Modern CFOs are successfully leveraging digital technologies in their Enterprise Performance Management (EPM) processes to transform their finance organisations and generate value for the business.
Which EPM priorities are at the top of the Finance agenda?
What are the most compelling developments in big data, analytics, mobile technology, and cloud computing that motivate Finance leaders to undertake new technology initiatives?
A survey was conducted by Oracle of hundreds of decision makers to learn more about their EPM plans—both within the Oracle customer base and the industry at large.
Participants were asked to provide specific feedback on EPM technologies and practices—past, present, and future. From the results we compiled the following trends:
Enterprise Performance Management Hits the Big Time
Research shows that the Cloud is enabling more users to be part of the EPM reporting process. 50% of the respondents stated that the Cloud has enabled them to increase the number of users who have access to their EPM system; after all more users will create better decisions.
In fact, 40% of the organisations surveyed have 150 or more people who are involved in their EPM processes; and of this 40%, over half have more than 500 people involved.
‘Planning and budgeting’ is the EPM Beachhead to Cloud
Planning and Budgeting is the leading EPM application adopted in the Cloud today with respondents indicating nearly double the number of companies using it than the next most popular EPM Cloud application.
The Future is Even More Planning in the Cloud
The future EPM Cloud plans of organisations that took part in the study are clear – 4 of the top 5 applications are planning applications. The top application, as we expected, is financial planning and budgeting. However, organisations list Sales, Workforce, and Capital planning as applications they will put in the Cloud within the next two years.
EPM Goes Straight to the Cloud
The Cloud is accelerating the adoption of EPM applications - over 50% of the organisations that have EPM applications in the Cloud today did not have these applications previously on-premises.
This confirms the attraction of using the Cloud for EPM applications. Organisations may have considered on-premises applications to be too difficult or costly to implement, but due to the simplicity of implementation, flexibility, and low total cost of ownership the Cloud offers, they are now jumping on board.
EPM is better in the Cloud
EPM in the Cloud delivers a better experience all around. More than 50% of organisations have seen improvements in 5 out of 6 categories since implementing a Cloud EPM solution.
This validates many of the claims made for the Cloud in terms of shorter implementation times, better scalability and performance, and access to newer functionality. Better user acceptance dips slightly below 50%, but 90% of respondents found user acceptance to be at least the same or better in the Cloud than on-premises.
Perceptions Change Once you have moved to the Cloud
Much has been discussed not only about the great benefits of the Cloud, but also about the reservations organisations have about moving their financial software applications to the Cloud.
It is interesting how reservations related to EPM Cloud Solutions change with experience with the Cloud. Across the entire spectrum of typical concerns, the number of organisations expressing concerns fell following implementation of an EPM Cloud solution with the exception of secure access --which remained the same.
It is clear that the fear of the unknown is driving negative Cloud perceptions, and not the reality of using them.
Cloud Drivers and Benefits are not the same
The majority of organisations in Oracles’ survey cite cost as the primary reason for moving their EPM applications to the Cloud. Yet, it is interesting to note that cost was the 4th most cited benefit realized – not the first. The top two benefits realized are getting results faster and improvements in the service received.
Cloud is an EPM Enabler
In addition to realising better EPM solutions and service, Cloud has enabled the majority of the organisations we surveyed to do something that they were not able to do before.
A classic example is: A business wants to utilise predictive planning to improve the quality and accuracy of their forecasts; but are unable to execute using their current spreadsheet solution.
By adopting a Cloud based planning application, they were able to do this quickly and easily, and saw significant improvements in the accuracy of their forecasts.
Culture is the Surprise Enemy of the Cloud
Finally, when asked what was holding organisations back from adopting Cloud EPM applications, respondents surprisingly indicated company culture as the number one reason. Others listed are more typical of what is expected (security, control, company policy, etc).
If culture is such a problem, then proponents of EPM Cloud solutions have much to do to educate organisations of the reality and more benefits of adopting EPM Cloud solutions.
The focus of Modern Finance is evolving from governance to guidance. Predictive, data-driven analysis, continuous planning and budgeting, and real-time decision making are what are needed now.
Modern EPM tools leverage cloud, mobile and big data technology and are changing how Finance organisations are run and the best practices they use to measure contribution to the business. Armed with fresh, accurate, enterprise insights from EPM tools, the Finance department can confidently drive digital transformation.
The availability of ‘Enterprise’ EPM solutions in the Cloud is providing many organisations with the opportunity to improve their EPM processes, and to do things that they were not able to do before.
As they experience EPM in the Cloud, their understanding of what the Cloud can offer and their concerns change dramatically. Planning is the leading EPM application in the Cloud and, given the results and insights provided here, should be considered by all organisations as their ‘beachhead’ to the adoption of the Cloud for their EPM processes.