Are CFOs Avoiding the Cloud?

BOSTON--(BUSINESS WIRE)--The pros and cons of cloud computing may be regularly debated by the IT team but what about the rest of the business? How many Chief Financial Officers (CFOs) are still afraid to take the plunge? Most are familiar with the compelling benefits of lower capital expenditure, improved financial control and rapid deployment – all key issues when facing an over-worked IT department struggling to find the time to even discuss business requirements, let alone oversee the delivery of new software. So, why the reticence?

It is, perhaps, understandable that a CFO may be unwilling to rush headlong into the cloud with a business critical application such as the core financial software. But there are other aspects of the financial portfolio that provide a fantastic opportunity for testing the viability of the hosted model.

As Karen Conneely, Group Commercial Manager at Real Asset Management, explains, those companies that opt for a hosted Fixed Asset Register, can rapidly discover the benefits of the cloud and prove the long term viability of the hosted model for the entire software portfolio.

Flexible Business

Demand is growing globally for hosted solutions as organizations wrestle with continuing financial constraints that are now seriously hampering ongoing business development. With many organizations continuing to pare back internal IT resources, business managers have to wait months to get access to critical IT skills. They are facing a near complete lock down on the capital expenditure required to deploy much needed new software solutions; indeed they are even struggling to ensure compliance-critical upgrades of financial software are completed on time.

In contrast, the option to leverage a highly secure, hosted third party solution that can be delivered within days, rather than months, is compelling. Add in the appeal of monthly or annual subscription rather than the huge upfront cost of a perpetual licence, and the hosted model has clear financial and business value.

So why is it that the IT department rather than the finance team is driving the move to the cloud? Is this reticence based on educated mistrust and a justifiable decision not to hand over responsibility for critical financial data to a third party or a simple fear of the unknown?

Buying Decision

The decision on whether or not to exploit the benefits that the hosted model can offer is business critical. And while CFOs will be understandably reluctant to trial this approach with the core ERP or financial software, why not dip a toe in the water with other key applications, such as fixed asset management? Indeed, a hosted fixed asset register offers a raft of additional benefits. Automated upgrades ensure the software is always up to date – a key consideration for compliance requirements, particularly in relation to the latest IFRS and SORP regulations affecting organizations; while the hosted model also ensures the upgrade process can be achieved without any disruption or dent in user productivity.

Furthermore, a hosted model provides access to the system from any location, allowing members of the finance team to run reports, analyze asset information and check depreciation at any time, further boosting productivity.

With the option to get the new solution up and running within just five working days, organizations can rapidly meet corporate demands for improved fixed asset management, including the adoption of mobile asset recording via PDAs. With minimal up front expenditure, the improvement in asset accuracy combined with the reduction in manual overhead delivers a very quick return on investment (ROI).

Measured Decision

Of course, before any such buying decision can be made, CFOs need to understand exactly what is on offer. Security is obviously key – no organization wants to expose its list of fixed assets to the world at large.

The options are clear: does the business want to opt for a dedicated hosted server, or the slightly less secure, and less expensive, cloud based solution where resources are shared on a virtual machine? Either way, the servers should be located in a highly secure, multimillion dollar data center facility that offers security far higher than that of in-house systems.

Organizations also need to consider how the business will access the system? One option is a dedicated Virtual Private Network (VPN), which would further reinforce the security level, but organizations must ensure the communications bandwidth will deliver the required performance.

Conclusion

Whatever route a business decides to explore, there is growing pressure on CFOs to at least try out the hosted model. Yes, a large proportion of risk adverse CFOs may well be unwilling to opt for a major financials implementation as a first venture into the hosted model. But even if the global financial situation radically improves and IT suddenly receives a massive input of resources, the finance team should be at least considering the financial and speed to delivery benefits on offer. It is time to test the waters of cloud computing.

About Real Asset Management

Real Asset Management (RAM) is a leading provider of fixed asset management solutions with over 3,000 clients in more than 70 countries. RAM's solutions enable you to choose the optimal asset management strategies for your organization.

RAM's market leading Series4000 range integrates virtually every aspect of fixed asset management. The suite consists of 15 comprehensive modules and incorporates depreciation, federal and state tax, asset budgeting and forecasting, lessee asset accounting, capital project control, document management, inventory control, asset tracking, technical support and maintenance management.

With offices in the US and UK and resellers in South Africa, Singapore, Australia and New Zealand, RAM's products and services are designed to meet the requirements of both private and public sector organizations and can accommodate multi-national (multi-location) and single-site companies.