Building the Business Case for
Cloud Computing
William M. Sinnett
Senior Director, Research
Financial Executives Research Foundation
the source for financial solutions
1250 Headquarters Plaza
West Tower, 7th Floor
Morristown, New Jersey 07960
www.ferf.org
an affiliate of
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financial executives international
Building the Business Case for Cloud Computing
TABLE OF CONTENTS
What is Cloud Computing?
1
Motivations for Choosing a Cloud Solution
3
The Tangible Benefits of Cloud
4
How Cloud Can Transform the Finance Function
6
Companies that Use Cloud Computing
7
Encore Enterprises Inc.
7
Fitness Formula Clubs
9
ProKarma, Inc.
10
TradingPartners
12
For More Information about Cloud
15
About the Author and the Sponsor
16
About Financial Executives Research Foundation, Inc.
17
2
What is Cloud Computing?
Cloud computing has been defined by the National Institute of Standards and Technology (NIST) and the
Cloud Security Alliance as:
“A model for enabling convenient, on-demand network access to a shared pool of configurable computing
resources that can be rapidly provisioned and released with minimal management effort or service provider
interaction.”
ISACA, the worldwide association of IS professionals dedicated to the audit, control, and security of
information systems, has identified some key business benefits offered by the cloud:

Cost containment – The cloud offers enterprises the option of scalability without the financial
commitments required for infrastructure purchase and maintenance.

Immediacy – Many early adopters of cloud computing have cited the ability to provision and utilize
a service in a single day.

Availability – Cloud providers have the infrastructure and bandwidth to accommodate business
requirements for high speed access, storage and applications.

Scalability – With unconstrained capacity, cloud services offer increased flexibility and scalability
for evolving IT needs.

Efficiency – Reallocating information management operational activities to the cloud offers
businesses a unique opportunity to focus efforts on innovation and research and development.
This allows for business and product growth and may be even more beneficial than the financial
advantages offered by the cloud.

Resiliency – Cloud providers have mirrored solutions that can be utilized in a disaster scenario as
well as for load-balancing traffic.
Source: Cloud Computing: Business Benefits With Security, Governance and Assurance Perspectives ©2009, ISACA
There are also risks with Cloud solutions that will need to be managed. ISACA has identified several
potential risks:

Enterprises need to be particular in choosing a provider. Reputation, history and sustainability
should all be factors to consider.

The SaaS provider often takes responsibility for information handling, which is a critical part of the
business. Failure to perform to agreed-upon service levels can impact not only confidentiality, but
also availability.

The dynamic nature of SaaS may result in confusion as to where information actually resides.
When information retrieval is required, this may create delays.

Third-party access to sensitive information creates a risk of compromise to confidential
information. In cloud computing, this can pose a significant threat to ensuring the protection of
intellectual property and trade secrets.
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
Due to the dynamic nature of the cloud, information may not immediately be located in the event of
a disaster. Business continuity and disaster recovery plans must be well documented and tested.

Compliance with regulations and laws in different geographic regions can be a challenge for
enterprises. At this time, there is little legal precedent regarding liability in the cloud.
To find out why and how cloud computing is used by the finance function, we interviewed four CFOs in four
different industries for this research project:

Ginger Gordon, CFO at TradingPartners, a spend management consulting company;

Craig Stack, CFO at ProKarma, Inc., a global IT solutions company;

Mahesh Shetty, COO and CFO at Encore Enterprises Inc., a real estate investment company; and

Bruce Singleton, CFO at Fitness Formula, Ltd., a network of health and fitness clubs.
We asked them to discuss their motivations for choosing a cloud-based solution, what tangible benefits
they have enjoyed, and how Cloud has helped them transform the finance function. Questions included:

What cloud-based financial solution(s) do you use?

What were the primary motivations behind choosing a cloud-based solution?

What challenges did your finance organization face, and what did you hope to accomplish with a
cloud-based solution?

What tangible benefits have you realized versus your previous on-premise solution?

