34 outsourcing Moving to the cloud
More SMEs are choosing to change their IT infrastructure by moving to the cloud. Here Simon Murrells, outsource manager and software specialist at Wilkins Kennedy LLP in Winchester, tells us why
What is the cloud?
Cloud computing is just another way of saying: “I’m going to do my computing on a remote server via the Internet.“ Think of Facebook, there’s no software to install, you just go to their website, you login, and you’re there. It’s all on their servers, and you access it via the Internet.
What is cloud accounting?
It is the entire accounting and financial processes moved onto the cloud. Software, documents, reports, tools ... all accessible from anywhere you have an Internet connection.
What are the benefits of cloud accounting?
Here are just some of the benefits: • Reduced costs – instead of buying all the hardware/ software yourself, you pay a provider incrementally,
therefore lowering the ’cost of entry’
• State-of-the-art hardware/off- site backup
• Increased mobility – staff are no longer tied to the office or their desks
• Greater security and flexibility – the cloud enables SME businesses to reach and even exceed compliance and industry security standards, previously enjoyed by larger organisations
• Automation and shifts IT focus – by using the cloud a lot of processes become automated and SMEs no longer have to focus on costly server updates, maintenance, backup issues or software updates.
How secure is it?
Very. All the major service providers offer 128-bit encryption which is an industry standard used in Internet banking. The use of an
up-to-date web browser is highly recommended. When you are logged into the service the address bar in your browser will be green in colour, indicating that the service provider is using an extended validation certificate and giving you the confidence that the servers you are logged in to are secure.
How can Wilkins Kennedy support your move to the cloud?
As accredited partners for Sage One, Xero and Quickbooks Wilkins Kennedy can offer WK Online 50 via our website, www.
wilkinskennedy.com, as well as extensive knowledge of many of the other cloud packages available.
What operating systems are supported?
Windows, Mac, Linux, iOS, and Android. iOS and Android access
Outsourcing R&D abroad boosts innovation
Businesses that outsource research and development (R&D) overseas are more likely to innovate than those that outsource at home, says new research
Professor Michael Mol of Warwick Business School, and associate professor Olivier Bertrand, of SKEMA Business School in France, analysed a large database of 6,015 French businesses over a five-year period and found that the use of home R&D suppliers can have a largely negative effect on product and process innovation.
“Firms that go through the trouble of finding highly- qualified foreign suppliers see a bigger pay-off than if they had outsourced at home,“ said Mol. “This is a very interesting finding, because typically we only associate outsourcing abroad with efforts to bring down costs, not to increase innovation.
“Home outsourcing occurs when firms lack innovative capabilities and are either trying to save costs or their own internal R&D departments are lacking. By
www.businessmag.co.uk
contrast, those that choose to outsource abroad do so to tap specialist sources of knowledge that complement and strengthen their own internal R&D.
“An interesting example of this is IBM’s strategy to build research labs in places like Switzerland, Japan, Israel, UK, China and India from which R&D is outsourced to various research institutes.“
According to the 2012 Global Innovation 1000 the top three industries that spend the most on R&D are computing and electronics, health (including pharmaceuticals), and automotive.
Mol’s study shows that a key factor in the decision-making process of outsourcing R&D is cognitive distance, which refers to the distance in knowledge and understanding between the business that outsources and its
supplier. Suppliers in the home country are less attractive for innovation purposes because their knowledge is often too similar.
The research shows that while outsourcing at home is a sound option to fill short-term gaps, outsourcing abroad can be hugely beneficial if a company is looking to innovate.
“When firms are looking for capabilities which are relatively mundane, they can often find them in a wide variety of locations around the world,“ said Mol.
“If these capabilities can be outsourced at home, it generally makes little sense to source them from abroad given the costs involved. By contrast, R&D tapped from international markets provides firms with more opportunities and choices, and hence a greater potential
for complementarities with the internal R&D function.“
And he explains that it is important for managers and business owners to have a clear understanding of the advantages of outsourcing abroad.
“From a managerial perspective, it is important to understand how outsourcing R&D contributes to innovation outcomes, and when offshore outsourcing is a viable strategy,“ he said.
“Since R&D outsourcing, especially abroad, is a rapidly-growing phenomenon, academics and practitioners should continue to invest in understanding its implications.“
The paper: ’The antecedents and innovation effects of domestic and offshore R&D outsourcing: The contingent impact of cognitive distance and absorptive capacity’ was published in Strategic Management Journal, the world’s top strategy journal.
THE BUSINESS MAGAZINE – SOLENT & SOUTH CENTRAL – NOVEMBER 2013
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Should you have any more questions relating to cloud accounting or any other accounts software questions we would love to hear from you.
Details: Simon Murrells
01962-852263 or 01794-515441
simon.murrells@
wilkinskennedy.com www.wilkinskennedy.com
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