Finance is waking up to the Cloud

Finance and ERP applications are putting up the most resistance in the transition to Cloud computing, delegates heard at the Business Cloud Summit on Tuesday 30 November.

In a presentation of interim survey findings from 628 UK organisations, London School of Economics professor Leslie Willcocks said that 16-17% of respondents were currently using business Cloud applications, with 29% evaluating them and “the rest are doing other things”.

There had not been “a massive amount of deployment yet”, he said, but companies were looking to the future and planning to invest. Around 40% of the LSE survey respondents planned to spend 10-30% of their IT budgets on the Cloud in the next 18 months, with more investments in the pipeline over the next five years. “It’s clearly on the financial radar,” he said.

However, he continued, “Finance and ERP applications are the least suitable for cloud enablement, at least at the moment.” IT executives were not voting to put those particular services in the Cloud. While general business executives showed more enthusiasm for Cloud applications because they promised faster implementation times, more innovation and access to best in class programs that were otherwise unavailable, the IT community had concerns about “lock-in” and exit costs from Cloud applications. “Probably because they’ve managed outsourcing contracts in the past,” Willcocks added.

“The model that we’re being sold about Cloud computing as a slot machine that you get your credit card out and pay for the service is far from what you can do with the Cloud. There’s a  lot more you have to contract for.”

But the landscape is changing. Figures from the annual Software Satisfaction Awards show that the tide is turning towards the Cloud, even within accounting. Over the past four years, the proportion of Cloud users in the accounting and finance categories has increased from 7% in 2008 to 16% in 2009 and 41% this year.

RightNow CEO Greg Gianforte positioned his company as part of the final drive into finance and ERP. “We just implemented NetSuite as our accounting system,” he told the summit audience. “We’re a $200m publicly quoted company and we run our accounts in the Cloud. It delivers value so much more quickly.

“The wider business market has come to recognise that the Cloud is the next generation delivery model for enterprise applications,” Gianforte told BusinessCloud9.com editor Stuart Lauchlan.

For further coverage from the Business Cloud Summit 2010, see our live blog feed. IT Faculty head Richard Anning and AccountingWEB.co.uk contributor Richard Messik also took part in a panel discussion with users on Finance and Accounting in the Cloud.

Comments
onesys's picture

It's all about Confidence and Control

onesys | | Permalink

Companies we speak to want more control and flexibility, not less.

Apart form the fact that the UK fibre-optic broadband network is only availble to a minority of companies, trust and control issues may slow the adoption of Cloud applications, no matter how cheap the monthly rates are.

The current weather problems may prompt many businesses to research Cloud applications, but we still find a preference in the marketplace for server-based software with VPN / remote access capability.