The Benefit of Cloud Technology - Case Study Example

Student Name Tutor Course Date Table of Contents Table of Contents 2 Executive summary 3 Introduction 3 Cloud accounting 3 Benefits of using cloud accounting 6 Dilemma 6 Recommendations 7 Conclusion 7 Works Cited 8 Elmroth E, Marquez F. G., Henriksson D. & Ferrera D.P. Accounting and Billing for Federated Cloud Infrastructures. Grid and Cooperative Computing, 2009. GCC '09. Eighth International Conference on: 268-275, 2009 9 Executive summary The paper first focuses on the meaning of the increasingly common cloud techniques by describing these approaches and how they are used by businesses. As will be seen in the paper, cloud techniques adopt virtual machines and storage centres and use these to achieve convenient processes. The paper then focuses on the cloud environment and outlines the confusions associated with the practices and how these systems may be implemented effectively. Also discussed are the challenges as well as benefits that are derived from the cloud techniques and the reasons why organizations should consider setting up these systems to enhance their performance. The recommendations given outline the vital system requirements and how these requirements may be achieved in implementation of the cloud accounting techniques. Introduction Technological developments have been witnessed in the recent past, some of which have been put to use by businesses for the betterment of their business performance. The internet has presented new opportunities that have been utilised in a manner that has increased organization efficiency and easier access to organizational information by the employees. Cloud computing techniques have become increasingly common in the business environments, but have come with challenges as well as benefits for organizations. In this paper, cloud techniques have been described and discussed and recommendations provided on the best way to achieve a successful cloud service with the best performance. Also discussed are the challenges and benefits associated with these techniques. Cloud accounting Recent cloud computing infrastructures have provided resources on demand that are based on post-paid principles. These infrastructures are able to deliver elastic capacity that can automatically increase or decrease so as to achieve cost-efficient service level agreements. With these infrastructures, the total capacity of data centres can be extended by subcontracting more resources from other collaborating data centres so that the overall infrastructure forms a federation of clouds (Elmroth et al 268). Takabi et al argue that cloud technologies aim to consolidate the economic utility model with the evolutionary development of several existing computer technologies and approaches, including applications, distributed services, as well as information infrastructure that consists of a group of computers, storage resources and networks (1). According to Buyya et al, cloud computing refers to some parallel and distributed system that consists of a collection of virtualised computers that are interconnected and are dynamically presented and provisioned as one or more unified resources which are based on service-level agreements (599). When these methods are adopted for accounting, the infrastructures require novel approaches that will enable performance of accounting for capacity that can vary over time and for services (or more specifically virtual machines) that shift between physical machines or in some cases, between data centres. Internet services accounting has presented several challenges to service providers. The practice involves several terminology and motions that are not often clearly defined and the semantics of some terms may not be properly defined. However, accounting has been applied to several areas like Wi-Fi connections, mobile networks, micro-payments, grid services, among others (Detal et al 24; Koutsopoulou et al 18; Morariu et al 43). Cloud computing has also enable multiple service providers to take part simultaneously during the same session and users can roam through several service providers and networks. Therefore, a significant number of various charging schemes may be simultaneously involved within a single session. Cloud accounting will therefore demand new working paradigms with new billing requirements to ensure that the requirements of all service providers are adequately met. Finding convenient billing models has been found to pose a real challenge for the establishment of cloud computing infrastructure due to the operator processes and structure, being key factors for the their deployment. Despite the fact that technologies have evolved quickly, many services providers believe that classic billing systems remain convenient for the emerging networks. Their use has meant adapting them with subsequent possibility of revenue reductions, slow new service introduction and system instability. As Takabi et al observe, confusion has surrounded IT communities with regard to how a cloud differs from other existing models and how these differences can influence its adoption (24). The authors further say that Traditional models have been known to present a centralised architecture. In these systems, all Usage Detail Records are processed by a single rating engine and another invoicing engine that limit the system’s scalability. Cloud computing and accounting techniques, on the other hand, require high scalability levels that will support a large number of inter-carrier settlement activities and customers. With the centralised architecture, it is possible to access data from any business application. With this architecture, however, the processing time is long and management complicated. The distributed architecture supports balanced system loads but with increased system complexity due to the need to ensure maintained consistency between the different instances. Cloud computing dominates the traditional approach in the level of system flexibility since classical billing systems have been designed service-specific. Traditional systems are not able to accommodate content-based pricing that will replace the flat-rate models. In these systems, therefore, in the event that a new service is to be introduced, there will be the need to put in place a new billing system. Cloud accounting will come with heterogeneous data from a diverse number of systems. The end user will therefore require a convergent billing system that will be used to provide a unified view of services that it will consume. Cloud computing, has become increasingly important given its potential to greatly reduce costs by optimizing and increasing operation and economic efficiencies (Takabi et al 1). Furthermore, it has been found to significantly enhance agility, collaboration, and scale, therefore enabling a truly global model over the internet infrastructure. But of greater significance has been the establishment of appropriate privacy and security solutions that are designed for clouds. Several surveys have revealed that for cloud adopters, security and privacy remain the primary concern that hinders its adoption (Takabi et al 1). The security and privacy concerns