By Cara Vollmer, Senior Content Strategist, Oracle
Retail is facing a data-driven revolution. To be a modern retailer means embracing new business models and technologies to meet rising customer demands—and some of the most profound changes are happening in retail finance departments.
As organizations look to finance as a catalyst for growth and innovation, retail CFOs “are being judged in terms of business outcomes as well as traditional financial industry standards,” says a new report, Retail Finance in the Digital Age. Citing research from Oracle, CFO Magazine, and PricewaterhouseCoopers (PwC), the report examines how modern cloud solutions drive retail transformation.
Cloud-based ERP solutions automate financial processes to free up time for strategic thinking, and enables emerging technologies like AI, machine learning, and blockchain. With deeper, real-time data, finance can influence everything from pricing and procurement to mergers and acquisitions—and help the business deliver the fast, personalized experiences customers expect.
CFOs are taking note. In a 2017 CFO Magazine survey, 66 percent of respondents said that the value realized from implementing a cloud strategy exceeds the costs involved. Still, many have yet to take the leap:
|63 percent of CFOs surveyed described their finance technology as “inefficient,” “silo-constrained,” or “not linked to decision-making.|
For those who still need convincing, here are 5 reasons to move retail finance to the cloud:
When compared to on-premises systems, cloud-based ERP solutions offer a range of savings that can help reduce operating costs. They eliminate the need for hardware (which can comprise 30 percent of the cost of an on-premises or hosted system), and enable retail companies to buy software as a subscription service, so they only pay for what they need.
By moving retail finance to the cloud, you can also avoid making upgrades every 3-5 years. Cloud vendors provide frequent updates, included in your subscription price—making cloud the last upgrade you’ll ever need.
Having easy access to accurate and real-time data is key for retail CFOs who are expected to drive better decision-making and adapt quickly to different market conditions. “A critical focus of CFOs needs to be knocking down data silos in their organization so there’s a single source of truth,” said Steve Cox, Oracle group vice president of ERP and EPM. “You’ve got to be able to trust your data.”
That starts with trusting your technology. Cloud solutions from a single vendor utilize a common database built with a single schema and a standard data dictionary. With pre-integrated applications, all associated data is shared as needed and updated in real time—so you can present accurate, timely reports to business stakeholders.
Cloud-based ERP is also powering faster expansion into new regions and markets. Because cloud solutions are on-demand applications, they can scale rapidly as retailers add new locations, people, or product lines. They can also help businesses keep pace with regulatory changes and local tax laws for more precise planning and budgeting.
For retailers experiencing hyper-growth, like candy purveyor Lolli & Pops, those capabilities are vital. They’re using Oracle ERP Cloud, including Oracle EPM Cloud, to help plan and forecast their entire business and gain control over operating expenses.
With "consumer rights" taking center stage, as illustrated by the recent enforcement of the European Union (EU) General Data Protection Regulation (GDPR) and the growing number of cyber threats, concerns around data privacy and security have become top of mind.
Verizon’s 2018 Data Breach Investigations Report (DBIR) revealed that ransomware attacks on retailers have doubled since 2017. What’s more, 68% of data breaches took months or longer to discover.
Retail—and CPG companies, specifically—are falling behind other businesses in their security measures. According to PwC’s 20th CEO Survey, they are less likely to address data and ethics breaches, including those affecting critical systems.
Cloud-based ERP can help. Security is embedded within the cloud service, with dedicated professionals who monitor and react to threats. And when retailers use a single cloud vendor with a unified data schema, it removes security risks associated with running multiple systems from multiple vendors.
Simply put, cloud-based ERP speeds decision-making. Dashboards and reporting tools deliver information throughout the organization—across multiple platforms, quicker than ever before.
“Knowing that the data they are seeing is real-time and unadulterated, along with the significantly reduced probability of formula error … increases user confidence,” says the report, Retail Finance in the Digital Age. “By comparison, exporting data to spreadsheets disconnects the information from its source, making it a ‘snapshot’ rather than a real-time view.”