Sage Advice US

Contractors see more options with cloud outsourcing

For years, smaller construction companies have not had the luxury of IT staff. In fact, I know a lot of CFOs who’ve doubled as the tech experts in their companies, recruiting anyone in the organization who had some sense of computers to help out. So when cloud computing started to offer another alternative—a way to outsource IT functions and infrastructure—construction companies took notice.

Over the past few years, IT outsourcing has especially become prevalent among smaller construction firms. More than three out of four construction firms under $50 million in revenue outsource their information technology, according to the 2016 Construction Hiring and Business Outlook conducted by the AGC in collaboration with Sage.

In 2017, hosted cloud services will continue to grow in popularity among contractors who want to outsource their IT operations and infrastructure. Even larger construction companies are seeing value in putting some parts of their IT infrastructure in the cloud and will continue to do so.

This growth trend is being spurred by many factors. For one, servers and equipment are continuing to age, creating a decision point for contractors to determine if it’s more cost effective to buy new equipment or use an Infrastructure as a Service (IaaS) cloud service. Backup and disaster recovery are also major incentives for contractors to use an outside cloud service to protect their data. And, of course, cost reduction is always an underlying motivation to move to the cloud.

Another key factor—and perhaps the biggest change I’m seeing—is contractors are now more comfortable with using cloud computing services for hosting accounting and other proprietary software.

Why the change in comfort level?  In my opinion, it primarily boils down to the need for information access. Data is the fuel that drives decision-making both on and off the construction job site. Consequently, contractors can no longer afford to have data that is available to only a few people. Secure, hosted cloud environments make it possible for many more authorized individuals to quickly, easily, and cost-effectively get to the information they need to do their jobs.

How you use a cloud service provider for outsourcing depends entirely on your individual business needs. You can, for example:

Cloud computing has and will continue to reshape the way construction companies manage their businesses. In 2017, we are sure to see more options for contractors who want to outsource their IT services in the cloud.