It’s a truly exciting time to be working in the financial management applications industry, which is in the process of a major shift to cloud-based systems. While Workday has always been in the cloud, and I’ve personally believed for some time that the cloud offers tremendous benefits over on-premise financial systems, new research shows that the majority of the finance community knows this, too.
In a study completed in April 2013 by Saugatuck Technology and commissioned by Workday, 57% of 271 senior finance and technology executives surveyed said they believe cloud/SaaS financial management systems are already replacing on-premise systems, or will replace them within two years. One-third of respondents are uncertain, and only 10% said they don’t think financial management will ever move to the cloud.
What’s more, 65% of respondents said a finance systems change is being considered, planned, or executed at their organizations, and cited “inflexibility and fragmentation” as key hindrances of their current systems. In its summary report, “Changing Times, Changing Business: Why Finance Management Moves to Cloud,” Saugatuck Technology highlights the “net results” of its study, which include these points:
- Legacy finance systems are seen by both finance and IT leaders as unable to keep pace with current business demands, let alone adapt cost-effectively to expected market, compliance, usage, technology, and management changes;
- Finance and IT leaders have clear expectations regarding how cloud can and does deliver value—and what cloud solutions and providers must deliver.
What’s particularly enlightening about Saugatuck’s findings is that the finance community is no longer just talking about the obvious lower cost of ownership of the cloud model—it recognizes that cloud applications are more adaptable and flexible than on-premise applications. A cloud vendor using a multi-tenant model is able to continuously make available important updates and innovations to all customers. In the fast changing world of financial management, this continuous innovation approach offers customers a significant competitive and operational advantage. Compare this with legacy systems, which survey respondents indicated are unable to keep pace with current business demands or adapt to changes in their markets and compliance. Inflexible and fragmented legacy systems are dragging down executives’ ability to move their organizations forward and deliver value, and they know it’s time to embrace a modern approach. This is a huge and encouraging advancement in the overall understanding of the benefits of the cloud.
It also gets right to the core of why we believe Workday will lead this shift. Workday Financial Management was designed from the beginning as a modern cloud offering that supports flexibility and rapid adaptation to change. As one global system, Workday supports multiple currencies, accounting standards, internal controls, and global and local compliance in one place and delivers updates to all customers to support marketplace and regulatory changes.
One global system also means one source of the truth. Embedded analytics, which I blogged about here, make it possible to deliver reports and key performance indicators (KPIs) based on this single source of truth. This supports finance’s goal to find “more and better ways to deliver value to the enterprise,” as Saugatuck notes in its summary report, and Workday will continue to expand on this value with the planned delivery of Workday Big Data Analytics.
A cloud system’s flexibility and adaptability also make it possible to deliver the latest and best in user experiences, too. In Workday Financial Management, business and finance professionals can analyze and report financial data using in-memory, multi-dimensional analytics anytime and anywhere from mobile and desktop devices, with little or no intervention from their IT departments. We’ve focused on making it easy for people to discover new features and to complete complex tasks quickly, resulting in higher user satisfaction and productivity.
To gain even more understanding of why this shift to the cloud is happening, read “Five Key Reasons Why Financial Management is Better in the Cloud,” published June 10 by Business Finance magazine.
With more and more data and case studies showing this amazing transformation in our industry, I’m convinced that those in the finance community remaining uncertain about financials in the cloud will soon come to understand its power and value.