Cloud computing, how small businesses can harness its power and spur growth.
Journey to the future
I would like to take you on a journey, A journey to the future: it’s the year 2007 and the new IPhone has just been released, Nokia is the market leader in cellphone technology but its unable to see the brink of a revolution, consequently it losses its market share to apple due to the introduction of a feature that had existed a whole 20 years earlier, The Touch screen. Not good enough, Let me take you even further into the future to 1998 and the Kodak board has just dismissed the digital camera idea in a board meeting, citing film was their major business. 5 years later digital cameras are everywhere and no one wants film.
Ooh my bad that wasn’t the future, or was it. The truth is that, the tech industry morphs and mutates so rapidly on a point fulcrum that it is sometimes difficult for businesses to catch up. This is due to the Moore’s law. Moore’s Law is the observation made by Intel co-founder Gordon Moore that the number of transistors on a chip doubles every two years while the costs are halved. The simplified version of this law states that overall processing power for computers will double every two years. This leads to an exponential growth in computer processing (read tech) and the trend is bound to continue. The tech world is at in-flexion point and businesses are about to be caught unaware.
This might not be the first time you are hearing of cloud computing, block chain or even bitcoin. Well these terms are thrown around willy-nilly by fraudsters and professionals in equal measure but they represent really powerful technologies. So what are they and how will they impact your business?
What is cloud computing?
Cloud computing is the delivery of on-demand computing services — from applications to storage and processing power — typically over the internet and on a pay-as-you-go basis. Rather than owning their own computing infrastructure or data centers, companies can rent access to anything from applications to storage from a cloud service provider.
A fundamental concept behind cloud computing is that the location of the service, and many of the details such as the hardware or operating system on which it is running, are largely irrelevant to the user. It’s with this in mind that the metaphor of the cloud was borrowed from old telecoms network schematics, in which the public telephone network (and later the internet) was often represented as a cloud to denote that it just didn’t matter – it was just a cloud of stuff. This is an over-simplification of course.
Cloud computing services cover a vast range of options now, from the basics of storage, networking, and processing power through to natural language processing and artificial intelligence as well as standard office applications. Pretty much any service that doesn’t require you to be physically close to the computer hardware that you are using can now be delivered via the cloud.
Cloud computing underpins a vast number of services. That includes consumer services like Gmail or the cloud back-up of the photos on Dropbox, through to the services which allow large enterprises to host all their data and run all of their applications in the cloud
Cloud computing can be broken down into three cloud computing models.
- Infrastructure-as-a-Service – Infrastructure-as-a-Service (IaaS) refers to the fundamental building blocks of computing that can be rented: physical or virtual servers, storage and networking. This is attractive to companies that want to build applications from the very ground up and want to control nearly all the elements themselves, but it does require firms to have the technical skills to be able to orchestrate services at that level.
- Platform-as-a-Service – It is the next layer up — as well as the underlying storage, networking, and virtual servers this will also include the tools and software that developers need to build applications on top of: that could include middleware, database management, operating systems, and development tools.
- Software-as-a-Service – Software-as-a-Service (SaaS) is the delivery of applications-as-a-service, probably the version of cloud computing that most people are used to on a day-to-day basis. The underlying hardware and operating system is irrelevant to the end user, who will access the service via a web browser or app; it is often bought on a per-seat or per-user basis.
This sound costly
Well there is no denying, setting up cloud infrastructure can be very costly. However the beauty of cloud is that you get to use only what you need. For small businesses this becomes very cost effective as firms can avoid the upfront cost and complexity of owning and maintaining their own IT infrastructure, and instead simply pay for what they use, when they use it.
No more buying servers, updating applications or operating systems, or decommissioning and disposing of hardware or software when it is out of date, as it is all taken care of by the supplier.
Why do small businesses need the cloud?
Small business seeking to grow sustainably face three critical challenges; access to capital and skills as a start-up; scalability and management control as the business grows rapidly; optimization and innovation as it becomes mature.
Today small and medium businesses operate within the fastest moving commercial environment in history. This marketplace offers outstanding opportunities for entrepreneurs and managers alike, but it is also potentially harmful for the unwary and those that are unable to appreciate and harness the power of digital technologies.
Cloud computing is the best thing for small business since the creation of the stapler. Cloud computing can give you access to your business data and applications from anywhere at any time from any mobile device, at a reasonable price. The cloud gives small businesses access to technologies that previously were out of their reach and lets them compete with both other small businesses and larger ones. Startups have immediate access to enterprise grade technology. With cloud, working from home or in traffic becomes the norm rather than the exception.
Changes in the tech industry can be disruptive and rapid. Infrastructure and computer equipment becomes obsolete very fast and this can be costly to keep up with the current technologies. Cloud however puts the pressure of upgrading the infrastructure on the service provider.
