Supporting company growth is a major challenge for CFOs and the financial department, and the ability to support this growth comes from the ability to properly manage finances. Historically, there have been two options for financial management solutions: on-premise and hosting. In an on-premise environment, your organization runs software applications that support finance operations on a server in-house. Hosting is similar, but someone else manages the applications and server. However, in recent years, cloud financial management has gained popularity, and for good reason. Managing finances in a cloud environment allows for four key benefits that on-premise and hosting simply cannot provide. These are also four of the biggest reasons that businesses are making the switch. In addition, cloud financial management can benefit other business groups supporting the growth of your company.
4 Key Differentiators of Cloud Financial Management
1. Quick Decision Making
Business decisions often need to happen quickly. With more accurate data due to real-time updates, you can make approvals and post entries faster. In addition to having real-time data, a critical part of the decision-making process is being able to dig deeper into the data with “drill-down” capabilities. You not only see the overview of what’s happening within your organization, but also are able to see exactly what is causing changes to occur and why.
When you think about it, every decision in an organization comes down to the numbers, and the numbers are a critical part of company growth. How much has your organization made and how much more can you make? In order to answer these questions, you need to have accurate information in your finance applications with drill-down capabilities to determine exactly where you can expand your operations and by how much.
2. Real-Time Access to Data
Cloud applications allow you to view financial data quickly. Since the application is constantly fed with real-time data, your data becomes more accurate, timelier, and easier to read. If your CFO wants to know exactly how much you made in the third quarter, they can easily view and report that information. Traditional on-premise systems require multiple applications to work together. The finance application may be separate from the analytics application, so trying to sync them can cause challenges. In a cloud environment, the integration of these applications is built in making it a centralized location to view and understand the data.
Real-time access to data also allows functional groups outside of finance to perform better, especially if businesses use the “just-in-time,” where you only want to spend what you need. For example, in supply chain management, finances impact the procuring of raw materials. There should be a system to state exactly what is available in inventory and what needs to be bought. Because cloud environments have real-time data, your supply chain team can see current inventory and make quick decisions on what to order. Human capital management is very similar; you need to know how many people you need for producing your product or service. Access to real-time data allows you to know exactly how many people you need to complete a project. Essentially, the cloud becomes not only a financial system but a data-centric system allowing for better decisions to take place across departments, which supports company growth.
3. Robust Security
If your finance application is on-premise, you need to put measures in place to safeguard and fireproof the application to make sure your financial data is properly secured. Security breaches are happening more frequently, and many organizations are unable to keep up with identifying, disrupting, and preventing these threats. In a cloud environment, your applications are managed for you in the cloud. Cloud service providers have highly skilled programmers with the most current cloud security knowledge to keep the software running and secure. This is something that many businesses simply can’t afford on their own. The cost stems from not only the highly skilled programmers but also from the constant need to update the infrastructure of an on-premise application. Constantly trying to keep up with these updates is expensive, especially since data in on-premise environments is replicated in a multitude of places which then has to be updated as well. Instead of spending time, energy, and money in the continuous development of IT and protecting against security threats, you can focus your attention on running the operations of your business.
4. Mobile Friendly
Staying up to date with data analysis has its challenges, and the use of mobile devices in the workplace has been growing due to its positive impact on productivity and employee satisfaction. In fact, those who classify their organization as a leader in mobile technology score 16% higher for productivity and 23% higher for employee satisfaction. On-premise and hosted environments run on servers, making it difficult to access data or do reporting and analytics from a mobile device. These two types of environments require high-powered laptops or desktop computers, and the immobility of these devices poses challenges to access the data, especially for those who travel often for work. Since they are not built to be mobile friendly, reporting and analytics tasks are also difficult to do as they don’t allow you to drill down into the data. Key finance decisions and approvals happen on-the-go, so data needs to be available at your fingertips from anywhere, instantaneously, in order to make quick decisions. There is a growing need for mobility in business systems and applications, and cloud environments can provide this much more easily.
To learn more about the advantages of a cloud environment and how your organization can migrate to the cloud, read The Guide to Cloud Migration.