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IT Cloud Solutions for Your Business

Cloud Solutions: Ensuring your financial operations are ready for sale

Cloud computing permeates our personal and professional lives, with applications like for client relationship management, iTunes for entertainment, Google for document management and ADP for payroll. Whether recognized or not, many of the daily tasks business owners do each and every day involve interaction with cloud technology.  It is not relegated to Internet start-ups. Cloud-based technologies can improve efficiency, tracking, and streamline business processes.  As you consider preparing and staging your company for a sale or transition, you might consider moving your internal financial operations to the Cloud.

Why move to the Cloud?

Cloud computing is now mainstream for business, with many using Software as a Service or cloud-based solutions in day-to-day operations.  In a June 11, 2014, New York Times article, “The Era of Cloud Computing,” industry analysts predicted, over the next six years, almost 90 percent of new spending on internet and communications technologies, a $5 trillion global business, will be on cloud-based technology.

Cloud-based solutions are being used by companies of all sizes, across all of their different functional areas.  This is because cloud-based solutions have removed much of the cost and inconvenience that was formerly associated with many business interactions. The leanest, most agile, most cost-efficient businesses are those that utilize the global reach and immediacy of the Cloud to access resources on demand. Cloud computing allows companies to function better and faster, and to scale their business as needed.

What are the factors leading decision makers to the Cloud?

  1. Flexibility and scalability – While cost is a ubiquitous factor in corporate decision making, the major business drivers pushing movement to the Cloud are flexibility and scalability. Cloud computing allows companies to scale their business according to any need. They can deploy business applications on demand, bringing new business initiatives online quickly and decommissioning non-profitable initiatives as needed.

Graph of factors considered in moving to the cloud

  1. Time savings – Cloud computing allows companies to work better and faster. Time savings increase a business’s competitive advantage.
  2. Lower cost and higher value – Cloud computing yields substantial economies of scale and skill, and lowers the total cost of ownership (TCO). Industry research has documented a 77% lower TCO for cloud-based vs. on-premise systems (The Hurwitz Group, The Compelling TCO Case for Cloud Computing). Cloud applications are also continuously improving, with upgrades based on market/user feedback happening seamlessly multiple times per year and without the disruptions that occur during legacy system upgrades.
  1. Agility and collaboration – The final major driver is being able to change how people work. “For business leaders, the Cloud offers a transformative opportunity to increase collaboration, alignment, and ownership of financial outcomes to the line managers making decisions,” says Lindy Antonelli, Executive Director of the Cloud Accounting Institute. “Applications are designed for ease of use, moving complexity behind the Cloud, so even non-financial, non-technical people can benefit from best-in-class technology.”

Cloud applications are designed to integrate with any system, on-premise or cloud, allowing your important data (sales pipeline, payroll, financials, ERP, etc.) to flow across your business infrastructure.  This flow drives alignment because all the players on your team are working off the same data at the same time. As a result, your team can respond faster and with more agility to ever-changing business conditions.

Can You Find Value in the Cloud to Support the Financial Functions of Your Company?

For the finance team (often the under-appreciated area of technology budgets), Cloud-based applications can transform the department, making it more efficient, providing greater depth of analysis and providing greater insight to decision makers, while allowing the CFO team to focus on its core responsibilities of control and accuracy in reporting.  This includes everything from general ledger (GL) to multi-currency transactions, equity administration, and budgeting and forecasting. Cloud solutions have the flexibility to be configured to work the way you do, and the capability to integrate with nearly any software package. Dwindling technology budgets mean businesses, and prospective purchasers, may look to the Cloud for agile IT solutions without prohibitive upfront costs.

Graph of factors improved after moving to the cloud

Cloud Strategy: Your company is in the Cloud. Now what? There are companies that specialize in providing “cloud consultants” that will help you make the most of your existing cloud investment, while mapping a winning game plan for the future.

Cloud Systems Implementation: In evaluating cloud-based products, ensure that there is a certified team of implementation specialists. It would be especially helpful to find professionals that began their careers in your shoes. Former CFOs, controllers and FP&A managers that share industry-best practices and process re-engineering expertise is the perfect marriage of skills and experience that you will should look for in connection with sourcing an implementation team.

Cloud Systems Integration: The Cloud has changed who can purchase technology, since line-of-business leaders now have access to new applications in a matter of minutes. The result: silos of cloud applications. Finding a company that can help integrate a financial cloud-based operating system can help increase ROI for your organization by combining these cloud islands into an integrated, responsive and agile technology nerve center for your business.

Make the Business the Customer of Technology/IT

In conclusion, cloud solutions allow CFOs and other line leaders to be conductors of technology decisions, and move quickly and cost-effectively to prioritize the needs of their changing businesses. Modern cloud architecture enables business leaders to implement integrated, best-of-breed solutions in a way not previously possible. To take advantage of your new role as “conductor” of your organization’s cloud environment, you need an experienced partner to help you navigate the opportunities and challenges. Evaluating your whether your internal financial processes are controlled and organized will help you determine whether to take your company to the cloud prior to marketing your company for sale.

Takeaway: What top questions should you be asking your team and consulting partners?

Jeff Epstein, Operating Partner at Bessemer Venture Partners, suggests asking these questions related to financial systems strategy:

  1. Do we have one integrated system for both our financial information and our operating metrics?
  2. Why do we have so many reports?
  3. Show me everything we are doing in Excel. Why are we using Excel?
  4. What are all the management judgments we are making as we prepare the financial statements?
  5. How long does it take us to close the books?
  6. How many manual journal entries are we making during the close process?
  7. Who has access to what functionality in the accounting system? How is this documented? Who approves changes?
  8. What is the volume of transactions in each department?
  9. How many sales orders or invoices are cancelled and rebilled and what are the primary causes of such events?
  10. Where should we invest our next dollar in the finance department?

About Sam Kashy

Sam Kashy is a leader in the Armanino Cloud Solutions Practice that provides its clients with strategic guidance and practical expertise in selecting and implementing best in breed cloud based technologies for entrepreneurial thru enterprise scale finance organizations. Sam’s industry expertise in tech, data services, CPG and consulting ranges from Fortune 50 to entrepreneurial start-up…

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