Cloud computing has gained momentum globally. Many firms are changing their services to incorporate the cloud computing systems. Cloud computing is an approach that entails conducting business activities through the Web. The “cloud” is a computer platform, which runs software and applications from any device that is connected to the Internet (Paknezhad & Keshtgary, 2013). It eradicates the need to install and run accounting software through the computer, performing it through a portal, instead, which delivers the software to any device that can login into the portal. In a way, it eliminates the necessity for investing in brick-and-mortar offices’ technology infrastructure. Technological evolution has created interest among CPA firms to take advantage of cloud computing. In general, there is increased trust in the cloud platform (Paknezhad & Keshtgary, 2013). The early adopters of the technology report that it has enabled the expansion of their roles and values for the customers. Majority of them have transformed from, a once in a year tax preparer or a bookkeeping firm, and they have become strategic partners and business advisers to the clients (Drew, 2012a). Incorporating cloud computing into the operations of CPA firm is essential in the modern business world but it also develops certain challenges, which have to be overcome.
The cloud computing platform can be utilized for a number of reasons, including backing up of company data, interacting with clients and marketing among others. Regardless of the use that a firm puts the platform into, it entails trusting a third-party company with confidential information. The information relates to the clients and other business issues (Zissis & Lekkas, 2012). Therefore, various security concerns associated with the technology exist. Some of the security issues include:
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Operations on cloud connectivity are based on the Internet. All such traffic between the firm and the service being used relies solely on the Internet. The channel used ought to be secure in order to guarantee the security of the data. The third-party firm that is offering the services should be trustworthy. In such case, some data, which may be confidential about the clients may be mishandled or used without the consent of the clients (Zissis & Lekkas, 2012). It may have adverse effects on the firm.
The firm should be aware of the different software interfaces used for cloud computing. The security of such interface is vital as weakness exposes the firm to numerous security threats relating to reliability, confidentiality, accessibility and responsibility (Zissis & Lekkas, 2012). Therefore, the firm should analyze the security throughout the system.
Other than sending data over the platform, it is also stored so that to be accessible to the authentic individuals. It is necessary to ensure that the data is encrypted whenever it is on the servers of the platform’s provider or when being used (Zissis & Lekkas, 2012). The potential providers ought to offer sufficient information regarding their approaches to the data protection when it is in transit and also when it is on their servers. Disposing such data should also be done in the appropriate way.
The data that the firm stores on the cloud is potentially accessible to the employees of the firm. In most cases, it lacks the usual personnel controls applied in the firm. It is necessary to consider the sensitivity of the data being allowed into the cloud (Zissis & Lekkas, 2012). In addition, the potential providers of the service should offer information regarding the approaches that they use to manage the data, as well as the access levels involved.
It is a security concern as the data comes from one source but is should be sent to specific users. Therefore, it is necessary for the data to be separated, since the cloud platform entails sharing of the space on the servers of the provider. The firm manager should understand the approach taken by the potential providers to separate and encrypt the data (Zissis & Lekkas, 2012).
Convenience and Opportunities of Cloud Computing
When a CPA firm moves to a cloud computation platform, it will experience a reduction in the costs. A client of cloud computing services pays for the computing resources only instead of buying or leasing the equipment. Such equipment is expensive and it may not be used all the time. The payments for the resources can be made on monthly or annual basis, which reduces the amount of funds required upfront. The hardware and maintenance costs involved are the devices to be used in the firm’s offices, which have probably been bought already, for example, computers (Drew, 2012a). It reduces the necessity of physical space and utility costs associated with the maintenance of a physical data center. When operating in some countries, for instance the United States, a firm that obtains all the cloud services from a provider can receive a tax benefit. The tax subsidy is not applied when the firm has its in-house IT functions.
When a firm uses the cloud connectivity through service providers, it meets its computing resources needs faster than in a situation where it may use its internal IT functions. The external provider specializes in the field and aims at satisfying the needs of the clients so that to retain them. The time used to meet such needs with the provider can reduce from months to weeks, or even days, depending on the requirements (Drew, 2012a). Therefore, the firm can concentrate on other managerial and strategic functions in line with its vision and goals.
Cloud computing enables a firm to scale up and down its capacity from a single server to as many as required without the need of making capital investments. Through the external service providers, the firm can obtain large amount of computing assets for its performance of temporary tasks that require massive computing when the need arises. It does not need to invest in additional resources in order to meet the needs of the temporary periods when the demand is high (Drew, 2012b).
Through the cloud computing platform, the firm’s capacity to handle business is expanded. As a result, the constant need for physical offices eliminates. Therefore, the employees can work from their homes and they are not limited by the office working hours. Therefore, they can work at any time of the day or night. In addition, the clients do not need to engage with the firm through the physical address. When operating through the Internet, the firm can deal with a high number of clients as there is no time or geographic limitation (Drew, 2012a). It is applicable in case the firm operates in different states as it will offer the services to the clients in real time, regardless of the time difference in such states. Additionally, it has the potential to expand internationally as the Internet is accessible throughout the globe.
