The advertising industry is expected to come up with startling ideas within tight time schedules.
Successful campaigns cannot wait for a supporting technology infrastructure to be put in place.
So the central proposition of “IT as a service”, parked in the cloud and expanding or contracting to meet the client’s needs, should be highly attractive for advertising companies.
Colin Fleming is chief financial officer at AMV BBDO, the UK’s biggest ad agency by client billings. IT is not his priority, but adaptability and security loom large in a business that handles the accounts of clients that include Diageo, the drinks group, and the Gillette razor brand owned by Procter & Gamble.
AMV has committed itself to the cloud, but its approach illustrates that software as a service (SaaS) is not always a simple proposition.
Mr Fleming divides AMV’s data into three categories.
The first, comprising emails and routine client information, is used by all of its 450 staff and will soon be accessed via Microsoft’s Office 365 service.
The second and third categories of data, sensitive information, including consumer research and AMV’s core accounting figures, represent corporate treasures that have to be carefully protected.
“It’s OK to use a public cloud for the first data category, which is not business-critical,” says Mr Fleming, “but if client data went astray, for example, it would put our business at risk”.
He likes the off-the-shelf nature of Microsoft’s product, but says that he would not feel comfortable putting in the cloud information that is normally accessible only by the top tier of AMV staff.
So AMV will use SaaS for 90 per cent of its work, while holding confidential material in an internal pen.
“The high-risk stuff involves low numbers of people,” Mr Fleming says.
What does appeal to Mr Fleming is the way that cloud resources can be tailored to fit a precise need and changed at very short notice.
“The advertising industry needs to be scalable, because client relationships are dynamic,” he says: AMV can sometimes push out a new campaign in a matter of days.
Mr Fleming expresses his frustration at the traditional IT industry model where a small expansion in capacity requires a large investment in hardware.
“I don’t like to have to buy a whole new server just because we a have bit more data,” he explains. He also notes that flexible working is on the rise, with staff much more receptive to logging on remotely, often via the cloud.
Taking a strategic view, Mr Fleming wants the cloud implementation to free his small IT department from mundane tasks such as user support and direct them towards business goals.
“They should be developing better client relationships via intranets, or tracking campaigns,” he says.
His vision is of the cloud as a liberating influence that gives IT the scope to turn its skills to more important strategic tasks.
Cost is not a prime consideration for this CFO. “It’s not about cost, it’s about a business strategy that’s nimble and flexible to mirror our accounts and our clients.”
However price can be a significant factor, points out Peter White, who was formerly a financial director in Prague at Ceske Radiokomunikace (CR).
Mr White worked at CR for four years, restructuring the company and then negotiating its 2011 sale to Macquarie Group, an Australian investment bank, for €574m.
He says that CR was a traditional company, with a matching approach to IT.
It had installed enterprise software “at vast expense”, leaving Mr White to come to reflect on the superiority of a cloud approach.
“[Enterprise] systems cost a fortune to buy, install, maintain and upgrade. The SaaS model is a no-brainer, while the software industry model is outdated.”
Mr White believes that cloud vendors are pushing at an open door.
“We CFOs are by nature risk-averse, but with opex [operating expenditure] and capex [capital expenditure] budgets under pressure, you will begin to see a viral impact as our peer group embraces the cloud and gains confidence that this is the way to cut costs.”
So the cloud appears to be gathering momentum among CFOs, who are increasingly disillusioned with the way that software industry behemoths profit from a billing system that is two decades old.
And it is not just the bigger programs that are being edged out.
DC Dental, a Baltimore-based US dental supplies distributor, moved to NetSuite, a cloud service, when it felt it had outgrown standard small business software packages.
Howie Friedman, DC Dental’s chief financial officer, appreciates the fact that using the cloud means it can take less than a week for new staff to be fully “IT functional”.
This, and the ability to compose financial reports without needing database query skills, satisfies Mr Friedman’s appetite for accessible technology.
Now he clicks on a spending item and sees exactly what it comprises. “I make reports myself, and that’s what cloud should be about, not needing outside assistance.”
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