By Alison Weiss
Although recent research points to cloud technology as the engine that will drive business productivity over the next decade, too many companies have yet to make the leap. Indeed, Anne Ozzimo, senior director of executive ERP and EPM cloud product marketing at Oracle, observes that remaining on legacy systems because of inertia—the “if it ain't broke, don't fix it” mentality—is a major stumbling block to productivity. Companies seem somehow reluctant to replace existing functional operations by updating to new cloud technology.
However, enterprises that have adopted a unified approach to finance modernization using cloud-based ERP, EPM, and SCM services (and other business platforms) are already achieving lucrative productivity improvements and gaining new business insights. As a result, they are well positioned for growth in an economy many now see as always on and always up to date.
“As cloud ERP gains steam, the value of a common approach to data, security, user experience, planning, and budgeting is really becoming more apparent,” says Ozzimo. “Smaller companies don’t have the IT resources to maintain multiple systems, and larger companies are now seeing the merits of having cloud services that share a common data and security model, a consistent user experience, and a common innovation cycle.”
Benefits of Unified Cloud
Deploying a unified cloud platform integrating ERP, EPM, and SCM has the obvious benefits of enabling enterprise data to flow freely across systems and providing a single source of truth to improve data quality. But there are two important developments that make an integrated platform particularly appealing for improving business performance. First, more enterprise leaders are incorporating both financial key performance indicators (KPIs), such as cash flow and profit margin, and operational KPIs, including product demand and supplier risks, to guide decision-making and support cross-functional reporting.
“What makes this integration so seamless is a common set of metadata supporting the cloud applications so that information is rendered consistently,” says Ozzimo. “The data doesn’t have to be massaged or translated, and that’s a huge benefit for finance teams.”
Second, there is real value in having a unified cloud platform for ERP, EPM, and SCM for finance teams as technology continues to evolve and change—especially as Oracle rolls out new functionality infused with artificial intelligence and machine learning.
“By standardizing on the Oracle Cloud platform, new innovations will be served up to you automatically every quarter, rather than having to wait years to access new features,” Ozzimo observes. “Having those updates come from the same provider simplifies the entire process across the cloud portfolio, ensuring that you are on the same platform and same innovation cycle. And having a modern, consistent user interface across all the applications reduces training costs and boosts productivity.”
Oracle itself is an example of the productivity benefits generated by standardizing on a unified cloud platform integrating ERP, EPM, customer experience, and human capital management (HCM). Since first deploying Oracle Customer Experience Cloud in 2012, the company has saved more than US$1 billion. More importantly, standardizing on a unified cloud platform has enabled the success of major end-to-end transformational initiatives such as the Accelerated Buying Experience, designed to improve how customers contract to buy Oracle Cloud services, and the Accelerated Hiring Experience, to streamline the process of onboarding new employees. With a unified cloud platform, it is easy to scale the business at little extra cost, and the company can stand up new business models very quickly, such as Oracle’s successful data-as-a-service cloud offering.
The integrated cloud platform has allowed Oracle finance leaders to gain a 360-degree view of operations, which has proven valuable in the new cloud model. Bookings, provisioning, lead times, renewals, contract base, contract length, churn rates, in-time capital requirements (i.e., demand predictions), billing requirements and schedules, and waterfall schedules are just some of the KPIs now examined by Oracle’s finance teams. Capital expenditures are also monitored, including new data centers, provisioning, and demand predictions.
New Efficiencies and Insights
Oracle customers are also seeing decisive productivity improvements with a unified cloud platform. FairfieldNodal, a full-service geophysical company serving the energy industry, recently implemented a full suite of cloud services for CRM, ERP, HCM, and SCM. Now, they are doing more transactions than ever before with less than 50 percent of the people in finance.
Blue Shield of California, for its part, has a cloud platform unifying ERP and HCM. The company avoided US$600,000 in training costs due to a more intuitive interface, and leaders appreciate access to industry best practices and continuous innovation.
While the productivity improvements generated by using a unified cloud platform are impressive, Ozzimo suggests there is another piece of the productivity puzzle that enterprise leaders shouldn’t ignore: people. She says that when she talks to CFOs who have implemented cloud ERP unified with cloud EPM and other systems, she is seeing a pattern. Many have underestimated how radically more efficient they are becoming and what that means when freeing up their teams to focus on strategic initiatives.
“CFOs need to consider whether they have the right staff in place now with the right skill sets to benefit from a cloud deployment,” Ozzimo says. “If they do, they will see enormous productivity gains because talent will be re-deployed in the right areas, including data analysis and visualization, C-suite advisory services, and line-of-business partnering.”
Alison Weiss is a frequent contributor to Profit.