The 2018 CPA Firm Management Association (CPAFMA.org) IT Benchmark Survey found that more than half of responding member firms had moved the majority of their applications and IT Infrastructure to cloud/hosted application providers instead of building and maintaining networks themselves. Read below why this trend is accelerating and why your firm should be considering the move before you replace your existing servers:
- Replacement Cost of Onsite Network: As servers come to life there is a cost of not only replacing the physical equipment, but conducting a thorough evaluation of current options and whether your internal personal have the experience to properly implement the new solution the first time. Case in point, for the majority of firms Hosted Microsoft Exchange is a no-brainer from a cost/feature perspective but internal IT personnel want to maintain control of email.
- Experienced Implementation/Support: Most firms have had tight IT training budgets since 2008 so few have invested in sending their IT team members to external training, and even fewer have experience in implementing the latest remote access and accounting application features, which are usually run by experienced enterprise class network personnel in the cloud. Cloud providers control the environment in which the application runs for multiple clients so they can focus on supporting the application instead of trying to diffuse technical IT issues. An interesting finding in the survey was that firms with large IT staffs significantly reduced the number of IT personnel (at the higher end of their salary spectrum) when they moved entirely to the cloud.
- Better Security: Security training has also been an afterthought in many firms and while most IT personnel do the basic operating system, anti-virus and firewall updates, they seldom have the knowledge and resources to implement multi-factor authentication, intrusion detection and prevention applications, or to properly manage the governance structure to (i.e. implementing AICPA SOC2 guidelines), especially when dealing with security issues.
- Working Remote Access by Default: Most firms today want the ability to work remotely from client sites, their homes, and even on their smartphone/tablet when they are on the go but struggle with making applications work the same as when they are in the office. Cloud-based applications are mobile by default whereas many firms have struggled with remote control and access solutions as their internal personnel do not have the experience or financial resources that cloud providers have built in.
- Depth of Personnel: Most firms with traditional onsite networks are understaffed from an IT perspective and would have a hard time replacing their IT personnel should they terminate employment, which leaves the firm seriously at risk. The reality today is that few CPA firm partners have the knowledge and/or desire to oversee IT, let alone hire IT personnel, whereas cloud providers have layers of personnel providing backup personnel.
- Disaster Recovery: Ask any partner what level of disaster recovery they want and they will say instant recovery! However, when told of the extensive cost for disaster recovery, they are seldom willing to pay for anything more than an offsite backup. Cloud providers have extensive disaster recovery capabilities built into their offering which is regularly tested and have the cost spread over all clients.
- Supports Growth/Mergers: Many firms are surprised at how difficult and expensive it can be to upgrade an internal storage area network or add remote user capabilities caused by an influx of new users from an acquisition or merger. Cloud providers have highly scalable architectures allowing firms to seamlessly add users and applications and are ideal for firms that are on a growth trajectory.
- Supports Demergers/New Firms: One of the benefits of cloud providers is you pay for what you use similar to a utility. In the case of a demerger or a manager wanting to start a new firm, the cloud has the ability to ramp up applications and users in a fraction of the time that it would take internal personnel to create a new network and it would do so at a fixed monthly cost instead of large initial capital outlay.
Traditional server farms and IT departments are being “uberized” and replaced with cloud applications and hosted service providers at an increasing rate. Don’t let your firm get locked into expensive and possibly obsolete hardware and IT support before considering cloud options.
About the Author
Roman H. Kepczyk, CPA.CITP and Lean Six Sigma Black Belt is Director of Firm Technology Strategy for Right Networks and works exclusively with accounting firms to optimize their internal production workflows within their tax, audit, client services and administrative areas. He can be contacted at 678-495-0508 or email@example.com.