The modern CFO's balancing act
Financial leaders today balance the need to manage an increasing level of business complexity with the need for speed. You're expected to keep your eye on multiple entities with multiple regulatory frameworks and multiple currencies. Think that's complicated? Now, add frequent changes to the equation. A monthly financial check-in isn't good enough for today's CFO. It would be best if you had the agility to make decisions at a moment's notice – and those decisions must be based on the real-time financial truth. Here's the question. In today's complicated business climate, is your accounting software helping you grow and compete – or holding you back? This guide will help you understand whether it's time to make a move.
Why is it so hard to get good financial information?
It’s not you, it’s your software. The last major adoption wave for financial management and accounting software dates back to the late 1980s, following the shift to Microsoft Windows. Every major financial software package today arose from this transition. Legacy ERP and accounting software all pre-date the internet. The problem with these systems is that they were never designed for today’s always-on, always-connected, always-working world. Instead of being able to configure your system on the fly, you have to pay for costly, permanent customisations.
As a result, you find yourself held back by vendor lock-in. This lack of flexibility also makes it difficult to get the reports you need, with the right information at the right time. And that’s precisely why so many companies are trapped in the past, struggling with old-fashioned, outdated financial management and accounting software packages. The fallout from using one of these older systems includes spiralling overhead costs, functional limitations and unnecessary risks. What’s more, there’s a cost to not being able to gain real-time visibility into your organisation’s financial and operational KPIs. It’s the cost of having your competitors make faster, better decisions than you.
Choosing a software delivery model:
On-premises solutions
With this traditional model, you license software and run it on your own servers. When considering this model, be sure to account for the capital and operating expenses associated with deployment, operations, support, customisation, integration, maintenance and upgrades. While these costs can be too great for small and mid-sized organisations to sustain, on-premises solutions remain a viable option for some larger companies. These organisations often have a built-out IT infrastructure, investment capital and expertise to support and maintain major software applications.
Hosted solutions (single tenant)
In a hosted environment, the software physically resides at a remote data centre operated by an expert third-party hosting provider. Your team would usually use a product like Citrix to access the software over the internet and see the screens being generated at the hosting provider. This model eliminates the responsibility of maintaining hardware infrastructure and, therefore, can help you avoid large upfront capital expenditures. But it works by providing you with a unique “instance” of your financial system on a dedicated server. That means you would still face the same costs for customisations, upgrades, integration and support and service.
Cloud computing solutions (multi-tenant)
Just like Google, Amazon and online banking, cloud-based financial applications were built for the internet age. Also known as software as a service (SaaS), these applications offer direct, always-on access to the solution, typically paid for on a per-user/per-month subscription basis. They are multi-tenant, which means you can unlock only your own data, but you work from a shared system – a single set of resources, application infrastructure and database. There are no upfront fees, capital investments or long-term commitments because you do not buy, license or manage the underlying hardware, software or networking infrastructure. Upgrades are performed at no cost to you. Even if you make extensive changes to the system, your customisations “roll over” to work with the new upgrade.
Is the cloud right for my finance organisation?
The cloud offers compelling and unmatched advantages for deploying business software, and particularly financial applications. Instead of continuing to invest in antiquated on-premises systems, leading digital transformation (DX) businesses have turned their focus to SaaS and cloud-enabled software because they need flexible and agile financial applications that are relatively easy to implement, configure and update. Demand for cloud-based financial applications continues to grow because of the ability to access and analyse massive amounts of data in near real-time. With speed as a guiding factor to winning business globally, organisations want and need more from their finance systems than ever before, and that includes using the most up-to-date and advanced systems found in SaaS and cloud-enabled finance systems. (Source: IDC Market Scape: Worldwide Cloud and SaaS ERP Accounts Receivables and Accounts Payables Applications 2018–2019 Vendor Assessment).
Best practice when choosing new ERP software
- Gather requirements
- Identify top priorities and challenges
- Research your options
- Demo or trial from shortlist
- Focus on product fit
With so many alternatives for financial applications, financial leaders must ensure they understand the implications of all options: on-premises, hosted and cloud computing. Ultimately, cloud computing is about capitalising on a new software delivery model that accelerates payback of a larger ROI and better aligns the financial organisation with the new dynamics of growing businesses. In this guide, you’ve discovered why legacy systems make it difficult to get good financial information, what to expect from a modern cloud-based solution and how to make sure you choose the right solution for your organisation. In today’s market for accounting applications, the buyer has the power. No matter what solution you choose, you should expect faster financial closes, easier regulatory compliance, less manual work, real-time visibility and reporting and an outstanding service level agreement. Looking forward to being a part of your ERP software journey.
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