Competing to Win: How Cloud Accounting Enables Growth

CFO Objectives for Automation
As interest in finance and accounting automation grows (see this survey), CFO’s consider how far “the AI” (reference is now a noun, which marks a change to personalized technology from straight programmatic intelligence), will move their departments and job functions. For now, CFO’s objectives for automation include reducing repetitive tasks, data transfer risks/errors, and back office labor. They’ve also set their sights on an advanced set of goals for the pooling of data, unified reporting, and expanded analytical services.  

To achieve these goals, business systems need to move together, and vendors should invest in the modeling of manual work processes so their software conforms to efficient (and formerly) human workflows. True Cloud deployment also helps to close the gap between different systems, and the people who use them, as they take advantage of standardized request and response protocol, and allow for uniform participation within a single application.    

Continuum of Data Isolation

While the Cloud offers a means of unifying protocol and participants, the rise of specialized software systems fosters division. That is, software for meeting sales, HR, T&E, revenue recognition, and countless other single functions isolates data (thus creating “data marts”), despite their value as single task solutions. A trade-off (see below “Continuum of Data Isolation”), then ensues where the depth of the full set of individual solutions increases in proportion to the number of data marts, and, ultimately, isolates organizational data. To overcome this curve, a higher grouping of results must form around the y-axis, without significant skew on the x-axis (“alternative points of mastery”). This combination suggests highly integrated applications sharing data, or a single system that meets most of the business’ objectives.  

The proliferation of systems, with resulting data marts/isolation, moves users up the curve, and impacts automation. Viz. Separate systems, and data, reintroduce all the losing propositions that automation was supposed to fix – the repetition of effort, risk, and labor. To counteract this movement, and back to a point of mastery, organizations attempt to use batch data integration and/or uploads, and separate application package uploads which require significant configuration. They also consider “suite” systems which have their limitations if an ERP vendor cannot remain distinctly competitive in each of its single task solutions.

The Holy Grail of Automation

What alternatives move automation, and other CFO goals for data sharing, reporting, and analytics forward?  The Holy Grail is a Cloud ERP system with pre-integrated 3rd party applications where each vendor is wholly better at their own scheme, but whose execution and data remain within the ERP. Think of a best-in-class CRM accessible through your ERP, with menu option sunk straight into the single system. One vendor to keep accountable, pay and execute with, and one database.

Suite providers often get themselves in a bind trying to defend every aspect of what they sell, while best-of-breed sellers struggle with forming the necessary relationships with other vendors. Who prevails? In another context, think of Apple, which arguably has the most powerful ecosystem in the world; they’re not giving developers the rights to manipulate the operating system (core competency), but do give them the tools to build and integrate with their core competency. Incidentally, Apple also owns a significant portion of the pipeline through which content is distributed. This doesn’t apply to the ERP world, yet.

Achieving Work Transformation

The outcome CFO’s want from automation resides in efficient resource management, a unified data model, and a quick turnaround of their financial position and performance. These goals can be achieved by bringing offline processes online, and shooting for a highly-integrated set of vendors around their ERP.

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[ Published: April 19, 2017 ]