Thursday, 10 November 2011 21:57

There is no doubt that the FE sector is coming under increasing pressure to reduce costs and increase efficiencies wherever it can. Not only are budgets being cut - the Institute for Fiscal Studies (IFS), recently reported that public spending on UK education will drop by 14.4% between 2010-11 and 2014-15, but this is also compounded by the additional challenges of rising levels of bureaucracy and falling enrolments.

The current situation is therefore making concepts such as the cloud more appealing and it is the public sector that is leading the way with adoption. Recent research reveals that over 30% of public sector organisations questioned use cloud applications, compared with 19% of private sector organisations. What's more, market analyst IDC predicts that spending on public IT cloud services will hit £46bn in 2015 (up from £13bn in 2010). Cloud technologies are no longer up in the air - it's now a reality for many innovative organisations to access their IT applications in a virtual environment.

College finance departments switch to the cloud?

Unsurprisingly college finance departments are already waking up to the benefits of Cloud. As the technology becomes mainstream, security concerns have diminished and FDs are beginning to understand how the concept can be applied across the organisation to help save money and improve overall efficiency and performance.

A cloud strategy also fits perfectly with a shared services philosophy, so not only can individual colleges spend less on IT hardware and resources to support and maintain technology, they can also spread the costs with sister colleges or perhaps others in the same region.

Interestingly, already, 9% of FE institutions are already using a shared service for their finance system. The trend with cloud tends to be for one aspect of IT to be trialled first as a pilot, before deciding to migrate additional IT functions.

What key challenges can be solved?

The key advantage of putting your finances in the cloud is that you immediately move to an 'opex' rather than a 'capex' arrangement, whereby you only pay for what you use and you do not have to invest or maintain hardware internally. Both of these factors can represent significant cost-savings. Firstly you no longer have to budget for hardware or upgrades and secondly it means you become less reliant on your IT team and in turn they can re-allocate their time to more pressing and valuable activities.

Not only does cloud enable colleges to save money on capital expenditure it can also help drive efficiency improvements by enabling your staff to work smarter. Just as it allows the IT department to focus on key tasks, the finance team can also free themselves from the day-to-day minutiae of transactional management and focus on their main roles such as budgeting and planning.

Tap into additional services

The very nature of Cloud means that your systems are hosted virtually, which means not only does the Cloud provider take care of the maintenance and any upgrades, but they can also offer you additional support services which can often be carried out more quickly and economically than you could do internally.

With staffing costs being reduced, the cloud represents a viable option to outsource more time-consuming, administrative tasks to a third party. Take for example a busy college finance department. Even without recent personnel cuts, there are delays in getting reports completed, debt management is overlooked and at busy times such as year-end or enrolment there is a mounting backlog.

The cloud facilitates the ability to outsource certain tasks to a reliable service provider who can take care of these on your behalf. So a finance department could feasibly outsource 'Monthly Reporting', 'Month End' or simple data entry as and when they need to.

Understand what courses are profitable

The service element of cloud is not restricted to just administrative tasks though, it can also be applied to more strategic projects too.

For example, many colleges do not have the necessary information or time to assess what individual courses are costing them and whether they actually make financial sense to run. By applying activity based costing, a third party with access to data in the finance system can calculate this and deliver a report that highlights which courses are economical and which are not, taking into account all types of variables such as student numbers, staffing costs, estates management information and so on. This is the type of activity that ordinarily might be overlooked by a busy finance department, but it can be carried out relatively easy as a standalone project and will deliver long-term savings in the future.

How to find out more about moving to the cloud

As part of a shared service strategy colleges can expect to save 20-40% by moving to the Cloud on top of the other benefits it can deliver. For further advice or to evaluate a cloud-based accounting solution, speak to a Symmetry advisor on 0117 900 6262 (www.symmetry.co.uk/financialsc). The company can also provide more information on how cloud-based accounting can form part of a shared services strategy. LinkedIn members may also like to join the "Cloud Accounting in FE" group.

Benefits of cloud at a glance

• Save 20-40% as part of shared services strategy

• Take advantage of new functionality to improve efficiency

• Less budget required as no on-going costs of hardware/software & licensing

• Delivered via the web so is location independent and ideal for shared services between group of colleges

• Pay for what you use on a monthly basis

• Reduce level of IT staff required

• Data is held remotely with service provider responsible for back-ups/disaster recovery

• Allows you to focus on core issues without the distraction of technical issues

• Always on the latest software with minimal downtime for upgrades

• Service level agreements offer peace of mind

• Outsource time-consuming administrative tasks

• Short implementation time

Julian Sayer is sales and operations director at accounting software vendor Symmetry