• Kirit Patel , Regional Managing Director (UK & Europe) at EOH


• 01.03.2018 10:45 am
undisclosed

The IT department was cloud’s natural early adopter. There was initial resistance due to security concerns and the apparent risks to job roles – but the advantages of cost and scalability made the business case for PAYG computing irresistible.

Sales and marketing came next, as companies like Salesforce offered CRM and other applications as software-as-a-service (SaaS) – perfect for teams often on the road and needing daily/hourly access to shared data and assets.

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.

CFOs: The last cloud holdouts?

Gartner reported last year 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
• Flexibility

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.

When French electrical-supplies distributor Rexel Group migrated its IT infrastructure to the cloud in 2016, the company was able to adopt an IT operational-expenditure model that lowered costs by 35%, while allowing the office of finance to generate financial reporting five times faster.

Rexel found that the costs of managing cloud-based systems are lower, and that the experience of using cloud software is more satisfying for end users, who always have the latest versions and the latest functions. Patches, upgrades, migrations from old to new software versions all happen invisibly in the background.

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.
• Excel Farewell: Cloud provides a low-risk, path to move processes away from spreadsheets
• 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 to 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 traveling, 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.

The importance of an implementation partner

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.

CFOs should consider working with an experienced implementation partner who can help answer the following questions:

• How much time and expense will we need to invest in evaluating cloud vendors?
• How can we make the implementation work for finance requirements, time cycles and processes?
• How much can we save by purchasing licenses as needed rather than having to project our needs up front?
• Will we need entirely new processes or can we migrate those as well?
• Looking beyond costs savings, where can cloud software give us a strategic advantage?

The advantages of cloud computing should give today’s CFOs lots to think about. The benefits are compelling, but at the outset at least, making the move alone is unwise. Consider working with an expert who can help you design an approach to cloud computing tailored to your organisation’s particular needs and business objectives.