BY STEVEN MIRANDA
TECH STRATEGY
ERP in the Cloud: CFOs See the Value of
Running Enterprise Applications as a Service
Heading into 2013, it’s time to clear
up some lingering misconceptions
about chief financial officers and tech-
nology, starting with the belief that
CFOs don’t “get” the cloud. The reality
is that CFOs not only understand the
cloud’s benefits, but are embracing it
faster and more broadly than many
originally thought possible, including
new services such as enterprise re-
source planning (ERP) in the cloud.
The skepticism and uncertainty fi-
nance executives felt at the beginning
of this decade about moving their mis-
sion-critical enterprise systems to the
cloud is fading, replaced with a grow-
ing enthusiasm for the financial flexi-
bility and freedom that comes from us-
ing the cloud’s modular, pay-as-you-go
approach to accessing the latest tech-
nology innovations.
Several recent surveys detail why
CFOs are increasingly open to moving
their enterprise applications into the
cloud. For example, a 2012 survey by
Financial Executives Research Founda-
tion (FERF) and technology advisory
firm Gartner found that 53 percent of
CFOs believe that more than half of
their enterprise transactions will be de-
livered through software-as-a-service
over the next four years, up from 12
percent today.
In addition, almost 70 percent of
CFOs surveyed in 2012 by Oracle
Corp. said they would consider mov-
ing to a cloud-based version of their
core enterprise software.
Some of the reasons CFOs cite in
favor of cloud-based ERP services in-
clude the resource allocation flexibili-
ty that comes with avoiding large up-
front investments in the early phases of
an ERP deployment, the ability to
avoid fixed capital investments during
periods of corporate or economic un-
www.financialexecutives.org
certainty and timely access to the lat-
est software capabilities.
The fact that traditionally risk-
averse CFOs are open to moving their
mission-critical ERP systems into the
cloud should be a clear indication to
all companies that ERP cloud services
are fast becoming the go-to strategy for
finance executives looking to access
the latest technologies quickly and
cost-effectively to support their corpo-
rate objectives.
Carrie Dolan, chief financial officer,
Lending Club
Dan Knutson, executive vice
president and chief financial officer,
Land O’ Lakes Inc.
FinancialExecutive • JANUARY/FEBRUARY 2013
CAN ERP CLOUD SERVICES DELIVER
ON EXPECTATIONS?
CFOs are becoming more actively
involved in the selection and deploy-
ment of ERP cloud services because
both they and their management teams
have high expectations for the benefits
they can achieve with the cloud. The
Oracle survey of CFOs supports that
finding, with 68 percent indicating that
they or their CEOs were responsible
for the acquisition or deployment of
cloud services.
However, along with that increased
responsibility comes greater accounta-
bility, especially when CFOs decide to
move core ERP systems into the cloud.
Though cost is clearly a primary
driver for looking at ERP cloud servic-
es, other CFOs may be more con-
cerned with scalability, operational effi-
ciencies, compliance or access to cut-
ting-edge technologies such as embed-
ded business analytics and social col-
laboration. When building the business
case for moving to ERP cloud services,
it is important to determine upfront the
exact benefits and specific goals the
CFO aims to realize.
For San Francisco-based Lending
Club, the decision to use ERP cloud
services was tied to the need for a ro-
bust technology platform to support its
fast-paced growth. The online financial
community — which puts lenders to-
gether with low-risk borrowers — more
than doubled the amount of loans it fa-
cilitated in the past 12 months, to more
than $1 billion.
