Tomorrow, Americans will celebrate Independence Day. For those of you outside the United States, July 4 commemorates the signing of the Declaration of Independence in 1776. The celebrated document included a lengthy list of grievances against Great Britain’s King George III and declared independence for 13 of the North American colonies.
In the spirit of this famous document, it's a great time—regardless of your citizenship—to declare your independence from the on-premises finance systems that oppress your business.
We hold this truth to be self-evident: that on-premises and cloud systems are not created equal. This summer, you can start your journey to modern finance in the cloud with the following 10 articles of independence.
With on-premises systems, you're spending money on hardware every day. Whether you’re using a hosting service or have an on-site data center, hardware and the related infrastructure to keep it running consumes much more than electricity. These dedicated, specially configured hardware systems are fueled with money to pay for staff, facilities, security and replacement parts.
Besides the physical hardware, on-premises systems need software—required to run operating systems, databases and related services. This licensed software also needs talented staff and partners to manage, debug and patch it on a regular basis. Fall behind, and your entire financial management system may be at risk of illegal intrusion.
It’s almost remarkable that any company will tolerate poor, inadequate, or complex reporting with third party bolt-on solutions. These products typically involve exporting data or utilizing out-of-sync data warehouses that merely provide point-in-time snapshots. The reporting revolution delivers embedded narrative, operational and management reporting in real time.
America’s Declaration of Independence disrupted common concepts of governance in the 18th century. In the 21st century, disruption is everywhere. The idea of on premises software is a 20th-century construct that slows an organization’s ability to respond to disruption.
Cloud solutions enable to companies to readily embrace today’s new technologies—such as artificial intelligence, the Internet of Things and smartphones. And because the cloud is updated on a regular basis, companies can easily adopt what’s next—even when “what’s next” is not fully defined.
On-premises systems require money to fund hardware, software licenses, implementation projects (including customization) and third-party consultants. In most organizations, this involves spending capital funds—limiting the capital available for growth and innovation. With the cloud, monthly operational expenses cover all aspects of your financial management solution, which frees up previously committed capital for wiser investments.
Companies with on-premises systems have dust-collecting “shelfware” throughout their environments. When they first bought their on-premises solution, they had to guess at their future needs (e.g. 100 users today, 200 in three years) or acquire licenses for future projects. Ongoing annual maintenance continues to pay for software that will never be used; valuable capital is simply tossed aside year after year. With the cloud, shelfware is forever in the past; you consume software licenses and applications as needed.
On-premises systems are notorious for customizations. Adding custom code puts users at the mercy of the staff and partners who did the initial work. When the time comes to upgrade, efforts to uplift and incorporate custom code can overshadow other efforts and consume yet more capital. The cloud is driven by configuration, not customization, so it makes upgrades painless by comparison.
On-premises ERP projects often require an army of consultants to implement, customize and test finance and other business applications. They seem to plunder all your travel and expense accounts for food, lodging and travel. Finance in the cloud is much quicker to implement, leading to lower project costs.
With many on-premises systems, selecting your user experience is not easy. With the cloud, users configure their own experience across dashboards, displays and reports. No more waiting for IT to make changes; users get the freedom to access the data they need, while IT frees up time to work on more strategic efforts.
Many companies divide on-premises costs across the enterprise as a budgetary expense—essentially a head tax. Since cloud systems come with a fixed monthly price and upgrades are included, departments don’t have to worry about absorbing new “taxes” if on-premises projects get more complicated, require more support, or need more customizations and consultants (especially with upgrade projects).
With thousands of companies already using finance in the cloud, the above declarations are truly self-evident. Over time, as users experience the benefits of the cloud—the ability to configure without IT, work with real-time data, and access revolutionary reporting—these benefits come to be seen as inalienable rights. With this new foundation for finance, any enterprise will be better positioned to engage in the pursuit of profits.