They came for the money. They stayed for the innovation.
That’s the key finding of our first ERP Top Trends report (a companion to the EPM Top Trends report, which has become an annual tradition).
In a survey of more than 400 finance and IT leaders, respondents said they made the move to ERP in the cloud primarily for economic reasons—including the desire to avoid infrastructure investments (45%) and on-premises upgrades (33%), as well as lower TCO (38%).
A strong majority of respondents (63%) achieved the economic benefits they initially set out to find. But something surprising emerged from the survey results. When asked about the top benefits of ERP in the cloud, an overwhelming 81% of respondents cited, “Staying current on technology” as the #1 benefit—far outpacing any of the other advantages cited.
The ability to keep up with the unprecedented pace of business change—implementing the latest best practices and innovations on a regular basis—is fairly new for the back office. This is an entirely new phenomenon, in which innovation is rolled out to the finance function several times a year by the cloud provider.
In the old world of on-premises systems, it is unthinkable to update ERP at such a breakneck pace. Years pass between upgrades—and with every passing year, the risk of the business falling behind competitors grows.
With cloud, the risk of technology obsolescence drops to zero—putting the business on a more solidly competitive footing. In our research on Intelligent Finance, Frank Sorrentino, CEO of ConnectOne Bank, echoed this sentiment.
“Bankers ask me all the time, ‘How are you running that business, at that size, with that growth rate, with that reputation and with that level of service with as few people as you have?’ We are living in a cloud-based world. And as far as I am concerned, there is no better place to be.”
Emerging Technologies Are Set to Transform Finance
The cloud is the primary delivery mechanism for new and emerging technologies: blockchain, artificial intelligence, machine learning, cognitive computing, intelligent process automation, and the Internet of Things (IoT). Finance professionals are exhibiting a keen interest in these technologies. Roughly 4 out of 10 are already exploring these areas—in keeping with their desire for innovation and new capabilities.
Many of these emerging technologies fall squarely into the charter of the finance function. For example, blockchain has a number of use cases that could impact finance and the supply chain, while AI and machine learning can detect patterns in huge data sets that a human being could never uncover, potentially reducing and even correcting for material risks.
These technologies have the potential to automate routine transaction processing, eliminate manual tasks, and reduce the likelihood of errors. Such automation will free up finance professionals to spend more time providing forward-looking guidance, uncovering and recommending new opportunities to senior management.
It’s Not “Cloud First, it’s “Cloud Now”
With the benefits clearer than ever, cloud ERP has become the new standard for the office of finance. 76 percent of respondents said they have plans to run ERP in the cloud. The discussion is no longer about when to make the move. It’s now.
Historically, the perceived effort of migrating a core financial system has left ERP as one of the last technology systems running on premises. Yet the vast majority of companies we surveyed believe that the benefits of such a move outweigh the potential pitfalls; less than one-quarter of respondents (24%) have no plans for cloud ERP (yet).
A Regular Cadence of Innovation
With the pace of business change accelerating, finance leaders recognize that the technology of the past won’t help them keep up with the competition. Moving to ERP cloud is an opportunity for companies to re-invent and transform their business processes. With the regular cadence of innovation delivered by the cloud, and zero risk of technology obsolescence, finance leaders will be well positioned to help build the business of the future.