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THE VALUE OF OPERATING IN THE CLOUD

INTRODUCTIONS

Leo Yancey leads the Enterprise Firm Segment of Thomson Reuters Tax & Accounting, which encompasses the top 3,000 accounting firms in the U.S. He has been with Thomson Reuters since 1992 and has held a number of positions, including roles focused on customer support, sales, management and acquisition integration.

Leo has been with Thomson Reuters through its transition from providing CD-based products to providing web-hosted solutions and he has also been heavily involved in the rollout of a number of products on Thomson Reuters Tax & Accounting’s web-based ONESOURCE platform.

Prior to joining Thomson Reuters, Leo worked in the Corporate Tax Department of J.C. Penney with a focus on Insurance taxation. Before that, he worked for Andrews, Carlow & McCollum as a staff accountant.

Leo has an accounting degree from the University of Arkansas and is a Certified Public Accountant.

Leo Yancey Vice President & General Manager , Enterprise Firm Segment Thomson Reuters Tax & Accounting

THE VALUE OF OPERATING IN THE CLOUD

Your next-generation clients won’t be reliant on a desktop PC and paper. They've grown up using the web and mobile devices.

The firms they'll reward with their business will be the firms that fit into their life and business styles.

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THE VALUE OF OPERATING IN THE CLOUD

This isn’t just a client consideration. It also holds true for the next generation of accountants who will enter our industry…and your business.

THE VALUE OF OPERATING IN THE CLOUD

Have you thought about where your clients and staff will come from in the future?

Are you ready with the services and products they'll demand? If not, what are the changes you need to make to attract them?

Cloud-based solutions will provide them with the technology they are expecting.

WHAT IS CLOUD COMPUTING?

InfoWorld: Cloud computing encompasses any subscription-based or pay-per-use service that, in real time over the Internet, extends IT's existing capabilities.

http://www.infoworld.com/d/cloud-computing/what-cloud-computing-really-means-031

Wikipedia: Cloud computing is Internet-based computing, whereby shared resources, software and information, are provided to computers and other devices on-demand. The term "cloud" is used as a metaphor for the Internet, based on the cloud drawing used . . . to depict the Internet in computer network diagrams as an abstraction of the underlying infrastructure it represents.

http://en.wikipedia.org/wiki/Cloud_computing

For our discussion today, it means… Applications are hosted in a vendor-provided data center and firm staff

users and firm client users access those applications via their Internet connection.

Google returned 2.85M results on a search for “definition of cloud computing”

http://www.google.com/search?sourceid=navclient&aq=0&oq=definition+of+clou&ie=UTF-8&rlz=1T4SKPB_enUS368US368&q=definition+of+cloud+computing

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THOMSON REUTERS’ STRATEGIC APPROACH TO CLOUD COMPUTING

THOMSON REUTERS TAX & ACCOUNTING ORGANIZATION

Thomson Reuters Professional Division

$5.4 billion

Tax & Accounting $1.0 billion

Legal $3.6 billion

Healthcare & Science $0.8 billion

Workflow & Service Solutions

$600 million

Business Compliance & Knowledge Solutions

$400 million

Global tax planning, compliance and integrated workflow solutions

Global tax and accounting information, certification and

GRC solutions

Corporate Markets

Professional Markets

Tax & Accounting is part of Thomson Reuters Professional Division and has two businesses serving the global tax and accounting market

Note: Results from ongoing businesses

THOMSON REUTERS TAX & ACCOUNTING STRATEGY

Be the leading provider of integrated workflow, compliance and knowledge solutions to the global tax and accounting market of professional firms

and corporations

Core Strategies

Tax & Accounting Vision

Extend Leadership Position in US Global Expansion

Extend Tax & Accounting’s leadership position by continuing

to integrate products into increasingly comprehensive

solutions

Expand global technology suite and enter attractive, high-growth

global markets

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Thomson Reuters Strategy

Develop products using a

web-centric strategy.

Focus on robust

systems to handle

complex calculations

and concepts.

Maintain deeply

integrated suite focus

while capitalizing on 3rd party integration.

Delivering field-based service in addition to

phone, web, and

email options.

