So you're considering converting to the cloud. Sure, it has great benefits ranging from collaborative sharing and mobility to streamlining operations and efficiency, but this transition should not be taken lightly. There are many risks and problems that your organisation needs to consider before making this leap.
Without proper precautions, the transition to the cloud could have serious consequences to your organisation in both tangible and intangible ways. The following list highlights the risks that your organisation should understand and evaluate before diving into this investment:
- Unregulated
- Data jurisdiction
- Internet connectivity
- Stability of the Cloud Service Provider
- User experience
- Choosing the wrong cloud applications
Unregulated - No Defined Set of Standards
Cloud computing has been spoken about for years in the industry, but has only recently become a realistic solution for streamlining IT efficiency and increasing productivity. Due to this rapid acceptance, the standards and compliance normally set in place with other IT products are yet to be established. This lack of a universal standard is problematic to say the least. Your organisation has to put a huge amount of trust into the company providing the cloud solution. Since each company has their own standards, it’s crucial for your organisation to pick the appropriate vendor for your requirements.
Below is a possible scenario in which your organisation could find itself:
Your company’s terms and conditions promise your clients 99% uptime. Since you have full control of your software, you can ensure this guarantee is met. However, when you transfer to cloud, you transfer part of the responsibility as well. If your company offers 99% uptimebut this particular cloud solution only offers 98%, your company will not be able to uphold your terms and conditions.
As each cloud service provider has its own unique set of standards, it’s important to thoroughly investigate the vendor’s terms and conditions to find the most suitable match for your business. A far more costly example is found under Data Jurisdiction.
Data Jurisdiction
In the cloud, data is not stored locally; rather, data resides on the cloud service provider’s systems. This means your corporate data, including confidential information, is kept in a geographical location external to your workplace in a data warehouse your cloud vendor has chosen.
Since there’s a strong possibility your data could be stored in a different country, there are two major concerns:
- Depending on industry regulations, it could be illegal to store particular types of information in a foreign country. This is applicable to various fields including financial institutions.
- When your data is held in another country, the information is subject to that nation’s laws.
For example, if you’re an Australian company using a cloud vendor that stores information in the United States, your data is subject to U.S. jurisdiction, including the Patriot Act. As privacy laws vary country to country, you need to be mindful that particular countries could access or gain ownership of your company’s information while it’s stored there.
A solution to this problem is to research data laws in various countries or use a cloud service based in your own country. Due to this complexity, it is best to consult an expert in data law who can advise you on which country's laws suit your organisation best.
Internet Connectivity
The rapid progression of Internet connectivity has made cloud computing a viable option for organisations everywhere. However, this dependency on the Internet is what makes cloud computing a risk for your organisation.
This dependency creates the possibility of a bottleneck. This is when an entire system is limited by a single component. Since cloud applications require an active Internet connection that can reach a certain throughput (speed) in order to run optimally, an inferior Internet connection can result in poor performance or even crash applications. This will result in the company suffering both a productivity and efficiency decrease.
Related: 6 ways to increase IT efficiency
Organisations all have different requirements, and certain applications require a lot of bandwidth. In most countries this isn't much of a worry. However, large areas of Australia don’t have the infrastructure to produce the throughput necessary to effectively run these programs.
Furtherto this, without the Internet, all an organisation’s cloud-based systems wouldl go offline. This is further compounded by certain geographic areas where poor quality Internet causes frequent dropouts. In this case, a backup Internet service should be available through a different medium (eg., if the primary service is ADSL, then the backup service should be 3G).
It is vital the organisation performs an appropriate risk assessment and calculates the bandwidth necessary and the throughput that can be delivered.
A recommended mitigation strategy is to have backup local applications that can be run in case the Internet becomes unavailable, as well as redundant Internet connections.
Stability of the Cloud Service Provider
As mentioned earlier, the lack of universal standards for cloud solutions means there’s the risk of instability regarding the cloud service provider. Quality assurance needs to be implemented when choosing a company, as the negative impacts of having a company lose all your data or delivering a system with performance issues would be damaging to your organisation.
User Experience
A very important thing to remember is the intangible element that user experience has on your organisation. When moving from local software to cloud software, there are some differences that can alter the user experience. Although still efficient, cloud-based applications may be slightly slower to respond because they are accessed over the Internet. Also, since you’re confined to a browser rather than locally installed software, certain functionality might change. For example, if you're using a SaaS product, the ability to drag and drop is often removed. This may often cause frustration with staff if appropriate training and change management is not employed.
One solution is to warn staff of upcoming changes and appropriately prepare them for the transition with training and support.
Choosing the Wrong Cloud Applications
When moving from a local environment to the cloud, your organisation’s software may also change. It’s important to determine which appropriate cloud software is available when considering this transition. Failing to do so may cause your company to suffer productivity losses, or in a worst-case scenario, prohibit the ability to perform critical business activities.
Related: 4 ways to improve productivity through better use of technology
Cloud computing has great potential for increased efficiency, but none of it will matter if certain tasks which were possible in the old system cannot be completed efficiently in the new one. Because of this, clear software functional requirements need to be mapped out.
This process can often be documented by an independent IT consultant, which can ensure that your organisation can assess whether the software matches your requirements.
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