How Disruptive Cloud Technology is Shaping Practice Growth

With 2023 now well underway, we’re beginning to see changes in how practices approach their use of cloud, as they navigate past historic challenges to take advantage of the opportunities the cloud offers. The cloud was once viewed as mainly a cost-savings-focused technology model, allowing businesses to control and even optimise expenditures to get more out of their IT budgets.

However, today, practices are seeing more opportunities using cloud to help transform their businesses. In this article, we look at three key areas where disruptive cloud technology has changed, and is continuing to change, the tax and accounting industry.

The Cloud is Helping to Add New Revenue Sources

The cloud may be synonymous with cost-savings, but today, practices are also leveraging the cloud to introduce new revenue opportunities and to transform business. That’s not to say that budgets and cloud spending will increase dramatically; most businesses will continue to be prudent in these times of economic uncertainty. However, what we are seeing is practices recognising that they need to get on the cloud journey quite quickly, and that they will focus future investments on digital technologies and the cloud.

What does a new revenue source look like? This is where the power of data and real-time analytics comes into play. With the cloud, advisors have all their data in one easily accessible place, and they can run analytics-based scenarios at any time to determine how their clients are performing against targets. With this increased visibility, practices can offer better advice and new opportunities for their clients, which may lead to new lines of business and revenue opportunities.

The Data Security Mindset Has Changed

For many years, some practices may have considered whether holding clients’ data in the cloud as a security risk, opting instead for the on-premise storage of data. Today, however, we’re seeing a new mindset surrounding cloud security.

When The Cloud Industry Forum (CIF) surveyed 250 UK-based organisations from the smallest businesses through to the largest enterprises in its annual Cloud: Driving Business Transformation study last year, it revealed that cloud security mindset had changed. The study identified that security now falls behind budget and legacy integration issues in order of companies’ top concerns surrounding cloud adoption, and 61% of companies in the study now feel more secure using the cloud.

As McKinsey notes in Debunking seven common myths about cloud, all major Cloud Service Providers have made significant investments in their underlying security capabilities. Their business models depend entirely on best-in-class security, and as such, they have invested billions in cloud security cybersecurity experts, tools, and methods. By now, most practices have realised that the investment that hyperscale cloud providers put into security is greater than anything they can do in their own data centres.

We’ll also see Cloud Service Providers take data sovereignty into account more broadly. It is possible to create data policy frameworks that prevent data from migrating across geographies, and we’ll see more cloud providers put their data centres into specific countries to help with data sovereignty requirements.

Practices Will Have High Expectations From Their People and Their Vendors

It’s still a challenge to find the right talent to support digital transformation and cloud initiatives in business. Without the right technical skills to enable technology-led changes, practices may struggle to really secure those new revenue-generating opportunities. Many practices are looking to create a better culture of learning so that they can train existing employees with the digital skills they need to make the best possible use of the cloud and cloud-based services.

Practices are also expecting more from their vendors and strategic partners as they look to fully digitise their practices. For us, this is an opportunity to help our customers drive more innovation, to improve business processes with technology, and maintain competitive advantage. It’s a unique opportunity to help practices innovate and execute in their market, to introduce automation where they can, and to use technology to help navigate the pace of change.

By Kevin Renshaw, Chief Technology Officer, Wolters Kluwer Tax & Accounting Europe

Wolters Kluwer will be exhibiting at Accountex London on the 10-11 of May 2023, at stand 1460.

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