A 2013 Gartner study (Adoption of Cloud ERP, 2013-2023) shows that 47% of companies plan to move their core ERP systems into the cloud by 2018. If your systems can’t keep up with your business objectives or your old on-premise ERP system requires another expensive non-value added upgrade, then you should strongly consider adopting cloud based applications.
Here are nine compelling reasons for CFO’s to deploy cloud applications:
1. No More Costly Upgrade Projects
Most organizations need to upgrade their applications and all of the infrastructure it runs on every three years to stay current with the vendor’s latest release. The upgrades are expensive in terms of real dollars and also in terms of opportunity cost, with little tangible beneﬁt oﬀered to your organization. While your IT team and key business users are spending months upgrading the application they are not focusing on key organizational objectives. Why spend time catching up to your vendor’s release versus improving your business?
2. One Version of the Software
In traditional on-premise applications, once you buy the software it becomes unique to you – there is no one else running your exact implementation. You chose the hardware to run it on, how to conﬁgure the database and servers, what operating system to use, what version you are on, and when you upgrade. Each of these factors makes your installation unique. This makes it diﬃcult for your vendor to provide eﬀective support, requiring you to staﬀ a team of professionals to maintain your installation. With all cloud users on the same version, cloud vendors can optimize performance because they control the technology stack. Once they ﬁnd a bug, they ﬁx it once and deploy it to everyone instantaneously. The end result is an application that just works, taking the burden oﬀ of you and your team.
3. Better Financial Visibility
Old on-premise software was built on the design concept of having modules or sub-ledgers. Users enter transactions in AP or AR, but the transactions do not post in the general ledger immediately. Users have to run a batch process (nightly, weekly or monthly) to pick up these transactions and post them in the ledger. In addition to sub-ledgers, old systems require special processes that are run periodically to perform other tasks, such as consolidation and currency conversion. In new cloud based applications, the concept of sub-ledgers and separate currency and consolidation programs are eliminated. As soon as transactions are entered and approved, Finance can see their impact on all ﬁnancial reports. CFOs have real time visibility across all of their subsidiaries, currencies and transactions.
4. No Infrastructure
With most cloud vendors, you receive your production and test applications within 24 hours of signing your contract. You do not need to procure, install, conﬁgure, manage and upgrade any additional infrastructure. Gone are the days of worrying about databases, servers, operating systems and additional third party software required to run traditional on-premise applications. Why do you care about a vendor’s technology “stack”? CFOs can focus on running their business rather than focusing on the applications that their business runs on!
5. Continuous Opportunity to Improve Your Processes
Most cloud vendors push new releases out two to four times per year. These releases are typically packed with many new features. A month before the upgrade, your organization can review each new feature’s applicability to your business in a preview release. This preview gives you an opportunity to determine if and when to implement each feature. The cloud vendor will then upgrade your application, and all other customer’s applications, typically in less than twelve hours
6. Limited Ability (temptation) to Customize
Cloud based applications rely heavily on conﬁguration versus customizations. Some vendors provide limited ability to customize their application to meet your unique business needs; however, organizations should ask – are my core Finance needs really that unique? When implementing cloud applications, organizations are given a wealth of conﬁguration choices that they can choose from for core ﬁnance processes. For most organizations, these options are excellent and encourage a company to alter their process to meet the system versus altering the system to ﬁt the process. By reducing customizations, organizations can implement cloud solutions faster, less expensively, and with less risk. Organizations also will not need to maintain and upgrade these customizations over time, vastly reducing your total cost of ownership.
7. Better Security
Cloud applications are highly secure. Cloud vendors invest heavily in high tech physical and application security protocols. Your applications are running in secure data centers around the world, providing you with peace of mind for the security of your data. Cloud vendors also provide better “up-time” and disaster recovery than most companies can deliver internally with on-premise solutions.
8. Less Training Required
Most cloud based applications are built with the latest advancements in application usability. This includes designing the applications so they are not only intuitive to use, but also so they work eﬀectively on both web browsers and mobile applications. By extending business processes to mobile devices and consumer like interfaces (vs. traditional transaction processing), organizations can reduce the need for end user training because your ﬁnance applications function just like your every-day consumer applications.
9. Easier Integration with Other Systems
Cloud applications come in many sizes. Some are meant to be comprehensive business applications that cover most of your needs, while others are point solutions that solve a speciﬁc business problem (e.g. spend management, budgeting). Regardless of the solution, they have a common architecture that allows them to share data with each other. These APIs allow you to develop integrations with your application eco-system eﬃciently using common technologies. In addition, since there is only one version of the cloud software (see #2), vendors only need to build an interface from their latest version to the other vendor’s latest version, making them easier to build, more eﬃcient and easier to deploy. You can easily plug and play additional applications to meet your unique business needs.