How have existing staff been redeployed? And

How has the cloud enabled you to transform the finance function?
This chart summarizes the responses from the CFOs interviewed:
Prior Solutions On-Premise
Today’s Cloud Solutions
Access/
Visibility
Extremely limited
Anytime/Anywhere
“Live and Local”
Implementation
Time
Implementation hours based
on required customization
300 to 400 hours (including the
importing of past transaction data)
Integration
Issues
Nothing was integrated
Solutions are integrated
Upgrade Costs
$1K to $60K/
Depends on solution
$0
On-Going
Maintenance
$1K to $200K/year
$0
Scalability
Very limited
Easy to scale with
Full multi-dimensional analysis
Days to Close
15 to 35 days
5 to 15 days
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Motivations for Choosing a Cloud Solution
The primary motivations for choosing a cloud-based solution described by the CFOs fall into three general
categories:

A desire to optimize IT system(s), eliminating costs and IT overhead;

A desire for better user access; and

A desire to streamline and automate financial accounting processes and provide robust reporting
for improved decision making.
Optimize IT Systems
Mahesh Shetty, COO and CFO at Encore Enterprises Inc., decided that Encore is a real estate investment
company and not an IT development company. As a growing business, he wanted Encore to be able to scale
up while reducing both costs and headcount, and get the best available technology at the lowest cost. Shetty
also wants automatic updates, which do not require the purchase, installation or additional maintenance of
new releases. He describes these goals as “optimizing the IT systems that we use.”
Craig Stack is CFO of ProKarma, Inc., which has 20 locations on three continents. “We were looking for a
quick and cost-effective implementation with solid maintenance and support. And we didn’t want to install
and maintain any software or hardware.”
Ginger Gordon, CFO of TradingPartners, was simply looking for a system that would be easy to install and
would not be dependent on an IT department for implementation or support.
Better User Access
Ginger Gordon had employees in both the UK and the U.S., but the data was maintained on a server
located in the UK. They had different processes, so it was difficult for them to collaborate. “It became clear
to me that in order for the company to have a more efficient finance organization, we needed to find a way to
easily share accurate and real time information.”
Craig Stack wanted centralized control. “We wanted one central database with central control and equal,
simple access for everyone. We needed Cloud to Cloud integration, so system connectivity was very
important.”
Streamline Accounting and Reporting
When Ginger Gordon joined TradingPartners as CFO, the finance function had quite a few complexities,
including global consolidations for entities in the UK, U.S., China and Japan, foreign exchange translations
with four different currencies, and the inability to access financial information outside of the UK. “The
consolidation and FX processes were compiled manually and highly dependent on error prone excel
spreadsheets.”
Brian Singleton is the CFO at Fitness Formula, Ltd. When he joined Fitness Formula, they had nine
locations, but no standard chart of accounts. “I got separate reports for each location, which I had to
consolidate manually using Excel, and that took a full day to do. Then, any changes created other problems,
because everything had to be recalculated, and nothing was updated in real time. So consolidation was very
labor-intensive. In addition, all statistical reporting had to be done manually.”
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The Tangible Benefits of Cloud
Marc Linden, CFO of Intacct Corporation, describes three achievable benefits using cloud computing:
1. Companies can finally realize the promise of accessing data real time, wherever the data was
entered and wherever it is used. Data can be stored in one centralized location and access
anywhere, in any country, based on permissions.
2. Companies have flexibility in how they organize the finance department. Data can be input
anywhere, so the companies may take advantage of labor cost savings in other countries.
3. Cloud computing provides more computing capability per dollar. Companies pay on a subscription
basis for just that functionality that they need, as an operating expense, with no upfront capital
expense. Cloud computing is scalable, with the provider assuming the risk.
Ginger Gordon describes a long list of tangible benefits provided to TradingPartners by its cloud-based
solution:

The productivity of the finance organization has been greatly enhanced. The close process has
been reduced from 25 days to less than five.

