Challenges and Benefits of Cloud Computing - Coursework Example

THE АССОUNTING INFОRMАTIОN SYSTЕMS (AIS) By Students Name Course Professor University State Date Introduction In the service industries, Accounting was among the first to take advantage of the information technology advancements. This was the use of general electric utilized computers to organize and process accounting aspects. In the 1970’s the accounting information systems arose and managed to revolutionize the key accounting task handling in the companies (Marston, et al. 2011). In the past, recent years providers of accounting services have been actively exhibiting low user's activity level and high provider's activity level. Nowadays, the development of the contemporary cloud-based accounting software has improved the accounting services by the way they have been repositioned as interactive services such that the user's activity level is increased (Marston, et al. 2011). Increased ability to access internet based systems service providers and customers have close cooperation in real time irrespective of the geographical distance. In order to get an in-depth understanding of this development in the accounting sector, this paper aims to analyze сlоud bаsеd ассоunting infоrmаtiоn systеms (AIS) adoption the business environment. Cloud computing Cloud computing alludes to the storage of data and servers in secure data centers where users can be able to access them through the internet browsers. The implication is that there is no need to have servers in businesses, with information certainly retrieved through. In general cloud computing acts as a service model which provides information technology that is able to offer accessible computing ability over a network at a reduced cost. In the business sector agility is provided by cloud where the use of intensive computer analytics is enhanced to facilitate the exchange of real-time data and increased interactivity. Cloud computing has also become a source of innovation where it has been identified to take place between two stages (Apte, & Mason, 1995). The first one is cloud adoption, and the other one is innovation with cloud resources. Innovations in the cloud computing address issues involving IT operations business procedures and market innovation. Initially, cloud adoption objective is based on cost efficiency where business is continuing to become more experienced with technology (ComPUtING, 2011). However, as time goes aspects such as business procedures and IT innovation are becoming a major advantage of the cloud. In the case of accounting business procedures, cloud-based information technology systems are seen to outsource a wider variety of task (Willcocks, et al. 2012). This implies that business that is highly disaggregated their processes are likely to give customers a chance to allocate duties in more effective way. The most exciting aspect of accounting industry as far as cloud computing is concerned is the fact that through cloud accounting is an easy concept to understand (Willcocks, Venters, & Whitley, 2013). This implies that all the accounting systems will be placed in a private space online where it becomes accessible through the internet or a source of remote connection. Challenges and benefits The cloud accounting system is crucial in the operation of the accounting process, but like any other system, there are both problems and benefits that emanate from its use. These aspects are discussed in details below. Benefits Widening the role of an accountant; the use of cloud-based accounting information system enables the customers to have an enhanced visibility of the accountant operations and the interactions between the two parties improve as well (Armbrust, et al. 2010). Accountants are now working within the cloud system which has a lot of customer data, and there is increasing demand for value added services that cross the traditional counting services boundary. Improved level of service disaggregation; Through the help of cloud technology the overall accounting services are disaggregated into smaller task leading into a considerable change in the manner the services are managed (Cheng, and HE, 2011). As a result accountants and the client, the company is able to access data and process it in real time. This change to the accounting procedures challenges the traditional thought of providing oriented service delivery. This results into a widened horizon for a novel type of accounting arrangements and increased demand for customers. System integration and real-time information; One a business grows and develops it becomes hard to track the financial data especially when the data is not up to date. The increased visibility that emanated from the adoption of cloud accounting information system paves way companies request for better system integration. This enables ease of access where a business can have the capacity to have admittance to their financial data from anywhere around the globe without making downloads or installation to PC’s.This, in general, implies that business owners can travel easily and gain access to new customers and handle crucial business matters without having to be in the office all the time. The price of this form of system is relatively low in that a business does not have to pay upfront for the cost as it happens for a desktop accounting program as it’s done on monthly basis. Again, cloud accounting does not require any update, as they are automatically included in the price. This mode of payment enables the business to manage their cash flow and be able to reduce their computer costs because cost such as maintenance updates, administration costs, and others are no longer encountered because