Making the transition from a server-based system to a cloud-based system is a move that finance leaders, more so than those in any other function, approach with great trepidation. Despite cloud companies’ vigorous assertions to the contrary, there are still residual fears among CFOs about the security of their company data. There is also a fear among CFOs of spending the political capital required to migrate to a new financial system, and the impact that any flaws that come up during the migration could have on their status in the firm.
There are many benefits that come from moving to a cloud system. The ability to access information anywhere, at any time, is the biggest. It is also highly cost-effective. Firms have the ability to pay for what they use under the Software as a Service (SaaS) model, and the costly expenses of running traditional on-premise IT systems is removed - both by cutting down on maintenance and training.
The lack of security that has made many skeptical is also as a fallacy. There have been significant improvements made by cloud vendors to ensure that breaches do not occur. Cloud vendors recently began offering advanced security features to their customers as standard features, such as two-step verification and geography-based access restrictions. Vendors are also increasingly actively testing controls and applying heuristic analysis to customer audit logs to identify security risks, and even intervene in order to protect customer data.
The simple truth is that the move to the cloud is inevitable. A KPMG survey saw 70% of respondents say that they believe the cloud to be already delivering efficiencies and cost savings, and this will only grow. CFOs that haven’t already made the shift must be prepared.
To do this, they have to work in conjunction with their CIO in order to build an effective cloud computing strategy. CFOs must consider the risks and rewards of the strategies that CIOs develop, but they also have to be aware that CIO’s have a vested interest in that increasing efficiencies can reduce demand for IT staff. They also need to play a large part in helping select the correct vendor.
Firstly, the CFO needs to help determine which subscription model is the most appropriate. There is a large range of payment plans available, and it also needs to be established whether a private cloud, a public cloud or a hybrid cloud offers the best solution. The private cloud has been particularly popular among those in the finance function because it appears to resolve fears around data breaches, but the complexity and expense of the IT infrastructure necessary for one puts it out of reach of many SMEs.
In order for cloud technology to be successful, it is important that staff across the company are on board and understand the system. This can be easily achieved by using a modern, usable, intuitive interface that is easy for people to use immediately. The system needs to be easy to access from anywhere and on any device. The CFO must also be prepared to assess a cloud provider’s ability to safeguard the data that it holds in its systems, and confirm that any data is secure, as well as regulated for privacy and compliance. The cloud vendor must be fully apprised of any regulations that may could an impact on your firm, and documents kept to prove this has happened will put an organization in a far better position should the regulators find any discrepancies.
It is not only necessary to find the best system available for your company, it is also the responsibility of the CFO to constantly assess the performance of the cloud vendor, and monitor costs to manage accurate billing. Simply making the decision to move to the cloud is not the end of the CFO’s role in the matter, and they should be aware from the off that the transition will be an ongoing issue.