert to them as remote work policies evolve. This hesitation stems from two key issues:
1. IT-driven decision making
Too often, what should be a crucial business strategy decision is left to IT departments to make. Instead of seeing the bigger picture, these teams may be concerned about losing control and relevance in a cloud-first world, and make decisions based on this rather than what makes the most sense for the business. These teams are missing the opportunity to evolve their roles as well as hampering the organisation’s overall success.
2. Leadership abdication
The other side of the coin is business leaders shying away from grappling with the cloud, viewing it as a purely technical matter, and not a critical success factor for the business. This is a mistake. Just as with AI, leaders need to educate themselves about cloud technology, determine their business requirements, direct their cloud strategy, and manage perceptions, concerns and change management across the organisation.
The hidden costs of doing nothing
Yes, there is an initial cost, in time and money, when embarking on a cloud migration. But companies must consider the long-term costs of staying on-prem. These include potential exclusion from public cloud-only services and falling behind competitors in terms of agility and innovation of service delivery.
It's also worth noting that some IT departments might push for private cloud solutions as a compromise. The argument is that this is the ideal bridge between the perceived increased security of keeping everything on-site with in-house management, and the flexibility and remote capabilities of having your data “in the cloud”.
However, this hybrid approach is unlikely to deliver the full benefits of public cloud services. It won’t give you the scalability and support of the public cloud. Remember a third-party service provider offering their applications via the public cloud is uniquely positioned to update, upgrade and manage their applications for you. This is not available with any hosted or hybrid-type environment. Ultimately this will limit the benefits of moving to the cloud and reduce the ROI you can achieve.
Business must lead tech
So even though we don’t have a watershed moment such as the pandemic prompting action, business leaders need to take the reins on cloud strategy. Remember you're running a tech-enabled business, not a tech business, and the business needs to lead the tech.
This starts with educating yourself about the business benefits and implications of a cloud approach, and then clearly defining your organisation’s requirements. Collaborate with IT, but don’t delegate this strategic decision wholly to them. Finally, as with AI, manage the change across the organisation, correcting misperceptions and encouraging employees to reimagine their roles, instead of thinking they are out of a job.
For accountancy firms, this isn't just about your operations. As a strategic advisor to your clients, you can share your experiences and educate them about the benefits of moving off premises and onto the cloud, even in a return to office world, painting the security, economic and capability picture for them. By embracing the cloud strategically, you're not just solving today's problems – you're positioning your firm, and your clients, for tomorrow's opportunities.
As published in AccountingWeb - October 2024
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