The Status of Finance and Cloud
As part of Saugatuck’s participation in this week’s inaugural SIIA Deciphering Finance event in Boston, Saugatuck SVP and head of research Bruce Guptill first presented a summation of Saugatuck’s research on changes in the scope and pace of Cloud adoption by Finance leaders and organizations over the past decade, then engaged in a series of discussions with CFOs at the event regarding their own Cloud plans, activity, and associated impacts.
The net of this interaction: After several years of first inhibiting and prohibiting Cloud use, then a brief period of Cloud uncertainty, Finance leaders overall, and Finance as a corporate entity, have embraced Cloud as a means of enabling, increasing, and delivering the value required of Finance by enterprises in an increasingly-fast-changing business environment.
As a result, Cloud has become the first choice of Finance leaders and buyers for Finance management solutions and is increasingly encouraged by Finance leadership and policy as a first choice for broader enterprise business IT.
Why is it Happening?
The Finance embrace of Cloud-based Finance management solutions from basic consolidation, reporting, planning and analysis through core critical systems like accounting and treasury management has been slow to unfold.
But the coalescence of several business trends, including lingering economic uncertainty, accelerated technological innovation, increased regulatory requirements, the opening of new markets, and tighter competitive situations, has led Finance to reassess its roles, the value it enables and delivers to the enterprise, and how these are accomplished. Meanwhile, the recent multi-year period of significant business change is closely correlated to the consideration of and adoption of Cloud-based systems for core Finance management functions.
Saugatuck research over the past several years makes it clear that the combination of economic uncertainty and increased business pressures are driving Finance to consider, adopt, utilize, and rely upon Cloud-based Finance management solutions. Our discussions this week with CFOs and other Finance leaders at the SIIA event confirmed this research, and helped to consolidate our key findings regarding the driving forces behind it:
Finance Must Deliver More Value to the Enterprise. The true nature of Finance lives well beyond its traditional role as record keeper and planner; Finance is positioned to be a truly strategic enterprise asset. Conversation after conversation centered on the themes that Finance as a group and its operations should be more integrated into enterprise business strategy, planning and management, and that the core value of Finance depends on providing useful business data and guidance.
Too Many Finance Systems Are Not Up to Today’s Needs. This has been a Saugatuck research theme for several years, most recently confirmed in project work done for clients such as Workday, SAP, and Adaptive Planning. We consistently find that most existing Finance systems while they are well-built for their initial/original functions tend to be too fragmented, disassociated, and expensive to cost-effectively maintain or upgrade. Too many existing systems also lack or inhibit timely access to financial and performance information, which results in a lack of visibility and insights along with a growing lack of flexibility that prevent Finance from adapting and improving as the business grows and changes.
Too Many Finance Systems Are Not Up to Tomorrow’s Needs. Globally, Saugatuck research since 2010 continues to indicate the same key business changes for all types and sizes of firms: Increasing competition, increasingly complex regulatory environments, recovering (and quickening) business growth, and an rising level of significant organizational and structural changes as the enterprise is affected by economic, competitive, and technological changes.
Click here to read the market impact.
This blog was originally published at Saugatuck's Lens360 blog on December 5, 2013. Published with permission.