Interest in finance cloud solutions has been steadily increasing. Gartner research predicts an impressive 16.5 percent compound growth rate for the worldwide public cloud services: $175B in 2015 to more than $204B in 2016.
Finance departments, being more risk averse, have not been as fast to move as other functions. You could say such is the nature of accounting. Many finance executives still have concerns about the maturity of solutions and risks such as security. However the benefits of moving to cloud — the flexibility, scalability, standardization and ease of pace of adoption — is proving more compelling. Vendors are also making the move to the cloud easier, providing deployments that help minimize disruption.
With this perspective in mind, I asked Tony Klimas, Global Finance Leader at EY, and Pras Chatterjee, Senior Director, Product Marketing, EPM, SAP, about their perspective of opportunities for finance departments in the cloud.
Q: What opportunities do you see for your customers and clients in the marketplace as far as adoption of cloud solutions in finance?
Klimas: As the technology matures, people can better understand the different options to secure their data in the cloud. This will open many opportunities for finance, including deploying apps via the cloud which keeps maintenance and operational costs down. The general benefits of cloud; scalability, ease of maintenance, upgrades and ability to secure data benefit finance. In addition there are other specific opportunities for finance departments, including:
- The deployment of a control environment for finance – data that is kept up to date in a more timely manner helps ease the audit process.
- There is a single version of the truth, data is just available, accessible and secure, this helps with reporting and analytics and frees up finance teams to focus on data quality, not reconciliation or version control.
- It can host the central repository for finance and accounting policies, such as separation of duties.
- Finally, as cloud instances can be leveraged to increase the speed in which changes are implemented and disseminated across the organization, compliance becomes easier.
Chatterjee: I would like to add an additional area as in enterprises there are often CFO’s throughout the organization These technologies now make it easier for areas outside of the head office to deploy the latest and greatest technologies (in-memory, real-time, advanced visualization, collaboration enabled) without incurring large capital costs and in a shorter time frame. This ensures the entire enterprise’s time to value is increased.
Q: What concerns or challenges do you hear most about moving to the cloud?
Klimas: Of course data privacy, security and understanding the threat environment are always issues for any function (including finance) adopting the cloud. However more executives are starting to understand that if implemented correctly, it can actually reduce threats, increase security and control and in general provide an environment less susceptible to cyber-attacks. Especially those involving “phishing” and human engineering where people are manipulated into providing access to attackers without their knowledge.
If cloud is implemented correctly, it can reduce threats, increase security and provide an environment less susceptible to cyber-attacks
Another concern is the tendency of Finance to move into the cloud environment slowly and in moderated steps. Although being careful and thoughtful is important, understanding the big picture and the overall strategy is too. There are definite “switching” costs if changes are desired later. So having a long term vision of private vs public, what remains “on-premise” and a clear migration strategy is critical.
Chatterjee: I agree, I hear a lot of concerns on how the future of the (cloud) platform will align with overall enterprise architecture. However concern has been somewhat mitigated as the latest cloud platforms often allow for almost seamless integration with established on-premise platforms. As Tony mentioned migration from the legacy platform to new cloud based platforms are also a point of concern. This may involve a re-implementation which can incur costs. However migrating to new cloud platforms often provide an opportunity for complete finance transformation.
Migrating to new cloud platforms often provide an opportunity for complete finance transformation
Q: What excites you the most about the value of cloud solutions for the finance department?
Klimas: Speed, agility around deployment and operations, security and the ability of finance to focus on more important things.
Chatterjee: Faster deployment with potentially much more bells and whistles. The overall potential for finance transformation I see as one of the most understated benefits. Finance can evolve to the latest platforms and really be a steward for the business. Finance departments can take advantage of the ease of use of cloud tools and the instant insight available to provide true guidance versus reporting on past results.
Q: Do you see cloud solutions providing the level of flexibility, i.e. customers moving from one vendor to another?
Klimas: With the amount of data and effort put into SLAs and contracts, not to mention the effort required to migrate. moving vendors is difficult today, but over time, it will become easier to do. A good proxy for this would be the change that has occurred in general in the BPO industry or with other less complex hosted software.
Chatterjee: Cloud solutions are built with simplicity and user experience in mind. Moving platforms and vendors may be a challenge at the moment, but experience is growing with SI’s and vendors, and this will change quickly.
Moving platforms and vendors may be a challenge, but experience is growing with SI’s and vendors, and this will change quickly
Q: What do you predict will happen over the next three to five years as far as cloud adoption?
Klimas: I think we will see more things moving to the cloud as security concerns ease. The technology itself will become more seamless and integrated. Major software providers, including SAP, will further integrate the cloud into their offerings making ease of implementation and use much better. As the technology becomes easier to use and implement, the focus will shift to further leveraging the technology in new and innovative ways that add more value. Here, I believe that early adopters will have some competitive advantage due to having a robust and stable environment in place and being further up the learning curve. Those who take a “wait and see’ approach might have an easier time implementing the basics, but they will be behind on the more advanced uses of the cloud and in their understanding of how to leverage the technology to maximize value.
Chatterjee: Exactly, I also believe the adoption of cloud will continue to accelerate. Finance departments will feel business and competitive pressures to be enabled with the latest technology. They will need them to be deployed quickly versus drawn out selection cycles dependent on software, services and hardware. One key reason for these pressures will be to provide the real time, relevant insights and foresights to their business constituents internally and be relevant as a function.
With cloud, finance departments can provide real time insights and be relevant as a function.
This will be an exciting area as the solutions mature and confidence grows.
Judy Cubiss is director of Content Marketing for Finance Audience at SAP
Top image via Shutterstock