By tobyehatch-Oracle on Jul 31, 2015
By Guest Blogger Muthu Ranganathan, Director, EPM Product Management at Oracle
There is no denying the fact that the world is moving towards “the cloud”, and CFOs and CIOs have come to the point where they can’t avoid recognizing the many benefits of the cloud. While finance took more time than their peers in Human Resources or Sales to go to the cloud, recent trends indicate that more CFOs are open to “getting on the cloud”.
Let’s explore the benefits that CFOs are receiving from moving to the cloud.
Opex vs Capex
Given CFOs care a lot about cash flow and ROI, the biggest advantage for them with cloud is the “Opex" (Operational expense) element, as cloud systems are not “Capex”(Capital expense) types. The cloud certainly helps them with profitability and cash flow as a justification to move to the cloud.
Boundaries – You just need a URL and your cloud applications can be easily rolled out to your customers, vendors and other stakeholders in your business network. This is a huge advantage for finance, especially when they can exchange information through the systems. Imagine getting sales forecast data from your distributors, or project finance data from your subcontractors.
No Shelfware – One of the biggest pains of the past was that a lot of software was purchased, but not used. The unused “shelfware” became a sunk investment due to the lack of resources available to get the application installed and working. Cloud completely eliminates this issue as it’s managed by the cloud vendor.
No Hardware - other big benefit is that you don’t have to worry about hardware costs - and more importantly maintaining hardware - the installed applications, and having to consider different test and production environments.
New Features Rapidly – As we login to Gmail or LinkedIn every day, we often see that there are a lot of new features added. This is the power of the cloud. The same is also true for enterprise applications – you no longer have to wait for a long upgrade process to see new features, because in the cloud they appear rapidly.
EPM and the Cloud
Enterprise Performance Management (or Management Accounting / Information Management) systems have evolved with different generations of software. Reporting, planning, profitability and consolidations have evolved from spreadsheets to desktop applications, to the web, and now to the era of cloud and mobile. While the above benefits are relevant for EPM systems, there are even more that make it clear it is time for EPM to move to the cloud.
Tapping the Unserved Business Users
While EPM systems have existed for over a decade, it has still been a highly corporate finance affair for many years. Still, many Business Unit level users rely on spreadsheets and other unstructured ways of creating and seeking information. There are several reasons for this, one of the main being difficulty in maintaining IT systems, costs, and lack of technical consultants to support their pursuits. With cloud, we see a change where we can now roll out these systems just via a url to anyone in the company at a very affordable subscription-based price. It starts to really tap into the departmental use cases for Business Unit CFOs and other business users such as HR, Marketing, Sales Ops etc. With Oracle Planning and Budgeting Cloud Services, as well as Oracle Enterprise Reporting Cloud Services, departmental business users are also better served.
Business Calls the Shots
Traditionally, Business users, especially coming from finance, have owned the EPM systems. Often in the past, due to heavy Capex and upfront investments as well as infrastructure/upgrade needs, IT was heavily involved in EPM projects. With the cloud, business users are able to make quick decisions and call the shots for EPM systems. They can be live in just a few days or weeks. This is certainly an exciting reason for business and finance to move to the cloud for EPM. We are seeing faster adoption due to Business being in charge for Oracle Planning and Budgeting Cloud services.
People as the Focal Point
Cloud brings with it the benefit of receiving new features rapidly, as mentioned earlier. As users have now experienced consumer grade cloud applications like Facebook, they will expect enterprise applications also to act in the same way; so the focus is mostly on user experience, flexibility and keeping it very simple for the users. Also, for EPM systems, users have been great fans of spreadsheets; so it’s very important to have the user experience to be like a great consumer grade application combined with the flexibility and simplicity of spreadsheets. The great advantage with cloud is, engineers who build these systems get really close to seeing how users use the solution and roll out changes more frequently.
Oracle Planning Budgeting Cloud Service has been very well received by users because of the great user experience and spreadsheet-like flexibility on the web, and because it is supported by SmartView for the Microsoft Office interface - for the Excel lovers.
The Case for Hybrid EPM
But, with the benefits and value mentioned above the question still remains - Can all of the EPM systems go fully into the cloud? The answer is yes!But, it may take more time since many companies have mission critical financial consolidation and reporting systems, as well as corporate planning systems in which they have invested over the years, and cannot be replaced in a short period of time.
This is where Oracle provides a hybrid EPM strategy for companies to combine on premises and cloud based EPM systems. What we see is that customers are continuing to leverage their existing on premises deployments for the corporate finance needs, and using cloud applications and infrastructure to surround these for new Departmental and Business Unit needs.
As both on premises and cloud run on the same best-in-class Oracle Hyperion technologies, it is as seamless and integrated as a suite of hybrid EPM solutions. While EPM systems provide significant benefits to warrant moving to the cloud in the medium term, hybrid EPM is the best strategy for the short term; and Oracle is the best equipped to provide the best of both worlds.
For more information on Oracle EPM on premises applications, click here
For more information on Oracle EPM Cloud, click here