Numerous manual processes have been eliminated.

Visibility into financial and operational data. Business unit leaders are able to access real time
data at their leisure.

Adapting to growing business needs.

Improving organizational decision-making.

Freeing up time to focus on strategic initiatives. “My role has changed drastically.”
Headcount Reduction
TradingPartners has been able to reduce finance staff headcount by 50%, rather than re-deploying existing
staff. “We eliminated our U.K. finance department, and transitioned the finance team to the U.S.”
Mahesh Shetty reports that Encore Enterprises has also been able to reduce both headcount and costs.
“Over the past two years, Encore has reduced the accounting department from 25 people down to 6. Over
the past 3 years, the IT department has been reduced from 15 to 4. By next year, the IT department will be
reduced again down to 2. This headcount reduction has saved Encore $200,000 annually in IT costs, and
$650,000 annually in accounting department costs. And Encore was able to make these reductions while
increasing the number of properties owned or managed by 30%.”
Craig Stack says that Prokarma has grown in the past year from 900 to 1,400 employees. “We could not
have managed this growth with our previous systems.”
Fitness Formula Clubs has also been able to expand the business without added headcount.
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Visibility
Craig Stack says that visibility into financial and operational data has been the cloud’s greatest contribution
to ProKarma. “We currently provide over 400 project P&Ls to our project managers worldwide. This has
greatly increased our ability to make timely, informed decisions on our business – at every level.”
Brian Singleton agrees that visibility into financial and operational data is very important. “Before Intacct,
th
all the club managers and department managers would call me after the 10 of the month for their financial
reports. Now, they are able to access their own reports with just a Web browser.”
Summary of Benefits
Here is a summary of the benefits of cloud computing as described by the CFOs interviewed:

Benefits of increased anytime, anywhere visibility;

Productivity savings, such as superior integration with existing business solutions;

Reduced hardware and software costs
o
No hardware licenses or hardware maintenance and upgrade costs;
o
Reduced up front software license costs, minus discounts; and
o
Payment models transition from up-front licensing/purchase costs to a monthly price based
on number of users.


