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Cloud financial software can be a safe bet with preparation

The controller at benefits provider Hodges-Mace did extra research to ensure that the FinancialForce SaaS offering had good security. One analyst said such diligence is essential.

Moving financial assets into the cloud can be a harrowing process. Not only is a company giving up a measure of control over some of its most sensitive data: Moving to cloud financial software is also a process that no IT or finance executive wants to have to repeat any time soon. Getting this migration right the first time is critical.

That means making the right choice among cloud architectures. While public software as a service (SaaS) applications, private clouds and hybrid environments all are viable solutions for cloud financial software, each one is best suited to certain types of workloads and company profiles.

For employee benefits service provider Hodges-Mace LLC, the decision to migrate its general accounting system onto FinancialForce's SaaS-based application in 2012 was a simple one. The company, founded in 2004, was relatively young for its industry, and it was already a customer of Salesforce, whose Force.com platform FinancialForce runs on. So while Hodges-Mace didn't exactly ignore public and private clouds as possibilities, it clearly understood its own reality.

"For a company our size, it doesn't make sense for us to devote the resources that are required from an IT standpoint to manage something like that in-house," said the company's controller, Matt Kellaway. "I don't think we'll be at that point for a while."

But things change quickly in the cloud world, and hybrid or private cloud options could very well have been more attractive had Hodges-Mace made its move today. Timing is an important part of the cloud financial software discussion, which is one reason analysts recommend that organizations evaluate all of their cloud options each time they look to move any part of their technology stacks.

"What was true about cloud 12 or 18 or 24 months ago is probably not true anymore," said Bruce Guptill, senior vice president of IT consultancy Saugatuck Technology. "Things that weren't suitable two years ago may be now."

One of the things that made FinancialForce's SaaS offering so suitable for Hodges-Mace was the promise of being relieved of heavy-duty IT responsibilities. As a relatively small company, Hodges-Mace, which employs about 200, lacks the resources to assemble the IT talent needed to manage a complex cloud environment. That made the autopilot nature of SaaS a logical answer -- and one the company was familiar with from its experience with Salesforce.

"The update process is far easier than if we had a custom solution or something in a private cloud," Kellaway said. "The level of commitment from us is a fraction of what it would be if we were on a more complex solution."

Hodges-Mace also was appeased by one component of SaaS that had improved greatly leading up to the company's move: security. It's the topic that most often has stopped companies from moving any critical data -- especially financial data -- into the public cloud. But the perception that data is more vulnerable in a SaaS application is outdated today. Fears have been replaced by a recognition that SaaS providers have to get security right if they want to stay in business.

"I know how hard it is to even get at one of those boxes, and how well they're managed, and how closely they're monitored," Kellaway said. "I'd argue that you're outsourcing it to people who can do it much more effectively, and much more cheaply, than you ever could yourself."

Cloud financial software calls for due diligence

Still, Kellaway is a financial guy, and although he joined Hodges-Mace after the move to FinancialForce occurred, he wanted peace of mind, so he took an important step: He reviewed the service organization control report FinancialForce had hired Ernst & Young to prepare.

Kellaway suggests that companies following in Hodges-Mace's footprints get their hands on such a report, if one is available, and look at who put it together and how deep the audit went.

"If they're paying one of the Big Four firms to look at a dozen attributes, that mitigates most of the risk in my mind," he said.

Another step many companies take before migrating assets onto cloud financial software is using one of the many online calculators for determining the suitability of workloads in various cloud settings. But Guptill cautioned against giving such calculators too much weight, instead recommending that companies use such tools to supplement more fundamental self-analysis of their needs.

The analysis is so important because it may lead to the surprising, and potentially money- and time-saving conclusion that the best option might be to forget the cloud for the time being.

"There are some things that don't make sense on cloud because they're already optimized for the way you do things," Guptill said. "You may be better off leaving them where they are or moving them to upgraded servers with better security and more capabilities."

Chances are that there's a cloud option that makes sense, but the last thing an organization needs is to end up in the wrong environment, potentially setting the business back years. That's why it's so important to make the best decision on which cloud option to use.

Get it right, and a company can end up feeling as satisfied as Hodges-Mace.

"We're paying for access to data, a solution on top of the data and security," Kellaway said. "All things considered, it's a pretty good deal."

Next Steps

Read another FinancialForce case study

Get a handbook on budgeting in the cloud

Understand FinancialForce ERP

This was last published in February 2016

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