Focus on consulting services to deliver best

practices from actual

market experience.

THOMSON REUTERS CLOUD SOLUTION

•  Applications Hosted by Thomson Reuters

•  Integration

•  Visibility Into Processes

•  Streamlined Data Collection and Data Management

•  Flexible, Accessible Client Interface

•  Security and Availability

Integration and Management of Process, Data and

Applications…in a Web Delivered Environment

GATHER DATA (Portal)

ANALYZE DATA (Workpaper System)

RETURNS , REPORTS, ETC.

(Tax/Accounting Software).

REVIEW, SIGN OFF (Workflow System)

DELIVERY TO CLIENT (Portal)

DELIVERY TO REGULATORY BODIES

(Workflow System)

Practice Management People, Process, Data

(Practice/Workflow System)

Client-serving professionals

THOMSON REUTERS CLOUD SOLUTION

Practice Management Practice CS

Workflow Management FirmFlow

Client Management NetClient

Document Management GoFileRoom / FileCabinet CS

Tax GoSystem UltraTax

Audit Engagement CS

Accounting / Write-Up

Accounting CS

INTE

GR

ATIO

N IN

TEG

RATIO

N

Applications Hosted by Thomson Reuters

Applications Hosted by Thomson Reuters

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INTEGRATION: OUT OF THE BOX

GoSystem

• Calculate return

• Print to PDF

GoFile Room

• Store PDF return copy and other docs

• Status of process

• Status of client

NetClient

• Publish PDF return and other docs to client

• Client status passed back to GFR

Integration moves PDF from GoSystem to GFR and stores it in the correct client file

Integration moves docs from GFR to NetClient and passes status from NetClient to GFR

Integration Integration

INTEGRATION: CUSTOM

Data Storage (SQL)

Tax Application

Analysis Workpapers

Reports & Workpapers

Source Systems - Portals

- Client docs - Elec files

Tax Application Web Service - Data with no user handling needed (e.g. auto adjs) - Leverage tax application as needed for calcs

Tax Analysis Web Service/Import - Data needs human analysis, moves to analysis workpapers - Sent to SQL and tax app after analysis

Data Update Web Service - If data changes, update

Data Store Web Service - Data moves from source systems to central database when available in sources

One client implementation resulted in an elimination of up to 75 mouse clicks per return from their prior process.

INTEGRATION: DEVELOPED FOR THIRD PARTY DEVICES AND APPLICATIONS •  Mobile Applications

–  Mobile CS (available via iPhone today) –  Integrates with our Practice Mgmt Product –  Extend Advantage of Cloud Computing

to Handheld Devices

•  Scan and Fill Solutions –  Reduce manual data entry –  SurePrep, Copanion

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WHAT DOES “MOBILE” MEAN? •  Mobile basically means access to systems from

somewhere other than your desk –  Laptop –  iPad –  Smartphone

•  The device can impact the experience –  Have to “scale” to the device –  Larger device may offer more sophisticated UI (doesn’t

mean small device can’t deliver an effective UI)

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MOBILE IS WHITE HOT!

17

59% of adults are mobile web

users

Mobile web users will surpass

desktop web users by 2014

23% of adults are in

households with no land line

Consumer devices have

entered Your firm!

MOBILE IS WHITE HOT!

18

80 70 40 60 50

1.2M

1M

800K

600K

400K

200K

10 20 30 90 1 2 3 4 5 6 7

Days Years

Units

iPad sales = 1M Units

28 Days

iPhone sales = 1M Units

74 Days

PC sales = 1M Units

7 Years The Value of Mobile:

•  Mobility

•  Productivity

•  Convenience

•  Service

Mobile is “Wow factor” for your firm and your clients

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THOMSON REUTERS WEB EVOLUTION

1999•  FirstASPWebHostedSystems

• GoSystemTaxRS,VirtualOffice

2001•  SecureClientPortals

2002• WebHostedGoFileRoomDocumentManagementandWorkflow

2008•  ThomsonReuters“SaaS”deliveryby“ProfilesofUse”

2010• VirtualClientOffice

• MobileCS

THOMSON REUTERS CLOUD SOLUTION

•  Web Hosted, Scalable Systems

•  Integration

•  Concurrent User Access

•  Single System for All Offices

•  Web Services Data Exchange

Delivering and managing the complexities related to web-hosted solutions is a core competency for Thomson Reuters.

