Reducing Risk in a Dynamic Environment with the Cloud

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Reducing Risk in a Dynamic Environment with the Cloud

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Learning Objectives

After participating in this event you will be able to:

Understand the risk areas exposed in a rapidly changing economic and business environment.

Recognize the Finance business goals impacted by change and risk management

Identify areas that cloud-based financial applications can help manage change and risk


Reducing Risk in a Dynamic Environment with the CloudIan Halifax, CMA, CPAChief Financial OfficerHost Analytics


What We Worry About

5

• Risk

• Surprises

• Cost


What We Do

6

1. Accounting/reporting2. Planning/forecasting3. Analytics/intelligence4. Regulatory requirements (SEC, SOX)5. Taxation6. Treasury/cash management7. External /internal audit8. Investor/BOD relations9. Mergers and acquisitions10. Systems infrastructure


Risk Areas Exposed by Rapid Change

7

• Control risk– Inflexible, antiquated systems– Inadequate audit trails

• Misstatement risk– Multiple data sources– Manual process mean higher risk of errors

• Forecast risk– Data accuracy– Timeliness – data aggregation versus data analysis


What A CFO Needs

What Best-In-Class Means• No surprises• Right performance on demand• Powerful early warning system for the organization• Happy auditors• CFO sleeps at night

What a CFO Needs• Efficient and effective processes and systems• The right, accurate metrics on demand• Run rapid forecast scenarios• Flexibility to manage change (e.g. M&A)• Credible voice• Ability to move very quickly• Rapid enterprise application deployment


Excel And Email Is Risky

No WorkflowNo SecurityNo PrivacyNo Version ControlLimited Reporting


What Is Enterprise Performance Management?

Planning

Close

Reporting

Analytics

Enterprise Performance Management (EPM = CPM = FPM ≠ BI ≠ ERP)

To improve

InsightActionable

AccountabilityAcross the org

SpeedFaster processes


How Does EPM Reduce Risk?

• Strengthens Control Environment– Controlled financial consolidations– Built-in audit trails

• Improves Data Integrity– Central source of truth– Lower chance of manual errors

• Enhances Forecasting Capability– More time for analysis and scenario modeling– Early warning system: faster and broader visibility of key metrics


But EPM Projects Introduce Different Risks

Budget overruns services

Selecting wrong vendor

Project stalls

Lack of end-user acceptance

Missed target dates

Budget overruns software

Doesn't meet expectations

0 10 20 30 40 50 60 70 80

EPM Project Risks

Percent of total respondents N=226

Source: BPM Partners “The Pulse of Performance Management 2013”


The Cloud Lowers EPM Project Risks



Project stalls


Missed target dates



0 10 20 30 40 50 60 70 80

EPM Project Risks



Cloud:• No more drive-by software selling of large up-front software and hardware

purchases• Lack of infrastructure means you can start-small, then phase in additional

processes, departments, and users• Cloud vendors must win your business every year. They are more aligned to

meet customer expectations.





Project stalls


Missed target dates



0 10 20 30 40 50 60 70 80

EPM Project Risks



Cloud:• No hidden costs• Predictable ongoing subscription





Project stalls


Missed target dates



0 10 20 30 40 50 60 70 80

EPM Project Risks



Cloud:• Faster implementation, less implementation fatigue





Project stalls


Missed target dates



0 10 20 30 40 50 60 70 80

EPM Project Risks



Cloud:• Only need a browser• No VPN interruption issues• Single-sign-on• Consumer-web design• Clicks-not-code• Drag-and-drop UI





Project stalls


Missed target dates



0 10 20 30 40 50 60 70 80

EPM Project Risks



Cloud:• Shorter implementation means less fatigue• Finance administered, no IT burden• Less time required of finance to deploy





Project stalls


Missed target dates



0 10 20 30 40 50 60 70 80

EPM Project Risks


Cloud:• Fast pace of innovation means cloud vendors can catch-up on product

capabilities• Lower upfront cost as compared to on-premises systems means lower

switching costs





Project stalls


Missed target dates



0 10 20 30 40 50 60 70 80



Cloud:• Lower % of software costs (typically 25-75% rather than 100%-400%)• Clicks-not-code mean no expensive consultant needed to modify application


Why Software Buyers Choose The Cloud

Source: Forrester, April 2012, “The Changing Cloud Agenda”. Base 920 software decision-makers at firms

Improved business agility

Improved focus

Speed of implementation

Faster releases

Lower overall costs

OpEx not CapEx

Why Did You Choose Cloud?