Lower implementation and integration costs
o
Reduced professional service costs; and
o
Easier access and training.
Lower operational and maintenance costs
o
Reduced professional services costs and support requirements
o
Improved IT staff productivity; and
o
Lower cost backup and disaster recovery.
5
How Cloud Can Transform the Finance Function
Cloud-based solutions have provided tangible benefits for each of the companies interviewed. But can
cloud-based systems help transform the finance function? Each of the executives interviewed noted that
cloud-based solutions have freed up their time so that they could support their businesses with better and
more strategic information.
Craig Stack describes the transformation at ProKarma: “Our employees work in concert with each other
across the globe, and everyone can look at the same numbers from the same database at the same time. It
is a matter of communication. Now when a manager in Chennai, India, needs utilization information,
dashboards and reports are created and delivered in minutes, not days. I have a direct line of communication
with the managers, which fosters a deep connection within the organization. There is a high level of
communication, participation, and ownership across all of our businesses.”
Mahesh Shetty sums up the transformation at Encore: “Finance now provides decision support rather than
being an historian. We partner with the business people to analyze potential deals.”
Bruce Singleton at Fitness Formula agrees: “Cloud has helped to free up my time so that I can be more
strategic and support the business.”
Ginger Gordon describes the results of the transformation at TradingPartners:
“The transformation of the TradingPartners finance department has allowed me to spend more time on
strategic issues and work closely with our CEO to grow the business. My #1 goal is business acceleration.
This has led to a CFO role which is one of leadership and performance management; clearly a transition from
a role as a process manager. My contribution to the organization has evolved and is now viewed as
strategic.”
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Companies that Use Cloud Computing
Encore Enterprises Inc.
Encore Enterprises Inc. is a privately owned national real estate investment company founded in 1999.
Encore develops and acquires mixed-use complexes, limited and full-service hotels, multi-family apartment
home communities, retail shopping centers and commercial office buildings. In addition, the company
manages hotels, vacation condominium resorts, and homeowner associations.
Encore's operational efficiency has allowed the company to stay ahead of the commercial real estate
market curve during the recent recession. This efficiency, combined with disciplined underwriting enables the
company to capitalize on market trends providing returns in line with each investor's set of parameters.
Encore uses nine different cloud-based solutions:
1. Microsoft Office 365 is used for e-mail, documents and spreadsheets.
2. MRI is the accounting system for the Real Estate Division and Encore corporate.
3. M3 is the accounting system for the Hospitality Division. All hotels that Encore Enterprises
either owns or manages use M3 to track revenues and expenses. M3 provides a dashboard
for the individual hotels.
4. Exponent HR is used for all payroll, benefits and other human resource functions.
5. Real Page is used as the property management system for the Multi-Family Division. Real
Page provides Business Intelligence (BI) and property management services. Real Page
enables Encore to optimize rental income based on local market data.
6. Real Space is used for document management.
7. External IT is used for the IT Help Desk.
8. Avid is used as work flow engine to approve all accounts payable invoices.
9. Wells Fargo A/P is used to process checks.
Mahesh Shetty is Chief Operating Officer and
Chief Financial Officer. He has essentially
virtualized the entire “back office.” Shetty
“Managing growth and keeping overhead
describes his motivations for choosing cloud-
costs low was a big challenge under our
based systems:
traditional model of in-house accounting,
From a strategic perspective, we asked
IT development and the associated
ourselves “Are we an IT development company?
resources. The path of cloud computing
The answer was No. Our core competence is to
made the finance organization more
identify good real estate locations, develop
strategic by focusing on decision support
properties and sell them at a profit. We are a
and the IT applications became a utility
growing company, so we wanted to be able to
that enabled the business to be more
scale up without increasing headcount. In fact, we
wanted to reduce both costs and headcount. So
productive without having to wait for the
our primary motivation was to optimize the IT
next release of software.”
systems that we use. We wanted to get the best
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technology at the lowest cost.”
“Our old legacy systems had to be customized and maintained, and required in-house development of bolt
on programs, all of which created a lot of headaches. Our new cloud solutions have replaced these old
legacy IT systems. Cloud solutions also provide automatic upgrades, which do not require the purchase,
installation or maintenance of new releases.”
“Managing growth and keeping overhead costs low was a big challenge under our traditional model of inhouse accounting, IT development and the associated resources. The path of cloud computing made the
finance organization more strategic by focusing on decision support and the IT applications became a utility
that enabled the business to be more productive without having to wait for the next release of software.”
What have been the tangible benefits of these cloud-based solutions? Cloud solutions have helped reduce
both headcount and operating costs. Over the past two years, Encore has reduced the accounting
department from 25 people down to 6:

