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How SMEs can use Cloud Computing to punch above their weight in business

By Gordon Carmichael

Having a well thought through business strategy is key to keeping ahead of your competition. Adopting cloud computing as part your strategy, can be an important factor in striving for excellence.

Cloud computing can enable SME businesses to compete with larger business globally. It can allow both Start-up and established businesses to scale up with ease. This article will demonstrate some of the opportunities that are available to businesses that adopt cloud computing while considering the potential downsides.

What is the cloud and where is it?

Cloud computing is an Internet-based computing model that provides shared data and computer processing resources typically on a “pay as you go” model. Up front capital costs are replaced with ongoing variable costs. Unlike traditional local IT, capacity can be rapidly scaled up and down with minimal management resources. Cloud computing enables ubiquitous on-demand access via PCs and mobile devices. Cloud services are usually hosted in secure data centres with massive computing, storage and communication resources.

Organisations can usually setup new applications by easy configuring rather than by complex programming. Most systems are a Public Cloud in that they use computing resources that are shared with other users. Private Cloud systems are also available and often a Hybrid Cloud approach is taken. Public does not imply a lack of privacy or security as each organisation does not share its data unless it chooses to.

Why adopt cloud based solutions?

The ‘Exact 2015 SME Cloud Barometer’ – an independent research study of just under 3,000 SME leaders across the UK, the USA, France, Germany, the Netherlands and Belgium – found those who are ‘heavy users’ of cloud software (defined as having three or more different cloud products in place) achieved far higher revenue growth and more than double the profit of those using fewer cloud products.’

The survey indicated that IT cost savings are the primary reason for adoption by UK SMEs. Elsewhere better security was the main reason. Cost and functionality can be optimised by selecting the appropriate subscription level.

Privacy and security concerns are a perceived barrier to adoption. The average SME business using traditional computing often has gaping holes in privacy, security and recovery. There are pitfalls and some regulatory issues on where data is stored, but properly implemented cloud solutions can be very safe. Business processes can be enforced and data is usually strongly encrypted when stored and transferred.

Cloud solutions enable operational efficiency through making valuable business data available to office based and mobile workers. The ability to collaborate and share data when in teams and when working with partners can transform operations. For more complex applications, different systems can be integrated ensuring that relevant data is input once and available wherever needed.

Cloud based solution considerations

Some applications can operate offline, but a reliable and fast business grade internet connection is usually essential. Consideration has to be given to vendor reliability and lock in, with appropriate service level agreements being essential. You need to ensure that your data is backed up and that you have access to it. In some cases, security and privacy can be compromised by not having control over service providers. Regulatory limitations in some industries may restrict where and how you can store data.

Poorly planned cloud implementations can potentially have a higher cost of ownership than traditional solutions due to the ongoing subscriptions over the longer term.

Free, “cheap” or consumer based applications can be a really bad choice for businesses even start-ups. They can offer inappropriate service levels, unacceptable security, limited flexibility and can end up costing a business more to upgrade later with inefficient operations in the meantime.

Typical cloud based applications

Cloud storage – Applications such as Microsoft OneDrive for business, Google Drive and Dropbox are used by many businesses and local data can be easily synchronised with the cloud. With due regard to confidentiality and security, cloud based storage allows easy sharing of selected information inside organisations and also with outside partners to enable collaborative working and huge operational efficiency gains. Most smart phones and tablets can be used to access cloud based data on the move. Please note that with a few exceptions, cloud based storage is not an acceptable backup methodology. Accidental or malicious deletion of data on one device can replicate to all synchronised storage locations and devices.

Office Productivity such as email, document handling and spreadsheets – Microsoft Office 365 for Business and G Suite (Google Workplace for Business) are the most common options. Microsoft is the market leader and with a typical current subscription cost of under £100 per user per year, Office 365 is a compelling proposition for a complete suite of PC and mobile based applications, integrated with cloud hosted email and storage. Adding and removing employee access is simple and quick. PCs or tablets are required but the cloud service provision is managed by the provider. You don’t need to pay for, upgrade and maintain a local server, just a network and an internet connection. It may be desirable to retain local network storage.

Company specific applications –  If your business needs a customised Private Cloud solution with computing, storage and network resources, then the underlying services will typically be provided by Amazon Web Services, Microsoft Azure and UK companies like Rackspace. There can be control about where the data is stored to ensure compliance with any relevant legislation.

Accounting and Payroll – There are many cloud based accounting offerings including Sage One, Kashflow, Xero and Quickbooks. Your accountant can have easy access to the relevant data to provide assistance and prepare accounts and HMRC submissions.  Payroll services are provided as standard or as service upgrades. The relevant data is entered once. Applications can integrate seamlessly with automatic bank feeds to minimise data entry and with other applications such as Customer Relationship Management. The SaaS subscription means that applications are kept up to date and compliant. It also means that your organisation should keep a local copy of your data as you only have online access for as long as you subscribe.

Marketing and CRM – Typical cloud solutions include Google Analytics for website performance measurements, Adobe Creative Cloud for content creation and powerful Email marketing applications such as Mailchimp and Constant Contact. Cloud based Customer Relationship Management applications such as Really Simple Systems CRM can improve customer service by integrating with other applications such as accounting and email marketing.

Other applications – Telecom services can be cloud hosted using applications like 3CX to connect local and mobile workers. This means the end of a company switchboard and expensive proprietary hardware. Industrial design applications from companies like Autodesk enable access to massive computing resources when required and create efficiencies in workflow, collaboration and project management. Automation, Artificial Intelligence, Big Data and Internet of Things can enable previously impossible solutions.

For a no-obligation chat about your total business strategy, please feel free to get in touch with me at gordon.carmichael@hcbusinessadvisors.co.uk or on 01276 818125.

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