CFOs are embracing cloud deployments for their ERP software and applications in greater numbers, and the advantages of cloud ERP are becoming clearer every year. In a recent discussion with Ray Wang, founder and principal analyst of Constellation Research, Oracle CEO Mark Hurd said that cloud ERP allows finance leaders to “get rid of spreadsheets, get out of customizations, lower costs, and get better reporting.”
The burden of regulatory compliance is one key issue that has driven cloud ERP adoption among CFOs, according to Constellation’s 2018 survey of CFOs; 42% of survey respondents highlighted regulatory compliance as a top priority in their work. However, the dominant consideration for financial executives contemplating a shift to cloud ERP solutions is the cost of system implementation, upkeep, and improvement.
Oracle’s recent survey of finance professionals for its 2018 ERP Trends report shows that 63% of those surveyed consider economic benefits to be a key reason to use or switch over to cloud ERP solutions. These findings parallel a recent Nucleus Research study demonstrating that cloud applications produced 3.2x the return on investment of on-premises deployments, while offering a 52% lower total cost of ownership. It’s no surprise, then, that migrating to cloud ERP applications is an increasingly compelling proposition for CFOs worldwide.
Steering a company with thousands of employees can be difficult in the best of times. It’s simply not possible to respond to changing economic and regulatory conditions with speed and agility while simultaneously updating software and systems on site across thousands of employees’ workstations. Adding to the complexity is the security risk of allowing financial employees to store sensitive data on their laptops or flash drives, which are easy to steal and easy to hack.
Cloud ERP solves both of these problems for CFOs. A dedicated cloud ERP solution is constantly managed and updated by dedicated teams, providing significantly more expertise and technological knowledge than that of a typical enterprise IT department. Cloud ERP systems also have dedicated compliance teams, who help ensure that software upgrades have functionality designed to assist customers with their compliance obligations.
Storing sensitive financial documents in the cloud also empowers CFOs to delegate or restrict access to any document available at any point. The fact that cloud applications can be consistently and instantly updated across the entire enterprise enforces enterprise-wide use of the proper templates, formulas, and controls, preventing errors that might arise from the use of an outdated or improper process. Using cloud-based applications also can preserve an audit trail of past access and updates to every file and report, which makes it significantly easier to review a company’s financial position at various points in time and to validate workflow.
All of these advantages add up to lower costs, better processes, and faster upgrades for companies of ten or ten thousand people, or more. But one additional advantage of cloud ERP that’s often overlooked is that it provides enterprises access to the latest technological breakthroughs, such as artificial intelligence (AI).
AI is already being used in cloud ERP solutions to automate a number of tedious or repetitive financial processes and provide CFOs and their staffs with superior analytical capabilities. Mark Hurd has said that “You’ll see AI integrated into most everything that comes to market,” a prediction that certainly encompasses Oracle ERP Cloud. Cloud ERP applications can pull data from a wide array of sources and provide actionable insights from that data to help CFOs figure out how and where to deploy their budgets, where to cut costs, and even determine if a prospective merger or acquisition will be worth the cost.
It’s no longer about whether CFOs should provide their companies with cloud ERP solutions, but when. The best and most innovative enterprises today are all in the cloud or in the process of migrating to cloud ERP applications.