Moving to the Cloud: Is Federal Financial Management Fair Game?

Article excerpt

Cloud computing is suddenly all the rage. Turn on the television and you'll see commercial after commercial encouraging us to "move to the cloud." All the large technology companies are getting into the game, and smaller ones are also testing the waters. On June 6, Apple CEO Steve Jobs announced the company was launching its cloud music storage service called iCIoud. It seems that you can either jump on the bandwagon or get out of the way because the move to the cloud is happening quickly. Now that we have seen the hype, do we really understand what it is and how it works, especially as it relates to public sector financial management?

Cloud Computing and the Federal Perspective

Not to be left behind, the federal government is planning to move in the direction of cloud computing. Late last year, the U.S. Chief Information Officer (CIO) outlined the government's vision for the future in a 25-Point Implementation Plan to Reform Federal Information Technology Management, and it clearly includes cloud computing. Specifically, the plan declared "the federal government w ill shift to a 'Cloud First' policy. The government issued an implementation plan in May 2011, with the strategy to accelerate the safe and secure adoption of cloud computing." And even in these days of federal austerity measures and budget battles, the government is not scaling back on this effort, with a plan to allocate $20 billion of the total $80 billion federal IT budget to cloud computing.

What is Cloud Computing?

A little background on cloud computing would help, especially for those of us whose world involves accounting transactions, accounts receivable, payables, PP&E, etc. If you do some research, on Wikipedia you will find:

Cloud computing refers to the provision of computational resources on demand via a computer network. In the traditional model of computing, both data and software are fully contained on the user's computer. In cloud computing, the user's computer may contain almost no software or data (perhaps a minimal operating system and web browser only), serving as little more than a display terminal for processes occurring on a network of computers far away. A common shorthand for a provider's cloud computing service, or even an aggregation of all existing cloud services, is "the cloud."2

The National Institute of Standards and Technology (NIST) is charged with leading the initiative, and describes cloud computing as "a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (for example, networks, servers, storage, applications and services) that can be rapidly provisioned and released with minimal management effort or service pro v ider i nterac t ion ."3

The U.S. CIO, Vivek Kundra, who recently left government to enroll in a fellowship program at Harvard University, envisioned a future in which the government is more efficient, agile and innovative through more effective use of IT investments and by applying innovations developed in the private sector-hence, the emphasis on moving to the cloud.

A variety of cloud solutions are available. For example, we have seen different types of "services" associated with the cloud, such as Software-as-a-Service (SaaS), meaning that a local PC accesses software applications from the cloud servers rather than locally installed software. There is also Infrastructure-as-a-Service (IaaS), which delivers a computer infrastructure-typically a platform visualization environment-as a service. Rather than purchasing servers, software, data center space or network equipment, clients instead buy those resources as a fully outsourced service.4 Recent pictures of Apple's new enormous iCloud network center demonstrate the largess associated with the IaaS part of the cloud. Email-as-a-Service (EaaS) is where cloud (web-based) e-mail resides.

From the perspective of a federal financial manager, an agency could be accessing finance and accounting software (provided by the vendor) through the cloud, accessing a virtual platform in the cloud and responding to e-mails that reside in the cloud, linking the SaaS, IaaS and EaaS models. …