Preparing for 2010

What Cloud Computing Means to Finance

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Cloud Computing is Transformational

“The Internet is the key to

the success of our business model”“Internet Applications Sizzle…”

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What You Should Expect from this Session

An understanding of cloud computing and Software as a Service

A good sense of how cloud computing applies to finance

Best practices for evaluating, selecting, contracting and negotiating for cloud-based business applications

Not a sales pitch

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To Ask Questions…

Type questions into the chat box at the lower right side of your screen. Then submit by clicking “Chat”

We’ll answer them in real time and pick the most popular questions to answer at the completion of the webinar

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To Request CPE Credit…

You must attend the event in its entirety.

At the conclusion of the webinar you will be asked to complete a survey and provide your license number and contact details. This must be completed in order to receive CPE credit.

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Daniel Druker

ddruker@intacct.com

SVP Intacct

CMO Postini

CMO Trigo

GM Hyperion

+ Oracle, Arbor

Software, Intel

SaaS 2.0 Blog –

intacct.blogspot.com

My (and Intacct’s) Bona Fides

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The Cloud Impacts All of Us Both asConsumers and in Business

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And Now, Also for Business ApplicationsUse the Cloud Anytime, Anywhere via any Web Browser

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Software as a Service – Run your Business Applications in the Cloud

Cloud computing is a broad term encompassing everything from B2C services to infrastructure

Software as a Service is a subset of cloud computing focused on enterprise business applications

− Mature, high function applications

− Flexible to configure and integrate

− World class operations and maintenance

− Support and service level agreements

− Vastly better economics than on-premises

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Security, Infrastructure & OperationsCloud Vendors Have Superior Operating Capabilities

Far better than nearly all not for profits can afford to deploy

− IBM Fortune 100 class data center

− Encryption & hardened systems

− 24x7x365 operations on three continents

− SunGard disaster recovery center

− Redundant hardware and networking

− Continuous backups

− Automatic upgrades

− SAS 70 type II audited

Possible because costs are spread across thousands of organizations

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Upfront License Fees

18+% Annual Maintenance Fee

Customer Bears All IT Costs & Risk

18-24 Month Release Cycles

Customer Bears All Upgrade Costs & Risk

“Ship and Forget”

On Premises Model

Pay for what you use

Included

Vendor’s Problem

Monthly Innovation

Vendor Handles

Vendor Accountable

Cloud Model

Cloud Computing Turns Capex into Opex

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2009 - The AICPA and the Federal Government Begin Recommending Cloud Computing

Feb 2009 – Obama CTO begins recommending cloud computing for government agencies

April 2009 – AICPA partners with Intacct to drive adoption of cloud computing

Motivation: Productivity

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Agenda

Cloud Computing Defined

Why Cloud Computing for Finance

Best Practices for Contracting and Negotiating

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State of Current Financial SolutionsEffectiveness Gap

Source: Saugatuck Technology, Cloud Financials Come of Age, 2008

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The Impact of SaaS on FinancialsClosing the Effectiveness Gap

Source: Saugatuck Technology, Cloud Financials Come of Age, 2008

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Cloud Financials Delivers Real Business Advantages

Achieve anytime, anywhere accessibility

Ensure control and compliance

Gain real time organizational visibility

Gain operational efficiencies

Get out of the no value added IT business

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The Cloud and Organizational VisibilityOrganizations Need “Real Time” Visibility

Management by Dashboard & KPI’s

Real time, consistent information

24x7 accessibility and cross-functional alignment

• Management by spreadsheet

• Manually intensive, error prone

• Trapped in silos on the desktop

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Web-based Workflow and ControlsEnsure Compliance, Reduce Costs and Risk

• Automated purchasing and employee expense management

• Custom defined approval workflows for purchase requisitions, purchase orders, and employee expense reports

• Multiple levels of approvals

• Comprehensive audit trails

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Real-time Visibility for your StakeholdersOver the Internet

Your finance team gets professional

power of an industrial strength

accounting system, can access all

financials from a single console.

Officers, managers and other stakeholders

get use easy reports, approvals and

dashboards.

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Cloud Computing Streamlines the Financial Consolidation Process

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Cloud Computing Game Changers Combine Technology and Intellectual Capital

Industry templates

XBRL tags

Business Guidance

Best Practices

Trusted Business Advisor Checklists

PCPS Involvement

AICPA Content

Standards Updates

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Agenda

Cloud Computing Defined

Why Cloud Computing for Finance

Best Practices for Contracting and Negotiating

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Selection Process Basics are the Same Whether Cloud or On-Premises

Gather your requirements

Write down your priorities

Identify your top challenges

Create a RFI / RFP

Demo or trial from short list

Calculate TCO / ROI

Check references

Score and selectUltimately, the process is about

finding the solution that best solves

your business problem at the lowest

cost / risk

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What’s Different in the CloudThere is More to Evaluate

Product fit

Implementation success

Support quality

+Operational track record

Infrastructure and security

Ongoing business practices / culture

ROI / TCO

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Selecting Business Applications in 2010The Web Tells All

