This article explores financial planning and analysis in the cloud for your CPM strategies.
In the budgeting and forecasting realm, Financial Planning and Analysis (FP&A) is becoming more and more relevant. Most mid-sized and large companies have dedicated professionals in FP&A roles due to the constant evolution of finance and the reach across the enterprise. If you are not familiar with FP&A, this article will cover the benefits of cloud for your finances and hopefully, answers any questions you may have regarding to FP&A and the cloud.
TechTarget defines FP&A as “the process of compiling and analyzing an organization’s long-term financial strategy.” The traditional method of compiling and analyzing your company’s financial strategy would involve heavily using manual spreadsheets and developing reports and plans manually for your executive team. The problem with this is that you are most likely using different report writers from several sources and manual Excel spreadsheets for budgeting and forecasting.
I know we are well into the year of 2017, but to convey how the cloud affects your company’s finances, let me share a couple of statistics with you. APQC reported in 2015 that 25 percent of survey participants were currently using cloud technologies to do their finances. Also, 10 percent were considering a move to the cloud immediately, and 12 percent were planning to make a move to the cloud within the next year. Forbes mentioned that 74 percent of Chief Financial Officers (CFOs) say that the cloud will have the most measurable impact on their organization in 2017. Modern cloud solutions can be a strong platform of FP&A processes due to accessibility, ease of implementation and upgrades. This blog has covered the constantly evolving technology of cloud computing solutions. Just as cloud solutions are improving, your FP&A processes should match and constantly improve to meet your company needs.
Thankfully, there are modern corporate performance management (CPM) solutions with a data warehouse (DW) to help improve your data. It’s becoming easier than ever for FP&A professionals to deploy CPM solutions because they are becoming more accessible in the cloud. Clearly, the very reason why reporting and budgeting are moving to the cloud applies to FP&A. When your CPM tool is managed by a vendor, such as Adaptive Insights, Host Analytics, or Solver’s BI360, which mean it’s not a privately managed cloud, there is no room for confusion or conflict between FP&A and the IT department because your IT team isn’t managing the report writer, planning tool or a new server installment. The FP&A professional is now able to subscribe that solution in the cloud from his/her modern CPM vendor. Hence, he/she can get things started much faster because these business intelligence (BI) solutions typically come with easy-to-use data connectors, which makes it quick and easy to pull data from an accounting system as well as other data sources, whereas an older proprietary CPM solution may take weeks of integration development.
I understand that transitioning to a new platform can sound time-consuming and hard to adjust to, but companies are doing it in great numbers, and they have found that the benefits of cloud in finance outweigh the costs immensely. In fact, the cost per user for a cloud solution can be lower overall. Once a scalable, highly functional solution is ready in place, FP&A will become an incredible strategic part of the organization’s growth. Keep in mind that as cloud solutions continue to get smarter, it is likely that hybrid models will appear in the marketplace, combining both cloud and on-premise requirements. In other words, if your FP&A department decided on moving to the Cloud, you could still choose to keep certain functions on-premise.
With the cloud, your FP&A team can have access to the latest versions of the applications needed to run your company. This allows productivity, and software upgrades are typically released frequently as the cloud vendor roll them out, whereas on-premises usually take some time to roll out because they involve coordination and scheduling with your own IT department.
As mentioned in our previous articles, cloud solutions are a lot more flexible and accessible than traditional systems as users can get to the applications practically anywhere as long as there is Internet. Some applications even work off-line. With the cloud, FP&A can take work anywhere through their mobile devices and tablets, allowing room for teamwork. The cloud enables people from all over the world to meet virtually and easily share information and data in real time. This capability can save time and improve customer service as well as product development. Cloud computing is more cost effective as organizations do not have to purchase equipment and build and operate a data center, which means they do not have to spend a large amount of money on facilities, utilities, hardware and operational systems. With more traditional methods, organizations have to spend tons of cash before it gets value from investing in a data system. Additionally, an interesting perspective that most people don’t realize is that the cloud is making less of a negative impact on the environment with fewer, highly efficient data centers worldwide.
Clearly, you can see how the cloud changes the FP&A role. If you are on the fence about cloud-based CPM solutions or if you want to get to know more benefits, check out skyhigh’s article on “11 Advantages of Cloud Computing and How Your Business Can Benefit From Them.”
Solver enables world-class decisions with BI360, a leading web-based CPM suite made up of budgeting, reporting, dashboards, and data warehousing, delivered through a web portal. Solver is reinventing CPM with its next generation solution. BI360 empowers business users with modern features including innovative use of Excel in the model design process. If you’re interested in learning more, our team is excited to hear about your organizational needs and goals.