Our advice to CFOs on public cloud services is don’t be penny-wise and cloud-foolish.
Cloud computing is all over the lips of executives nowadays as more and more companies consider moving from licensing and do-it-yourself software to renting their software as a service. The bottom line on cloud computing services for CFOs is that a very compelling and disruptive cost model versus licensing accounting software, that is now a realistic alternative because of the ease of access to the ‘net.
Beyond cost, the crucial advantage of cloud infrastructure is the elasticity that it provides; which simply means the ability to scale up or back down rapidly without adding more internal capital infrastructure and data centers, and only pay for what you use. In fact, you may not even need an internal IT department at all to support your use of cloud applications and data storage.
The advantages of cloud go on and on. The monthly operating costs are very predictable. The system can be accessed from anywhere that you have network access, which is more and more important in the work-at-home environment. You always have the latest development tools and software patches automatically. Your data is always backed up with cloud security, away from your offices. Providers like Amazon Web Services and Microsoft Azure allow you to automate and dispense with manual processes. It provides a clear path to integrate your planning tools (the future) with your day-to-day accounting and reporting tools (the past) and performance measurement tools (the present) into a more “seamless” real-time business management system.
So, what is our advice on the cloud to CFOs? Be cloud-wise, not penny-wise. But don’t be cloud-foolish.
The CFO Digital Shift
Most leading-edge CFOs are already cloud-wise as a part of the CFO Digital Shift. Today’s CFO needs to be just as strong in their technology, data, and analytics skills as they are in their financial skills and business acumen. Organizations that want to be more agile and experience transformative growth need to invest in these technologies – and CFOs are leading the charge.
What we see, working for many of the most successful companies in the US, is that leading-edge CFO’s are indisputably moving more and more of their planning, accounting, reporting, performance measurement, and day-to-day processes to cloud software. What’s driving this? They are taking the chance to eliminate out-of-date systems that are fragmented and that lead to long monthly closing processes. They are also automating labor-intensive reporting processes, reducing errors, and ultimately providing senior management with better up-to-date snapshots of the state of their businesses.
Unfortunately, we also see too many others electing to go with the absolutely cheapest initial accounting solutions in an attempt to be penny-wise. Then these systems more often end up unable to cope with complexity such as multiple entities and or multiple currency operations. While a suitable cloud ERP solution may cost perhaps $15,000 in annual rental fees and a similar amount in initial setup, it will have all of the capabilities to grow a company to a substantial size cost-effectively over time. While $30,000 might seem a substantial investment amount to an early-stage company, the total cost of ownership is quickly reduced over the medium term using software over the cloud.
We can’t tell you which software to choose from. That, of course, depends upon the features, capabilities, price, experience, staying power, and reputation of the vendor. We do predict, as do many analysts, that this move to cloud-based planning, accounting, reporting, and performance measurement will only continue to accelerate. More and more vendors will provide ERP, database, planning, and other applications in a huge range of configurations and price ranges for startups, fast-growing mid-range businesses, and enterprise organizations alike.
But we do advise you to consider cloud very seriously as your leading-edge competitors are probably doing so.
GCG’s CFO Consultants can implement these systems and practices, or provide training and guidance
If you’re looking to transform your business using data but aren’t sure where to start, look to Greenough Group. Our CFO consultants are available to work with you to reinvent your business’ relationship with data and the cloud, or to train other executives within your organization to be digital leaders.
You can rely on the professionals at GCG to focus on overseeing your cloud transition while you concentrate on growing your business. We will seamlessly manage the roadmap and complex issues that arise during implementation, all at a far lower cost than hiring executives or additional staff in house. Our outsourced CFOs provide a cost-effective way for businesses to grow.
Contact us today for a free consultation, and learn how our outsourced CFO services can help take your financial oversight and planning to the next level.