Build a Business Case for Running Finance in the Cloud
Perhaps it’s not surprising that finance and IT executives are unhappy with their current financial management systems. These systems typically were not designed to deliver real-time, actionable information, nor do they have the agility to meet the rapidly changing compliance, usage, technology, and management requirements that are commonplace today.
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What is surprising, however, is the extent to which decision makers are expressing and acting upon their dissatisfaction. According to a 2013 survey conducted by Saugatuck Technology, 82% of finance and IT executives said they have already changed or need to change their financial management systems. Only 18% said they were happy with their existing systems.
The question is not whether to fix financial systems, but how to fix them most effectively to deliver ongoing value to the business.
The majority of executives believe that the answer to fixing their financial management systems lies in the cloud. Approximately 57% told Saugatuck that the shift from on-premises to the cloud for financial management is either taking place today or will happen within the next two years.
Here’s another way to view those numbers: The 43% who are taking a wait-and-see approach probably haven’t done the analysis yet to compare cloud vs. on-premises financial management solutions. Because once they conduct the analysis and start building the business case, they will find that the reasons to run finance in the cloud are just too compelling to ignore.
What is the business case for running finance using a cloud-based solution? Here’s a start:
- Reduce costs: You won’t need to be constantly acquiring, evaluating and upgrading servers, storage, networking capacity, and software to run the financial management system. You also won’t have the operational costs of managing, maintaining, scaling, patching, updating, securing, and adapting the system as your needs inevitably change.
- Grow revenue: A modern, cloud-based solution will enable your organization to drive incremental revenue and profit opportunities by accelerating time to value. With access to real-time financial information, decision makers throughout the organization can react much faster to new business opportunities, pricing trends, customer service issues, and a wide range of other factors that can drive revenue growth and decrease costs. A financial system that can deliver reports and analysis using current information won’t just help the finance department; it will also improve decision making throughout the organization.
- Increase control: Modern, cloud-based solutions have internal controls, month-end close, and auditability built into the fabric of the system. They were not an afterthought, whereas traditional accounting systems were designed before governance, risk, and compliance became critical requirements. Compensating technology must be bolted on to traditional solutions, making them even more complex. Further, modern financial management solutions are managed by a business process framework that ensures that proper approval, workflow, and routing processes are defined and orchestrated centrally while preserving a complete audit trail of all events that cannot be bypassed or modified after the fact. Providing these capabilities as part of the functional core helps organizations to more effectively reduce their risk while simplifying the audit process.
- Improve agility: Every business talks about being more agile. Forrester Research has called agility “the central business issue of our times.” Traditional on-premises financial systems not only lack speed and timely access to financial and performance information, but they are also very difficult to update and improve as the business changes. Cloud-based solutions are designed to be adaptable and infinitely scalable to meet the needs of where today’s businesses are headed.
In building your own business case for running finance in the cloud, these four bullet points may provide a starting point, but you will have issues and challenges that will likely be unique to your organization. It is important to remember that not all cloud solutions are created equal. Make sure your provider can deliver:
- True multi-tenancy
- Financial insight in business terms
- Built-in support for governance, risk, and compliance
- Information that is always current
- World-class security and data protection
- An agile solution that keeps pace with an ever-changing environment
Want to learn more about building a business case for running finance in the cloud? Here are some key resources: