Part 2 in the 3-part “Finance and Intelligent Technology” series
The first blog in this series looked at the Fourth Industrial Revolution and how intelligent technologies are impacting finance teams by helping to fuel it. When thinking about these technologies – the Internet of Things (IoT), artificial intelligence, 3D printing, augmented reality, and more – it’s sometimes easy to overlook the importance of cloud computing as the foundation.
Cloud computing, after all, has been with us for some time – at least in terms of technology timelines. It’s a mature technology that has long passed the apex of the hype curve. It’s useful to keep in mind, however, that for organizations on the ground engaged with digital transformation, the intelligent cloud is critical to making it all happen. The decision on how and when to move to the cloud, and the right deployment model, is a momentous one for companies all over the world.
The security argument that’s winning the day
One of the most significant concerns that I hear about cloud adoption is security. But the fact is that few organizations do security better than cloud service providers. Their business model depends on it. And that reality is overcoming any last qualms.
If you’re a cloud service provider, keeping customers loyal hangs on security excellence. What’s more, many companies running on-premises are nevertheless networked and connected to the Internet – which means they’re not necessarily immune to malicious actors. While security can never be guaranteed 100%, cloud service providers clearly have the edge in terms of experience and expertise.
The reward is agility
As CFOs help their companies run the risk/reward calculus of cloud computing, the reward side of the equation is difficult to resist.
What the cloud supports is tremendous strategic agility – the ability to seize new opportunities faster at lower cost and risk. With the cloud, it’s much easier to experiment with new ideas; you always have the flexibility to change your mind. In a global economy, where new competitors can enter established markets with greater ease than ever, agility is the one skill organizations need above all else.
During my conversation with Tony Klimas at EY for this blog series, he shared a trend he’s noticed: customers are using the cloud not only to drive transformation, but to pay for it as well.
“Increasingly, I’m working with customers who want to tackle their digital transformations in bursts,” he said. “They are initiating small, targeted projects using specific technologies with quick and measurable ROI. And the only way to do this is with a cloud platform predicated on a cloud computing strategy.”
Indeed, with the cloud, you can stand up new projects in a fraction of the time. With an intelligent cloud platform, your developers have access to cloud-ready technologies that can be deployed rapidly for targeted areas of improvement capable of returning value in the short term. “Over, say, a two-year time frame,” Tony predicts, “customers will find themselves in a very different place. They’ll have a lot of expertise using technologies such as machine learning and IoT. And they’ll be much more comfortable using the cloud to push further.”
Finance is more relevant than ever
As the transition to the cloud continues apace, financial stewardship is always part of the equation for CFOs. What CFOs like is that the subscription- or usage-based model for cloud computing helps liberate finance from large capital outlays in favor of smaller, predictable, more regular operational expenses. This amortizes the cost of doing business, which frees up the power of capital for more profitable pursuits.
Finance plays a critical role in enabling access to low-cost innovation, too. In the on-premises model, for example, new innovations for critical systems (ERP, customer management, supply chain management, etc.) are typically managed by lines of business with support from IT. In the cloud model, innovations are implemented by the service provider, which can also provide regular automatic updates, if your team prefers. This accelerates time to value – without business disruption.
“Ultimately, companies are recognizing that the ownership model for the cloud is simply much more favorable, and in fact, see evidence in several successful cloud-only applications like BlackLine and Success Factors,” Tony remarked. “This is particularly true for smaller and midsize organizations, where the public cloud option is especially attractive because of its affordability and flexibility. And with larger organizations, we see private cloud solutions becoming more common. Once they get the sense that the cloud model is comparable or even superior to on-premises when it comes to security, that’s when the case for low cost of ownership and access to rapid innovation takes over.”
Stay tuned for the next blog in this series. We’ll be focusing on blockchain.
Explore the “Data Management Challenges For Financial Services.”