The CFO (Shetty),

Two controllers,

One senior accountant, and

Two administrative staff.
Over the past 3 years, the IT department has been reduced from 15 (including some in India) to four. By
next year, the IT department will be reduced again down to two.
This headcount reduction has saved Encore $200,000 annually in IT costs, and $650,000 annually in
accounting department costs. And Encore was able to make these reductions while increasing the number of
properties owned or managed by 30%.
So how has Cloud helped to transform the finance function? “Finance now provides decision support
rather than being a historian. We partner with the business people to analyze potential deals.”
“We have transitioned from in-house on-premises software to outsourced IT services. But we continue to
ask if there is anything else that we should consider.”
Snapshot of Encore Enterprises Inc:
Today’s Cloud Solutions
Prior Solutions On-Premise
Access/
Visibility
Issues based on employee computer
configuration
Single browser login/
All files available to all employees
Implementation
Time
Implementation hours based
on required customization
Upgrades are automatic/
IT team not required
Integration
Issues
IT team resolved problems/
Time and effort required
Cloud provider manages transition/
Fixes are universal to all customers
Upgrade Costs
$25K to $60K/
Depends on solution
$0
On-Going
Maintenance
Average $200K/year
One consultant troubleshoots all issues at
$40K/year
Scalability
Fixed costs based on upfront capital expenses
Variable costs
Days to Close
15 days
5 days
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Fitness Formula Clubs
Fitness Formula, Ltd. is a network of urban and suburban health and fitness clubs operating under the
brand name of Fitness Formula Clubs. It is Chicagoland's largest privately owned reciprocal usage provider
of health, fitness and wellness facilities. It employs more than 600 experienced staff, and has established
partnership and medical sub-tenant affiliate relationships with Chicago's leading hospitals and physical
therapy providers. Currently, Fitness Formula Clubs owns nine clubs in the Chicago area, and manages
three others.
Brian Singleton is the Chief Financial Officer. Singleton describes his motivations for choosing a cloudbased financial solution:
“When I joined Fitness Formula, they were using Sage’s Business Works, which is like QuickBooks, and it
left a lot to be desired. We had nine locations, but no standard chart of accounts. I got separate reports for
each location, which I had to consolidate manually using Excel, and that took a full day to do. Then, any
changes created other problems, because everything had to be recalculated, and nothing was updated in
real time. So consolidation was very labor-intensive. In addition, all statistical reporting had to be done
manually. I lived with Business Works for two years, and then I knew that we needed a change. Choosing
Intacct, a cloud-based financial solution, was my decision.”
What have been the tangible benefits of these cloud-based solutions? “The most tangible benefit of Intacct
is that we can expand the business without adding headcount. I am the CFO, and I have two staff
accountants working for me. With Intacct, we have been able to add three more locations without adding any
additional staff. In other words, we can now do more with the same people. And I can now produce
important metrics for senior management that I was
not able to do before.”
“Visibility into financial and operational data is very
“What have been the tangible benefits of
important to me. Before Intacct, all the club
these cloud-based solutions? “The most
managers and department managers would call me
tangible benefit of Intacct is that we can
th
after the 10 of the month for their financial reports.
Now, they are able to access their own reports with
expand the business without adding
just a Web browser.”
headcount. I am the CFO, and I have two
“Another benefit is working with documentation.
staff accountants working for me. With
With Intacct, we can attach documentation to journal
Intacct, we have been able to add three
entries. When we used the previous system, I had to
more locations without adding any
go to a back closet and sort through old boxes to find
additional staff. In other words, we can
documentation. Cloud facilitates a quicker year-end
now do more with the same people. And I
reporting process and helps in the annual audit.”
can now produce important metrics for
So how has Cloud helped to transform the finance
senior management that I was not able to
function? “Cloud has helped to free up my time so
do before.”
that I can be more strategic and better support the
business.”
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ProKarma, Inc.
ProKarma is a global IT solutions company. They partner with leading enterprise companies to deliver
simple and scalable solutions to address complex business challenges. Founded in 2000, it is headquartered
in Omaha, NE, with 20 offices across U.S., India and Argentina, and has a global work force of 1,400.
Craig Stack is the Chief Financial Officer. He has been with ProKarma for six years. In that time,
employment has grown from 180 people to 1,400 people. Stack says, “I have 20 years of history with hosted
applications, and I have watched the evolution of hosted applications to full Cloud solutions, which gives me a
good perspective on Cloud.”
ProKarma employs six different cloud-based solutions:

SalesForce.com for sales and HR;

Job Science integrated with SalesForce.com, for sourcing and recruiting;

Box.Net for document storage and management;

ADP for payroll;

Intacct for finance, project accounting and revenue recognition (1,200 employees using Intacct);
and

