Most clients asking about financial business application markets are solely interested in the cloud option
A major shift is taking place in how enterprises select their financial management applications, with a migration to cloud applications happening faster than expected, reports Gartner.
A recent survey of senior finance executives by the analyst firm found that by 2020, 36 per cent of enterprises will use the cloud to support more than half of their transactional systems of record.
Gartner says the survey covered 439 global senior financial executives (including 410 who had implemented cloud strategic and financial corporate performance management solutions) from January through March 2017 to explore their technology perspective, influence of IT, needs and priorities in technology investment.
The survey finds:
Organisations of all sizes are moving to cloud solutions, such as core financial applications, for transactional systems of record.
Cloud momentum is consistently higher across financial business applications year over year.
Business analytics and enterprise business applications continue as top investment initiatives for senior financial executives.
Organisations of all sizes are moving to cloud solutions, such as core financial applications, for transactional systems of record.
The survey also found smaller and midsize organisations are adopting cloud more rapidly than larger organisations, with 44.6 per cent of smaller organisations, 37.7 per cent of midsize enterprises and 40.4 per cent of large organisations planning to move 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," says John Van Decker, research vice president at Gartner.
"Many enterprises that currently run on-premises solutions want to move to newer solutions that put more control in the hands of the end user, and reduce the effort required when compared with on-premises upgrades."
Gartner says the human capital management and procure-to-pay markets have already been migrating their business applications to the cloud, while the office of finance has been slower to move.
However, things are changing for the finance organisation. CFOs are usually more conservative about moving their data to the cloud, says Gartner.
But given the current change in the market Gartner predicts there will be a steady migration over the next five to 10 years.
Cloud solutions are still developing and do not have uniform capability to meet the needs of all verticals, company size and local markets, and clients will need to do their due diligence when evaluating cloud solutions in these markets, it states.
"The Gartner survey showed that 93 per cent of enterprises see the cloud being utilised for half of enterprise transactions in the future," says Van Decker.
"The cloud has definitely changed the game for financial management business applications.”
“Vendors have responded with new and re-architected platforms in the cloud, and most have de-emphasised their on-premises solutions, in favour of cloud implementations, which are more profitable for the vendors, while reducing the effort of local IT support."
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