• Security, privacy

– No more Excel security risks– No more out-of-date/un-patched software – no wait for patches– Granular security and privacy controls – Regular penetration testing and audits – Encryption

• Service interruption

– Service-level agreements that are typically higher than internal IT– No disruptive upgrades– Redundant, geographically distributed data centers

Is The Cloud Secure?


Consider Platform Risk

Source: BPM Partners “The Pulse of Performance Management 2013” N=226

Would you or have you considered a Cloud-based EPM solution?

2012 2013

Cloud 57%

Cloud 62%

“We expect SaaS to become the primary FPM deployment model within three to five years.” - Paul Hamerman, VP Principal Analyst, Forrester Research


Summary

• Excel and email are not ERP/BI/EPM solutions

• Extensive historic EPM deployment

• All enterprise applications are moving to the cloud

• EPM is very much part of this wave


Thank You


Reducing Risk in a Dynamic Environment with the CloudShane Riddle Manager FP&APlanar Systems, INC


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Financial Risk• Missing plan• Compliance risk• Confidentiality risk

Technology Risk• Service-level risk• System failure• Complexity risk

Three Buckets Of Risks

Team Risk• Team retention• Key-man risk


Challenge• Missing plan• Surprise miss• Currency risks

Solution• One source-of-truth• Leading indicators• Accountability across the org• Real-time data

Turn To EPM Solution To Minimize Plan Risk


Challenge• SEC Compliance• Yearly process• Audit costs• Weak security with spreadsheets• Highest risk is insiders who have

access to data

Solution• “Audit-as-a-Service”

– SOX compliant– SSAE-16 Soc 1&2

• Audit trails minimize audit costs• Strong security• Lock-down access

Turn To Cloud-based EPM To Minimize Compliance Risk


Challenge• Keep HR and comp info private• Weak privacy with spreadsheets• Risk of leakage by internals with

special access

Solution• Lock-down access• Roll-up info without employee

names• No internal access• Fully-encrypted at all points

Turn To Cloud-based EPM To Minimize Confidentiality Risk


Challenge• Long ERP implementation• Units flying blind• Pressure on finance for answers

• Upgrade risks• Lot of effort to manage• Quarterly patches for security

updates

Solution• Short EPM implementation• Bridge transition• Validate ERP data

• No more upgrades• No time wasted• No more patches

Turn To Cloud-based EPM Solution To Minimize Service-level Risk


Turn To Cloud-based EPM To Minimize System Failure Risk

Challenge• On-premises physical system failure• Ongoing hardware requirements• Lots of infrastructure to keep-up• Expensive

Solution• Cloud infrastructure

– World-class data-centers– Redundancy

• Service level agreement• Lower total cost of ownership


Challenge• Managing too many systems• Requires more IT staff• Lots of maintenance contracts

Solution• System rationalization• Reduce headcount• Save a ton of money• Reduce complexity

Turn To Cloud-based EPM To Minimize Complexity Risk


Turn To Cloud-based EPM To Minimize Team Retention Risk

Challenge• Exit interviews revealed that

antiquated systems contributed to talent churn

• Want to be analysts yet sucked into system dev. work

Solution• Provide modern tools and best

practices to retain talent• Excited to be analysts again


Challenge• If I get hit by a bus, can someone

pick-it up• Turn-over is a fact of life

Solution• Chose systems that are easily

learnable

Turn To Cloud-based EPM To Minimize Key-man Risk


Thank You


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