How the cloud can help make your business run better
The cloud trend is growing, but what can it do for you? Here are four practical examples of how the cloud has helped real companies, from Sholto Macpherson of BoxFreeIT.
Australian businesses are slowly turning to the cloud for software to run their businesses. It’s a trend still in its infancy but it’s growing. While Google and Microsoft refuse to reveal the number of Australian customers, the most popular cloud accounting vendor, Xero, saw Australian customers jump from 6,000 to 16,000 last year.
In a nutshell, the technology has the potential to save you money, save you spending time doing things like fiddling with servers, and could potentially save the amount of money you spend on having someone to run and maintain everything. It’s not something you need to be a high-tech company to benefit from either. Companies that can benefit include plumbers to freight companies and bookkeepers.
Example 1: Accounting firm
The cloud offers several ways to reduce costs and improve efficiency. One of the most rewarding projects is to replace a dedicated email server with a cloud platform such as Microsoft Office 365 or Google Apps.
A 50-person accounting firm in Sydney replaced its email server with Google Apps and cut IT costs by 70%, according to IT company Cloud Adapt which performed the migration.
It cost $9,977 per user to run server-based Microsoft Exchange for three years, compared to $3,026 per user for Google Apps.
Google Apps costs US$50 per user per year for email, productivity suite, online forms, group lists, basic intranet and video hosting.
To understand the potential for saving money, a business must add up the cost of the infrastructure required to run an application in-house. This is much more than the cost of the server itself; there’s power and cooling, replacement hard drives, backup tapes and drives, extra rent in floor space for the server room.
The 50-person accounting firm spent over $5,000 on power, backups and an uninterruptible power supply on top of the $6,000 for the server and operating system.
Example 2: Plumber
Cloud computing is not just for office types. Tradies and field service businesses are also testing out applications to replace pen-and-paper invoicing and administration. Connect2Field and GeoOp are two cloud programs which automate the process of managing a team of workers in the field.
Connect2Field co-ordinates schedules for a team in a single calendar, sends each worker the location and contact details of each customer and records invoices. The program gives head office instant, real-time knowledge of the location of each worker, the amount of work invoiced for the day and helps plan where to send workers the following day.
There can be tangible savings. Sydney-based plumbing business JedPlumb saved $27,000 a year by cutting back on paperwork after switching to Connect2Field. Field workers previously handwrote individual job sheets for as many as 8 jobs each day. The plumber now uses Connect2Field to dispatch jobs to fieldworkers, create quotes and collect invoices. One of the advantages of the software is that the boss can know where field workers are and whether they’ve finished a job without having to constantly call them. Connect2Field costs $65 per administrative user a month and $10 per mobile user a month.
Example 3: Freight trucking
Often the cloud lifts productivity or improves customer satisfaction, both valuable to a business but harder to quantify in dollars. GeoOp, a competitor to Connect2Field, is also used to schedule mobile workers. A Victorian freight and distribution company with 15 trucks tested out GeoOp to reduce the number of incorrect deliveries which cost the company in time and mileage.
The family-run freight company received quotes of $60,000 for server-based software before finding GeoOp through the iTunes Apps Store. At a cost of several cents per job and several iPhones for drivers, the freight company reduced incorrect deliveries to virtually zero.
The base team used to constantly communicate on the phone with drivers to find out where they were which the drivers found frustrating. But without knowing the trucks’ location the business was operating with inaccurate information, leading to confusion among staff and customers.
GeoOp cost from 35 cents to 26 cents per job to run, depending on the volume of jobs per month.
Example 4: Bookkeeping
Another time saver is the ease with which you can share information among cloud programs. Job scheduling software like Connect2Field and GeoOp can send invoices and other data directly to cloud accounting software.
The two most popular cloud accounting programs in Australia, Xero and Saasu, automatically download bank transactions every day from the major banks and many smaller financial institutions. Accountants can log into businesses’ accounts and view their financial position in real time - there’s no need to send a large data file (as required by desktop accounting software) and then waiting for the accountant to update and send it back.
Accountants and bookkeepers have found that feeds from banks and other applications cuts down data entry by 30 percent or more.
One Queensland bookkeeper said she had also saved in travel time to clients’ offices because she could log onto their Xero account from anywhere she had an internet connection.
Xero cost $29 per month for a limited version for smaller businesses and $49 per month for unlimited invoices.
The other big benefit: save money on IT support
But the biggest cost to most businesses is not hardware or software but support. Cloud services can slash the amount businesses pay IT services companies to maintain, upgrade and support their IT systems.
With cloud-based systems, software upgrades, maintenance, patching and security is the responsibility of the vendor. This removes a huge headache and cost for businesses and gives them much more time to run their own operations.
It’s not perfect
While Google Apps can replace email with little loss of functionality, Google’s online-only approach is less successful if you are writing and dealing with a lot of documents. Many companies still find it hard to move all their documents online for several reasons. Non-Microsoft Office documents such as those created in Photoshop or InDesign won’t open from Google Docs and must be downloaded to the desktop first.
Also Google Apps still isn’t 100% compatible with the latest format of Microsoft Office - .docx, .xlsx, .pptx. This means graphs may not display correctly in Excel, columns can appear out of alignment in Word, and animations, transitions and some fonts won’t work in PowerPoint slides.
Sholto Macpherson is editor of BoxFreeIT.com.au, a news website about cloud software for business. Sholto is a passionate advocate of cloud computing and its potential to transform business.