Overcoming financial data security fears: 5 ways to convince executives to switch to the cloud
Cloud computing has revolutionized financial planning analytics software, yet not every company is reaping the benefits of financial performance management technology. Over-simplified fears of financial data security and breaches are stopping many leaders from putting their company's sensitive information on the cloud. Here are five tips to help CFOs convince other executives of the value of the cloud and plan financial data security measures.
1. Compare cloud-based and on-premise solutions
Despite what many executives believe, the cloud is a very safe place. Almost 75 percent of respondents to a recent Harvard Business Review Analytic Services report said that the cloud increased (39 percent) or had a neutral impact on (34 percent) their organizations' data security levels. Only 10 percent reported a decrease in security.
Cloud-based financial planning software and services from reputable vendors include advanced security features that small and midsize businesses may not be able to otherwise afford. These features including penetration testing, intrusion detecting, monitoring, alerting and incidence management, all of which are designed to keep financial data safe.
"The reality is that cloud in and of itself is no more or less secure than other models," the Harvard Business Review study concludes. "It depends on the measures organizations and their providers take to secure the data. If policies and procedures aren't robust, then data will be vulnerable wherever it is hosted."
2. Explain benefits of the cloud
The cloud often alleviates internal issues, aids in disaster recovery and allows different areas of a business to access data from anywhere at any time. The Knowland Group improved the reliability of its information when it migrated from spreadsheets to software on the cloud, CFO Jeff Haslow explained in CIO Review.
"The server was supposed to have been backed up, but was not, and the last backup that was done could not be restored properly," Haslow wrote of his company's pre-cloud problems. "We lost four days of work and spent thousands of dollars rebuilding the accounting database. This was in addition to already frequent downtime for maintenance releases, integration patches, hardware updates and data center outages."
3. Warn of the consequences of poorly handled data
At many companies, forecasting takes place in a series of interlinked spreadsheets. These may be located across different work sites and sometimes even different countries or continents. Each time an analyst runs a model, he has to consolidate all the versions and be sure the data is properly updated.
This exposes companies to version-control risk, errors that can result in serious miscalculations and lax controls that lead to security problems and fraud, according to the European Spreadsheet Risks Interest Group (EuSpRIG). Among EUSpRIG's collected horror stories is a $6 million accounting error made by the Knox County Trustee's Office when one account wasn't correctly linked in an Excel spreadsheet. The mistake cost the office $12,500 in audit fees.
Cloud-based financial planning gives stakeholders fast access to real-time data, ensuring everyone is working with the same version whether they are in the office or traveling abroad. This eliminates concerns about outdated or missing financial data, which are key concerns for strategic performance management.
4. Wow them with the cloud's flexibility
Cloud computing gives businesses the scalability to quickly acquire more capacity when it's needed or scale down when it's not.
Consider an example from Independent Banker magazine: "A community bank's IT staff can buy time on such services for one-time projects — such as comparing the interchange fees of several prospective ATM vendors based on actual transactions — or continuously rent time on cloud computing services for ongoing calculations, such as credit-risk simulations for a steady stream of loan applications."
With cloud-based solutions, new projects no longer require the time, cost and expertise of installing new servers or software.
5. Outline potential savings
Increased agility translates into speedier decisions, limited project delays and quicker product and service launches. In the Harvard Business Review Analytic Services study, 40 percent of respondents reported that cloud use increased revenue, and 36 percent said it increased profit margins.
That's in addition to the potential savings from buying less equipment, hiring fewer IT staff members to maintain it and not paying for the physical space to store servers — all factors guaranteed to get fellow executive's attention.
Start your financial performance management journey today, and deliver deeper insights that help your organization make faster, better business decisions. Visit the IBM Financial Performance Management webpage, and sign up for a free trial today.