Although not new, cloud computing has gained traction across all industries over the last several years due to its proven cost benefits and improved data security. Security in particular was a significant concern that had hindered early adoption by asset managers and other financial professionals handling sensitive financial information.
According to PwC, “as significant as the shift toward cloud-based computing has been, it is just getting started.” In fact, PwC’s 18th Annual Global CEO Survey found that “52% of asset management CEOs believe that cloud computing will be strategically important to their organization.” And with good reason. Moving technology to the cloud offers many compelling benefits, including a lower cost of ownership, agility, improved operational efficiency and reduced risk.
Lower Total Cost of Ownership
Traditional installed on-premise solutions require a large up-front capital expenditure in addition to the cumulative ongoing cost of maintaining infrastructure, hardware, software, IT staff and other operational requirements. Capital expenditures are sunk costs that can’t readily be adjusted to match changing business needs.
Cloud-based and hosted solutions, on the other hand, offer a lower Total Cost of Ownership (TCO). There is no hardware inventory and no application software to install, configure and support. Cloud providers offer a fixed, flat-fee cost structure that facilitates budgeting. At the same time, the inherent flexibility of cloud computing means firms can increase/decrease the level of service as needed and see the corresponding change immediately reflected in their operating expenses.
Compete More Aggressively
While cost reduction is often thought to be the driving force behind interest in the cloud, a survey of investment banks by HTF Research regarding cloud adoption found that “it is the flexibility, capacity and agility of cloud that is grabbing people’s attention.”
Maintaining IT infrastructure is expensive and managing legacy applications can feel like an albatross that hinders potential growth. Migrating to the cloud provides greater agility to take advantage of new technologies, respond more quickly and stay ahead of market needs. It also offers a steady path forward to phase out legacy applications so a firm can compete more effectively. Cloud and hosted service providers handle all upgrades and patches ensuring clients have the most up-to-date software and latest security controls.
Improved Operating Efficiency
Cloud computing offers scalability that is difficult to achieve with installed solutions. It enables organizations to grow or contract in response to market forces and ‘rightsize’ technology as needed to prevent over/under investment for true operational efficiency. Moreover, cloud computing lifts the burden of IT support so firms can instead focus on core competencies.
Firms that lack the resources, expertise or budget to implement the safeguards and controls that are standard with reputable cloud service providers may find that moving to the cloud offers greater data security than an installed solution. Managed cloud service providers like Digital Edge, are ISO certified and follow strict industry standard protocols to ensure data security.
Loss of business continuity is a real risk in this era of unpredictable weather, potential terror attacks and other events that can threaten business as usual. Cloud service providers are well prepared to address these risks. They offer business continuity, redundancy and disaster recovery services to protect your operation and get your business up and running in the event of a crisis.
Whether your firm chooses to dip a toe into cloud and hosted services or dive in completely, you’ll be in good company — the wave of the future clearly points to the cloud to improve efficiency, lower costs, compete more effectively and reduce risk.
FundCount offers FC Hosted, a fully hosted and managed implementation through Digital Edge, a leader in managed cloud solutions and FundCount partner. Contact us to learn more.