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I am pitched often (and I mean OFTEN) about how cloud software applications and services are transforming sales, marketing, manufacturing, pretty much any business process you can name. Up until this point, corporate finance teams—notorious Luddites when it comes to new information technology—have been far slower to jump on the bandwagon, while signing plenty of checks for their counterparts. But lately, CFOs have begun signing up for cloud financial software at a much faster pace.
To be real, overall adoption is still modest. But the forecast is telling: Almost 20% of companies surveyed in late 2015 by Forrester Research have replaced all or most of their accounting systems and financial tracking applications with alternatives that “live” in a cloud service rather than in some server tucked away in the company’s own data center. Another 24% plan to do so within two years. Separate research by KPMG corroborates the trend: 70% of the CEOs the consulting firm surveyed last year believe their CFOs need to invest in more cloud-based financial systems.
There’s plenty of revenue at stake: More than $23.1 billion will be spent on financial management software this year, second only to apps for managing customer relationships, according to Forrester’s projections.
Indeed, these are not insignificant projects. Two of the biggest commitments yet come from insurance giant Aon and commercial real estate powerhouse Cushman & Wakefield, both of which are replacing existing systems with cloud financial software from Workday. As you might expect, similar tales are shared by many of the other companies scrambling to win over finance teams. Adaptive Insights, which has about 3,000 customers, reports that a far higher number of them want to spend more time on planning and analytics than on closing the books. Intacct, which also fields ongoing CFO surveys, reports similar findings.
The CFO’s job is to look from the ‘outside in.’
The cloud converts preach the same mantra: They can spend far less time closing the books and far more time helping CEOs and counterparts in sales and marketing deliver on business growth objectives. “All of the finance folks, especially the younger ones coming out of university, want to help decision making,” says Laurel Meissner, senior vice president and global controller for financial services giant Aon. “The types of tools we have had are not providing information fast enough, or deep enough.”
How successful are these investments? In the case of the largest companies, it’s really too early to tell how transformative the cloud will prove to be, since many are still in the process of installing this software. But considering the nature of these buyers, there will be plenty of pressure to demonstrate the return quickly.