An increasing number of businesses are now seeking to move away from traditional on-premise solutions for corporate performance management (CPM). A 2014 survey entitled “Empowering Modern Finance” carried out by Longitude Research on behalf of Accenture and Oracle, says that more than two-thirds of executives have adopted a cloud-based system for core financials (24%), or are planning to do so (45%). Even higher numbers are adopting cloud-based planning,budgeting, and forecasting systems (PBF). Indeed, 27.8% are already deploying PBF in the cloud and 33.7% expect to be in the cloud within a year. Only a mere 16.6% say that they do not anticipate using the cloud for PBF.
So what started as a trickle is now turning into a steady stream of companies of all sizes wishing to take advantage of a new processing paradigm which leaves their finance functions free to concentrate on meeting new information requirements, automating processes and better business partnering while the solution vendor takes care of the ‘heavy lifting’.
And it’s easy to see why businesses are so effusive about the cloud. The scalability, immediacy and accessibility of the cloud removes many of the barriers to enterprise deployment, enabling businesses to distribute financial reporting or budgeting capability wherever it is needed and engage collaboratively with larger populations of users. This helps drive data quality, enhances management visibility and accelerates decision making. And in an era in which organizations are striving to reduce business complexity and improve user productivity through process standardization, the ease which cloud solutions can be deployed holds obvious appeal. Yet despite these benefits, some CFOs continue to harbour concerns that they may have to accept some compromises along the way if they are to make a seamlessly successful transition to the cloud.
In part, their views have been coloured by a rash of new cloud vendors entering the market with little track record and resources. They typically offer ‘point’ solutions of limited scope designed to solve only one particular problem area, say budgeting but not consolidation. And if they do offer more complete CPM systems then there are often concerns about the breadth and depth of functionality, the ability to cater for more complex reporting requirements and the ability of an inexperienced vendor to ride out an extremely competitive market.
However, the emergence of traditional on-premise vendors, such as Tagetik, that are now also able to provide equivalent solutions in the cloud is having a profound impact. Businesses can now leverage decades of domain expertise (knowledgeable resources) and functionality without compromising on the economic, technical and operational advantages of the cloud.
And so far, from this standpoint, the cloud is living up to its promise. Take for example, the Randstad Group the second largest HR services provider in the world, listed on the NYSE Euronext Amsterdam exchange with a revenue of € 17.1 billion (2012), 29,320 corporate employees working from 4,496 branches, and employing over 581,000 people every day. It has deployed Tagetik in the cloud to manage considerable complexity and scale.
A single unified environment manages monthly and weekly group data collection (from around 465 entities in 32 currencies), financial consolidation, budgeting and rolling forecasting, cash flow and organic growth reporting, management and investor relations reporting as well as annual and quarterly IFRS reporting.
But crucially, deploying the application in the cloud has allowed management to focus on process improvements such as the automated production of cash flow statements throughout the organization (at the base level), pushing intercompany reconciliations to the lowest level in the organizational hierarchy, combining management and statutory reporting in a single application (something that could not be done in the Hyperion Enterprise instance which Tagetik replaced) and the introduction of rolling forecasts. And all of this was achieved in a 9 month timeframe.
This experience illustrates that it is possible for large multi-national finance functions to deploy complex performance management applications in a single unified environment in the cloud without compromising on breadth of solution, finance specific functionality or scale. But it should be remembered that not all cloud solutions are the same. Uniquely, on-premise vendors with equal capability in the cloud can offer significant peace of mind to hesitant CFOs.
By Gary Simon, from: http://www.tagetik.com/blog/authors/gary-simon/2015-03-performance-management-in-the-cloud#.VSLbPtzF98E