Don’t be surprised to find your finance department in the cloud. In 2008, IT researcher Gartner, of Stamford, CT, declared “Cloud computing will be as influential as e-business.”

Based on a survey of 244 executives, International Data Corp. (IDC), Framingham, MA, another IT research firm, predicted in late 2008 that cloud computing was poised to go mainstream, and noted that cloud computing was entering a period of accelerated growth.

Your finance department probably already dabbles in the cloud. Anybody using a free Gmail account from Google? That’s the cloud. Does your organization use Salesforce.com? Another big cloud player.

Almost every software-as-a-service (SaaS) provider is part of the cloud. Last time I checked, there were dozens of financial applications available from SaaS providers. Click here to see if one of yours is there.

Cloud computing is just the latest twist on outsourcing. This time around, it is being expedited and facilitated by the ubiquitous accessibility of the Internet. The Internet is the cloud.

The first services to land in the cloud are IT infrastructure services. Amazon.com, for example, staked out its cloud position early by providing dynamically configurable compute (server) resources. Say that your end-of-quarter closing overly taxes your servers. No problem; with Amazon’s Elastic Compute Cloud (EC2), you can get the extra server resources for just that period, paying only for what you use, when you use it. Amazon’s Simple Storage Service (dubbed Amazon S3) provides dynamic storage capacity as needed.

A number of financial services providers are jumping to the cloud. Transzap provides procure-to-pay services. NetSuite has moved a raft of business management service capabilities to the cloud. IBM jumped into the cloud in a big way with its Blue Cloud initiative. Even big ERP players like SAP are adding cloud capabilities.

The cloud delivers attractive advantages:

• Subscription and pay-as-you-go business models

• Resources on demand, anytime, anywhere

• No need to invest in IT hardware or manage IT infrastructure

• Ease of use through browser-based access

Despite the growing cloud clamor, organizations should proceed cautiously. Start by selectively out-tasking specific IT infrastructure services, such as cloud-based backup. If you are facing a major upgrade of your server or storage resources, then certainly take a look at cloud offerings. It is a way to avoid a heavy upfront investment. If you are considering cloud-based applications, you need to assess the features and capabilities as you would a conventional application.

The cloud, however, comes with drawbacks, too:

• You need to carefully review, manage, and monitor service level agreements as you would with any vendor or outsourcing provider.

• Anywhere, anytime access is only as good as your network links.

• Cloud providers can stumble; Google experienced a 4-hour outage in February.

• You still need to integrate your cloud services with the rest of your operation.

• You give up direct control.

The cloud holds the promise of delivering the long-held IT dream of fluid IT capabilities on demand and without a big upfront capital investment or the ongoing expense of maintaining a resilient IT infrastructure. That’s good news for the CFO but maybe not so welcome to the CIO. ###