What's the Big Deal about the Cloud?

I read some really interesting comments on AccountingWeb about why paperless is always associated with the cloud when they are two different things.  My resulting comment got so lengthy, I decided to turn it into a blog instead taking up four pages of space in the comments section.

So here’s the premise of the discussion.  Thanks to Robert Lopez for kicking off the topic.

“Why is paperless always associated with cloud? Paperless is one thing and cloud is another. Paperless is about office culture, interactive software, expert systems, data bases, e- learning and e-supervision. Cloud is about just one thing - hosting your stuff on a remote server. People talk about cloud as if its a big deal. The big deal is going paperless and that can be done without cloud.”

“...I still hold the view that “cloud” is not the central issue. How an application is built (open source code, language, platform etc) is interesting but different code can be used to create the same interface. I do not know the numbers but suspect a great deal of office administration, accounting etc is done on local servers. There are reasons for this. Local servers are faster than cloud. Local servers are more reliable than cloud - the former can function with intranet only, the later needs both inter and intranet. A lot of businesses do not need ongoing active online file sharing. The level and need for file sharing is low and so can be achieved with VPN logins etc. Updating software on local servers is mainly automated and very easy these days. A lot of software applications are not multi-user and do not want to be (think say Adobe Acrobat). There is more but my final point is we are totally paperless and we do this without using cloud at all. The reason for this is not that we do not get it, or have not thought about it, but because we just don’t see the advantage of putting some of our apps on a remote server. 99% of the work was getting staff to accept, live with and grow to like the culture of paperless – cloud is just not that big an issue.”

And here is my response.

That’s an interesting perspective.  Our business environment is completely cloud-based, and I think maybe you are confusing the concept of working in a cloud environment with working in a hosted server environment. 
 
“Local servers are faster than cloud.”  I completely remember those days, particularly because it wasn’t very long ago… maybe five years ago or less.  In fact, even sharing Excel files in a cloud tool (similar to a local server and now, I’d argue, just as fast) became really frustrating, and we would download, make changes locally, and upload again.  It was really annoying.  But then our company switched to Google Docs for file sharing, and our lives were totally changed.  I didn’t even really realize how much we shared documents or how much we needed to collaborate until we had the proper tool for the job.  There is nothing like being able to hop on the same document and make changes at the same time while having a web conference about the document.  It’s better than being in the same room and definitely better than using a local server.  

“A lot of businesses do not need ongoing active online file sharing.”  I’ve found that not only do we need (and now use) this more internally, now that we’ve gotten a taste of it, we’re finding a need (or desire) to use this externally with our clients more as well.  When you say there’s not a need for file sharing, I would argue that people simply aren’t aware of the need because they have never had it before.  It’s like saying that someone who has never tried chocolate doesn’t crave chocolate so they must not like it.  We literally have to share everything to run effectively… documents (Google Docs), calendars (Google Apps/Gmail), file cabinets (SmartVault), accounting software (Xero), passwords lists (LastPass), task lists (Asana), and on and on.  I can’t think of a single tool we *don’t* need to share, and most of them are shared not only internally but with clients as well.

“A lot of software applications are not multi-user and do not want to be (think say Adobe Acrobat).”  True, but Adobe Acrobat and others are moving into the “apps” and subscription world at an incredibly fast pace, and that’s not an accident.  The world is going mobile, and local servers can’t compete with that.  People want to be able to see their documents on their tablet.  They want to be able to collaborate without being tied to a local server.  They want to be able to quickly pull up a browser to see financial data or cookie recipes or when their child’s next ballet recital is.  It’s less about multi-user and more about connectivity.  Connection to what, when, and where it’s important to them, not just when they have their laptop and can VPN into a local server.

I’ll wrap it up by saying that I agree with your original premise… paperless and cloud are completely separate concepts.  Paperless is one thing, and cloud is another.  But more than that, it’s a gradual evolution from one to the other.  I began moving to paperless before the cloud became the cloud.  It was about 2005, and I was scanning everything in that I possibly could.  It was painfully slow and a colossal pain, but I kept with it.  In 2007 to 2008, the big question in tax firms wanting to go paperless was whether to scan documents at the beginning of the process or at the end after all the workpapers had been built.  By about 2009 or 2010, I got my Fujitsu scanner that scanned at top speed, and it rocked my world.  No piece of paper was safe from feverishly scanning hands.  And at about the same time (as software tools caught up with demand), the answer was that you could scan at the beginning and become truly paperless.  But that was just the beginning.

