Adom Chemists Ltd: cloud decision with eleven unreliable outlets
Adom Chemists Ltd runs 14 pharmacy outlets - three in Accra and eleven in regional towns - from a group finance office in Accra. Its accounting package runs on a seven-year-old server in a converted storeroom with one air-conditioner; the server failed twice last quarter, once for 14 hours. Sixty-two staff would need access. The vendor proposes a cloud subscription at USD 45 per user per month on a three-year term, data hosted in Ireland, a 99.5% uptime service level, backups included, no exit assistance and a 60-day notice termination clause. Four in ten outlets report internet outages of two hours or more each week, and each outlet's point-of-sale till is a standalone system that does not feed the accounts. The cedi has depreciated about 20% against the dollar over the past year. The Managing Director likes the idea because the cloud removes IT from our problems.
1. Assess readiness and advise whether to sign the proposal as presented.
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Recommendation: do not sign as presented. The direction is defensible; this contract and this timing are not.
Quantify first. USD 45 x 62 users x 12 = USD 33,480 a year, or roughly USD 100,000 over the term before any price escalation. At a 20% annual depreciation, the cedi cost of a fixed dollar commitment rises every year while the internal cost it replaces is largely fixed in cedis. The proposal is therefore a currency bet as well as a technology choice, and the board should see that explicitly.
Readiness gaps.
- Connectivity: if 40% of outlets lose internet for two hours or more weekly, an online-only accounting system will not be usable at those outlets. A 99.5% service level sounds strong but permits about three and a half hours of downtime a month, so the vendor is not promising better availability than the unreliable link the outlets actually have.
- The standalone tills are the real problem. Moving a ledger to the cloud leaves revenue capture at outlet level unintegrated, so the reconciliation headache survives the migration and the benefit case weakens.
- The organisation has no experience managing a subscription contract, service levels or a data processor.
Also test the premise. The Managing Director's claim that the cloud removes IT is wrong: it changes IT into contract management, identity management and connectivity management, none of which the group currently does well.
Conditions before signature: a connectivity upgrade or offline-capable fallback for the eleven regional outlets; a reconciliation or integration route for the tills; data protection review of hosting outside Ghana under Act 843; and contract terms per the next task. A ten-week pilot in the three Accra outlets with a documented success test would materially de-risk the decision.
2. Specify the contract terms you would require before signing, and explain the risk each one addresses.
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Uptime and remedies. Keep the 99.5% figure only if it is accompanied by service credits that are meaningful - expressed as a percentage of monthly fees, escalating for repeated failure - and by a right to terminate for chronic underperformance. Without a remedy, a service level is marketing.
Exit and data portability. Delete the no-exit-assistance clause. Require extraction of all data in a standard, documented format at any time on request, exit assistance for a defined period after termination at no extra charge, and certified deletion with written confirmation afterwards. This addresses lock-in, which is the main long-term cost risk in this proposal.
Termination. Replace the 60-day notice clause with termination for convenience on reasonable notice plus termination for cause, and confirm whether the three-year term locks the price or merely the commitment.
Data protection. Under the Data Protection Act, 2012 (Act 843), transfer of personal data outside Ghana is restricted; require the vendor's security certifications, a written data processing agreement, breach notification within a short fixed period, disclosure of subcontractors and hosting locations, and confirmation that patient and customer data are handled lawfully. Take legal advice on the cross-border element.
Price and currency. A cap on annual escalation, a defined exchange-rate mechanism or a cedi-denominated price, and clarity on what is excluded (support hours, additional modules, data storage growth).
Continuity and liability. Recovery time and recovery point objectives stated numerically; the liability cap must not be so low that total data loss is effectively uninsured.
Tax and compliance fitness. A warranty that the system produces the records and returns the group needs in Ghana, with the vendor responsible for statutory updates.
3. Recommend a migration approach and say how you would handle the eleven outlets with poor connectivity.
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Sequence matters more than speed.
- Clean before you move. Rationalise the chart of accounts, remove duplicate suppliers and customers, and agree opening balances. Migrating a messy ledger to a faster platform gives you a faster mess.
- Phase it. Pilot in the three Accra outlets for ten weeks with named success criteria: ledger close within the same number of days as now or better, no unresolved reconciliation differences over GH₵5,000, and user-reported issues below an agreed threshold. Only then extend to the regions.
- Parallel run one full month, with the old system as the system of record until the first clean close in the new one. Never cut over mid-month or at year-end.
- Retain read-only access to the legacy system for the period the group must keep records; statutory retention does not end because the server does.
- Train by role, not by module. A branch supervisor needs expenses and stock; finance needs the close. Identify one super-user per region as first-line support.
Handling the eleven low-connectivity outlets. Do not pretend the problem away. Options, in order of preference: upgrade each outlet to a business broadband link with a second network as failover (for example a fixed line plus a mobile router on a different provider); where that is uneconomic, deploy an offline-capable front end that queues transactions locally and synchronises when connectivity returns, with a documented conflict-resolution rule; and, as a last resort, keep a controlled local ledger extract at those outlets with a daily reconciliation to head office.
Fix the tills in parallel. Contract an interface or a replacement point-of-sale that posts daily sales summaries, otherwise the accounting migration solves the wrong problem and revenue assurance remains weak.