Cloud computing: It's not just for IT any longer.
The shift to the cloud is starting to encompass all different parts of the enterprise. For a while, IT took advantage of the cloud, especially public infrastructure-as-a-service (IaaS) platforms, to build more flexibility into the network, especially when it came to compute resources, as well as pricing.
After IT, marketing and sales started to see benefits in the cloud as well. Specifically, CRM and other applications served up as software-as-a-service (SaaS).
Now, CFOs and their financial teams want in on the cloud, too.
The fact that CFOs are always looking to tighten costs and improve the bottom line is nothing new. In fact, I wrote earlier this year about how CFOs are looking at the cloud not only as a cost saver for the whole company, but as a way to help make their own departments more efficient, especially with enterprise resource planning (ERP) software now readily available as a SaaS offering. (See In the Cloud, CFOs Have a Say, Too.)
In 2006, KPMG released a report that showed seven out of ten CEOs want their financial teams migrated to better, cloud-based ERP systems.
For their part, CFOs have heard the message and are moving their finance departments to the cloud faster than expected.
In a September 13 report, analysts at Gartner reported that by 2020, about 36% of all transactional systems will move to the cloud. In addition, with each passing year, more and more financial applications move to the cloud.
The Gartner report is based on questions submitted to about 440 senior financial executives between January and March of this year. While that is an admittedly small slice of world's financial workers, it does back up other studies that are showing the same shift toward cloud and a growing acceptance of SaaS-based ERP and other apps.
One reason for this shift is that it is easier to push upgrades through in order to stay current -- a key component in a heavily regulated part of the business.
"Many enterprises that currently run on-premises solutions want to move to newer solutions that put more control in the hands of the end user, and reduce the effort required when compared with on-premises upgrades," John Van Decker, research vice president at Gartner, wrote in the study.
The biggest shift in attitude among enterprises with the cloud is with small and midsized businesses (SMBs). Gartner points out that 44.6% of small companies and 37.7% of midsized firms are moving to the cloud, while about 40% of large organizations are on the way to the cloud over the next three years.
One reason is that bigger companies with larger finance departments and conservative CFOs are more cautious about moving large data sets over the cloud, but those barriers are starting to break down. Smaller businesses are more willing to take the plunge since they have less to protect and need the cost savings now.
However, the steady shift to the cloud for all businesses should continue over the next five to ten years, according to the report.
The one caution for IT and CIOs in this change is that as CFOs and their teams see the benefits of cloud up close, these executives will likely have more and more say over the tech budget.
However, smart CIOs need to learn to work with their CFO counterparts.
In a recent column, consultant Larry Bonfante, himself a former CIO, advised IT leaders to make sure that they form good, personal relationships with the other member of the C-suite and to work with them when required. (See How CIOs Can Win Friends & Influence Spending.)
Instead of imposing a certain technology on the company, CIOs should work with CFOs to bring in the right IT for the job, which helps ensure that IT leaders still have a place at the table, as well as come control, as the cloud allows different parts of the business to have greater say over the technology that they use.
It's also a good way to help prevent the spread of "shadow IT" within the company.
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This column is sponsored by Huawei.