Cloud computing also offers better security for small businesses, or does it. Data stored on the cloud is safer than data stored on servers on ones premises. Well in tech we say data is never 100% secure due to threats from hackers but technologies do exist that make cloud computing safer. Military grade encryption is now readily available for small businesses and it’s easily configurable to secure a myriad of data. Cloud computing applications are regularly updated, so you don’t have to spend time and money doing it – and giving you the advantage of always having access to an application’s latest features and functions
Using cloud services means companies can move faster on projects and test out concepts without lengthy procurement and big upfront costs, because firms only pay for the resources they consume. For a company with an application that has big peaks in usage, for example that is only used at a particular time of the week or year, it may make financial sense to have it hosted in the cloud, rather than have dedicated hardware and software laying idle for much of the time.
Cloud computing tends to shift spending from capital expenditure (CapEx) to operating expenditure (OpEx) as companies buy computing as a service rather than in the form of physical servers. This may allow companies to avoid large increases in IT spending which would traditionally be seen with new projects; using the cloud to make room in the budget may be easier than going to the CFO and looking for more money.
According to Delloitte Small business, big tech paper commissioned by google and research carried out in 5 European countries and the United States. Small businesses using cloud technology to overcome their growth challenges grow 26% faster and deliver 21% higher gross profits. 85% of those surveyed believe cloud enable their businesses to scale and grow faster.
Of course, a business’s strategy, products, market, customer service, operations, partnerships and talent are all reasons for stellar growth performance. Cloud technologies cannot replace these skills and characteristics of a fast growing business, but they can be a significant enabler of them.
Why small businesses are not utilizing the cloud
Despite all the fairly obvious advantages, small businesses are yet to take advantage of the cloud. Their main hindrance being, cloud computing is not necessarily cheaper than other forms of computing, just as renting is not always cheaper than buying in the long term.
Some companies may be reluctant to host sensitive data in a service that is also used by rivals. If you are all using the same software or computing infrastructure, then it becomes harder to compete.
Lack of specialized applications for small businesses are also in short supply, especially in Kenya. At Mbitrix Technologies we are committed at offering above board cloud solutions and Inhouse cloud accounting is one such solution.
Inhouse Cloud Accounting
Inhouse Cloud Accounting is a powerful and intuitive cloud base accounting software that is here to help small to medium sized enterprises manage their business effectively, make better, more informed decisions and help them stay on top of their business. It introduces revolutionary and powerful feature sets that combine to create a complete finance management, payroll management and accounting platform.
It delivers secure, inexpensive remote access to business accounts enabling businesses to track cash flows, sales, expenses and profits by offering simple, time saving tools that help them take control of their finances and focus on running their businesses.
The system allows for generation of customer and supplier statements, summaries of receivables and payables and provides easy insights into your business with 30+ reports. This report data enables business owners to make inferences and create robust, up-to-date business plans.
Inhouse ERP significantly improves the efficiency in managing SME’s by providing tools to organize and manage businesses on the go with a touch of class and confidence.
Why use accounting software
Before we can even talk about cloud accounting, small businesses usually forget all the advantages of doing clear and accounting. Good accounting can help you gauge the health of your business at a glance. Accounting software offers a myriad of advantages but since we are in Kenya and its 2005 let me just remind you the advantages that come with using accounting software;
- Accuracy- Accounting software can help to increase the accuracy of your records by reducing or eliminating human errors in calculation. Manual bookkeeping processes involve making a lot of mathematical calculations by hand.
- Speed- Using accounting software allows businesses to process their accounts with greater speed than manual processing. Part of this speed increase comes from the use of computers, which are able to process figures far faster than the human brain.
- Reports- Accounting software helps businesses to supply the necessary members of staff with timely and accurate financial information. For example, suppose that a company’s finance director needs a report of cash flow to take to a meeting in two hours. Many accounting software systems have built-in reporting modules that enable users to create this type of report by simply filling in a form or clicking a button.
- Tax – Filing your business taxes can be a complex process, requiring you to keep close track of all your business’s transactions. Accounting software helps to make this process easier by ensuring that all of your business’s financial details are in one place.
Problems with traditional accounting software
- The data in the system isn’t up to date and neither is the software.
- It only works on one computer and data bounces from place to place. For example, on a USB drive. This is not secure or reliable.
- Only one person has user access. Key people can’t access financial and customer details.
- It’s costly and complicated to keep backups (if done at all).
- It’s expensive, difficult and time consuming to upgrade the software.
Cloud Accounting is accounting on steroids
Small business accounting software that’s not available via the cloud can be tedious. Traditionally, it can suck up far too much of your business’ time and effort. This doesn’t add value, and takes the fun out of being in business. Cloud software can save your company time and money.
You can use cloud-based software from any device with an internet connection. Online accounting means small business owners stay connected to their data and their accountants.
Journey to the future
So, finally let me take you to the future, its 2022 we are just about to have an election, Even more importantly, Quantum computers are now a thing, 5G came and went and Elon musk has just sent 2 cargo ships to Mars. Computer processing speeds are now 50 times what they are currently and all but a few computer functions are on the cloud. Sounds impossible, that’s what Nokia said. Will your business be left out or will you adapt and become the new Apple computing.