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Financial Modeling on the Cloud: Defying Gravity to Gravitate Towards the Clouds

Mar 6, 2018

Do you plan, budget and forecast in spreadsheets or an old “on-premises” planning software solution today? Tired of trying to get IT support to maintain your planning process? Curious about “cloud” (software-as-a-service or SaaS) budgeting, forecasting and planning solutions and how they work? Want a “quick start” process that doesn’t require your entire department’s budget? Then this session at FinNext is for you! 

What is “The Cloud” and Why Should I Care?

We’ve all had that moment…the one where you’re sitting at lunch, in a meeting, or in the sunshine with friends and someone casually mentions, “My <insert here> [music/photos/software/banking account] are stored in the cloud”…and you end up daydreaming about angels up in the clouds reviewing everyone’s information! You’re then left wondering, “What is ‘The Cloud’…and why should I care?!”

cloudPCMag.com offers a great definition, along with an explanation of the silly ‘cloud’ imagery developed over the years in this article. In the simplest terms, cloud computing means storing and accessing data and programs over the Internet instead of over your computer’s hard drive. "The cloud is just a metaphor for the Internet. It goes back to the days of flowcharts and presentations that would represent the gigantic server-farm infrastructure of the Internet as nothing but a puffy, white cumulonimbus cloud, accepting connections and doling out information as it floats.”

So how does this impact you? As AccountingWeb.com mentions in this article, “In the early days of computers, users rented time on a mainframe computer. A few decades later, we all became accustomed to having our own personal computers on our desk, upon which we installed shrink-wrapped software. We became responsible for upgrading our computers, software, and backing up our data. As often happens in life, though, things are going full circle where we’re returning to the days of renting time on someone else’s computer.”

In terms of your day-to-day life, this means devices like your smart phone or tablet allow you to access huge amounts of information stored on someone else’s computers (called “servers”) via an advertising and/or subscription model. You no longer must have local storage on your device to keep everything close at hand!  As with anything positive, there are also possible negatives in this situation and a few of the big potential downsides include:

  • Security. You’re trusting someone else with your data, outside of your own protected environment. Mistakes can and do happen (the recent Equifax hack is a frightening example of what can happen with personal data stored on the Internet).
  • Data access. A business could decide to stop offering the service…or you could close your account…and you may lose access to important data and information.
This big shift to "The Cloud" also impacts your work life in much the same way, but the terminology can get a little confusing here too.

You may have heard the term ‘Software-as-a-Service’ or ‘SaaS.’ This simply means software that doesn’t run “on-premises” at your office location(s). Sometimes companies refer to storage in ‘The Cloud’ and to ‘SaaS’ as different things. This is because cloud-based storage of information (infrastructure and services) can be a totally different solution than the software being delivered as a service (applications) via the cloud! Other organizations use these terms interchangeably. Just be careful to clarify what someone means if you hear these words used in a business context.

We’ve already talked about some of the concerns with SaaS and cloud-based solutions; the obvious benefits include (but aren’t limited to):

  • Reduced upfront costs. SaaS is delivered as a service with fees per month or year, allowing the costs to spread out over time.
  • Reduced IT costs. The SaaS vendor automatically deals with hardware and software upgrades, as well as the personnel to support the solution.
  • Remote access. You no longer need to be tied to a physical computer where the data is stored so you can access solutions almost anywhere!

Why should you care? This is big business, and a trend that’s not slowing down any time soon.  It’s no longer a question of whether to move to cloud solutions for most organizations…it’s a question of when and how to move.

Join me at  FinNext and attend my Breakout Session on Monday, March 19th, from 10:45 – 11:15 AM to learn more about how to defy gravity when gravitating to the cloud!

Kirby Lunger
Partner
Performance Architects, Inc.