Adaptive Planning for budgeting and planning.
ProKarma was using SalesForce.com when Stack first arrived. At that time, it was rudimentary and being
used for sales and HR. Over the past six years, SalesForce.com has been developed into a robust system
for sales, recruiting and HR. “It has become our front office,” notes Stack. “We use Job Science to source,
recruit and onboard new consultants to our staff, and it feeds directly into SalesForce.com.”
Stack describes his motivations for choosing cloud-based systems:
“We have offices in 20 locations on three continents (Argentina, India and the U.S.), and customers in 60
locations worldwide. A year and a half ago, we were using QuickBooks Enterprise in both the U.S. and India,
and Excel spreadsheets for all of our consolidations.”
“This was not a very efficient system, so I initiated an extensive vendor evaluation to help us implement a
new system that would allow us to drive new levels of efficiency and scale to accommodate our growing
operations.”
“We wanted one central database with central control and equal, simple access for everyone. We needed
Cloud to Cloud integration, so system connectivity was very important. We were looking for a quick and costeffective implementation with solid maintenance and support. And we didn’t want to install and maintain any
software or hardware.”
What have been the tangible benefits of these cloud-based solutions? “Our Intacct implementation was
efficiently planned and well executed by their professional services team. We went from a signed contract to
go-live in just three months. We could have only accomplished this success with a cloud-based offering.”
“The first realization of productivity of the finance organization was our consolidation process. The system
handles consolidations very efficiently with excellent audit trails – all with just a push of a button. I can have
multiple consolidation books consolidating in different currencies. By comparison to our old Excel-based
consolidation process, we are saving about 20 hours per month.”
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“The visibility into our financial and operational data has been Intacct’s greatest contribution to the
company. Our previous accounting system had a basic Profit and Loss statement with only one dimension
choice available. Intacct provides full multi-dimensional analysis into the Profit and Loss statements giving us
the ability to analyze our locations, business units, customers, projects, vendors, and employees. We
currently provide over 400 project P&Ls to our project managers worldwide. This has greatly increased our
ability to make timely, informed decisions on our business – at every level.”
“One of the goals we wanted to achieve with our Intacct system was to deliver accurate financial
information within 15 days of every month. Within three months of implementation, we accomplished this
goal. This was achieved primarily due to two features: the integration of our 5,000 timesheets per month
together with our billing system, and the consolidation process.”
“When we implemented Intacct over a year ago, we had 900 employees. We now have 1,400 employees,
of which 20 work in accounting and finance. We could not have managed this growth with our previous
systems.”
So how has Cloud helped to transform the finance function? “From a financial and operations perspective,
our company has been transformed 180 degrees over the last year due to the implementation of Cloud. We
have consistent, timely, accurate, multi-dimensional finance and operational data.”
“Our employees work in concert with each other across the globe, and everyone can look at the same
numbers from the same database at the same time. A project manager from our Portland Oregon office
jokingly stated our P&L’s are “live and local”, coining a tag line from our local weather channel. That summed
it up perfectly from my vantage point.”
“It is a matter of communication. Now when a manager in Chennai, India, needs utilization information,
dashboards and reports are created and delivered in minutes, not days.”
“I have a direct line of communication with the managers, which fosters a deep connection within the
organization. There is a high level of communication, participation, and ownership across all of our
businesses.”
Snapshot of ProKarma, Inc:
Today’s Cloud Solutions
Prior Solutions On-Premise
Access/
Visibility
Extremely limited/
Copy of database required
Anytime/Anywhere
“Live and Local”
Implementation
Time
100 hours for Quickbooks
400 hours
Integration
Issues
Timesheet system was not
integrated
Salesforce.com and Adaptive Planning are integrated with
timesheets
Upgrade Costs
$5,000/year for 15 users
$0
On-Going
Maintenance
$1,000/year
$0
Scalability
Very limited/
No G/L dimensional capability
Full multi-dimensional analysis
Days to Close
35 days
15 days
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TradingPartners
TradingPartners provides spend management products and services that create dashboard visibility to
enterprise data and enable customers to make better decisions, negotiate more effectively and manage their
business profitably. With category expertise in retail, manufacturing, services, healthcare, public sector and
foodservice, TradingPartners helps Fortune 1000 customers to identify spend reduction opportunities through
strategic SpendScience. SpendScience creates visibility of spend and identifies opportunities to reduce costs
and promote corporate procurement initiatives. Most importantly, SpendScience creates dashboard
transparency of key performance indicators from across the business.
Ginger Gordon joined TradingPartners in 2010 as Chief Financial Officer. “When I joined TradingPartners
in 2010, the company utilized several cloud based solutions. Our core business was based on a cloud based
reverse auction negotiation tool, which today is just one component of the company’s SpendScience
platform. Today, TradingPartners’ SpendScience™ platform is a cloud-based platform and allows customers
to create configurable dashboard visibility of complex data streams which can be viewed in real-time online.”
“In addition to SpendScience, the company also utilized the cloud based application Salesforce.com, and
Concur Expense Reporting. As the company was keenly aware of the benefits cloud computing offered, the
lack of progress utilizing cloud based tools within the finance function surprised me. Today, the finance
function uses Intacct.”
Gordon describes her motivations for choosing cloud-based systems:
“When I joined TradingPartners, the finance function was behind the times, inefficient and prone to errors
as 100% of the reporting was completed manually using Excel spreadsheets. The finance function had quite
a few complexities, including global consolidations for entities in the UK, US, China and Japan, foreign
exchange translations with four different currencies, and the inability to access financial information outside of
the UK. Our data was maintained on local servers in the UK thus accessing this information in the U.S. was
painfully slow and unreliable. The consolidation and FX processes were compiled manually and highly
dependent on error-prone Excel spreadsheets.”
“One of my initiatives when I joined TradingPartners was to develop a sound financial infrastructure. I had
quality people working for me in both the UK and US, but it was difficult for them to collaborate which resulted
in two separate finance functions with varying processes and procedures. It became clear to me that in order
for the company to have a more efficient finance organization, we needed to find a way to easily share
accurate and real time information.”
“We reviewed eight possible new financial systems. Some were on-premises and some were cloudbased. I was quite surprised by the number of on-premises systems being marketed as a current solution.
My expectation was that all the major financial systems providers would offer a cloud-based option. That was
not the case. We took our time and used various web-based avenues to discover what products were
available.”
“The primary motivations for a cloud-based solution were:
1. A system that could be accessed, shared and used with real-time data anytime and anywhere;
2. A system that would be easy to install and would not be dependent on an IT department for
implementation or support;
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3. My instinct told me that if we did not select a cloud-based option, soon after implementation our
selection would be out of date and not in line with current best practices.”
What have been the tangible benefits of these cloud-based solutions?

