bptu - Fotolia
Making the decision to move your financials to the cloud is pretty simple: The cost savings, increased flexibility and ease of maintenance are too good to pass up. After that, though, things get complicated. With all the different cloud options out there today, it can be confusing to determine which deployment choice to use for cloud-based financial software -- public, private or hybrid.
"Generally, most companies aren't in a position to make an informed decision on the matter," said Craig Downing, senior director of global cloud marketing at Epicor, an enterprise software vendor. "More often than not, they haven't had to make this decision before and so are trying to figure out what the need-to-ask questions are -- never mind the answers."
If your organization is a small or medium-sized business (SMB), your cloud choices are about to get a lot easier. For the most part, a multi-tenant software-as-a-service (SaaS) public-cloud option will be your best bet. But we're getting ahead of ourselves.
Sorting through the cloud options
According to Michele Corvino, director of product management at ViaWest, an IT infrastructure provider, companies must first decide if they want to control their own financial data, which would point to private or hybrid cloud, or if they are happy to let a third party manage the data in a public cloud-based SaaS application.
Organizations moving financials -- or any other application, for that matter -- to the cloud face the choice of public, private or a hybrid of the two. To maximize security and control over financial data, many large enterprises choose to go with private cloud, which means they do not share the infrastructure with any other customers -- hence, the term private: It is theirs alone. Private cloud is often the best fit for large enterprises for the additional reason that they can port over their existing on-premises financials, which are often highly customized, to the cloud provider without needing to worry about changing the way users interact with the system. This reduces the amount of change the organization needs to absorb.
Private cloud most closely resembles traditional outsourcing, also called "hosted" cloud or managed services. The gist is that the provider runs and maintains the hardware and software infrastructure for that customer alone, whose users access the cloud-based financial software via Web browser. This option offers the apparent advantages of security and performance -- though some might argue those points -- but it is expensive. Most SMBs are not in a position to give this option serious consideration.
Large enterprises are also more likely than SMBs to use a hybrid cloud architecture, which refers to a mix of private cloud, for maximum control, and public-cloud services, to reduce costs for less demanding workloads, for example. The hybrid scenario, in general, presents too many moving parts for SMBs, which need ease of management above all.
That brings us to public cloud, in this case, a SaaS-based financial application from a software vendor running on shared infrastructure on the public cloud. SaaS applications leverage efficiencies by serving multiple clients from a single software instance on a cost-effective public cloud platform, such as Amazon Web Services. This works well for financial applications that have been designed from the ground up to run in a multi-tenant architecture.
This option is best for SMBs because it is affordable, shifts the burden of maintenance to the provider and offers ultimate pay-as-you-go scalability. Accounting departments can easily add and remove users as needed. Users can access the financials from any device or location via Web browser.
With this option, there is little opportunity to customize the software. That would add cost and wouldn't work in a multi-tenant environment. For most SMBs, the sacrifice of little to no customization is worth the benefits of no-brainer upgrades and low costs.
Once you decide to go with a multi-tenant SaaS product, you will ultimately make your selection based on capabilities offered by providers in this category of cloud-based financial software. So, digging down into the details of the SaaS financial offerings is a good starting point on your cloud journey.
"The typical finance management solution buying process we see today starts and ends with a list of functional and security requirements," said Bruce Guptill, senior vice president at Saugatuck Technology, a research and analysis firm.
As long as you evaluate cloud-based financial software based on the features and functions you need, making sure the provider's security provisions meet industry standards, the choice should proceed in a straightforward manner, added Guptill. "You set up the right parameters and define the right corresponding characteristics required and then have the providers walk through every single one."
Learn about trends in cloud financials
Get more analyst views on financial clouds
Take a quiz on moving financials to the cloud