are echoed by other researchers. Kinkela & College mention that cloud computing has been seen to promise cost efficiencies to businesses and particularly their accounting departments by using third party vendors who store and process information (1). However, this innovation used for storing and managing data off site has added concern about the data security of companies (Kinkela & College 1). Benefits of using cloud accounting Cloud computing enables applications and software capabilities and there is instant access to several programs. By having an expert third party who is able to instantly modify software, instead of having to send patches to upgrade software to the user, businesses have been able to achieve efficiencies. The cloud has also made it easier to share data as well as other related software since users can easily log in remotely and securely. Again, as pointed out by COSO, there are the added benefits of having added space for storage of data on the cloud and in some cases, the cloud has been put to use as an offsite backup for data (8). As Kinkela & College further says, in most cases, the cost of cloud based technology has been found to be lower than the traditional delivery methods (3). Although, organizations will have to cater for maintenance and licence fees, the IT support provided off site could greatly reduce infrastructure costs. Again, these disruptive technologies and analytics can be used by the small organizations to test these tools before committing to a complete in house department. Dilemma Wyld points out that cloud infrastructure is shared by a number of organizations and it supports a community that has shared concerns (12). The infrastructure may therefore be managed by the organization or by a third party and it may exist off or on premise. Other authors have proposed the implementation of hybrid systems that combined cloud techniques with traditional techniques. The price of storage and bandwidth has continued to drop over the years, making cloud-based services more and more attractive to businesses that seek to reduce licensing costs and those that aim at avoiding recruitment of IT staff. These organizations have been able to concentrate on their core responsibility. But given the challenges associated with cloud computing, there is need for organizations to utilize both approaches in hybrid systems. With the hybrid delivery model, organizations can enjoy the benefits of both worlds without long-term investment commitments, avoidable expenses and the inefficiencies of on-premise and hosted models (GFI 1). Recommendations Cloud techniques remain significant for organizations and present an opportunity for expansion of capacity for these organizations in a convenient manner. Accounting firms like Deloitte have utilised these technologies and have used these to increase performance. Callewalt, Robinson & Blattman state that Deloitte has extended its services and now offers consulting at the outset of a cloud based vendor selection (6). This company also offers advice and help organizations with their policy frameworks required to align cloud services as well as those to enable the organizations comply with regulations. Given the benefits discussed above, accounting using these techniques could prove more beneficial as compared to the traditional approaches since this platform will introduce great flexibility, ease access to data, remote log in and several other benefits. It is therefore highly recommended that the organization adopts cloud accounting and take the performance of the department to the next level. While several challenges have been identified for this approach, policies could be established that will ensure that the system is protected from these risks. As Lemaire & Cara argue, the policies should ensure that there are clear guidelines that describe how to investigate if a breach is suggested (12). Additionally, if the third party service providers participate in the investigation, it will be necessary to ensure coordination between the services providers and the organization. While the system is up and running, any breach discovered must be critically considered by the organization and it should take remedial actions. The relationship between the organization and service provider should then be reassessed. Conclusion The discussion above has outlined the challenges experienced with cloud technologies and cloud accounting, some of which have been associated with fear of data loss and possibilities of leakage of critical business information. Despite the challenges, cloud accounting remains significantly beneficial as compared to traditional methods given the vast advantages it has. Flexibility and increased capacity are some of the most important benefits associated with cloud accounting. As discussed in the recommendations, appropriate measures must be taken to ensure that the system developed functions according to specification and that the third party service providers respect privacy of the information supported by these systems. Works Cited Buyya, R., Yeo, C., Venugopal, S., Broberg, J. and Brandic, I. Cloud computing and emerging IT platforms: Vision, hype, and reality for delivering computing as the 5th utility. Future Generation Computer Systems (25:6), pp. 599-616, 2009. Lemaire, O. & Cara, S. Cloud Computing: Issues and Challenges. New York: Ernst and Young, 2012. Callewalt, P. Robinson, P. & Blattman, P. Cloud Computing: Forecasting Change. New York: Deloitte, 2012 GFI. On-Premise vs. Cloud-based solutions. Luxembourg: GFI Software, 2010 Jasen, W. & Grance T. Guidelines on Security and Privacy in Public Cloud Computing. Gaithersburg: Draft Special Publication 800-144, 2011 COSO. Enterprise Risk Management for Cloud Computing. Washington D.C.: COSO, 2012. Kinkela, K & College, I. Practical and ethical considerations on the use of cloud computing in accounting. Journal of Finance and Accountancy: pp. 1-10, 2013. Wyld, D.C. Moving to the Cloud: An Introduction to Cloud Computing in Government. Washington, DC: IBM Center for the Business of Government, 2009 Griffin, J. Managing Disruptive Technologies in the Cloud. New York: Deloitte, 2012. Detal, G., Leroy, D. and Bonaventure, O. An adaptive three-party accounting protocol, Proceedings of the 5th international student workshop on Emerging networking experiments and technologies, ACM, pp. 3-4, 2009. Koutsopoulou, M., Kaloxylos, A., Alonistioti, A., Merakos, L. and Kawamura, K. Charging, accounting and billing management schemes in mobile telecommunication networks and the internet. IEEE Communications Surveys (6:1), pp. 50-58, 2004. Morariu, C., Waldburger, M. and Stiller, B. "An Integrated Accounting and Charging Architecture for Mobile Grids" 3rd International Conference on Broadband Communications, Networks and Systems, pp. 1-10, 2006. Takabi H, Joshi J.B.D & Ahn G. Security and Privacy Challenges in Cloud Computing Environments. London: The IEEE computer and reliability societies, 2010 Elmroth E, Marquez F. G., Henriksson D. & Ferrera D.P. Accounting and Billing for Federated Cloud Infrastructures. Grid and Cooperative Computing, 2009. GCC '09. Eighth International Conference on: 268-275, 2009 Read More