We’ve been doing it since 1999.

SO HOW DOES THE CLOUD IMPROVE THE FIRM?

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FIRM BENEFITS

Cloud Solutions

Efficiency / Productivity

Data Security

Client Interaction /

Collaboration

Lower Cost of Ownership

EFFICIENCY / PRODUCTIVITY

Cultural

Staff & Partner

Balance Workloads

One Firm Concept

• Common access to software • Uniform policies and procedures • Focus on “what” not “where”

• Trade work based on availability • Build teams based on expertise • Focus on “the need” not “where”

• Access anytime, anywhere • Flexibility • Focus on “the work” not “where”

• We’re in a 24 x 7 world • Clients and staff expect to work via the web • Work is what you do, not a place you go

COST OF OWNERSHIP

How Does Cloud Computing = Economic Value For My Firm?

Internal Costs Security & Risk Reduction

• Application infrastructure provided by vendor

• Vendor spreads infrastructure investment across thousands and thousands of users

• Application updates and maintenance responsibility of the vendor

• Pay for what you use

• Standards for hosting vendors provides a higher level of availability and data redundancy infrastructure than practical for a single firm to provide itself

• Centralized control of data and access to it

• Compliance with regulatory requirements related to data security

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WHAT ABOUT IT STAFF?

The Evolving Role of the Technologist…

More: • Strategic technology planning

for the firm •  Interfacing with vendors /

business partners •  Project management •  Bandwidth management

Less: • Repetitive maintenance tasks •  Server management

DATA SECURITY & PRIVACY

•  State laws becoming more stringent! –  Seeing mandates that e-mail cannot be used to transfer

client information that contain sensitive pieces of data (i.e. SSN).

–  Privacy laws about protecting access to sensitive documents and files.

–  Examples: 7216, Massachusetts - 201 CMR 17.00, Nevada Rev Stat 597.970

•  It’s not just about physical and electronic security –  Centralized control…It’s easier to establish and enforce

policies for a cloud-based system than for a patchwork system of e-mail accounts, physical media and thumb drives.

DATA SECURITY & PRIVACY

Physical Security

• Tier IV facilities • N+1 Redundancy • Power Infrastructure • SAS 70 and penetration testing

Application Security

• User Authentication • Encryption • Control Access and Permissions

• Audit trails

Regulatory Compliance

• Focus on tackling regulatory requirements (e.g. 7216)

• Architectures enable quick adaptation and compliance of security and privacy regulations

Thomson Reuters Approach

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CLIENT INTERACTION & COLLABORATION

How Do Portals Benefit the Client Interaction Process?

Client Firm

• Available anytime, anywhere. People today have a 24 x 7 mindset and expect to do business via the Web

• Easy to transfer information to and receive information from CPA

• Security, peace of mind

• Repository for critical information

• Meets privacy and security standards where e-mail may not

• Avoid large file attachments filling up e-mail boxes

• Single source for client material

• Paperless

WHAT ARE CLIENT PORTALS? •  A portal is a gateway to a collection of electronic information

and files that is accessible over the Internet via a CPA firm’s website. –  Your clients access their customized web space through your

website using their unique login and password, so security is preserved at all times

Client

Accounting Firm

Firm’s Website

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SUMMARY

ADVANTAGES OF CLOUD SOLUTIONS

•  Low Start-Up Costs

•  Anytime, Anywhere Access

•  Reliable and Automatic Backup Systems

•  Automatic Updates & Version Control

•  Significantly Reduced IT Infrastructure

•  High-Level Security

•  Ensured Business Continuation

•  Enhanced Client Experience

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THE VALUE OF OPERATING IN THE CLOUD

Are you up to speed on the impact of Cloud Computing and comfortable with your strategy to embrace it?

If you're not quite there yet, don’t worry. We are here to provide solutions for your firm and guide you every step of the way.