With technology disrupting business functions at a frantic pace, there’s no area — including finance — where doing “business as usual” is still good enough; innovation waits for no one, and you have to keep up or risk being left behind by more nimble competitors.
As such, CFOs looking to take their businesses to the next level in accounting, performance, talent, cybersecurity, and compliance are increasingly recognizing the importance of collaborating with their organization’s tech leaders to seamlessly implement cloud capabilities.
To this point, respondents to Deloitte’s Q4 2018 Signals survey cited hiring and retaining top-tier talent as their top internal concern in an increasingly worrisome economy, with 73% of respondents saying they will implement new automation to replace workers in 2019, and just under 49% saying they will hire more people than they let go throughout the year.
Not too long ago, C-suite executives were talking about how the cloud could help to transform their businesses when it matured and achieved mainstream adoption. For those executives who haven’t been paying attention, we’re here to tell you that that time is now.
Cloud is no longer an untested and unproven technology. It can be a reliable, stable and cost-effective tool that helps organizations operate agilely and efficiently. In addition, cloud technology illuminates the possibility that leaders can be simultaneously innovative and cost-conscious — a concept that may have seemed impossible before.
Cloud can significantly reduce time-to-market, enabling companies to launch new products and services quickly and to assess their impact and make real-time adjustments. Opportunities could be missed by those who do not embrace the technology. If your company hasn’t already started a pilot program to test the cloud’s potential, you may already be lagging and incurring higher operating costs than your competitors.
In fact, 93% of the respondents to Deloitte’s 2018 Global Outsourcing Survey of finance and other business leaders reported that their organizations have already started, or are considering, new cloud implementations. Similarly, a poll of 3,000 finance executives conducted during a recent Deloitte webcast found that nearly half (48%) of respondents believe that cloud technology will be critical to the performance of their finance departments within the next two years.
These findings support the trends CFOs indicated in our Q3 2018 Signals report, which showed that the key skills to develop to support their finance functions in three years will likely be related to analytical skills, digital technologies and automation, and core business skills. Add this to the fact that 85% of CFOs queried in Deloitte’s Q1 2019 Signals survey believe an economic slowdown will occur by the end of 2020. Considering cloud has never been more critical.
While most people would think that any sort of new cloud initiative might fall strictly under the purview of the chief information officer, the fact is, chief financial officers can – and should – exercise a significant amount of influence over installation and migration activities. For organizations in the pilot or early implementation phases, CFOs should focus their attention on answering the following questions:
By working with the CIO and other executives to analyze and answer these questions, CFOs can help the business identify areas where outdated processes and technology may be hampering performance. They can also help find the areas where it is most cost-effective to test new cloud solutions. As such, proactive CFOs can help push the business forward while also realizing one of their most important job functions — leveraging the strategic value that the cloud can bring to the organization.
When you combine fears of a slowing global economy with the continuing development of advanced artificial intelligence and other disruptive technologies, it only makes sense that companies are looking for cost savings throughout their organizations. Those can come from reducing discretionary spending, workforce reductions, streamlining legacy processes, or by adopting new, more efficient ways to store and access information.
Oftentimes, CFOs might take exception with that last point and express some skepticism about proposed cost savings that derive from spending money elsewhere in the organization. There are times, however, when it may actually be true. Regarding new cloud implementations, we suggest that the finance organization seek to answer the following questions before considering a new cloud program:
Of course, a successful and cost-effective cloud implementation relies on more than just a change in back-end technology. To achieve the maximum benefit the cloud can provide, CFOs must work with the rest of the executive team to identify and implement the required changes in processes and people that can help the organization run more efficiently.
So, what’s the upside? While every company is different, we have seen companies post returns of 10x and higher on their cloud investments. And, unlike some other technologies that are targeted at specific sectors or business functions, the cloud can provide myriad benefits across an entire organization from finance and human resources to sales, marketing, manufacturing, and even the supply chain.
As a CFO, it is important to work with the rest of the C-suite team to identify all the areas where the cloud can help streamline the business. The team must also develop coherent business plans that will allow the organization to quickly and efficiently implement the appropriate solution to achieve both short- and long-term goals.
Matt Schwenderman is a principal at Deloitte Consulting and the emerging ERP solutions finance transformation leader. Sandy Cockrell III is the global leader of the CFO Program for Deloitte Touche Tohmatsu Limited.
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