The revolutionary potential of cloud computing in business financial management

Are you a CFO contemplating a transition to cloud-based operations for your business? If so, here are some key points to consider and actionable steps to make it a reality.

As a CFO or a leader in a small or medium-sized enterprise (SME), you may have already recognised the need to adjust your technology strategy in response to the pandemic’s impact. 

In this recent Sage article, we will explore the considerations surrounding tech investment, the transformative potential of the cloud, and its role in enhancing your company’s financial management.

Here’s what we will cover:

Considerations for Tech Investment
Challenges of Legacy Software and Manual Processes
Benefits of Cloud Migration for the Finance Team
The Role of Automation in Finance
5 Steps to Successfully Transition to the Cloud
Advocating for Cloud Adoption and Embracing Digital Transformation

Considerations for Tech Investment

According to IDC’s 2021 Cloud Pulse Survey, some businesses tried to hold back on spending.

In fact, 18% of SMEs worldwide aimed to save money by turning off selected IT services, 16% negotiated pricing with vendors, and 15% halted new IT projects completely.

All completely understandable actions in the current climate. But perhaps surprisingly, almost a quarter (23%) of global SMEs reinvested in IT.

During the pandemic, as offices and stores closed during various lockdowns, you may have rapidly invested in cloud technology to support remote working and gain supply chain efficiencies to combat sourcing issues.

More than half (60%) of SMEs say they had planned to increase their IT budgets during 2022, with 32% significantly increasing their cloud budget, and only 5% planning to decrease it.

If you’re in charge of your business’ finance team and not spending money on cloud technology, you should be.

Typically, cloud software can be more secure than desktop legacy solutions, as cloud providers should guarantee the safety and security of their platforms which such safety measures, as password protection, encryption and access limitations based on user profiles.

Cloud providers normally provide 24/7 monitoring and dedicated cybersecurity teams that can rapidly identify and respond to potential threats to give that added peace of mind.

Challenges of Legacy Software and Manual Processes

For businesses, it can be tempting to delay investment in financial management software. The process of finding the right cloud vendor requires effort, and budget constraints often discourage spending.

It’s understandable for businesses to adopt an “if it isn’t broken, why fix it?” mindset. Legacy software may still fulfil the basic functions necessary for day-to-day finance operations, leading to a reluctance to switch to new systems.

However, relying on outdated accounting software can result in a range of problems, including the following:

Inaccurate data

With desktop legacy financial management software, you lack real time, up-to-date information for accurate reporting. If you’re still working with spreadsheets, you might have to manually enter data, which is risky because mistakes are simple to make.

Inefficient and outdated processes

As well as risking errors, manual processes such as retyping and rekeying data from spreadsheet to spreadsheet take up a lot of time.

That’s time better spent on more critical business activities, such as strategy and planning.

Errors in data

As your business grows, you’ll build up a mass of documents and data, which will be highly challenging to keep organised if you’re still reliant on paper and on-premises storage.

As you grow, you may also be subject to increased regulation, which demands accurate record keeping. If you end up becoming a public company, that may present new challenges.

Poor visibility

If you can’t actively see what’s going on in your company’s finances, it opens you to a world of pain when looking for mistakes or ways to stop them before they become an issue.

It’s also more complicated than necessary to identify trends and patterns and make accurate financial projections.

Benefits of Cloud Migration for the Finance Team

Cloud technology, helps you measure the financial impact of decision-making, identifying and validating your most valuable revenue streams.

Getting value out of your data, working with IT in moving your business to the cloud and implementing technologies such as automation, analytics and artificial intelligence could help steer your business in the right direction.

Cloud technology enables you to build a foundational framework for your finance team to manage, measure and monetise data as an asset. Working with real-time data, your finance team can build insights into new revenue streams, and support tech and finance to work together and improve efficiencies.

The Role of Automation in Finance

Automation makes your people more efficient, as it removes the time sucking, repetitive and low-value tasks, costing your business financially each year—funds you could reinvestment to expand or improve your operations.

Cloud finance software can automate those tedious accounting tasks, crunch the numbers, automate reports, and provide valuable analytics to the wider team.

It’s about taking advantage of the strategic value and edge in the marketplace that cloud technology can give you – rather than just getting rid of old technology!

5 Steps to Successfully Transition to the Cloud

Here are a few pointers if you want to move your business to the cloud.

1. Create a business case

With the cloud, your finance team can become more agile and faster, gaining efficiencies through the time you save by removing time-intensive manual tasks.

2. Get your IT people on onboard in the early stages of the project

To extract value from the cloud, it’ll be up to you to assess commercial models, look at the risks, recognise and account for value, and apply controls and governance.

3. Plan and understand your strategic goals

Examine your financial management business goals and what will drive your use of the cloud.

4. Evaluate how cloud technologies will work within your business operational company wide

Create a clear roadmap for implementation. Work closely with your people around your company to understand their needs and requirements and understand who will drive the use of new technology.

With the tech in place, you’ll need to work at measuring your progress and ask a few questions of your finance team:

  • How are you using the cloud tech, and are you doing it right?
  • How effective are your new processes?
  • Are they leading to the productivity and efficiency improvements you expect?
  • What outcomes do you see with the new technology?
  • How can you get business metrics for your intended goals?

5. Communicate the changes with your team

Keeping your finance team (and the wider business) up to date with the move to cloud software is important. After all, they’ll be using the new technology, so they’ll have to be clear on what’s happening and when.

Make sure you get them involved in the new ways of working—they’ll be able to support and offer valuable day-to-day insights that will result in the move being a smooth one.

Advocating for Cloud Adoption and Embracing Digital Transformation

As a member of the finance team, you possess a vital role in driving the digitalisation of your business.

In an era where success hinges on the ability to extract value from vast amounts of data, you can play a central part in this transformation.

By partnering with Xplor and harnessing the power of cloud data capabilities, you can make informed decisions regarding investments and resource allocation.

We can help you establish a strong correlation between cloud technology and tangible business value. Our Sage solutions help elevate the significance of your finance team within the organisation by demonstrating the value of the cloud as they foster agility, forward-thinking, and data-driven practices.

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