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The Future of Cloud for Finance – The Benefits of True Cloud

The Future of Cloud for Finance – The Benefits of True Cloud

August 1, 2017

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Report 5     The Benefits of True Cloud for Charities

 

Why does True Cloud matter?

Uniquely, multi-tenanted software has to be developed that way and, most notably, it is not really feasible to convert a typical on-premise application designed to be used by one organisation at a time into a multi-tenanted solution.  This is why unscrupulous vendors with ageing on-premise products are tempted to describe their hosted or managed products as cloud-based solutions. Furthermore, by charging a monthly subscription rather than an upfront perpetual licence fee some attempt to disguise a hosted or managed environment as a true cloud solution.

All of this matters because most of the benefits that accrue from cloud computing vest in the true cloud, rather than managed and hosted solutions.

What are the benefits?

There are really two levels of benefit.  At a basic level, organisations of all sizes can take advantage of

  • the immediacy of the cloud, i.e. the ability to log onto a configurable application that is ready to go.  (No need to wait for hardware and software to be installed as is the case in managed and hosted environments.) In fact, a 2014 study by IDG (quoted in Forbes), confirms that the ability to get up and running quickly with cloud-based applications is the most popular reason why enterprises are transitioning to the cloud.
  • the scalability of the cloud, i.e. the ability to upscale or downsize in sympathy with organisational needs and demands – the cloud application vendor takes responsibility for provisioning the capacity on demand and in most cases hardware can even be added without interrupting operations.
  • supplier maintained applications and operations. The supplier takes responsibility for all of the ‘heavy lifting’, for example, upgrading application and systems software to the current version, enhancing functionality, ensuring backup and security as well as ensuring a high level of reliability. This means that smaller organisations do not need to maintain in-house IT skills and for larger organisations the IT function is relieved of the need to maintain new applications and to provide help desks.
  • fixed costs on a subscription basis. Costs are spread over multiple customers (‘tenants’) and are reduced to an affordable fixed monthly sum that can be accounted for as operational expenditure rather than capital expenditure that has to be amortized.

Taken together, the costs of provisioning hardware, software, consulting and in-house resources for an on-premise solution can be immense.  It has been described as “total madness” by veterans of the business software market who have worked on both sides of the fence (cloud and on-premise) such as Jarle Sky, founder of the Xledger, a provider of modern accounting and financial management solutions in the cloud.

But more profoundly, organisations that have moved to the cloud are finding that in addition to the basic advantages, the cloud imbues them with considerable agility which translates into the ability to compete and respond to market changes in a fraction of the time of it takes to procure and install traditional on-premise solutions.

For businesses operating in a constant state of flux, for example, acquisitions, reorganisations, entering or testing new markets the true cloud option provides unaccustomed flexibility, particularly for large multi-nationals that have been held back by legacy systems.

No Compromise

The charge that cloud software is not as functionally rich as on-premise software could have been levelled at cloud vendors a few years ago but now many products are the equal if not better than their on-premises counterparts.

Much depends on the roots of the organisation. Some so called “born in the cloud” products were brought to market too quickly but there are also born in the cloud accounting and financial management products that have been developed by organisations that have been steeped in financial applications for decades, albeit on-premise. These organisations are the ones to watch since they have capitalised on everything they learnt on-premise to create a new generation of accounting software that takes businesses to the next level in terms of automation and sophistication.  And the new tools available in the cloud have assisted in that journey.

Most benefit from the extensive capabilities of new browser technologies such as HTML 5. These are used to build a more engaging user experience (more akin to consumer applications) and provide the ability to handle voluminous and complex data sets in real time without suffering degradation of response times.

The cloud is also a great leveller.  Applications such as Xledger’s financial management, with its unified data model, brings ‘industrial strength’ analytical capabilities within the reach of mid-sized businesses – something previously only available to large public and private sector entities with deep pockets.

Summary

CFOs face a bewildering choice of options in the cloud but very few can be considered to be true cloud offerings. 

Ceding responsibility for the ‘heavy lifting’ to a true cloud vendor allows businesses to simplify their IT operations and accelerate their move to standardised and automated processes. And with shared visibility into a sophisticated and modern financial management systems such as Xledger, built around a single data model, businesses can quickly take advantage of more dependable and consistent management information as well as exert a higher level of control than was possible in the on-premise world. 

By leveraging fully this capability, CFOs can transition from the mundane responsibility for transaction processing and focus on being business partners at the top table.

Check out Part 1 Hybrid, Hosted or True Cloud here and Part 2 The Risks of Hybrid, Hosted & Managed Cloud here.

Download the Full Report here.


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