Video/Presentation: http://www.proformative.com/events/rules-financial-revolutionaries-planning-understanding-impact-cloud-your-financial-technology
No department in your organization is more dependent on the integration best-of-breed solutions, complex workflows and in many cases homegrown technologies, than the Finance department. At the same time no other function stands to benefit as much by embracing next generation technologies. Emerging cloud technologies not only pose a significant acquisition, deployment and operations costs reduction, they also enable the finance function to scale the investments made within the enterprise-wide competitive tools such as data analytics and mobility. This session will explore how Finance Executives are exercising discipline and rigor to strike the right balance between existing and emerging technologies within their Finance functions.
Speakers:
Neil Krefsky, Sr., Director, Product Marketing, SAP Cloud
Terry Rice, Director of Finance, Living Proof
Presentation delivered at CFO Dimensions 2013 - http://www.cfodimensions.com
Track: Finance Technology | Session: 3
For the last 3 years, research from Saugatuck technology indicates that the Cloud expectations of Finance leaders and groups have substantially increased, as they become more comfortable relying on Cloud providers and solutions for core Finance applications and operations. However, the Finance move to Cloud is complicated by an important fact: Finance groups and operations tend to incorporate a wider range of software and systems than most other enterprise business units, and Finance leaders and managers have come to expect and even specify a “best of breed” approach in procuring new Finance IT. Cloud not only enables significant cost and time savings in acquiring, implementing and managing new IT, it also enables cost-effective and rapidly-scalable investments in such emergent competitive tools as mobility and data analytics.
Surveys and interviews with CFOs and other Finance leaders since 2004 have consistently shown that Finance leadership is not only aware of Cloud, but is keenly aware of its benefits to their organizations and to the enterprise at large.
This graph summarizes recent survey research that illustrates how prevalent Cloud-based Financial management solutions are already – and how much that is expected to increase over the next few years.It’s not only the enterprise-class (and exceptionally affordable) security, reliability and availability of Cloud-based services that have convinced an ever-increasing percentage of CFOs to establish new systems in the Cloud, or to migrate existing systems and operations to Cloud-based providers and solutions. It’s also the ability of leading Cloud providers to deliver customized, complex, centralized and coordinated Financial data analysis, backup, disaster recovery, and audit capabilities consistent with key standards (e.g., SSAE 16/ISAE 3402). A Finance move to include the Cloud is clearly on.
Even in the face of increasing enthusiasm and aggressive adoption plans, recent research – including conversations with hundreds of Finance executives since 2002 – indicates that Finance is not (yet) moving EVERYTHING to Cloud.Instead, we see the most advanced and progressive Finance groups using Cloud to enhance and extend their existing systems and abilities, adding critical and scalable capabilities at low cost while retaining many traditional assets.
This graph summarizes research data to illustrate executive-level expectations of rapid growth in the use of hybrid Cloud business and IT environment.Such a “hybrid” Cloud-plus-on-premises IT/Finance environment enables Cloud-based extension, expansion, adaptability and integration across a mix of solutions and systems while protecting (and extending the useful life of) core Finance IT assets that have typically been acquired, integrated, refined and tailored over years of investment and use. The hybrid Cloud reality affects Finance much more than most other enterprise business units, because in many company’s experience, Finance is much more likely to have implemented and optimized “best of breed” solutions to its business and regulatory needs over years and decades. As a result, many Finance leaders and man-agers have come to expect, and incorporate, best-of-breed approaches to the specification and procurement of new IT.
In many ways, this puts Finance at the center of the hybrid Cloud reality as a very important driving factor. This same research consistently shows that, the closer Cloud gets to the “money” applications and operations within the enterprise, the more influence those applications and operations have on the enterprise’s Cloud adoption and use. Finance’s long-standing desire and need for best-of-breed, tailored and optimized IT makes it the vanguard of hybrid Cloud within most enterprises. “Hybrid” does not mean just on-premises-to-Cloud, it also includes Cloud-to-Cloud operation and integration. Many companies also explain that they want to stick with their established, previous-generation solutions because they expect those solutions’ providers to roll out new, Cloud-optimized versions at some point (and they are often quite comfortable with that vendor relationship).And almost every traditional software provider has introduced Cloud-enabled versions or extensions of its traditional solutions. With the right, standards-architected Cloud-based Financial management platform, these solutions can also be woven into an effective, efficient, and well-managed hybrid Finance environment.We find that this situation consistently raises a concern among CFOs and other Finance leaders, that being: The complexities of Cloud Finance applications and services will reduce or prevent their ability to retain and utilize their time-tested, best-of-breed systems. In the early days of Cloud, especially of limited, point-solution software-as-a-service, this was a very legitimate concern. Cloud-based software tended to be extremely focused on specific tasks or application areas, to the point where integration or even interoperability with other applications and systems (Cloud-based or otherwise) was an afterthought. Organizations preferring to keep legacy, customized and optimized systems were forced to compromise.This is less and less the case today. The most advanced and aggressive Cloud providers, including several traditional enterprise software firms such as my own employer, now include substantial capabilities for integrating and managing a range of Finance applications and data. Our platform-based approaches utilize secure, reliable and standardized technologies and services that ease the integration and interoperability of a wide range of legacy systems. And better use of web services technologies has greatly simplified and improved the ability of well-engineered, Cloud platform-based systems to interoperate. This is less and less the case today. The most advanced and aggressive Cloud providers, including several traditional enterprise software firms such as SAP, now include substantial capabilities for integrating and managing a range of Finance applications and data. Their platform-based approaches utilize secure, reliable and standardized technologies and services that ease the integration and interoperability of a wide range of legacy systems. And better use of web services technologies has greatly simplified and improved the ability of well-engineered, Cloud platform-based systems to interoperate with other applications and data systems as well. In short, in the emergent hybridized IT/business reality, Finance can cost-effectively keep and build on its traditional Best-of-Breed app/system/processes through the use of leading Cloud-based management platforms and solutions. ate with other applications and data systems as well. In short, in the emergent hybridized IT/business reality, Finance can cost-effectively keep and build on its traditional Best-of-Breed app/system/processes through the use of leading Cloud-based management platforms and solutions.
