The potential obstacles are the very reasons why CFOs should make the move in the first place, says a KPMG executive.
It started with customer data a decade ago, followed by human capital management. Now the wave of cloud adoption is lapping at the door of finance as organizations begin to move their enterprise systems out of the company premises and into the cloud. KPMG estimates that 20% of organizations’ ERP systems are in the cloud now, and that number will grow significantly over the next five years.
CFOs of companies that are making the move tell us they’re reaping the benefits of standardization, innovation, and efficiency. A cloud platform drives standardized finance processes throughout the business, so CFOs can avoid the headaches that often occur when customizing on-premise ERP technology.
The cloud also allows companies to capture ERP innovation and investments much sooner, because vendors upgrade the software every six months or so. Finally, cloud systems charge by the user, so organizations can scale up or down as the business grows or shrinks. Together these advantages reduce the total cost of ownership.
Most companies implementing cloud solutions operate a hybrid of cloud and on-premise technology. We expect this model will predominate among large companies over the next 5 to 10 years, especially where finance systems or processes are deeply integrated with operational systems like manufacturing. Companies with more plug-and-play finance systems can move to a cloud platform sooner.
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SOURCE: CFO.com
Patrick Fenton is head of financial management, KPMG in the United Kingdom.
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