Shrugging off IT: Pros and Cons of Cloud for Finance

  • Finance Professionals Unhappy
  • Shrugging Off the IT Department
  • Most Finance Professionals Reject Cloud
  • Fusing Finance & HR
  • What Cloud Must Prove

Finance Professionals Unhappy

Executives don’t like the financial systems that they are using – that’s according to a 2013 poll by Saugatuck Technology. In fact, 82% of IT and finance professionals said they they had recently switched or were planning to switch their finance systems.

In other words, virtually everyone has been ready to change the way that they interact with their financial data. Most companies were transitioning to cloud: 57%.

Why cloud? While companies are understandably concerned with security, reported Maggie O’Neill in Baseline, they appreciate the user-friendliness of the virtual machines and the way they free up local IT for development and other forward-thinking business concerns.

Cloud makes it easier for finance specialists to stay centered on what needs to get done today for their clients rather than waiting: they can set up systems themselves without needing for on-site IT to become available.

“IT organizations, whether they are small or large, tend to be pretty well booked,” commented Rob Hull, president of cloud consultancy Adaptive Insights. “They are a busy crew, often a bit understaffed and often with a backlog of projects that need to be done.”

People often don’t feel that the setup and deployment of their systems is prioritized appropriately, but the general issue is that IT staffers are busy and in high demand.

Shrugging Off the IT Department

In July 2014, Adaptive Insights published a report based on the perspectives of 325 executives in the finance industry. Apparently, finance specialists hate having to wait on IT to be able to tackle a project.

What’s the #1 advantage of cloud? Scalability? Affordability? Collaborative potential? No. Almost one in four finance executives (23%) told the researchers that the biggest benefit was that it sidestepped the IT department.

“Being able to, ostensibly, put finance back in control of solving the business problems without making IT a bottleneck is a really big issue to them,” said Hull.

As you can imagine, cost was not that far behind. It came in second, with one in five users (21%) saying that was the main reason they used cloud. Price is of particular importance to small businesses, argued Hull.

The third highest response for the biggest cloud advantage was usability, essentially the intuitive nature of the cloud environment. Finance executives, like those in any field really, want solutions that are quick to adopt and don’t generate confusion or a threat to business continuity.

The extent to which a cloud system is easy to understand is fundamental to those in the finance field, suggested Hull, who explained that the user-friendliness of cloud solutions has gradually been refined. Today, cloud enterprise applications are more similar to software on the consumer market than they were in the past.

Among finance executives, the perception of cloud is uncertain: 47% said that they did not know if cloud would streamline their processes or not. Meanwhile, 31% commented that they believed their tasks would become more efficient, and 22% were pessimistic the cloud would allow them to operate more smoothly.

Although most financial executives were either unsure about cloud or negative toward it, Hull said that many firms achieve 50 to 75% better budget cycles.

“Once implemented, the question of whether or not [cloud-based technologies] save time becomes an absolute ‘yes,’” Hull remarked. “I think the survey leads to the conclusion that there is still some education that needs to be done.”

One findings suggested that comfort level is definitely higher with standard desktop software than with a cloud SaaS offering: 40% said they preferred the former, while 33% said they would rather use the latter.

Fusing Finance & HR

If the Adaptive Insights survey is accurate, cloud works well once you set it up. One particular use for the cloud is as a system to combine and integrate the efforts of the finance and human resources teams. Why might it make sense to synergize those two aspects of business within one cloud environment?

Al Perlman recently outlined a few ways that companies are benefiting from this type of integration:

  1. Better Coordination – “A unified system makes our teams better aligned, so we can better understand our costs across the university, identify redundancies, improve the overall efficiency of how we operate, and be more strategic,” explained Brown University project manager Roberta Gordon.
  2. Streamlining – Life Time Fitness used a transition to HR/finance cloud as an opportunity to move to paperless HR, saving more than 2 million sheets of paper annually.
  3. Faster – TripAdvisor said they liked how  their cloud system feeds payroll directly through HR, making reporting faster and more consistent.

What Cloud Must Prove

Although financial professionals may experience benefits from cloud, as suggested by improved budget cycles and the experience of those who combine financing and HR systems, cloud does have something to prove: comfort. The sheer fact that most of the finance professionals interviewed said they preferred non-cloud software suggests that the comfort level is just not there yet.

That’s why the transition is so absolutely critical. If you are migrating finance to cloud, Superb Internet can make your life easier with 30 Days Unlimited Assistance.

By Kent Roberts

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