It’s not automatic, of course. Not all providers, platforms and solutions can address all potential Finance legacy system needs. Most do a credible job; a few, like SAP, are more integrative in their approach by building platforms and solutions on industry-standard technologies, and developing applications utilizing standardized Finance practices and rules – while enabling significant configuration based on company needs. In this way, these Finance platform providers enable best-of-breed Finance solutions and practices while affording centralized management. And it’s not all on the providers. Finance groups need to be deployment-model-agnostic; i.e., they have to embrace the hybrid model and embrace the concept, if not the reality, of having and utilizing Finance assets in any of several deployment and usage models. This will include some assets and functions in Cloud, and some on-premises, utilizing a dynamic mix of standalone, Cloud-to-Cloud, Cloud-to-legacy, and other operational models. This is quite different than traditional Finance operational environments and models, where assets are physical and operations tend to take place in plain sight
The short answer to thisquestion above is “discipline and rigor.” Many Cloud-based solutions for Finance management have grown up rather haphazardly. They were developed in the early, point-solution-oriented days of SaaS and Cloud; developed and brought to market in bits and pieces over time, then cobbled together from some very good foundational elements and tweaked or refined to work together at various levels. They work, and work reasonably well; but as they were not developed and tested together as they were built, the discipline in their coding, integrations and the rigor in their testing can vary and therefore be suspect. Financial Management solutions that are not originally architected to work together will have more potential weak points, more potential faults that enable failure, discontinuities, and risks of data breach. Specific to the Finance group and its needs, rock-solid Cloud management solutions will also exhibit thoroughness, accuracy and consistency – i.e., rigor – in the following ways: In their ability to document splitting (i.e. assigning specific invoice line items to specific cost or profit centers), which should be enhanced with transactional tagging to enable richer management reporting; In their management of workflows and transactions, including associated audit trails and other aspects of compliance rigor; In how they enable and deliver both informal and formal collaboration within and between applications – e.g., having process checks, approvals, and more built into their workflows in ways that improve efficiencies, and improve the value that Finance delivers to the enterprise; and In their consistent use of open, standard interfaces that enable Cloud extensibility, flexibility, and agility that in turn reduces the system and process capacity for error while improving Finance’s efficiency and organizational ability to manage, create, and lead.Specific to the Finance group and its needs, rock-solid Cloud management solutions will also exhibit thoroughness, accuracy and consistency – i.e., rigor – in the following ways: In their ability to document splitting (i.e. assigning specific invoice line items to specific cost or profit centers), which should be enhanced with transactional tagging to enable richer management reporting; In their management of workflows and transactions, including associated audit trails and other aspects of compliance rigor; In how they enable and deliver both informal and formal collaboration within and between applications – e.g., having process checks, approvals, and more built into their workflows in ways that improve efficiencies, and improve the value that Finance delivers to the enterprise; and In their consistent use of open, standard interfaces that enable Cloud extensibility, flexibility, and agility that in turn reduces the system and process capacity for error while improving Finance’s efficiency and organizational ability to manage, create, and lead.
This is not an SAP commercial but we did want to let you know that we have a cloud based solution to help manage your financial and ERP needs. I’d be happy to talk to you offline about some of the benefits and innovations around this solution but the important point I want to make is: Even though this is SAP’s Cloud offering for ERP, it is based upon the proven best practices, internal controls and the financial foundation and rigor we’ve been providing in our On Premise solutions for over 40 years. The solution is taking advantage of the latest innovations in technology but delivering on a rock solid core of proven best practices.
So in addition to our solution being based upon the proven business processes you can here it has also been heavily adopted among finance departments. This is important because as financials professionals we are conservative and risk adverse in nature. When evaluating emerging technology we to be confident in whatever solutions we deploy that they are mature and proven!
Now let’s hear from a customer who has taken their company to the next level by deploying cloud based technology to help manage their financial operations.