Technology has served as a catalyst for new business opportunities in many industries, but even in the most tech-savvy companies, the Finance organization often lags behind the rest of the enterprise when it comes to speed of adoption. As a result, Finance often finds itself struggling to keep up, as the gap widens between what it knows must be done and its determination to do it.
Some argue that Finance was not designed to move ahead at breakneck speed. But today more data are coming in from more sources, the pace of business is accelerating and the ways we do business are changing. This means we are at a crossroads, and Finance organizations are at increasing risk of hindering the business.
Much of the innovation that is moving the enterprise forward is based in the cloud. In fact, 90 percent of all businesses are applying some type of cloud-based technology to change, improve, innovate and accelerate how they do business. But while other areas of the business are quickly adapting to innovative growth tactics, Finance is often the one to put on the brakes, sometimes for outdated reasons that are mired in misunderstanding. For example, while security is—and should be—a major concern, many finance organizations fall prey to the all-too-common myth that cloud is not secure. In fact, cloud systems tend to be orders of magnitude more secure and more reliable than systems in most enterprise data centers. In what is known as the “fallacy of direct control,” we tend to think that if we can see it and touch it, it must be more secure, but this is not true in the case of the cloud.
Of those who are embracing cloud computing, many are not using it to its greatest potential. And, too often, what we think we know about the cloud tends to be based on already-obsolete understandings of technology.
Not sure how to make the cloud decision? The truth is, the cloud is essential to reducing risk, enabling a company to compete and facilitate improved management and growth. The pace and scope of digital business is advancing far beyond traditional system evolution—and new methods must be cloud-based for business to keep up. Cloud systems are conceptualized, engineered, designed, built and managed for scalability, high reliability and security.
In a recent CFO Magazine webcast Finance at a Crossroads: The Risk of Standing Still, other panelists and I found a significant gap between the importance of financial management priorities and the ability of legacy systems to deliver on those priorities. In a poll of the audience, we found that, while 84 percent of enterprise Finance leaders cite effective planning, budget and forecasting as a high priority, only 41 percent are confident their systems are effective in this area.
That gap exists for a reason: we tend to use yesterday’s tools even while the pace of change is accelerating. Our poll also showed that Finance’s responsibility footprint is shifting and expanding over time, giving Finance a new set of priorities despite the fact that it has only the same old capabilities.
As the pace of business accelerates, companies can’t afford to stand still when it comes to upgrading or changing their finance systems. While there is always the risk of making the wrong decision, the greater risk is in making no decision.
When Finance finally makes the move to the cloud, it must be sure to find a solution that addresses security concerns, integrates with key processes and data, has robust reporting and analytics, offers a significant cost and functionality improvement, facilitates easy upgrades and is suitable to current and future needs and successes.
ISG helps Finance organizations find the right cloud-based solutions for them. Contact us to discuss further.