3 Facts You Should Know About Cloud Financial Solutions

Cloud solutions are pervasive throughout our personal and work lives.Yet adoption of financial systems on the cloud have lagged behind other corporate systems such as for HRM or CRM. That, however seems to be changing, and changing rapidly.

Saugatuck Technology recently released a survey, Saugatuck Technology’s 2014 CFO/CIO Survey: Cloud Financials - The Third Wave Emerges. This comprehensive survey gives great insights into why the market has lagged, but more interestingly, why it is moving from the “early adopter” stage to “early mainstream.”

The reasons why they have lagged are the usual suspects - security and data privacy. I’ve talked about the security topic before (Looking Deeper at Cloud Costs and Security) so I won’t go through it in detail again, but suffice it to say that Saugatuck Technology has come to a similar conclusion that the fear is far greater than the actual risk.

This study is full of great information, but there are 3 really interesting facts that come to light in this survey that I found fascinating - and very telling:

#1: The move to cloud is coming
This may not be surprising, but it was great to see some stats behind it. When asked “Will Cloud Replace On-Premises Financials?” 63% said Yes and that it would occur over the next two years! That’s an amazing stat given that only a few years back only around 5% of the market said they were moving to cloud.

#2: But….on-premises is not going away
Huh? How can this be given the above fact? Well the good folks at Saugatuck Technology luckily didn’t just ask the above question, but actually asked some details behind it, mainly what that move to the cloud will look like. That picture isn’t as black and white as Cloud or On-Prem. In this survey, by 2018, only 14% said they would be “Fully Redeployed to Cloud”. The rest are a mix of having pieces of functionality moved to the cloud, certain processes moved over, or a “side car” approach (i.e. Budgeting, Planning, Consolidation). The most amazing fact here is that 27% said they would still be “On-Premises Completely.”

#3: The move isn’t just about deployment
That’s right - companies are looking to move to new systems not just because they are in the cloud, but because there is a big gap in the effectiveness of their current systems and the importance of getting those processes right. For example, 84% surveyed said, “Effective planning, budgeting, and forecasting” was very important, but only 41% said their current system was effective. That’s an enormous gap. As you look at the study, similar gaps exist for “Monitoring / measuring performance”, “Managing compliance / internal controls” and many others. In short, companies are moving because they NEED TO, not just because of the cloud.

The take-aways
When you look at these facts, it is very apparent that when you are looking at Corporate Performance Management (CPM) solutions, it would be in your best interest if the solution you choose can work on premise or on the cloud. The best case is you being able to pick one deployment option and deciding to move to the other seamlessly - without losing all the investment made in setting up the system.

The other big take-away is that functionality does matter. I know this seems obvious, but the truth is many companies settle on lesser functionality solutions. Often it is because they are looking with blinders on - just trying to solve their immediate pain. Often they are ‘wowed’ by a cool feature in a demo. To avoid the importance/efficiency gaps this survey highlights, companies must look deeper. They must look at the long-term goals as well as the short-term pains. Take a deeper look into how complex issues are handled, and not just those that are simple.

I strongly recommend reading the full survey. I highlighted just a few of the points, but there is so much more.

What are your thoughts? Do you see the same gaps that are highlighted here? How do you define ‘moving to the cloud’?

 

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