When a company owns and operates its IT function, it incurs many costs and has to allocate more time to manage it. However, cloud computing allows the firm to focus on its time and strategic objectives. In addition, most of the cloud service providers base their operation on standard technological foundation, which facilitates better support (Drew, 2012a). The foundation makes it easy to provision computing resources, which enables constant technological upgrades. It also expedites the fulfillment of information technology resource requests. Therefore, a CPA firm can run its accounting business without minding about the management of the technological aspect of the business. It is handled by experts, which improves the results and the firm can meet its strategic goals.
When a firm changes from managing its data to the cloud computing offered by an external service provider, it makes a significant reduction in its overall power consumption, physical land use and carbon emissions. When the IT function of the company moves to the cloud computing, most of the IT hardware is located off-site and it is managed by the external service provider. It reduces the plugging costs in the firm; thus, reducing the power consumption costs (Paknezhad & Keshtgary, 2013).
When operating through the cloud, the need for paper documents elimination, as well. First, the information is sent to the clients through the cloud in a printable form. Therefore, the firm does not need to send a paper format of the document. The information can be accessed by any of the authorized personnel in real-time. It eliminates the number of client files that use much physical space for storage. It also promotes the environment by reducing the demand for papers and eases the collaboration of the team members within the cloud (Drew, 2012a).
The experts of a CPA firm operating in the business are accountants. It is difficult for such firm to have IT experts who are given all the necessary resources to operate an IT function, which serves only to the specific firm. As a result, the firm experiences frequent downtime due to the maintenance and other issues related to the inexperience in the field. If the firm outsources the IT function through an experienced service provider, it will experience less down time and it will also enjoy the latest technology in IT (Drew, 2012b). It is mainly attributed to the IT firm’s expertise in the field, as well as its need to satisfy the client.
The system allows accessibility to the data and information at any time and location. However, the system may have serious dysfunctions, which may have adverse effects on the business. It is necessary for the firm to be aware that, like any other Internet technology, cloud computing is prone to technical issues and outages (Drew, 2012b). It is also entirely reliant on Internet connection; hence, lack of connectivity will cause inaccessibility into the system on a large scale.
As earlier discussed, the system is marred by numerous security issues, which may affect the business and the clients adversely. Prior to the adoption of the technology, it is essential for the firm to understand that delicate information will be handled by a third-party (Zissis & Lekkas, 2012). Therefore, the chosen provider should be trustworthy and reliable, as well as keep the information protected.
When the information is stored in a cloud, it increases the company’s vulnerability to external attacks and threats through hacking. It is possible for cyber criminals to hack the service provider’s servers and steal crucial information about the firm and its clients (Zissis & Lekkas, 2012). However, it is a problem associated with all Internet usages.
The cloud computing system is still evolving and it lacks the flexibility that a firm would prefer in relation to use and integration. In case the provider fails to meet the agreed terms, it may be difficult for the firm to migrate to another provider. It may also be difficult to move to another platform as the applications made by the Microsoft Company may not be compatible with those using the Linux platform (Zissis & Lekkas, 2012).
Incorporating the new system entails changes throughout the firm. The changes will not only affect the employees, but they also have a direct impact on the clients. It may be adversarial for the company if the clients are opposed to the change (Drew, 2012b). Since the aim of the technology is to move the transactions to the online platform, if the clients are opposed to it, the firm cannot implement its project or may risk losing the customers. In addition, the clients may lack the appropriate infrastructure, for example, strong Internet connectivity to implement the change. Therefore, they may opt to move to another CPA firm, or the firm may be forced to retain the old methods of operations. The employees may also be resistant to the change and it may delay the implementation of the project, which may be costly for the firm (Zissis & Lekkas, 2012). It also requires training for the employees and the clients in relation to the use of the new platform. Therefore, the firm should be ready to deal with the resistance.
It is evident that cloud computing holds numerous benefits for a CPA firm. However, there are also various shortcomings that the firm may face when implementing the system. I believe that it provides a great opportunity for Mr. Say to eliminate the negative effects and costs associated with the management of information systems. Anyway, the benefits of the platform outdo the involved shortcomings. It is possible to deal with most of the disadvantages, especially by choosing an experienced provider to handle the IT issues. There has been increased attention towards the online platform and it is important for Mr. Say’s firm to hold its market share. After checking all the shortcomings and developing appropriate countermeasures, the firm should start implementing the cloud computing slowly. For instance, it can start with one or two of its business applications and focus on a few of the clients. It will be an opportunity to monitor how it functions and decide on whether to scale-up or make some changes. The firm should not make a sudden implementation of the project without notifying the employees and the clients. Such move may lead to the loss of current clients.
It is important for the firm to elucidate all the details about the benefits of the system to the clients and the employees. Moving together throughout the process will eliminate the possibility of resistance to change. In addition, the firm should check what other CPA firms have done in relation to cloud computation. It will learn the problems that they came across during their implementation and the approaches they used to deal with them. In addition, it will also receive the information about the best providers of the services in order to start building a working relationship with the experts. It should also conduct research on the issue through other channels to ensure that it will receive the maximum benefits from the service. I would recommend the firm to move into the cloud computing platform, as it offers opportunities that will have immense impacts on its operations. It will have numerous benefits for the future performance of the firm, as it can develop to the international level.