Chief Financial Officers [CFOs'] attitudes towards cloud computing and digital technology have shifted significantly in the Asean region, said Nik Feizal Hanafi, Oracle Malaysia's country manager, applications, when speaking to Computerworld Malaysia recently.
Photo - Nik Feizal Hanafi, Country Manager, Applications, Oracle Malaysia
Could you outline some of the changing perceptions towards cloud computing by finance executives in the region?
Today's chief financial officers' (CFOs) attitudes toward technology have indeed evolved significantly. CFOs have started to recognise the value of digital technologies and new cloud-delivery mechanisms that enable them to achieve greater cost efficiencies throughout in business processes, and at the same time unlock new value across the organisation.
According to our [Oracle] and Accenture's 2013 survey titled 'Empowering Modern Finance: The CFO as Technology Evangelist', more than two-thirds of executives around the world are adopting a Cloud-based system for core financials with 24 percent of them already having implemented a Cloud-based system. The remaining 45 percent are working on a roadmap for doing so¹.
Increasingly, CFOs are being more appreciative of the benefits that the Cloud helps to deliver, from better performance scalability to more predictable costs, improved automation of business processes, better data accuracy, and stronger controls.
Based on our recent engagements with customers, the need to drive down costs in today's tough economy is also another main factor that is driving the CFOs to explore Cloud computing. From a cost perspective, CFOs broadly welcome the ability to shift capital expenditure from 'big ticket' IT projects into operational expenditure associated with the Cloud subscription model.
What are the core ERP applications that Asean CFOs have been on keen on putting on the Cloud within the last two years?
In addition to business processes like project management and email, CFOs today are also starting to leverage Cloud to deliver core ERP processes including financial management, human capital management, and procurement.
The Oracle and Accenture's 2013 survey also showed that 'Budgeting, Planning and Forecasting' has emerged as a new priority where today - 28 percent of businesses are already using the Cloud to support the said financial activities, and another 34 percent plan to move them into the Cloud¹.
Besides cost-savings, CFOs recognise the strategic benefits that the Cloud can deliver to get critical growth initiatives up and running quickly. For example, they can use Cloud to quickly upgrade enterprise applications for better customer services, or deliver new mobile or analytical capabilities to employees for higher operational efficiencies. Cloud is increasingly appreciated by CFOs for its ability to more easily accommodate business change, and its flexibility in how to deploy and manage enterprise applications.
How can CFOs drive the best ROIs when adopting Cloud for ERP processes?
Most organisations today have inherited many ERP applications with bespoke business processes. Existing ERP systems are challenged to scale to support fragmented business and processes. Moving to ERP cloud applications enables organisations to have a common platform for future businesses to be supported by best practice processes. With this platform, IT and back-office costs are mitigated while new functionality requirements are easily introduced easily via Cloud computing.
Cloud is available in a variety of models including public, private, and hybrid Clouds to meet business requirements. In particular, the adoption of ERP applications running in public Clouds has increased significantly as public Cloud enables organisations to consolidate disparate systems onto a single platform.
There are also advantages from an operational point of view. Applications hosted in the Cloud are usually available and supported 24/7 and this is a key advantage for distributed organizations working in different time zones. Furthermore, access to the applications requires no more than a browser on a PC, or perhaps a mobile device such as a laptop, tablet or mobile phone. Such flexibility not only suits a mobile workforce but also empowers other employees to work on a self-service basis as and when they like.
How can barriers be better mitigated when transitioning ERP applications onto the Cloud?
Despite the apparent advantages of Cloud computing, not all organisations are convinced that this is the best way forward as many CFOs still have their reservations about the quality of software vendors, and the possible creation of processing silos. Especially, the migration of ERP applications onto the Cloud is facilitating one of the biggest shifts in financial systems.
The challenge of integrating systems and technologies remains a key barrier to adoption at many organisations; as well as the question of whether there are sufficient internal skills to make the shift. Another challenge is data migration, especially when moving from a heavily customised solution. Uncertainty over the return on investment is also another big anxiety which high-growth companies are especially concerned.
To mitigate the risks associated with Cloud adoptions, organizations need to be wary of niche Cloud vendors as many of these have a limited track record, being relatively new to the market. Sometimes, the SaaS model for niche vendors is often predicated on exceptionally low levels of staffing, which means that subscribers have little human contact - a distinct disadvantage for relatively complex financial applications.
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