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Service Level Agreements are Important

Key to creating a successful ongoing relationship with your vendor

Sets expectations and guarantees performance for how your system is operated

Recognizes both concerns and advantages of cloud computing

Vital tool to reduce risk and establish shared performance goals

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Service Level Agreement Part 1Control

Establish system availability SLA− Based on average monthly availability

Establish system response time SLA− Based on average monthly response time, with penalties

for slow system performance

Establish disaster recovery fail over SLA − In the case of a catastrophic failure of the vendor's

infrastructure

Governs responsibilities that used to be under the control of the

in-house IT function, but are now under the vendor's control

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Evaluating Cloud Vendor Capabilities Infrastructure and Operations

Data center quality

24x7x365 operations

Backup Procedures

Automatic upgrades / scheduled downtime

Disaster recovery included

SAS 70 type II audits

3rd party penetration testing

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Service Level Agreement Part 2Operational Risk

Ensure that it is unambiguous that you own your data

Ensure that you can get your data back if you ever decide to leave

Ensure that the vendor will assist you in migrating away

Ensure that you can retain your data on the vendor's system for an appropriate fee

Review the vendor's privacy policy and make sure that you understand what happens according to the SLA if there is ever a privacy breach.

Address potential risks around security, privacy and data

ownership (established vendors are much better at this than you

are likely to be)

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Evaluating Cloud Vendor Capabilities Operational Risk – Cloud Security

Physical security, biometrics, man traps

Strong encryption on all network traffic

Encryption on disk

Hardened servers

Redundant firewalls and anti-virus

Unix and Oracle

Complete audit trail

Strong password enforcement and expiration

IP access restrictions

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Service Level Agreement Part 3Business Risk

Establish criteria for the quality and timeliness of professional services engagements

Look for guarantees around proactive communications

Ask for money-back guarantees

Cloud vendor can rationally offer business risk guarantees

because their track record of implementations can be quite

good compared to on-premises alternatives

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Service Level Agreement Part 4Penalties, Rewards and Transparency

Understand whether you will be issued an automatic credit if a failure occurs that impacts you, or must ask your vendor for a credit to receive one.

Understand whether you can get out of your contract if the vendor continuously and materially fails to meet their SLA.

Ensure the vendor guarantees transparency and proactive notification of system availability, production issues, scheduled downtime and pending updates.

Review the vendor's public real-time status website that shows their operational performance

Review the vendor's published service level agreement and understand how it applies to you

Ensure that the vendor documents the methodology for

measuring performance, calculating penalties and rewards and

offers full transparency into operations

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Service Level Transparency

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You’ve Got the Power in the RelationshipContracting and Negotiating Ideas

Cloud vendors are measured on recurring revenue

− Delivers goal alignment between client and vendor

− Willingness to offer steep subscription discounts is a red flag – demand caps on price increases on renewal, no changes to module definitions

Cloud vendors feel pressure on cost of sales− References, testimonials, ROI studies are valued for discounts

− The more prepared you are going into an evaluation (the faster the cycle) the more likely the vendor will be willing to discount

Ensure support, training and maintenance are included

− Check carefully so you don’t get surprised

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Apples to Apples TCO On-Premises Software vs. Cloud Computing

Cloud ComputingOn-Premises

• Apply Fixes, Patches,

Upgrade

• Downtime

• Performance tuning

• Rewrite customizations

• Rewrite integrations

• Upgrade dependent

applications

• Subscription fee

• Training

• Configuration

• Ongoing burden on IT

• Maintain/upgrade

hardware

• Maintain/upgrade network

• Maintain/upgrade security

• Maintain/upgrade

database

Ongoing Costs Ongoing Costs

* Yankee Group DecisionNote Technology Analysis

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Expect Significant Benefits73% to 589% ROI; $75,000 to $715,000 Annual Savings

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The Future: 100% in the Cloud

Radical simplification of IT infrastructure

Shift costs and risks to vendors and the cloud

Get out of the no-value-added IT business

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Connecting in the CloudsIntacct’s Own Internal Business Applications

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Key Insights

Cloud computing is here and is rapidly replacing on-premises systems

Significant benefits for finance - functional, productivity and TCO/ROI

Fast and easy to get started

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Let Us Know How We Did!

When you exit the webinar, you’ll be prompted to fill outa survey. Please take the time to tell us how we did.

If you’re requesting CPE credit, you must complete the survey and provide your license number and contact details. This must be completed in order to receive CPE credit.

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Daniel Druker

ddruker@intacct.com

SVP Intacct

CMO Postini

CMO Trigo

GM Hyperion

+ Oracle, Arbor Software, Intel

SaaS 2.0 Blog – intacct.blogspot.com

Questions?

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Interested in Learning More?

Email sales@intacct.com or call 877-437-7765

Attend one of our upcoming webinars:

• Intacct in Action

• Managing the Complexity of Revenue

Management with Intacct

• Best Practices for a Successful Cloud

Financials Implementation

http://intacct.com/webinars