Financial Management Migrating to the Cloud Faster Than Expected, Survey Finds
Financial management applications have been slow to move to the cloud, primarily because financial companies like to keep their systems in-house to ensure data and system security, privacy and stability. This is changing quickly, however, as the move to cloud-based financial apps is happening sooner than expected.
A recent Gartner survey of 439 global senior finance executives found that by 2020, 36 percent of enterprises will use the cloud to support more than half of their transactional systems of record.
Confidence in the Cloud
Today’s cloud solutions are a work in progress and may not meet the needs of all verticals, markets and company sizes. Financial executives, however, are overwhelmingly confident in the cloud’s potential. According to Gartner, 93 percent of organizations believe that half of enterprise transactions will be cloud-based by 2020.
“The cloud has definitely changed the game for financial management business applications,” said John Van Decker, Gartner research vice president, in the official press release.
Vendors are responding with new and redesigned cloud platforms, added Van Decker, with most downplaying their on-premises solutions in favor of cloud implementations, which are more profitable and reduce the workload of local IT support.
The cloud migration of financial management applications has been slower than that of other business applications because CFOs tend to be more conservative about moving data to the cloud, Gartner notes. Things are picking up, though, as organizations increase their investment in cloud-based analytics and enterprise business applications. The result will be a steady movement of financial apps to the cloud over the next five to 10 years.
For many companies, the move will happen even faster. The Gartner survey found that nearly 45 percent of smaller organizations, close to 38 percent of midsize enterprises and about 40 percent of large organizations plan to migrate to the cloud over the next three years.
“We have found that most clients asking about these financial business application markets are solely interested in the cloud option,” said Van Decker, adding that many enterprises with on-premises implementations want to move to solutions that reduce their effort and give end users more control.
Most enterprises remain skeptical of public cloud security. A recent survey of 650 IT professionals by Stratoscale found that 80 percent of businesses avoid running sensitive data, workloads and apps in the public cloud and fear being locked into one cloud vendor. Unsurprisingly, security remains the top reason why enterprises stick with the private cloud, the survey found.
And while many companies are testing public cloud offerings, the vast majority still run mission-critical workloads and sensitive data in the private cloud. As a result, most enterprises will likely embrace the hybrid cloud model for the foreseeable future, said Ariel Maislos, CEO at Stratoscale.
Cloud security is improving, though. Gartner forecasts that by 2020, public cloud infrastructure-as-a-service workloads will experience 60 percent fewer security incidents than those in traditional data centers.