The Harvard Business Review has produced a report singing the praises of cloud computing for financial planning and analysis. It argues that cloud-based financial planning and analysis systems - delivered via the software-as-a-service (SaaS) model - have begun to break down barriers to collaboration and encourage strategic partnerships between finance and business users.
“Cloud-based and mobile-friendly, they represent an alternative not only to budgeting on Excel spreadsheets, but also to the legacy financial planning platforms that many organisations have used since well before workforces mobilised and corporate data moved off-premises and into the cloud,” the HBR report: Transformational Journeys: Modern Business Planning says.
It argues that moving to a cloud based system breaks down the silos in which finance departments have traditionally operated. “The technology of finance [is] complex, cumbersome, and opaque. Conventional finance systems discourage collaboration and underscore the organisation’s distance from the rest of the enterprise.”
Jorge Villalpando, Enterprise Sales & Marketing Manager at Alexelera commented “conservative attitudes within the finance industry has held back the adoption of cloud in the past…. the ubiquity and benefits of cloud is starting to change minds.“
And, HBR says: “In an age of big data finance—in which decisions are shaped by an endless stream of data coming from enterprise systems, point-of-purchase sensors, news feeds and social media sites—companies need more access to information, not less.”
A HBR survey suggests the use of cloud, generally, is much more prevalent in large organisations and it gives several reasons why uptake has not spread to smaller organisations.
- Financial planning is so time-intensive at many companies that they feel they never have a sufficient window of opportunity to take out the old platform and put in something new. By the time they have created one annual plan it’s time to start the next.
- Finance executives are inherently conservative. CFOs don’t like to take risks, and anything that involves change involves risks.
- CFOs don’t appreciate how quickly cloud-based systems can be implemented, in part because they have painful memories of difficult, multiyear implementations with on-premises systems.
The paper provides a compelling case for cloud-based financial planning and analysis tools.
- Cloud-based systems employ much more user-friendly interfaces than legacy applications, which are primarily designed for highly trained power users working in finance. These more modern applications feature user experiences that mirror those found within consumer applications.
- Cloud-based systems enable faster access to data and analytics, in part because in-memory computation services, unlike batch processing, enable real-time analysis that can provide accurate and, in some cases, transformative information.
- Companies that use on-premises financial systems tend to take liberties in tailoring them to their own unique purposes, and these can become so highly customised that it becomes difficult to migrate to newer versions and take advantage of the new functionality the upgrades are meant to deliver. Cloud-based systems, by contrast, are typically offered on a SaaS model, with updates delivered automatically, often multiple times per year, with little input required from the end user.
In case the arguments set forth do not prove sufficiently convincing, the HBR report concludes with numerous case studies of companies that have successfully implemented cloud-based financial planning systems, with significant benefits.