What does a tipping point look like? We polled the attendees at our Cloud Accounting Thought Leadership Summit this week to see how many are already using Software as a Service. 52% of the attendees are not. However, 52% of their peers – respondents to a survey we reported on – are using it. With numbers balanced like that, Terry Petrzelka, our thought leader in the cloud ERP space, clearly called it right: we have reached the tipping point for SaaS adoption.
But let’s meet the speakers before we go on. Terry Petrzelka founded Tectura, a Microsoft Dynamics reseller, and built it up to be the largest accounting systems VAR in North America, with 75 offices, over 1900 employees, and revenues in excess of $250 million. Since 2010, as the Principal of The Petrzelka Group which provides professional management services for software publishers and channel partners, Terry has consulted broadly with industry leaders who want to do what he did. And he has headlined many seminars like ours, talking with business executives who want his assessment of the viability of cloud services.
Our thought leader in the CPA space was Seth Fineberg, Technology Editor of Accounting Today. Through his daily contact with accounting and finance professionals about their technology decisions and practice management challenges, Seth believes that “the accounting profession is undergoing a paradigm shift – from practitioners viewing themselves as compliance people to stepping up as true consultants and business advisers.” The cloud is a key enabler of that shift.
As moderator, Brittenford’s CEO Shereen Mahoney provided the framework for the discussion and presented research findings from the Cloud Accounting Institute. We won’t review those findings because you can view a recording of the webcast. Instead, let’s look at some key takeaways and what came up in the Q&A session.
To cut to the chase, both panelists said independently, “It is not a matter of ‘if’ but ‘when’ to move to the cloud. It is just a matter of time.” Cloud computing is rapidly accelerating in importance, has seen major improvements in functionality and operability in the last two years, and is beginning to go mainstream.
Terry recalls that just four or five years ago, only one in 20 companies preparing for an ERP upgrade even mentioned the cloud, and for them it was likely to be a checkbox on their wish list. Now 7 out of every 10 companies considering an ERP upgrade looks at cloud solutions.
Similarly, Seth points out that while CPAs are generally “one of the last holdouts” in the transition to the cloud, they are waking up to the advantages for themselves and their clients. Current technology spending plans prioritize document management, accounting/bookkeeping solutions, and portals for secure sharing of information and documents on the Internet, These are all areas where the cloud provides significant cost reductions or helps build new profit centers.
The Q&A session opened with questions about IT staffing, integration challenges, and security in the cloud. None of the speakers thought IT staff would disappear; they would be reallocated from routine report writing and maintenance chores to higher-value activities. For example, enterprises still need expertise in systems architecture to have a secure network environment, quite apart from the security of their cloud application.
Seth pointed out that cloud vendors tend to focus on a vertical industry and move with their market. Terry added that both the software publisher and their channel partners write to the same platform, so that when an upgrade is released, both the core application and any add-ins are all in sync and change seamlessly from the user perspective without breaking any of the customized configurations.
Terry said. “You walk out on Friday and when you come back Monday, the upgrade is complete – even if you have a global operation with 40 remote locations. It is scary the first time because you are used to the old upgrade cycle and things breaking.” Afterwards, he said, people see automatic upgrades as a major benefit. Lots of cloud vendors provide test beds when an upgrade is about to be released. This provides users with the opportunity to play with new things they might want to add to their business model – new features or functionality available from both the platform or the channel partners – with relative ease and without painting themselves into a corner.
The last question of the session was, What should you ask a cloud vendor whose products you are considering? Seth said that there are two important questions associated with the new delivery method. First, what is the vendor’s Service Level Agreement (SLA), particularly what is the guaranteed uptime? And secondly, if I decide to cancel my service or move to another cloud vendor, what happens to my data? Terry added two more questions. First, how are release upgrades handled, and how should I prepare for them? Secondly, what is the vendor’s roadmap for development over the next 3-5 years? What industry functionality is planned or available from channel partners?
If you want to go deeper into the areas touched on in this blog, click here to view the webcast.