This article was first published in the March 2016 China edition of Accounting and Business magazine.

So long, spreadsheets; increasingly, enterprise and resource planning (ERP) is migrating from on-premises software to cloud-based solutions. An umbrella term for internet-based provision, hosting and sharing of resources on computers and mobile devices, as well as storage in third-party data centres, cloud computing is nothing new.

‘It’s already a part of our daily lives,’ says Laurent Dedenis, president, international operations at Acumatica, a leading provider of Cloud ERP and cloud accounting software, citing the likes of Facebook, WhatsApp and Twitter as wildly popular and widely enjoyed recreational applications. ‘If we entrust so much of our personal data on the cloud, surely we can think of ways to leverage cloud for business?’

From project management through to operations, more and more cloud-based solutions are available for business users spanning individuals to start-ups, small and medium-sized enterprises (SME) to global cooperations. Finance is no exception, with a number of online tools already available and proving popular across the board. Indeed, according to Accenture’s 2014 High Performance Finance Study, 85% of CFOs plan to increase their investment in cloud or software-as-a-service (SaaS) solutions, with over a third of the report’s participants estimating an increase in investment in this area of more than 25%. While an overall and ongoing shift towards digital resources is unremarkable, that it’s increasingly being spearheaded by CFOs is yet another indication of the role’s ongoing evolution.

Of the continuing shifts to CFOs’ remit, responsibilities and reputation, David Axson, managing director of Accenture’s strategy, CFO and enterprise value practice, outlines how recent global financial crises brought recognition to CFOs and to the role’s untapped potential. ‘The CFO is the architect of creating the financial capacity for an organisation to a) compete and b) invest in new initiatives and growth strategies,’ he says.

Cue cloud computing for finance, which, according to Axson, can help transform CFOs from ‘cost authority to business value architect’, thanks to a capacity for analysis, multi-dimensional data and streamlined operating models. Namita Sethi, managing director of Futurebooks, a specialised accounting and secretarial services provider for growth companies in Singapore, agrees. ‘Finance departments, especially of growth companies and startups, will see their role radically transform from a compliance focus to a real-time performance focus by moving to cloud-based tools and apps,’ she says.

Seize the opportunities

Simply put, CFOs must seize the cloud’s opportunities for analysis. ‘Companies have no choice but to adapt, adopt and create value out of this intensely data-rich world that we now operate and live in,’ says Dedenis. Compared to an ongoing but gradual shift in global mature markets towards cloud solutions, he has observed strong uptake in Asia. ’Increasingly, we see that Asian companies, including SMEs, have embraced Cloud with readiness,’ he says. ‘One main driver is the lack of expensive or difficult-to-integrate legacy ERP systems.’ A predilection for digital is unsurprising; while the rise of mobile phone ownership in the region is well documented, more telling are the estimated 1,726 million active mobile broadband subscriptions (according to current data from UN agency Telecommunication Development Sector) being used for a plethora of mobile commerce uses. That businesses in the region are similarly open to online financial services therefore makes sense.

‘The cloud has really democratised technology,’ explains Axson. ‘[Because] the barrier to entry is low, a small company can afford cloud technology just as easily as a very large company. You now have access to bandwidth, software functionality and process capability, as well as data storage on an on-demand basis. It’s not too many years ago that if you wanted any of those things you had to build your own data centre, support and maintain that, as well as invest capital. Now, you can sign up for a few hundred dollars and get access to the same software that Fortune 500s use to run their businesses. That’s truly transformational.’

Tyranny of the spreadsheet

Another advantage of the cloud, albeit less quantifiable, is its impact on productivity. On a fundamental level, it can help liberate finance professionals from time-consuming, longstanding processes of old. ‘For a long time technology didn’t change,’ notes Axson, recalling first getting to grips with spreadsheets on graduating from university in the early 1980s. ‘We’re now 32 years later, and people are still mucking around with spreadsheets!’ he says. ‘It’s a phenomenal productivity tool, but it’s not a strategic planning system, it’s not a budgeting system, it’s not a forecasting system, it’s not a global management supporting tool, and yet in many organisations finance professionals spend 60% to 70% of their time manipulating data in spreadsheets. Now what we’re seeing is a new class of analytic technologies with the ability to deliver finance professionals from what I call the tyranny of the spreadsheet.’

Sethi, whose practice is aimed squarely at freeing up the finite resources of emerging businesses, agrees; fewer spreadsheets means more time for more insightful, profitable action. ‘Neither these cloud tools nor Futurebooks replaces the need for a CFO, which is a vital role for a growth company operating off venture funding; they help the company both with their planning and execution, and in fulfilling their fiduciary duties to their investors. The cloud tools facilitate the CFO’s job; indeed, we have had more than one anecdote of a CFO who was pleased he did not have to worry about bookkeeping and accounting compliance anymore and could instead focus on higher level financial matters.’

Its advocates also champion the cloud’s potential for unifying and empowering individuals and departments across organisations by making visible data once privy to management alone. ‘Cloud ERP or business management in the cloud allows for seamless implementation of tactical and strategic campaigns, as well as flexibility in implementing pricing strategies on the move,’ says Acumatica’s Dedenis. ‘It allows everyone in the organisation to create and access relevant data that enable them to do their work better. For instance, sales and marketing staff are more empowered by using such data as business intelligence for more informed and speedy decision-making while in the field.’

The US and Singapore-based provider recently worked with KFC Singapore in supporting the local chapter of the global fast-food chain’s switch from on-premises ERP software to web-based. Dedenis places KFC’s resulting savings on IT costs, including installation and upgrade of software, hardware maintenance and upgrade, and, above all, licensing costs, in the region of $50,000.

Consolidating finance functions into one centralised, cloud-based ‘one-stop shop’ certainly poses advantages, particularly for businesses looking to expand. Accounts can be accessed any time, anywhere in the world, and data maintained in real time. What Cloud can’t do, however, is unravel different jurisdictions’ laws and regulations with regard to taxation. Sethi of Futurebooks, whose services include tax compliance services, explains: ‘The aim of most cloud-based tools is to simplify tax and payroll compliance. Tools towards this, such as bank feeds, automatic payroll submission, bank payment preparation and GST reporting, are localised and active. This does not fully eliminate the need for a country-specific accountant, as systems still follow the GIGO [garbage in, garbage out] rule.’

Other points to consider include type of Cloud – public, hybrid or private – bearing in mind that conditions set by vendors may limit businesses’ ability to scale and ultimately migrate data. ‘Always read the fine print,’ cautions Dedenis, particularly with regard to data sovereignty and vendor lock-ins. ‘It could mean the difference between your vendor having ownership rights over your data versus your ultimate data ownership and sovereignty.’ However, the same no longer applies to security, reckons Dedenis. ‘With so much local legislation and global standards in play, reputable data centres and cloud providers will ultimately prove more secure than old-fashioned, self-managed on-premise servers – which are subject to natural disasters and human error on an exponential scale compared to a cloud instance in a secure data centre.’ Axson agrees: ‘Frankly, the companies running these cloud-based systems make major investments in security, [which] may actually be better than the company’s own,’ he says. ‘After all, it’s their business.’

Cloud computing for finance professionals is yet another marker of today’s constantly evolving workplace, not to mention the role of CFO. Used correctly, it heralds more informed and insightful analysis and action, as well as exciting and unprecedented possibilities for today’s emerging players and those of the future.

Frances Arnold, journalist