European CFOs are finally starting to show some interest in cloud-based financial applications with the maturing of data security and improved delivery models. The rationale being that by adopting cloud delivered application services, their organisations can enjoy the benefits of reduced costs and efficiency increases.
In a recent Claranet survey of 900 IT decision-makers in Europe:
- 40% of European IT Directors stated security was the most important factor in the delivery of finance applications.
- 29% of respondents selected availability
- 31% selected performance
Whilst in a separate survey by Blackline, a US financial controls and automation company:
- 80% of financial decision makers questioned agreed that Cloud delivery increased levels of automation and productivity.
- 75% of CFOs think their business is missing out on revenue opportunities by not having the right cloud applications and infrastructure in place to support digital business transformation.
“Cloud is not the dirty word it once was for European CFOs”, Andy Wilton, CIO of MSP Claranet commented.
With nearly 50% of organisations using third parties to manage and host their financial applications, it is little surprise that data sovereignty remains a key issue around hosting.
In-country datacentres are likely to be preferred for the hosting of financial data as we await the implementation of EU Data Protection Regulations and beyond.
One trend has been for legacy applications to remain in the private cloud to save on infrastructure costs and on hosting niche products such as financial reconciliation tools, whilst early test flavours getting favourable responses include bolt-on financial applications for a specific process eg. supplier statement reconciliation.
The upside potential is significant, with estimates of a reduction in total cost of ownership of up to 40% and a reduction in the speed and risk of implementation as companies adopt standard products, and increase their agility.
Hybrid cloud options are probably a more palatable mix to the Board, involving the use of public and private cloud, as this route stops the problems of shadow IT bypassing the internal IT department. Public cloud resources can then be applied alongside internal data management, so efficiency, performance results and ROI can be analysed in the round.
Compliance and security will always be the wrapper for any endeavour to move an organisation’s data into the Cloud environment and there will always be complexity with legacy systems to integrate. However, if well planned, professionally executed with an eye always on the security of the environment, businesses should benefit and future protect themselves through a SaaS model, despite the sense of challenge.