Cloud & On-Premise Software: The Ying & Yang of Business Technology

yang and yin symbol from cloud

Guest blog by Daniel Caringi, National Solutions Manager, BDO Canada LLP Solutions

By now, most have heard of cloud computing. Many of us use it every day, and for the most part we have a general idea of what it can do and how it can help us more efficient, successful businesses.

What many still struggle to understand is how cloud computing has quickly become to the “Yin” to traditional, on-premise software’s “Yang.” Cloud computing and on-premise software could not be more different, in both purpose and design. In true Yin-Yang fashion, however, these two opposite technologies are beginning to form a balanced symbiosis to give solutions for many businesses.

At its core, the business of cloud computing can be defined as a set of services, not products, that are accessible through the internet. These services tend to fall into three categories:

1. SaaS (Software as a Service): Examples include salesforce.com, Google Apps, and Mircosoft Office 365, which enable the on-demand use of software over the Internet.

2. PaaS  (Platform as a Service): Programming platforms and tools like Java Runtime, MYSQL, and Apache Tomcat that can be used to build custom cloud-based applications.

3. IaaS  (Infrastructure as a Service): Hardware and network resources like virtual machines, storage (hard disks), and networks that are available on-demand.

For the purpose of this post, we will focus primarily on SaaS and how it’s impacting finance.

First take a look at a capture from a leading technology analyst firm, Gartner Research, showcasing its top priorities for finance. Specifically called out are initiatives for cloud computing and on-demand applications/SaaS, highlighting the business trend that I mentioned before.

Adaptive insights, cloud cpm software, corporate performance management, business budgeting software, budgeting and forecasting, visual analytics, financial reporting software, financial consolidation

Although cloud computing and SaaS solutions are emphasized in their own categories in this survey, it’s important to note that there are already many cloud-based SaaS solutions in the market within the top two initiatives: BI, analytics, performance management, and integrated financial management applications/ERP. Salesforce.com, NetSuite, and Adaptive Insights are a few major players in the cloud technology industry.

Now take a look at the results below, showing a combination of ERP and Corporate Performance Management (CPM) applications are leading the charge in revolutionizing how finance departments work. This level of adoption is comparable to how cloud-based CRM applications have become the gold standard within sales and marketing departments.

Adaptive insights, cloud cpm software, corporate performance management, business budgeting software, budgeting and forecasting, visual analytics, financial reporting software, financial consolidation

There are a number of major factors driving these trends within the Gartner study, including:

  • 58% of new IT investments involve direct participation by Line of Business (LOB) executives such as Finance.
  • 80% of new IT investments will involve LOB executives by 2016 .
  • 24% of technology Initiatives are approved by CFOs.
  • 45% of CIOs or other Senior IT members now report to the CFO.
  • Young professionals are entering the market have grown up “online”.
  • There have been major advancements in technology, mobility that have heavily affected the way we conduct business today.

While much of the industry is trending towards cloud adoption, it’s worth recognizing that certain data will always need to be secured within an on-premise solution. Less sensitive or shared data, however, is simply better suited for cloud solutions. This is where the Yin-Yang analogy rings true, as businesses have a need for both types of solutions.

For instance, collaborative tasks like budgeting, planning, and forecasting work best with web or mobile access tools due to their flexible nature. Solutions that combine secure back-end logistics (i.e., databases, hardware, extra storage) through their application vendors with premium cloud functionality for the customers are often the most successful.

It’s not only the back-end logistics that often make cloud-based SaaS applications appealing, but also many of the factors outlined below:

Adaptive insights, cloud cpm software, corporate performance management, business budgeting software, budgeting and forecasting, visual analytics, financial reporting software, financial consolidation

With the Cloud, technology is no longer an IT project. It’s a business project. To help get you started on your cloud journey, start by assessing your organization’s health and evaluating its future technological direction with the understanding that:

1. SaaS is the fastest growing service platform (followed by IaaS and PaaS).

2. You’re already using your own personal cloud today – online banking, Facebook, LinkedIn and Gmail. Your personal cloud adoption will help permeate into business cloud adoption.

When looking at incorporating any new technology, the deciding factors often come down to your company culture, support from management, and the perspective that technology can be a catalyst for change. Take a collaborative approach while defining your requirements and process, and work with industry leaders in conducting your due diligence.

Adaptive insights, cloud cpm software, corporate performance management, business budgeting software, budgeting and forecasting, visual analytics, financial reporting software, financial consolidation, Daniel Caringi, BDO Canada LLP Solutions

Daniel Caringi, National Solutions Manager, BDO Canada LLP Solutions.

Daniel Caringi (@dancaringi) helps business leaders connect technology to strategy with business solutions that promote financial and operational effectiveness. 

To read more about Technology and Business visit the Driving Business Transformation Group and Blog.

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