Managing the move to the cloud analyzing the

Managing the move to the cloud – analyzing the risks and opportunities of cloud-based accounting information systems Venkata Marella

Introduction to the case • Pia Moksi – Sole Owner and Chief pharmacist • Increased workload especially due to accounting task • Accounting is a non-core activity • Idea to outsource the Accounting tasks • How do cloud-based services work?

Kluuvin Apteekki • Privately owned pharmacy with a € 2. 2 million revenue • The main branch is located in the heart of the city and the branch is located in Merihaka area. • Pharmacy industry is competitive and controlled by State • Customer Service, Sales Campaign and Low operating cost are the competitive advantages of Kluuvin Apteekki

Accounting process: Kluuvin 5 Tasks : sales, purchases, payments, reporting and payroll Task Sales Description Sales represent a detailed itemization of sales made, presented in date sequence. It may also contain credits issued that reduce the amount of sales (e. g. for products returned by customers). Purchases The purchase ledger is a sub-ledger in which all purchases made by Kluuvin Apteekki are recorded. Payments refer to all monetary transactions between Kluuvin Apteekki and third parties for the goods or services that are purchased by the company or additional fees and payments due Reporting Accounting reports are referred to as periodic statements, which show the financial position of a firm at a given time or over a stated period, resulting from its business transactions and operations. Payroll refers to the amount paid to employees for services they provided during a certain period of time and is crucial to the companies

Kluuvin Apteekki • Pia handles the Accounting process herself • Still using the paper based invoicing system. (small player) • Payroll is a complex task • Change number of employees • Calculating working hours (holidays, leaves, & Overtime) • Reporting tasks are less frequent but more complex • Errors have far-reaching consequences • Require good knowledge of the tax regulations

Cloud based AIS • Integrates all data into one services and provides real-time information • Provides flexibility to outsource any task • Cloud offers three service models • Software-as-a-Service • Platform-as-a-Service • Infrastructure-as-a-Service A private cloud is a secure solution that assumes that the implementation of all layers of cloud stays within the company IT

Cloud based AIS • A public cloud model assumes that services are deployed and maintained by the cloud provider within its own infrastructure. • Hybrid cloud provides control on crucial parts of the process, while allowing public cloud services to deal with routine and computing intensive tasks. Pia evaluated three systems highlighting the important dimensions, such as user interface, integration capabilities, modularity, and price

Benefits of Cloud • Cloud Computing is associated with lower costs • Provides scalability, flexibility, and accessibility • She could get in touch with a professional Accountant through cloud-service providers • Provides time to focus on Core business areas