In Oracle’s 2018 Enterprise Performance Management (EPM) Trends Report, more than half of the respondents (62 percent) have moved or will move their EPM processes to the Cloud within the next year. The report identified nine EPM trends that have emerged.

With aging systems and the accelerating pace of change, avoiding on-premises upgrades is now the top reason to move to the Cloud. In addition, companies are starting to appreciate the benefits of continuous innovation that come with the Cloud. They also understand the risk of technology obsolescence that can occur when focusing too many resources on maintaining outdated systems.

Moving to the Cloud is not simply about lifting and shifting capabilities from on-premises to the Cloud. It’s an opportunity to reinvent and transform your business processes and infuse them with best practices. Cloud not only enables new capabilities, but it also provides the vehicle to deliver emerging technologies such as Artificial Intelligence, Machine Learning, process automation, blockchain, and more. These capabilities are enhancing the next generation of EPM Cloud that enables finance leaders to build future-ready finance organizations.

EPM Trend 1 – EPM in the Cloud is the new status quo.

With finance, EPM processes have often been the first to move to the Cloud, and EPM in the Cloud is rapidly becoming the new standard. The pace of adoption is quickly accelerating. In this year’s survey, 62 percent of respondents reported that they are currently running EPM processes in the Cloud or that they will be within the next 12 months. This is an increase from 46 percent in last year’s survey. Overall, 79 percent of respondents indicated that they have plans for EPM in the Cloud within the next two years. Last year’s survey reported 65 percent.

EPM Trend 2 – Just say no to upgrades.

Costs and economic considerations continue to be key reasons for moving the Cloud. Other factors might be avoiding infrastructure investments and lowering TCO. However, in recent years as systems start to age, organizations are starting to look more closely at the pain, complexity, and time involved in upgrading their on-premises software. Avoiding on-premises upgrades was cited as the top reason for moving EPM to the Cloud. Last year it was the second most common reason, and two years ago it was listed as the sixth most common reason.

EPM Trend 3 – Come to save money but stay for business agility.

Even though economic drivers continue to lead the reasons to move to the Cloud, the benefits of EPM Cloud go far beyond cost savings. The competitive advantage offered by always-new technology outweighs all other benefits. In this year’s survey, staying current on technology as a benefit increased significantly as the top benefit of moving to EPM Cloud. Last year’s survey had 75 percent of respondents cite it as a benefit, and this year’s survey had 89 percent of respondents. Being able to deploy faster and increased flexibility tied as the second most commonly cited reason for moving to EPM Cloud.

In an era of digital disruption, it’s important for organizations to be nimble. Cloud offers the agility that is needed to rapidly adapt and stay ahead of changing conditions. Additionally, with Cloud, the risk of technology obsolescence drops to zero, which puts businesses on a more solid competitive footing.

EPM Trend 4 – Using best practices yet? Look to the Cloud.

Moving to the Cloud enables customers to innovate and adopt best practices like rolling forecasts, driver-based planning, and faster reporting and close. When these best-practice processes are tied into applications, Cloud services make it easier to disseminate standardized best practices across an organization. That would ultimately lead to higher productivity and performance. Best practices are like a well-organized toolbox that is continually upgraded with the latest features, so Cloud customers always benefit from access to the most current technology.

EPM Trend 5 – Financial consolidation is the next big thing.

What’s next for EPM Cloud users? Financial planning and budgeting have always been a top priority for EPM Cloud users, but financial consolidation has risen in importance as a significant area to move to Cloud. In fact, it tied at 54 percent with financial planning and budgeting as the most significant area to take to Cloud.

Increasing regulation and stakeholder demands are putting more pressure on financial consolidation, close, and reporting processes. A fragmented approach to financial close and reporting processes makes meeting these demands problematic. Organizations are now turning to Cloud software solutions that address the extended process, from ledger close to regulatory filing, to help them deliver a modern financial close.

EPM Trend 6 – It’s not just about the numbers.

Nearly two-thirds of survey respondents agreed that expanding qualitative commentary is critical in their reporting processes. In today’s dynamic business environment, it’s more important than ever for management to clearly explain the quality and sustainability of corporate performance. Organizations see the need to report in a timely and accurate manner and to provide a level of visibility and transparency so stakeholders can fully understand the numbers reported. Of respondents, 65 percent said that expanding qualitative commentary is critical. Yet, 52 percent of respondents are not confident in their tools to provide sufficient collaboration to produce that qualitative commentary.

Modern enterprise reporting solutions should provide collaboration facilities so that staff can enrich the numbers with meaningful commentary through integrated, secure and purpose-built functionality. Oracle EPM Cloud enables customers to reinvent narrative reporting, or even save lives as in the case of Montefiore’s experience with Oracle EPM Cloud, by streamlining reporting processes and combining data plus narrative in a secure, collaborative environment.

EPM Trend 7 – No more “black boxes.”

Traditionally, finance has focused on calculating costs at the company level. Less than half of the survey respondents also calculate costs at a group or class level, and at an individual customer, product, or service level.

With today’s technology, calculating the direct costs associated with each costing level is much easier than it used to be, but indirect costs for many are still done poorly or inaccurately. Even worse, some are done in a black box (purchased programs or in-house creations) with little or no transparency for recipients.

This year’s survey showed 43 percent of respondents declaring that they plan to change this practice and provide transparency of allocations to aid in controlling costs and changing inefficient practices.

EPM Trend 8 – The only thing that’s constant is change.

Change is rampant in today’s business environment. When changes like mergers and acquisitions, product rollouts, Cloud migrations, etc. occur, the data structures and hierarchies of how the business is managed must also change. However, according to the survey, the tools and processes that finance professionals have are not fit for that purpose. The most common methods used to manage structural changes across enterprise systems were reported to be spreadsheets and emails (70 percent) and face-to-face meetings (61 percent).

These methods are not easily repeatable, trackable, or auditable. In fact, they impede change. Organizations need an enterprise data management solution that is designed for dynamic, fast-changing business environments to keep structural information aligned. An enterprise data management solution resolves the difficulties of manual processes and helps finance executives drive more efficiency and more reliable numbers, which ultimately helps them become more effective business partners.

EPM Trend 9 -The power to transform.

There is a growing interest in emerging technologies like blockchain, Artificial Intelligence, Machine Learning, cognitive computing, intelligent or robotic process automation, and Internet of Things. Respondents indicated that they had already begun projects with some of the technologies and are interested in exploring more. AI was the leading technology that most are using or exploring, and blockchain followed closely as the second.

Emerging technologies like these have the power to transform finance functions. They can provide insights into analytics, help drive decision-making, automate routine tasks, and much more. Eliminating some of that manual labor can help reduce the likelihood of errors and free up valuable time for finance professionals to engage with operations. This will allow them to have more time spent providing forward-looking guidance that management needs to capitalize on future opportunities.

For more information about these EPM trends, check out the full Oracle EPM Trends Report attached below.