Cloud Computing and Treasury – Just Hot Air?

I had the opportunity of seeing a new treasury system launched recently by Access Treasury, a London-based firm that offers cloud computing options; an increasingly popular choice for treasurers seeking extra automation and technological assistance in delivering efficient cash management and oversight.

The system I viewed was cloud based. It looked good and I was taken through a comprehensive presentation of its features. Afterwards as I was reflecting upon what I had seen I got to thinking about what a difference the cloud environment is beginning to make to us all.

To be honest up until this point, I was not entirely sure I understood what the cloud really is, so naturally I went away and started researching this area and, in particular, what benefits it can bring to treasury. Before I could get to this point, however, I first needed to define what cloud computing is. This is what I have come up with: cloud computing refers to the use of computing resources that are delivered over a network as a service. This can be either hardware or software in nature.

There are three types of cloud:

  • Public: where a service provider uses the internet to make resources available for public use.
  • Private: where hosted services are provided to a limited number of people, secured behind a firewall.
  • Hybrid: this comprises of a combination of several clouds, often integrating a private cloud for the company’s most sensitive internal data to ensure security and a public cloud for other services to ensure widespread dissemination and easy access.

I have also seen reference to a fourth type of cloud, which is called the community cloud. This is basically a private cloud shared across a number of different organisations with common needs, but this cloud computing option is not yet so prevalent.

Advantages

From a treasury perspective cloud computing might be appealing. It has been described by some people as the next logical step to outsourcing and with some justification. Treasurers might welcome the ability to outsource their treasury systems provided they were able to keep control of the data and be confident in its security, especially if this came at a lower operating cost and with added capabilities such as easy remote access and scalability for the future.

So what are the key advantages of the cloud? Well, here is my summary:

  • You only pay for what you use, resulting in lower overall costs due to the ‘on demand’ nature of the cloud.
  • You only need access to the internet and therefore you can potentially perform your treasury and cash management activities from anywhere you want. Examples might include; payment authorisation, cash forecasting and cash visibility tools, accessible via the web. This could be really exciting and useful for remote working.
  • As a result cloud computing can lead to improvements in treasury control.
  • Implementation of new treasury systems and enhancements to existing ones should be easier and quicker with cloud compared to conventional systems as there are no local systems to be configured or integration / silo issues. Software-as-a-Service (SaaS) cloud delivery mechanisms are often specified for this reason, but are not the only option.
  • Maintenance and upgrades should be easier and cheaper as SaaS or other cloud-delivered services are more easily scalable than conventional technology.

There are some potential problems with the cloud, however, including the fact that data (often sensitive data) is stored outside the company. Although cloud companies might argue that there is no risk here and they operate very strong security measures, it is still outside of a company’s control, necessitating at the very least strong service level agreements (SLAs) around perimeter defences and business resiliency. It is also unclear how treasuries might integrate with non-cloud based systems, such as internal Enterprise Resource Planning (ERP) systems. These are two potential disadvantages of the cloud. The cheaper up front cost of paying an on-going fee for cloud-based services, if you decide to go for the outsourced vendor supported options available, also means that you face on-going fees, but conversely treasurers would of course save on capital expenditure budgets.

If we are to believe what is being written then the future is in the cloud and it seems that there are significant benefits to treasury if the profession embraces this technology. Have you had an experience of cloud computing that you can share with us? If so, I would love to hear from you.

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