Cloud technology is being fully embraced by finance departments across a broad spectrum of growing small-to-medium businesses (SMBs). Earlier this year, Oracle conducted our fifth annual Enterprise Performance Management (EPM) Trends Report, and in that survey, more than half the respondents have moved or will move their planning, budgeting, and forecasting and other EPM processes to the cloud within the next year.
But more striking were the findings around why they moved to the cloud vs. the benefits they received. Respondents said they made the move to EPM Cloud primarily for economic reasons, including avoiding on-premises upgrades, costly infrastructure investments, and lower TCO.
And while the majority (77 percent) achieved economic benefits, when asked about the top benefits of EPM Cloud, 89 percent pointed to “staying current on technology,” which significantly outweighed all the other advantages cited.
In addition, high-growth companies are starting to appreciate the continual innovation and upgrades that the cloud provides. Migrating financial close, planning, and budgeting processes to the cloud is not about simply “lifting and shifting” on-premises systems to a cloud platform; it is an opportunity to reinvent and transform business processes.
EPM Cloud is rapidly becoming the new standard for finance groups in companies across the world. The pace of adoption is accelerating, with 62 percent of this year’s survey respondents reporting that they are currently running EPM processes in the cloud, or will within the next 12 months. This is up from 46 percent in last year’s survey. Overall, 79 percent of respondents indicate they have plans for EPM Cloud in the cloud within the next two years, versus 65 percent in last year’s survey.
What’s driving this shift to EPM Cloud? As with our previous EPM trends studies, cost and economic considerations remain the two main reasons. But, with systems starting to age, organizations are looking more closely at the pain, complexity, and time involved in upgrading their on-premises software. Avoiding on-premises upgrades has rapidly risen to the top as the main driver for moving EPM to the cloud (48 percent), up from the second most stated reason (42 percent) last year and sixth place (23 percent) two years ago.
While economic drivers lead the reasons for cloud migration, the benefits realized with EPM in the cloud go far beyond cost savings. Organizations found that the competitive advantage offered by always-new technology outweighed everything else. Compared with last year’s survey, staying current on technology increased significantly as a benefit (89 percent, up from 75 percent).
In this era of digital disruption, organizations need to be nimble, and the cloud offers the agility to rapidly adapt to changing conditions―usually before those changes become permanent. Moreover, with cloud, there is no technology obsolescence, putting the growing business on a more solidly competitive footing.
This is just a preview of what the survey uncovered. The full report includes quotes on experiences from EPM Cloud users, identifies trends in financial consolidation and close, narrative reporting, profitability and costing, and enterprise data management. It also discusses how EPM Cloud helps finance teams adopt best practices, and how they can leverage emerging technologies such as blockchain, artificial intelligence (AI), machine learning (ML), and intelligent process automation to build future-ready finance organizations.
By Jennifer Toomey, Senior Director, Cloud Business Group, Oracle