The Buzz About the Cloud and
Collateral Monitoring Opportunities
The “Cloud” is at its core, a marketing term. It’s been
around for as long as there has been an Internet, but
it didn’t have the label “Cloud.” The essential concept
and question is: “Where is the computing taking place
and where is the data stored?” If you have a browser
you have access to the Cloud. Log into Facebook, and
you are working on Facebook’s servers, making use of
its software applications, and saving information on
its server. That’s the Cloud. If you are working on your
desktop and writing a letter on Word, and then save the
file on your desktop, you are not in the Cloud. That’s
pretty much it.
Same concept is true with a borrower’s records. If
the company runs its business on an application in its
office and/or on its desktops, it is not in the Cloud.
If it runs its business on someone else’s server and
saved the data there as well, then it is in the Cloud.
What determines which is better for the company and
for you? The answer is obvious. Anytime you have a
third party maintaining applications and storing data,
both borrowers and lenders will be safer as a general
principle. Otherwise, a lot of things can go wrong.
The single most important monitoring benefit of the
Cloud is the opportunity to monitor collateral in ways
never before imagined. Lenders can simply require a
user name and password for the borrower’s accounting
system, and have the ability to view the record’s
activity “live” (or nearly live) at all times. There is no
cost to anyone for this feature. It is important that the
system has “permission-based” architecture so that
The single most important monitoring benefit of the Cloud is the opportunity
to monitor collateral in ways never before imagined.
lenders can view the information but not have the
ability to make any changes or modifications to the
borrower’s books and records. Early warning signals
and red flags occur sooner, and these tools can serve
as a deterrent to fraudulent activities.
“As asset-based lenders continue to evolve in
upgrading technology and understanding the opportunities that these upgrades offer, lenders will have yet
another competitive tool to interface with clients. The
old saying that we ‘want it to be easy to do business
with us’ still is very powerful,” says Bruce Sprenger,
group senior vice president and regional manager, Cole
Taylor Business Capital, and current president of the
Commercial Finance Association.
The Credit Risks of the Data Storage and
Contingency Plan Business Models
One of the things that we all hear about is the safety,
backup and contingency planning for the mainte-
nance and recovery of business data. The market is
flooded with so many data storage companies, that
storage fees are dropping as a result. This industry is
undergoing a consolidation. Data storage and the other
remaining elements have become a commodity, and
the differences between one company and another are
hard to determine.
Enterprise Resource Planning
and Business Management
The overwhelming majority of small- and medium-sized
businesses (SMBs) maintain the business and information records with an antiquated pastiche of separate
and unrelated systems strung together. For example,
an inexpensive commercial package for general ledger,
receivables and payables; Excel for business analysis;
ACT! for contact and sales management; and project
management applications. The problem with this is
that these various packages, purchased separately,
don’t “talk” to one another. Data is entered manually into each distinct application, and important and
often-times critical information is not available on a
