By Jennifer Toomey, Senior Director, Oracle Cloud Business Group
Cloud technology has reached an inflection point within the office of finance. In our fifth annual Enterprise Performance Management (EPM) Trends Report, more than half the respondents have moved or will move their EPM processes to the cloud within the next year.
But more striking were the findings about why respondents moved to the cloud vs. the benefits they received. In our survey of more than 400 finance and IT leaders, respondents said they made the move to EPM in the cloud primarily for economic reasons, including avoiding on-premises upgrades, infrastructure investment, and lower TCO.
And while the majority (77%) achieved economic benefits, when asked about the top benefits of EPM in the cloud, 89% of respondents named “staying current on technology,” which significantly outweighed the other advantages cited.
Importantly, companies are starting to appreciate the benefits of continuous innovation that come with the cloud. Moving to the cloud is not about simply lifting and shifting capabilities from on premises to the cloud: It’s an opportunity to reinvent and transform your business processes and infuse them with best practices.
Within the office of finance, EPM processes have often been the first to move to the cloud, and EPM in the cloud is rapidly becoming the new standard. The pace of adoption is accelerating, with 62% of this year’s survey respondents reporting that they are currently running EPM processes in the cloud, or will within the next 12 months. This is up from 46% in last year’s survey. Overall, 79% of respondents indicate they have plans for EPM in the cloud within the next two years, versus 65% in last year’s survey.
What’s driving this shift to EPM cloud? As with our previous EPM trends studies, costs and economic considerations remain key reasons for moving to the cloud, including avoiding infrastructure investments and lowering TCO. But, with systems starting to age, organizations are looking more closely at the pain, complexity, and time involved in upgrading their on-premises software. Avoiding on-premises upgrades has rapidly risen to the top as the main driver for moving EPM to the cloud (48%), up from the second most stated reason (42%) last year and sixth place (23%) two years ago.
While economic drivers lead the reasons to move to the cloud, the benefits realized with EPM cloud go far beyond cost savings. Organizations found that the competitive advantage offered by always-new technology outweighed everything else. Compared with last year’s survey, staying current on technology increased significantly as a benefit (89%, up from 75%).
In this era of digital disruption, organizations need to be nimble, and the cloud offers the agility to rapidly adapt and stay ahead of changing conditions. Moreover, with cloud, the risk of technology obsolescence drops to zero—putting the business on a more solidly competitive footing.
This is just a preview of what we found. The full report includes quotes on experiences from EPM cloud users, identifies trends in financial consolidation and close, narrative reporting, profitability and costing, and enterprise data management. It also discusses how EPM cloud helps finance teams adopt best practices, and how they can leverage emerging technologies such as blockchain, artificial intelligence, machine learning, and intelligent process automation to build future-ready finance organizations.