the are handled by cloud accounting services provider. The data backup and security aspects are well taken care of whereby in a cloud accounting a company or business are issued within line with the data security standards. The online backups offered to a business such that it does not need any particular servers or even desktop configurations other than just an internet connection. Challenges There are numerous challenges that can be linked within this advancement in the accounting sector. The system is not favorable for a small business because they might end up paying more compared to a desktop accounting package. In this case, business is expected to buy updates for the software after 4 or 5 years and in case they do not need an online service back up the use of these systems becomes a disadvantage to the business (Zhang, and Gu, 2013). Once business financial information is contained in a cloud accounting system, it implies that business does not have control over where it is situated on the planet. That is it could be a server in the Asia, UK, or any other part of the world. For some business this is an actual problem in that sometimes governments or entities get to review or audit into a business data provisional on the rules in force within the jurisdiction where the data is located. Another challenge is that restrictions will always be present in terms of the applications, infrastructure and operating systems that are open to business. This implies that there will be things that the cloud accounting package will not do at all (Zhang, and Gu, 2013). This is because a cloud accounting supplier must have the capacity to offer what they as of now have and the redesigns anticipated to be presented in future. Thusly, the framework may neglect to do precisely do what a business needs and now that the business can not be able to change and configure easily becomes a disadvantage. Backups can also be a challenge in that many accounting software’s do not have a facility for a business to back up their data, export and save to their desktop to be able to print out selected financial reports. Therefore, moving to another bundle or proceeding with a long haul record without paying for month to month membership represents an issue. Recommendation The most important reason why the business shift to cloud computing is to have and enjoy reputable services from these providers that can be able to address all their issues and ensure that they receive a service that works best for them. As indicated in the report cloud computing can be a disadvantage to a small business. Therefore, it is recommendable that before a business decides to adopt this system they should first assess the viability of the system by weighing the benefits and challenges. There is numerous cloud accounting service provider; a business should take time and do some survey to increase knowledge on the system and then be able to select the best service providers that would work best for them. The development towards cloud computing is being stimulated by for business need to give support to decision making and increased focus on core competencies. All of this is evident while transferring services to external customers. Therefore, business should try and train their workforce to ensure that all management and security issues that can be linked to the system are taken care of. Conclusion As seen from this report cloud computing has huge benefits to the accounting firms that adopts it whereby it opens up the analysis of large volumes of data directly and perhaps cutting the problem of where half and annual reports are accumulated in the process. This technology holds endless possibilities for business and accounting firms within an economy that require proper accounting services that take less time and cost effective. As a result, customers are able to do their bookkeeping and another task. Therefore, the implementation of this form of accounting process can improve the services and roles of the accountants to that a true business advisor. However, business should also focus on the challenges present and try to improve on them. Reference List Apte, U., & Mason, R. (1995). Global Disaggregation of Information-Intensive Services. Management Science, 41(7), 1250–1262. Retrieved from http://mansci.journal.informs.org/content/41/7/1250.short Armbrust, M., Fox, A., Griffith, R., Joseph, A.D., Katz, R., Konwinski, A., Lee, G., Patterson, D., Rabkin, A., Stoica, I. and Zaharia, M., 2010. A view of cloud computing. Communications of the ACM, 53(4), pp.50-58. CHENG, P. and HE, X.F., 2011. Application of" Cloud Accounting" in SMEs Accounting Informatization. Journal of Chongqing University of Technology (Social Science), 1, p.011. ComPUtING, C., 2011. Cloud computing privacy concerns on our doorstep.Communications of the ACM, 54(1), pp.36-38. Marston, S., Li, Z., Bandyopadhyay, S., Zhang, J., & Ghalsasi, A. (2011). Cloud computing — The business perspective. Decision Support Systems, 51(1), 176–189. doi:10.1016/j.dss.2010.12.006 Maughan, A., 2012. Europe offers incentives to cloud computing growth.Europe. Willcocks, L., Venters, W., & Whitley, E. (2012). Cloud and the Future of Business: From Costs to Innovation. Retrieved from http://outsourcingunit.org/publications/Cloudreport5_management.pdf Willcocks, L., Venters, W., & Whitley, E. A. (2013). Cloud sourcing and innovation: slow train coming? A composite research study. Strategic Outsourcing: An International Journal, 6(2), 184–202. doi:10.1108/SO-04-2013-0004 Zhang, L. and Gu, W., 2013. The simple analysis of impact on financial outsourcing because of the rising of cloud accounting. Asian Journal of Business Management, 5(1), pp.140-143. Read More