The operational challenges facing small and midsize firms are similar. This is the second in an occasional series highlighting how individual practitioners tackled common issues. Click here for more AICPA resources for small firms.
We started our firm in 2004 and have done 13 mergers and acquisitions in the past 14 years. We now have 75 people across three offices in North Carolina. We also have an M&A business, LBA Haynes Strand Capital Advisors.
We were an early adopter of the cloud. It was a cost savings for us in 2009 because we were buying new servers every three to five years. Once on the cloud, we didn't have to replace the servers anymore. We previously had an outsourced IT department that helped us with updates, and that expense was eliminated as well. It saved us about $50,000 every three to five years because we did not have the hardware replacement costs.
We wanted to leverage technology. We had people who wanted to work from home, and our old model of tapping into the server remotely was challenging and slow. It became tougher to recruit. Moving to cloud-based technology was more efficient.
We are 100% cloud-based. We first used an accounting-based IT firm. This firm took out our office servers over a two-day weekend, and by Monday we were operational and fully cloud-based. The IT firm took all of our data and moved it into its servers in Atlanta, and built an app that allowed us to log in to our system. We were able to pull up our client files and log on to the internet with a username and password.
We used that technology until 2014, and then took it in-house and built our own cloud-based platform. The process was similar, except that now we owned the technology rather than renting it from the IT firm. We were paying that firm around $150 per month per user, or $60,000 a year at first. But five years later, we had grown to 65 people, and it became too expensive. The cost for us to build our own platform was similar to outsourcing the whole thing.. We now rent underground bunkers in Winston-Salem that require retina scans, and we're spending $75,000 to $100,000 annually. We found these bunkers through referrals from clients.
There are always some hiccups when switching to new technology. A specific printer or scanner driver may not work for a day, or perhaps you don't have access to a file. However, these are all small issues that can be identified and resolved very easily within a day. The issues we faced were small and nothing that anyone would lose sleep over. In nearly 10 years of being in the cloud, we've lost our access twice, for about four to five hours each time.
I was not worried about data security. I was more worried about uptime and downtime, or whether the cloud systems had the speed that we would need to quickly open files. But we did our homework on both platforms, and we received recommendations from many firms.
Cloud computing is significantly more secure than having servers in-house. When we had servers in-house, someone could have broken into our office, taken our servers, and done a lot of damage. But with the cloud, our IT department can see any unusual login. We also don't have to worry about the security of our laptops, since nobody has data stored on laptops anymore.
Cloud computing also allows for scalability. Many times you will add another server if your practice opens a new location. With the cloud, you don't need to do that, because you have instant access to the internet through a login and password.
And the cloud is reliable. We've been in this building for 12 years. We've lost power 15 to 20 times and a couple of times it was for two to three days. If our servers were here, nobody would have been able to work. However, for 10 years we've been cloud-based and in secure underground facilities that rarely lose power. We have 99% uptime. If we lose our power at the office, it's no big deal, as everyone can work from home.
Today, remote workforces are huge. In the last decade, more and more people want to work from different places, and it is tougher to recruit talent if you can't do that. If your whole system is cloud-based, it doesn't matter where they work, as long as they have a strong internet connection. I'm a great example: I've worked from all over the world. Our staff enjoys the cloud because of the flexibility and ease of access. It's been well-received, and the younger staff members really like it.
My advice to other firms or companies is to find a way to jump into the 21st century. You need to rip off the bandage and head in the direction of the cloud. For all the fear you may have about the cloud, the upside is significantly greater when you think about security, flexibility, and having little-to-no downtime. We had Hurricane Florence rip through North Carolina in September, and even though we lost power in different locations, everyone was still able to work because we are cloud-based.
Cheryl Meyer is a California-based freelance writer. To comment on this article or suggest an idea for another article, contact Chris Baysden, associate director – content development, at Chris.Baysden@aicpa-cima.com.