As Cloud continues to prove itself across the enterprise, CFOs and finance teams should be next to jump on board. But confusion about pricing, benefits, and how to make the transition from on-premise systems is holding many back. Gartner reported that around 36% of all transactional systems will move to the cloud by 2020. Finance applications form a big part of that and more will move to the cloud with each passing year.
The shift began with SMBs because bigger organisations were less enthusiastic about moving large data sets over the internet. It’s normal for an organisation’s keeper of financial probity to want hard evidence of value before investing in something new, but as proof has become more apparent, resistance to the cloud has begun to break down. Regardless of company size, CFOs are always looking to reduce costs and improve the bottom line, and an increasing number are seeing the cloud’s potential as a money saver – as well as a way to make their own departments more efficient and effective.
What’s making those early finance adopters make the move?
Efficiency and cost savings
Access to big company capabilities
The financial benefits of the cloud
Transferring responsibility for hosting and maintaining applications over to a cloud vendor can be quite empowering. The cloud provider does all the heavy lifting in terms of management of the hosting environment, securing data, and making sure applications are available to end-users at top performance and across devices. There are well-known risk factors associated with traditional IT systems. Sometimes they fail to deliver the promised benefits. Sometimes they fail due to lack of end-user acceptance.
The cloud’s subscription-based pricing model eliminates much of that uncertainty. Budget moves from CAPEX to OPEX. The freedom to pay only for the capacity, capabilities, and user licenses you need allows organisations to avoid the high upfront costs of on-premise solutions. In that way, Cloud makes it easier to align technology expenditure with growth. Cloud-based systems can also respond more flexibly to changing business requirements. Because they can be deployed without installing new hardware and software, Cloud allows companies to support new business models, harmonise systems with new acquisitions, and more easily test new markets. As a result, organisations can afford to be more progressive and disruptive by introducing the latest innovations in a manner that is easily digestible, and at a pace that compliments its technological maturity
Other cloud benefits for finance:
The finance-focused cloud is growing: more cloud solutions supporting core financial applications like ERP and EPM are entering the market and geared to organisations of all sizes.
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CFOs can keep IT costs in-sync with business levels: Since cloud assets can be scaled upward and downward quickly against an agreed cost structure, IT spend can be more closely aligned with growth.
That includes costs for IT security: The cost of keeping IT security up to date is significant, and the costs of a breach can be severe. The cloud initially raised safety concerns for some, but time and innovation have given cloud vendors some of the strongest security protections available in IT.
Improved Productivity: Since the cloud makes core applications more accessible, employees can accomplish more. Rather than being bound to a single location or machine, they can access the tools they need when travelling, offsite or out of hours.
Reduced Redundancy: Cloud environments eliminate the contingency expenditure built into on-premise systems. Any necessary redundancy is the vendor’s responsibility and built into the data centres where infrastructure and applications are hosted. With organisations of all sizes adopting cloud technologies at a rapid pace, it’s also worth evaluating what the competition is doing – no one wants to be left at a disadvantage.
Moving to the cloud. Can CFOs go it alone?
While the benefits of the cloud seem to be transparent and superficially require just a PC and fast internet connection to use, migrating data and processes from traditional IT to SaaS can be complex. There is much more to it than handing over access to your databases to the cloud vendor and assuming all will be fine. Integrating systems and creating new processes can be a lot of work. Significant planning is required in order to achieve data portability and interoperability with the cloud. The stages of migration and deployment can be costly and resource-heavy if not handled correctly. The advantages of cloud computing should give today’s CFOs lots to think about.