Cloud-based finance technology is an attractive proposition for forward-looking finance leaders looking to increase business performance, optimize operational efficiency and keep up with regulatory changes. Furthermore, moving finance to the cloud will help truly transform it into a strategic function.
A tipping point for finance
Amid the digitisation of the economy, the finance function is at a tipping point. Today’s CFOs need to adapt to change, embrace newer technologies and enable digital transformation.
“CFOs continue to play an ever important role in any organisation, especially in the present environment with disruptive technologies impacting business operations and financial results. As a vital member of the strategic team, they have to manage and control finance, ensure compliance and many a times the underlying systems and processes,” said Kalyanaraman K, managing director, Technology Consulting Practice at Protiviti in the Middle East.
This need to transform is pressing all over the planet, but particularly in a region that has seen a dramatic shift in its economic makeup, and is attempting to diversify its sources of income.
“With the downward trend in the global oil prices, we could see a reducing trend on CAPEX spending particularly in the IT systems and solutions. CFOs are evaluating various options to ensure that the budgets on CAPEX are minimised, simultaneously controlling the OPEX,” Kalyanaraman added.
Focusing on OPEX
Taking cost containment into consideration, CFOs should start exploring cloud for the evolution of their finance solutions. This is because moving to cloud has the potential to significantly reduce the CAPEX comprising IT hardware and support equipment, data centre and related facility management technologies, solution implementation and others.
“While an initial investment may at times be needed to critically examine and carry out migration to the best offered cloud-based solution, it definitely provides CFOs the option to focus on OPEX,” says Kalyanaraman.
However, acquiring cloud-based solutions should be carefully evaluated and managed seamlessly. As for any solution acquisition, the process to cloud migration requires a noticeably articulated solution strategy, identification of key stakeholders, defining business requirements, performing solution evaluations including the CAPEX and OPEX considerations, reference checks and more importantly, an expounded contract.
Kalyanaraman said the contract should, at the minimum, address the key aspects relating to data ownership, confidentiality, security, retention period, planned system down-time and availability, service levels, jurisdiction and the conditions relating to post-termination events.
Furthermore, the organisation should ensure that the selected service provider is certified in industry-leading best practices on governance, risk management, security and service levels management.
Moving finance to the cloud not only involves a change of mindset in terms of roles and responsibilities, but also a different way to measure success beyond the traditional return on investment. This is because cloud does not just make a difference to the bottom line; it also helps drive change within a business organisation.
“It goes without saying that it is business that drives change and transformation. As witnessed by us, such cloud-based initiatives are led by a team comprising heads of business at the strategic level, while the execution is managed by a core team of key business users,” remarks Kalyanaraman.
Obviously, CFOs and the team play a significant role in this initiative, as one of the indicators to the project success are measured in terms of seamless generation and availability of financial statements and reports.
“With the forward-looking organisations transforming themselves through digital technologies, it is high-time that the CFOs benchmark themselves as the ‘Enabler for Change’ towards a successful digital enterprise,” Kalyanaraman pointed out.
Cloud-based finance coupled with a real effort to re-organise the business and make it more efficient will basically re-invent the CFO function.