Though “the cloud” is rapidly gaining popularity with finance executives, nearly two-thirds of all finance organizations are being held back by old, on-premise ERP systems. To stay competitive and compliant, finance organizations must keep up with an evolving regulatory environment and revenue recognition rules, yet their legacy systems lack the functionality for them to do so. Additionally, maintenance upgrades with on-premise systems are expensive, time-consuming, and staff-intensive.
Finance organizations are seeking alternatives to clunky on-prem systems and turning to the cloud. Just like you use web-based email applications and online banking in your personal life, progressive companies are finding real value in using this technology for their financials. This results in software at a lower cost, easier collaboration between the finance team and shareholders, and faster innovation.
A survey of 800 IMA members asked finance professionals: “What do you perceive as the single key benefit of moving your financials to the cloud?” The clear drivers were around lower total cost of ownership, streamlines business processes, and access to data.
Reducing Total Cost of Ownership
Cloud computing allows businesses to recoup up to 50% of their IT application operating costs from their on-premise systems. Due to the fact that it’s web-based, there’s no need to purchase hardware. Additionally, maintenance on servers, databases, backups, patches, and upgrades are all done for you by the software vendor, freeing up more of your IT budget.
Business Process Improvement
A report from Gartner revealed that more than 90% of a typical IT budget is spent on maintenance, leaving less than 10% to dedicate to innovation and business process improvement. Moving financials to the cloud enables the finance organization to not only reduce IT spend, but also shift the IT budget from maintenance to innovation and focus on the adoption of key initiatives like revenue recognition, building reports and optimizing workflows.
Anytime, Anywhere Data Access
Traditional on-premise systems restrict financial data to the local servers they are housed on. This results in a “data silo” of outdated information, conflicting reports, and multiple versions of the “truth.” Cloud-based software allows all members of finance and stakeholders to see data in real-time and collaborate, regardless of location. Additionally, it enables for more effective planning due to the up-to-the-minute accuracy of information, and an end to out-of-date spreadsheets.
The cloud has become a buzz word in the financial management software industry. For that reason, it takes a careful analysis of each application to determine the most appropriate solution. Also, many companies are disguising their on-premise software by branding them as “cloud computing,” when in fact, they are really just hosted versions of the same software.
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