Where is the finance organization in adopting cloud technologies? What are the frustrations with the current on-premise ERP systems that finance organizations typically use? And what excites finance teams about cloud based applications?
Who better to ask, than the membership of the Institute of Management Accountants. As a strategic partner of the IMA, NetSuite recently conducted a webinar, "Best Practices for Successfully Deploying Cloud Based Financials" to the IMA community. The event featured a panel discussion with finance executives from Wireless Matrix, The PBN Company, and TorStar Digital, who discussed how they are using cloud ERP in their organizations, and the results they achieved.
The interest from the finance community was astounding - with over 800 finance professionals attending the event, hailing from 37 countries. So with that kind of sample size, we didn't miss the opportunity to ask such a large audience where they are in their cloud adoption cycle!
But we started by simply asking "What is your primary driver to move from your current accounting/ERP system?". The results were clear - frustration is high with business silos, and systems that simply don't integrate with each other, with over 30% wanting to streamline cross functional business process. A further 17% wanted to better support a distributed organization.
Finance teams are becoming increasingly distributed - whether some professionals working from home, different offices, or perhaps working with partially outsourced functions. Yet increasingly, accounting systems need to be more tightly woven in to the broader organization as the speed of business accelerates - such as managing orders coming in from multiple channels, or increasing pressure on speeding the cash cycle. Legacy ERP is proving difficult to use cross functionally, from how it integrates with different line-of-business systems, to how hard it is to provide everyone with the access they need to the application (without ballooning IT costs). Of course, the age old frustration of high IT costs in general associated with on-premise ERP was also a key driver, with 23% expressing frustration with the IT demands of the existing system.
So clearly, there is some room to improve for the typical ERP systems deployed at many organizations. Cloud delivery is viewed by many as the next technology wave for applications delivery in general, but where is cloud computing on finance's radar? So we asked "Where is your organization in the cloud adoption cycle?". And the awareness is probably a lot bigger than you think. 49% of the respondents indicated they are either using cloud applications today within some aspect of their organization, or they plan to adopt (or adopt more) within the next 12 months. To think that finance's awareness of cloud computing has gone from tiny, to close to 50% in just a few years, is a testament to the compelling nature of this new delivery model for business applications.
Finally we wanted to understand what finance organizations saw as the promise of cloud ERP - "What do you perceive as the single key benefit of moving your financials to the cloud?"
The stand out, was that 38% saw the ability to "access data from anywhere at anytime" as a key benefit. Business users increasingly want to access their business applications on their own terms - from their choice of device and location. And ERP really isn't any different. But it's a key limitation of old on-premise ERP that typically requires windows clients, VPN connections, and lack web-based access. As organizations are becoming increasingly distributed and mobile, cloud, web-based ERP provides the perfect enabler - meeting business users expectation to access their business applications as easily as they can access Gmail or Amazon.
The audience also saw the potential of cloud ERP to streamline business processes as another key advantage - with 31% responding that it is a main benefit. The reason is that cloud applications typically provide modern, easier to integrate application interfaces, typically cloud based marketplaces (like SuiteApp.com), and usually provide easier end user customization (because they were designed with the assumption that IT resources will be limited). It means that finance departments can more easily add additional applications, and also improve business processes themselves without engaging IT.
Interestingly, looking at this in aggregate, while many talk about the cost benefits of cloud, finance really sees cloud ERP as a productivity enabler, with the two highest polling items being about productivity and efficiency, not just cost.
I've no doubt that we'll be surveying the finance community in the second half of 2011 - so stay tuned to see how these results are trending with finance professionals!