What You Need To Know: Cloud-Based Solutions

What are some of the latest trends and innovations in financial management reporting tools? Well, one of the more significant trends over the last 10 years or more is cloud-based solutions. Now, cloud-based solutions can offer many benefits over traditional and on-premise systems. For instance, cloud-based solutions can allow you access to your financial data and reports from anywhere, anytime, using most any device.

Two they can enable you to integrate your financial data with other sources of information such as national registries, international, social, environmental data, other operations data, which is going to allow you to create some more insightful reports and get more comprehensive with your data.

Three, cloud-based solutions can reduce the cost and complexity of maintaining your systems for both your financials as well as any updates that need to be made.

Four, they can enhance the security and reliability of your data. Now, you'll notice I continuously use the word can, and the reason for that is if your business model or your data model does not directly line up with how that tool works, that can can go out the window.

You'll find that you have to do a lot of customization in order to make your business fit into their platform. And that can alleviate a lot of the positive benefits that cloud-based solutions can provide. So, I recommend you do your due diligence and researching any cloud-based platform you're considering using.

Now, what you should also be aware about with cloud-based solutions is that one, once you put your data on their platform, they own your data. At that point you stop being the owner of your data and start becoming a licensed user with rights to use your data, which you will have to pay for every year so long as that data exists on their platform.

Don't believe me? Try to take your data off of their platform before your contract is up and see how much you have to pay to regain. ownership rights of your data. Two, you should be aware of the data costs involved with cloud-based solutions. Now, once you've exceeded certain thresholds, you're going to pay a premium for having that additional data with each new license.

So, if you're doing something like a CRM, customer relationship manager, or ERP, um, enterprise resource planning, These things are going to grow as your staff grows, as your customer base grows and your data is going to grow with it. So as your business gets larger, your data expenses are going to balloon because once you get past that licensed amount, those costs go up substantially.

Third, while it is possible that moving to a cloud-based solution might reduce your immediate costs for maintenance and supporting your reporting engine, you should be aware that if the platform changes anything about how they process data, what applications they enable, what format that they code in. You may be in a position where you've got to completely redo your operations just in order to stay in sync with their systems.

Now, on the other hand, you might be the one causing the change. You change your business model, you change your operating practice, and you need to change how you manage your data.

Well, you may find that that platform is either unwilling Or unable to change how they manage your data because you're not their only client And changes their platform means it changes every client of theirs In short You're going to check into which cloud-based solutions that you're looking at and how well they align to your business.

If you find that you're well aligned to their data model, to their form of processing, to their platform, then great. It can probably do wonderful things for your business. But if you find that your business does not align with their model, then you're going to want to take into account the costs associated with either realigning your business, realigning your reporting, or realigning your operations in order to fit into what that tool already does. It's not an insignificant cost, so make sure you do your research.