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The Future of Cloud for Finance – The Risks of Hybrid, Hosted & Managed Cloud

The Future of Cloud for Finance – The Risks of Hybrid, Hosted & Managed Cloud

August 2, 2017

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Part 2     The Risks of Hybrid, Hosted & Managed Cloud

It is a commonly held view that hybrid environments (in which some applications reside in the cloud and others on-premise) are set to become the norm as organisations transition to the cloud over the next decade.

For instance, Gartner the analyst firm says nearly half of large enterprises will have hybrid cloud deployments by the end of 2017. But for the unwary this presents a significant risk to data integrity and reporting. 

Gartner also offered an alternative vision by announcing the era of “post-modern ERP” in which it is envisaged that organisations will move to ERP suites of more limited scope with core financial processes at the centre, supplemented by a variety of Best of Breed applications in the cloud or on-premise. Gartner predicts that by “2020, less than 20% of multinational organisations will continue to plan and adopt an ERP strategy based on a single-instance megasuite.”

But all of this raises the spectre of more complex systems architectures in which accounting processes, transaction data and metadata (data about data, for example, organisational hierarchy, chart of accounts, currencies) is scattered across multiple applications, vendors and cloud platforms. For some, the hybrid cloud is a compromise too far, leaving the formidable challenge of integrating processes and data in its wake. Of course few organisations start with a completely clean sheet of paper and a move to a hybrid arrangement may be unavoidable in the short term.

But CFOs should recognise that a partial shift to the cloud presents risks to data integrity, core financial processes and operational effectiveness.  It is not a decision to be taken lightly and organisations that are early adopters of the hybrid approach may find it unsustainable in the longer term. 

Check out Part 1 Hybrid, Hosted or True Cloud here and Part 3 The Benefits of True Cloud here.

Download the Full Report here.


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