Anil Kondla
Last Updated on July 9, 2024 by Team Experts
Financial management software, migrating to the cloud
The Rise of Cloud Migrations
A cloud migration strategy enables finance to drive business innovation. When a financial services company moves from an on-premises solution to a cloud-based infrastructure, building resilient operations becomes easier. Finally, the impact of cloud solutions extends beyond the risk management function, as their ease of use makes them more accessible to business units, which are the first line of defense, reliable tools for identifying and assessing risks. When planning a move from on-premises to the cloud, financial services organizations need to consider several additional factors when it comes to effectively monitoring their databases.
To meet the growing need for cloud-based financial services solutions and address migration challenges, financial institutions need to consider several factors, from assessing the level of need to choosing the right cloud provider. Gartner predicts that the cloud will become the dominant delivery model in all areas of financial management software applications by 2025. Gartner suggests that spending on cloud or SaaS-based apps has increased from 30% of the total market spending in 2015 to 47% by 2020 – and that the cloud will become the dominant delivery model in all areas of financial management applications by 2025.
Planning and Strategy
The confidence gained from early pilot projects and the adoption of less important cloud applications is now prompting companies to “upgrade and move” core systems to the cloud, including financial systems that were once considered too missionary. Many companies are using cloud-based software as game changers, enabling them to process large amounts of data, apply new analytical best practices, and take advantage of more flexible technical configurations. In recent years, the adoption of the cloud has swept all industries and has become the forefront of business transformation. It’s time to start thinking about migrating to the cloud, even if your company’s IT infrastructure is not yet available.
A recent survey of 1,300 companies in the United Kingdom and the United States, supplemented by the Manchester Business School’s high-quality telephone interviews with companies using the cloud in December 2012 and January 2013, found that 88% of cloud users indicated cost savings, 56 % Of respondents agreed. With this, Cloud services have helped them increase their profits. Up to 75% of financial respondents said innovation in the cloud is better than innovation on the server (25% of respondents agreed, and none of the respondents believe that innovation in the cloud is the worst). Due in part to the increased investment in monitoring solutions, finance departments will likely continue to place more demands on third-party tools and expect more features to enable them to complete their work faster and provide support, as needed.
Additional Considerations
Successful cloud migrations also include remote monitoring, which is becoming more and more important in today’s world. However, the cloud is more than just hosting existing software in the cloud. If your organization has not yet migrated to a cloud-based accounting model, all accounting software is likely to be installed locally, on a laptop, or on a local network. Migrating to the cloud can save organizations time, money, and effort, and eliminate the need to install expensive accounting software on separate machines with separate licenses.
One of the biggest barriers to cloud migration when it comes to financial management is stiff competition between IT and finance departments, alongside other business units within the organization. Often, competing priorities between business units reduce the importance of investing in financial cloud solutions. According to a Nutanix report released in early 2021, 62% of financial services organizations cited security and privacy as top concerns when launching applications in public cloud solutions.
Inherent Challenges
With the promise of greater transparency, monitoring tools, and security features of cloud computing, some members of the banking supervision community have taken a more open stance on the cloud in financial services. In many industries, however, financial management solutions are still built on traditional processes, which has long been seen as a barrier to the adoption of cloud-based methods. Understanding the in’s and out’s are the best ways for CFOs to help their organizations enter the new digital reality that increasingly relies on cloud services with greater confidence.
According to an Atlassian survey, 64% of financial services organizations believe that ditching hosting and hardware is a reason for moving to the cloud, and 52% believe that opting out of manual updates is also a priority. Ask companies across all industries why they moved to the cloud, and over 60% would say the main reasons were cost savings and not manual updates. In a 2020 survey by Tech Validate, 25 Atlassian customers made big cloud transitions, offering feedback on what prompted them to take those steps, and what happened next. As much as 89% say they reaped the benefits within six months.
For business as a whole, productivity improved, but 20% of respondents said migration and cloud integration was their most pressing concern, far ahead of all others. It’s now imperative to ensure that these solutions are fit for purpose as they continue to scale, and move to the cloud.
Final Thoughts
Moving to the cloud should be a company’s desire, not only because everyone is updating. Entrepreneurs need to understand the functional needs of their business and choose a cloud hosting company accordingly. Companies that need or require special applications (sometimes for customer-centric applications such as order management) may find that the supplier is unable or unwilling to accommodate these preferences; after all, the cloud model essentially depends on providing a standardized solution to the vendor’s customer base.