Now we’re reaching the next big step of the journey… the cloud.  By using cloud services, we can now run our office from anywhere.  All our employees work from home.  We have clients in different countries.  If one tool goes down (which is extremely rare), we can keep working in other tools.  We can customize the solutions we bring to clients.  We can look at documents on our phones.  And we don’t have the burden or cost of investing in a private server that we have to maintain and support.  We are scalable up and down with marginal usage costs vs. a giant outlay of cash.

But probably the biggest advantage to the cloud is how all of our favorite tools are now collaborating to connect to each other.  I look at something like Hubdoc which is a rockstar app which connects to our customers’ banks to download statements we would otherwise need to log into and download one by one ourselves.  And then they will download a bill from Comcast and push it into Xero with the document already attached so it’s queued up and ready for our client’s approval as soon as it’s ready to go.  Or look at TSheets.  Employees log in and enter hours which are sent to ZenPayroll for payroll processing, and then a bill is sent to Xero.  When payment is automatically pulled into Xero from the client’s bank, we apply that directly against the awaiting bill in Xero.  Boom.  Done.  Talk about power and monumental jumps in collaborative workflow and functionality.  You just can’t get this on a local server.  Literally.  Because they’re building it exclusively for the cloud. 

If you thought that becoming paperless was a big deal, just wait until you embrace the cloud.  It’ll rock your socks off.   

Comments

Robert Lopez 

12/17/14 6:59 pm

Thanks for that very detailed blog response. I read it carefully and once again nothing you have said strikes me as spruiking or not carefully thought through. In short you make a lot of valid points but I do take issue with your statement “If you thought that becoming paperless was a big deal, just wait until you embrace the cloud. It’ll rock your socks off.”

And here’s why.

To start with I run a CPA firm in Australia where we have only just begun building a national high speed broad band network (NBN). Speeds here are not what they are in many parts of the US and our NBN will likely not be complete for at least 8 – 10 years. That, however, is not part of my argument it’s just something to note. 

This is what paperless means in our office and is why I am pretty sure cloud will unlikely blow our socks off. Going paperless as a tax and audit firm meant we had to do the following:
Develop our own internal expert software type system that allows staff to access interactive documents, videos and e-supervision tools. For example, a staff member is filling out a specialised tax form that they do not usually do. Our system lets them create a job that has steps on how to fill out the form, including tags, MP3 and 4’s on what to do, what not to do and what to be careful with and why.

One of the main drivers for going paperless was creating a system for staff to work from home. That system must do several things including: creating assignments with instructions, steps and procedures. Allow a staffer to work at any time of the day or night without the need to contact the office for anything they might need. Allow a staffer to leave a query trail so that during normal office hours another staffer can resolve their questions etc (this works much better with audit type trails than it does by commenting on a shared documents etc). Allow a home based staffer to be kept abreast of new routines, tax rules etc in such a way that they see the changes when they need to use them (expert system not a data base).

Teach staff to use their microphones and document tagging and other system tools to store client information.

Teach staff the culture of creating new and useful templates and then make them part of a system that others can find if they are doing the same type of assignment months later. Not because someone told about the new form etc but because the paperless systems detects what they are doing and offers them the new template as a possible solution.

Design, run and implement a quality assurance system that attempts to monitor and detect staff who enter bad information, forget and/or do not follow the protocols that are essential to make it all work.

Once again there is more but that should do. Now here is the point. Let’s say that tomorrow morning I am told that there is the really high speed cloud server that I can put all my software and files onto and it will update everything all the time. My response would be that’s great, I will do that but at the end of the day not much will change – all I have done is stick my stuff on a remote server. 
Cloud to you is about all these online shared apps like Basecamp, Zoho etc.It is also about data feeds and shared accountancy software (which is easy to do without cloud as you know). All these shared apps are possibly useful but there is much much more to paperless than cloud.

Final comment – my biggest problem is not cloud, it’s getting other accountants to understand the power of going paperless. Most do not get it or seem to think they know all about it when it reality they have little to no idea. That is not the issue with you hence thank you for your thoughts.


Patti Scharf
12/18/2014 8:14am

Hi Robert,

Thank you for the backstory and additional perspective. It helps shed light on where it is you're coming from and the unique challenges you face.

I think that high-speed internet access is fundamentally important to having a good experience using the cloud, and if you don't have that, pretty much everything else I've said is moot.

I would also say that just as you say there is much more to paperless than cloud, there is also much more to cloud than paperless. :o)


JP
12/26/2014 6:31pm

We have fast enough internet here in Australia Patti. 

Not sure what Robert's point is but internet speed has no correlation for cloud adoption as cloud adoption is actually greater here in Australia than in the US.