A research study from The Hackett Group found that the adoption of performance management in the cloud is “set to rise significantly in the next couple of years.” The firm considers the momentum to be driven by the fact that performance management in the cloud solutions are “cost-effective, flexible and streamlined, while allowing more people to participate in the planning process.” The research shows that 72% of companies are either planning or exploring an implementation of a cloud-based financial planning or business intelligence solution.
The report lists several reasons for the growing adoption of performance management in the cloud, but there are two particular drivers that are quite interesting – they go beyond the “traditional” list of factors. These two reasons are:
- “They are reacting to the entry of major vendors in the cloud.” While there’s been plenty of hype around cloud-based financial planning and budgeting solutions for several years now, The Hackett Group states that “they have been offered mostly by midsize vendors and adopted by midsize companies as a cost-effective alternative for full-fledged, on-premise applications.”
- “They can better adapt to change and fiercer competition.” According to The Hackett Group, “Finance needs to generate data-driven decision support so the business can rapidly adapt amid volatile market conditions. The onus is on FP&A teams to put in place an infrastructure that lets them gather data from multiple sources and apply analytics in real time, while shaving days off core budgeting, forecasting and planning processes. Waiting for new functionality is not an acceptable option.”
The report also delves into how to extract the efficiencies of cloud solutions, whether or not to customize a cloud-based solution (or to what extent), and a mini case study of why one company selected to go with a cloud-based, versus on-premise, performance management solution.