The ERP cloud service not only
needed to scale, but also to integrate
seamlessly with Lending Club’s own
internally-developed online lending
platform, which won the World Eco-
nomic Forum’s Technology Pioneer
Award in 2012. The firm wanted open
65
 What Functionality Should an Enterprise-grade services to address strategic opportuni-
ERP Cloud Vendor Comprise? ties for the business. The $13 billion
• Subscription-based (SaaS) deployment model with easy, predictable dairy and agricultural services compa-
pricing. ny recently upgraded to centralize and
• Complete ERP services, including financials, planning and budget- optimize its procurement processes.
ing, risk and controls management, procurement and sourcing, The new procurement solution will co-
inventory and cost management, product master data management exist with its current ERP systems.
and project portfolio management. “We are running our new procure-
ment solution in a managed cloud fash-
• Applications engineered for global enterprises, with multi-GAAP,
ion because we think that it is better to
multi-currency, multi-language and multi-subsidiary capabilities.
have our resources focused on strategy
• Modern user experience and socially-enabled business processes, and our core competencies and let our
optimized for today’s collaborative, hyper-connected and mobile vendor manage the hardware and soft-
workforce. ware for us,” says Land O’ Lakes Chief
• Business intelligence for everyone with pervasive, in-context Financial Officer Dan Knutson.
analytics. The company has targeted millions
of dollars in savings by automating
• Global data center coverage using compliance-certified “Gen 4”
data centers, for improved security and performance. process flows across the procure-to-pay
cycle, improving negotiation capabili-
ties and increasing visibility of company
spend across categories and suppliers.
architecture, scalability, highly intu- to survive in today’s nimble, more
itive user interface and high data secu- modular IT world. Now, the advent of SHIFT MORE IT RESOURCES
rity and disaster recovery features. ERP cloud services has sparked TO INNOVATION
"We were looking to improve deci- renewed interest in integrated ERP Land O’Lakes’ Knutson is one of many
sion-making and workflow, implement suites among small and large firms progressive CFOs who see the value in
robust reporting and take advantage of alike. They see the ability to access using cloud services to free up IT
the inherent scalability and cost sav- enterprise-grade functionality and best- resources to focus more on IT-led inno-
ings provided by the cloud," says Car- practice business processes through vation. He and Chief Information
rie Dolan, chief financial officer of the cloud with less cost, risk, time and Officer Barry Libenson are redirecting
Lending Club. labor than ever before. IT resources into transformational proj-
"Since Lending Club’s online lend- Smaller firms that traditionally ects at their firm that use Big Data and
ing platform is internally developed, viewed ERP software as too expensive business analytics to gain insights into
we also needed a cloud ERP service and labor-intensive to install and man- solutions for major global problems,
that would integrate with current sys- age can take advantage of preconfig- such as how to feed the world’s grow-
tems easily, keep IT resources focused ured templates in cloud ERP solutions. ing population in the face of increas-
on the organization’s own platform and These solutions are built based on in- ingly scarce water and arable land.
reap the benefits of cloud scalability dustry-specific best practices and They are on the leading edge of
with lowered costs and the high data country-specific requirements, thus re- the new technological shift being
security and disaster recovery features. ducing project implementation time wrought by the cloud and other
“Lending Club is creating a more ef- and addressing specific business emerging technologies that are con-
ficient model, and the cloud is support- process requirements. verging to change how we do business
ing our efforts through automation, Large global enterprises can adopt now and in the future.
communication and collaboration fea- a hybrid approach to ERP cloud servic- Savvy CFOs will follow their lead,
tures that help us achieve better work- es where it makes sense. They can de- leveraging the cloud and new ERP
flow, increased efficiency and greater in- ploy specific ERP modules in bite- cloud services to tap into these game-
sight into our financial data," says Dolan. sized chunks to address specific pain changing technologies and help fi-
points, or run entire divisions or sub- nance set the agenda for their organi-
ENTERPRISE-GRADE ERP sidiaries using ERP cloud services zation’s success.
CLOUD SERVICES while keeping their core ERP systems
Not too long ago, headlines pro- for the corporate office. Steven Miranda (steven.r.miranda@ora
claimed that ERP was dead, and that Minnesota-based Land O’Lakes cle.com) is executive vice president,
suites of integrated ERP applications Inc. is an example of a company using applications product development for
were too expensive and cumbersome this type of hybrid approach to cloud Oracle Corp. in Redwood Shores, Calif.

66 JANUARY/FEBRUARY 2013 • FinancialExecutive www.financialexecutives.org

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