In the digital era, cloud migration is fast becoming a strategic necessity. Without it, finance teams may lack the infrastructure to be agile and leverage real-time insights that inform decision-making. In this article, Darren Roos, president of SAP S/4HANA Cloud, discusses why finance organisations need to embrace the move to the cloud now.
A recent report from Constellation Research estimates that over 60% of an organisation’s critical data will be accessible through the cloud by 2020. For today’s finance executives, the move to the cloud has become a necessary, but sometimes challenging shift.
“In years past, many finance teams have pushed off the cloud, categorising it as another industry buzzword,” notes Darren Roos, president of SAP S/4HANA Cloud. “However, in the face of rapid innovation and increased regulation, cloud adoption is critical for organisations to keep pace in the competitive landscape.”
Foster innovation in the cloud
The move to the cloud can be a dramatic shift for many finance departments. Finance is often placed at the bottom of the technology priority list, in favour of a long line of revenue-driving, customer-facing applications.
As the lifeblood to every business, finance is also often considered too high-priority to tinker with, and outdated systems remain in place for fear of disrupting business processes. This leaves finance professionals with ageing IT environments and suboptimal functionality that slows reporting and closing operations.
The cloud offers an opportunity to radically change technology adoption for corporate finance departments. Roos adds: “Once financial solutions are consumed in the cloud, executives have the opportunity to access the latest advances in technology – particularly AI and machine learning – moving finance applications to the cloud can serve as a catalyst for innovation.”
Empower the finance function
The cloud is an attractive option for CFOs and other finance executives looking to streamline processes and reduce costs. Since expensive hardware and the staff required to keep it operating are no longer needed, finance departments can experience significant savings when moving to the cloud. Additionally, the scalability of the cloud allows companies to be nimble – if a business is experiencing strong, rapid growth, the cloud allows for rapid roll-out of solutions and new market testing.
The cloud also offers flexibility for companies that wish to maintain part of their operations on-premise due to industry regulations or local jurisdictions. Operating these solutions within a hybrid environment is a way to ensure that companies, and particularly teams within the finance function, can still experience the benefits of cloud adoption while complying with industry standards.
The traditional role of finance has been to serve as the record keeper for the business, but the cloud offers finance executives the opportunity to take on new responsibility. In the cloud, business intelligence and analytics capabilities are no longer isolated. They are embedded within most cloud-based applications and serve as a valuable resource to provide finance executives with data on-demand. Cloud solutions allow organisations to be agile and arm finance leaders with the insights needed to serve as strategic partner for company executives.
Tackle new regulations
Historically, financial regulation has been a barrier to technology adoption, and the risk of non-compliance has often left finance executives will little wiggle room to explore technology innovation. However, what was once an obstacle is now critical for keeping up with the influx of regulatory standards.
Finance departments are currently facing IFRS and GAAP regulations set to take effect in 2018 and 2019. As companies prepare to meet these standards, cloud technology arms finance departments with the ability to automate processes and unify disparate data sets to create a holistic picture of their data. This allows for simpler reporting and analysis, lightening the burden on the road to compliance.
“In today’s digital world, finance executives are facing more pressure than ever before,” says Roos. “CFOs and other finance heads are seen as a key voice at the table to inform company strategy and drive decision-making. By embracing the cloud, the finance function can ensure it is armed with the latest tools and innovations to drive real-time insights, and gain a competitive edge in the market.”