Why modern business needs modern financials

Profile picture for user Chano Fernandez By Chano Fernandez August 11, 2015
Summary:
CFOs want a clear business case for moving financials to the cloud. Modern business needs make the case, writes Chano Fernandez, president, EMEA at Workday

Chano Fernandez Workday speaking 250px
Chano Fernandez Workday

We live in a vibrant, fast-paced business environment. Companies just starting out are disrupting established business models with new innovations, and large enterprises are expanding and diversifying with their own leading edge products.

Alongside these dynamics, mergers and acquisitions (M&A) continue to reshape the business landscape. In 2014, $2.8 trillion of M&A activity was conducted globally in 2014, with some analysts predicting this could rise to $4 trillion in 2015. Here in Europe, where I live and spend most of my time, some analysts are predicting $800 billion of M&A for this year.

All of this transformation creates huge new dynamics and change, with some companies coming out on top and others failing to keep pace. As an example, the FT 500 Europe Index saw 50 companies fall out to be replaced by 50 newcomers during 2014 alone, according to a Financial Times report.

Technology should support business

The rapid pace of technology innovation is often cited as a driver of many of these exciting changes and challenges facing businesses. Technology should be a key supporter of businesses as they seek to adapt to the constantly shifting landscape. More specifically, organizations should consider the state of their core financial management systems – do they just do a “good enough” job of handling finances, or are they designed to help them find new ways to grow?

Innovation is not just about the bells and whistles. It is also about using new technologies to improve critical, foundational aspects of running the business. Take the world of the finance department. CFOs are quite rightly not sold solely on the latest bright and shiny technology. While the cloud is clearly innovative, the best reason to move to the cloud is that it makes solid business sense to do so.

Three critical aspects

Let’s look at three critical aspects of the CFO’s role and the technology that delivers them: Security, Audit and Control.

Security – data security is critical when it comes to financials systems. Being able to guarantee the security of a company’s financial data is ‘table stakes’ for any supplier.  A modern cloud financials system is one that builds security into the core of the application. It’s not enough to rely on the security of the corporate network, individual users must each sign in using proper accreditation. Having inherent security built into the system has other advantages – you don’t have to build out separate roles and security profiles, removing an administrative burden. It also provides configurable role-based security to ensure the right information is only in the hands of those designated by the organization, a key requirement for finance departments.

Audit – in a true cloud financials solution, an embedded business process framework manages every single transaction. The system captures all required information, garners the right approvals and ensures the accounting impact of every transaction is immediately auditable upon approval. And the audit function is always on, making it a great tool for internal and external auditors.

Control – traditional finance systems were designed before governance, risk and compliance became critical requirements for business. True cloud financials solutions, on the other hand, have internal controls, month-end close and audibility built into the very fabric of the system, not as a bolt-on afterthought.

Innovative, true cloud technologies have been designed specifically to deliver these critical areas in ways and with benefits that old-world technologies just simply cannot match. As well as improving the effectiveness of these critical aspects, cloud financials systems also provide support for business innovation and growth.

Support for future growth

Cloud with business icons drawn by business woman © denisismagilov – Fotolia.com
A true cloud solution for financials can better support the challenges of a modern, global business – including real-time insights based on data, a unified data model encompassing both financial and workforce information, and a system built to accommodate growth and change management, such as quickly setting up new entities. Thus the business case becomes clear.

Moving a system so central to running the business to the cloud is not something to be taken lightly, but the benefits and advantages of doing so are becoming too clear to ignore, even for the most conservative CFO and CIO. It is increasingly apparent that the “risky” path is to stay with older, legacy financial systems – not only because of their failure to provide robust security and control but also because of their inability to support flexibility and growth.

Modern organizations require a modern, cloud-based financial management system to support their growth plans now and in the future.

Image credit: Cloud with business icons drawn by business woman © denisismagilov – Fotolia.com. Chano Fernandez photo by Workday.