Despite the well-documented benefits of the cloud, many companies still use on-premises finance applications. What might surprise you more is that many small-to-medium businesses (SMBs) are farther behind, trying to grow their business with a variety of legacy desktop tools, such as Excel spreadsheets.
Fortunately, now is a great time for SMBs to modernize. Cloud financial solutions are more comprehensive and powerful than ever and can return substantial lasting benefits. It’s also easier to make the transition to the cloud because the services in the cloud are more intuitive, deliver more best practice business processes, need less configuration, and, therefore, are easier to adopt.
Really, there’s no excuse for any business (of any size) to stay where they are, considering that cloud is quickly becoming the business standard: 79 percent of businesses surveyed for Oracle's EPM Trends Report said they plan to adopt Enterprise Performance Management (EPM) cloud within the next two years. Top reasons cited for making the move include avoiding on-premises upgrades, avoiding infrastructure investment, and improving total cost of ownership.
It’s likely these organizations have heard about the benefits of adopting Oracle EPM Cloud, such a long-established West Coast construction company that abandoned spreadsheets and gained more accurate planning and forecasting by adopting predictive analytics.
The $300 million engineering and construction company was a legacy Oracle JD Edwards (ERP) customer but was using spreadsheets to predict and forecast.
Because it was already an Oracle customer, it rapidly migrated to Oracle EPM Cloud for financial statement planning, which was integrated with its existing ERP solution. Now the company can more profitably scale because leaders can more effectively plan by using the prebuilt financial statement planning processes and the new predictive planning capabilities. The company also can better manage expensive capital and human resources and more effectively deploy finance expertise because there’s not a need for intensive spreadsheet maintenance. Additionally, when it’s ready, it can add more capabilities.
Another midsize company—a $500 million online consumer products retailer—also aimed for improved scalability with the adoption of Oracle EPM Cloud, but it also needed much more agility to respond to changes in the increasingly competitive online luxury goods market. Even though it was a native e-commerce company, the pace of change in the marketplace continued to accelerate, and leaders realized they needed the speed and flexibility of cloud tools and services to stay relevant.
These two companies realized that they needed more visibility and transparency across the whole organization to support a modern business environment, and this is where desktop tools fail. It’s this visibility and transparency that enable rapid response to change because they push operations into more informed decision-making that is closer to real-time conditions.
So what’s holding back SMBs and midsize companies from adopting cloud? Several things.
One is that cloud requires a cultural shift, and company leaders might not be ready to accept this. For organizations making the transition from startup to SMB, they still retain the entrepreneurial and innovative culture that defined their growth. Often in this stage, the company founders are still heavily involved in operations and, at the same time, they are learning to adjust their role by delegating responsibilities. Leaders quickly realize that the desktop systems and manual processes that served them well in the startup phase will not scale as the organization's requirements become more complex. They have a more hands-on role compared with larger enterprises with more distributed leadership.
A shift to cloud means changing internally built processes to fit an outside-in model centered on change. Cloud enables the constant assessment and adjustment that modern commerce requires based on key questions: Are we addressing our client needs most effectively? Are we creating the right products? Are we providing the right services with the right level of quality?
Second is that compared with large companies, SMBs have a harder time recovering from mistakes, so there’s reluctance to make the move when systems are already in place. This outlook is usually tied to a secondary factor, which is limited resources—time, budget, or personnel, both finance personnel and IT personnel, to execute on that move.
Finally, cloud vendors only offered point solutions, which were costly to integrate. Oracle EPM Cloud is the only comprehensive suite of tools for closing the books and reporting financial performance on a monthly, quarterly, and annual basis; reporting that performance to internal management, as well as external stakeholders; providing financial and operational planning across the organization; and creating all of the analytics and narratives that help understand the performance of the business.
It’s clear that when you look at what today’s cloud services and tools can do—beyond removing the burden and cost of on-site software and hardware maintenance—that there is no reason to hold. The methods of the past no longer apply. In fact, not making the move to cloud has become a significant risk itself because that’s where the rest of the world is or will be soon.
I have never met a business leader that wasn’t growth-minded. Expanding product and service portfolios, geographic footprints, markets, and revenues is inherent in small and medium business strategies. But meaningful and profitable growth can’t happen today without the operational visibility, transparency, and control that cloud enables.
That's why moving to EPM Cloud is critical. The longer you wait, the more difficult it is to make the switch to another process, a better process, a better toolset.