We are very much in favour of the advantages cloud services are bringing to small business - from being able to get to your software over the Internet, to less fiddling around with software installation, servers and software updates, to saving money. Read our article about how cloud services might help you.
As we always say, though, you should think about why you're doing it, and whether it will help you do your job, rather than rushing in blindly because it's new.
With this in mind, we notice accounting software provider MYOB has come out with five tips for small businesses thinking about using cloud services. Like other account providers, MYOB is involved in this area itself, so it has an axe to grind, but that doesn't mean its advice should be ignored.
Below we've listed MYOB's five tips, along with our own advice.
1. Research trustworthy cloud service providers
What MYOB says: "Important criteria when researching providers include credibility, technology expertise and reputation. Look for information on the providers' websites and via independent sources such as technology blogs, industry publications and research reports. Consider seeking advice from IT consultants, financial advisors and other business owners. Ask for client references and about e-learning, 24/7 support and other services offered. Going with an established, profitable, trusted provider is always a good idea."
BIT's advice: You'd expect "an established, profitable, trusted provider is always a good idea" to say that, but nevertheless, it is a good idea. You probably wouldn't engage an accountant or builder without doing reference checks and the like, and the same goes for something that could be just as critical to your business.
This is especially true for cloud services, otherwise called "software as a service" (often abbreviated to "SaaS"; in other words, where you use a web browser to gain access to programs such as Google Apps or MYOB's LiveAccounts that are actually running on remote servers), where it may be relatively difficult to get your data out in a usable form and in a hurry if the provider goes out of business.
With "infrastructure as a service" (or "IaaS" in industry jargon; this is where you rent a portion of the provider's server and install an operating system and applications on it for yourself) it's a lot easier to move your virtual machine images and other files to another provider at short notice as long as you continuously replicate the storage to disks on your own premises or in another provider's data centre, but that comes at an additional cost. Obviously, all this requires some knowledge and some people might decide they need help to set this up.
2. Review benefits and considerations of different cloud models
What MYOB says: "You'll discover cloud computing can take on many forms: some require you to learn new tools while others leverage your existing know-how. Some only work when you're connected to the internet, others also work in offline modes. Focus on the business benefits and then determine the technology required. For example, if you're interested in the ability to have online and offline access to your data anywhere, anytime, consider cloud-enabled software solutions that offer the best of both worlds: cloud, desktop, or both."
BIT's advice: Again, somewhat self-serving, but it does make sense. Keep in mind that software as a service isn't usually identical to the desktop version, so there will be some retraining or re-familiarisation involved, and the differences between two versions may (and we stress, may) be almost as great as between two similar programs from different providers.
The ability to work online or offline can be crucial in some situations, so that should also be taken into consideration. Keep in mind software as a service providers typically let you access their service on your phone or tablet as well as your laptop, so there's often a way to get to your data even if you're away from your main computer desk.
3. Prioritise security
What MYOB says: "The cloud involves accessing applications, information and data over the internet via a third-party provider. Therefore, the providers' security policies and procedures should be robust. This includes physical security of the server facility with 24 hour a day, 365 days a year video surveillance and strict personnel access control, firewalls, anti-virus protection, spam filters, disaster recovery and independent auditing and testing. For example, MYOB works closely with Stratsec, one of Australia's strongest and most awarded information security teams to conduct regular independent audits and penetration tests on both the servers and application."
Don't overlook security, but know that some cloud providers will be more security conscious than some small businesses are. There's no reason to sacrifice security to get the benefits of cloud, but don't let vague fears about 'cloud security' discourage using a provider that takes IT security more seriously than you currently do. Security scares have affected cloud services, but cloud security is just one of several major security issues you might encounter. We highly recommeng you read our article about cloud security
4. Read the fine print
What MYOB says: "Check: are there hidden costs, add-ons or other features that will take up extra time and money to get everything running? Or is it an all-in-one cloud solution? Also enquire about the providers' service level agreements (SLAs), especially in the event of an unexpected or planned outage for maintenance reasons. For example, if a half-day outage will be detrimental to your business, then discuss what measures are in place as well as any potential outcomes with the provider upfront."
BIT's advice: Definitely read the fine print, but we wonder whether a small business is likely to manage to obtain any variations to the standard contract terms when dealing with a major provider. If that hypothetical half-day outage is going to cause problems, you'll need to make your own arrangements to overcome it, because cloud providers typically won't make any restitution beyond credit for the time the service wasn't available. What would happen if a system you owned was down for half a day? Warranties and maintenance contracts often only provide for next-day restoration. It's worth taving a look at how reliable your own systems are as well - maybe a cloud service will have better performance.
5. Evaluate your own IT processes and systems
What MYOB says: "Each business is unique, with varying budgets and capacities. Evaluating your own IT processes and systems is essential before migrating to the cloud. For example, will you require cloud access for all staff and for multiple devices such as computers, tablets and smartphones? What areas of business operation will truly benefit from incorporating the cloud? A good provider will help you budget and plan for now and for the future. It also helps to map out a transition plan to help make the move to your chosen cloud solution as seamless as possible so there is little to no disruption to your business."
BIT's advice: It's hard to argue with any of that. Such an evaluation should be one of the first steps in the process. Is it really appropriate to move some or all of your processes into the cloud, or will that involve paying more for no real benefit? A year's subscription to a cloud accounting service can cost about the same as an equivalent program, and unless you need the updated tax tables you don't have to pay to upgrade the program every year.
For example, MYOB LiveAccounts costs $25 for every month you use it, while AccountRight Basics is $289 outright. A small sum, perhaps, but every dollar counts if you're a micro business. And if you're a 'lock the door when you go home and don't think about the business until you open next morning' sole proprietor, there might be less benefit in being able to use a cloud service from anywhere that you have an Internet connection.
But really, we're agreeing with MYOB: don't adopt cloud technology just because it seems to be the current thing to do. Adopt it where it benefits your business and plan the transition carefully, because making a change always involves a cost.