Productivity of the finance organization: Productivity of the organization was greatly enhanced. The
close process reduced from 25 days to less than five. More time is now spent analyzing information
and providing business intelligence to business unit leaders rather than mundane tasks that are now
automated.

Reduction or elimination of manual procedures: Numerous manual processes are eliminated. For
instance, with Intacct, FX rates are automatically downloaded daily. Consolidated reporting reflects the
FX rates without any intervention by the user. At set up, our standard practices for FX are documented
within the system allowing for consistent and immediate reporting. Automation of the global
consolidations and FX has eliminated numerous manual procedures and has created huge time
savings. In addition, the errors which were symptomatic of the manual process are eliminated and
confidence in reporting is significantly enhanced.

Visibility into financial and operational data: Prior to our transition to a cloud based system,
business unit leaders were dependent on the financial department to send reports. With Intacct
dashboards, business unit leaders are able to access real time data at their leisure. In addition, with
scheduled reporting managers are confident reports will be delivered timely. The regularly set schedule
allows the finance group to consistently meet reporting expectations of the business unit leaders.

Adapting to growing business needs: TradingPartners current growth into Latin America has been
seamless from a financial reporting perspective. As the business continues to expand, the flexibility
Intacct offers makes TP very adaptable to our business needs.

Improving organizational decision-making: Dashboards and ability to compare like business
operations has greatly enhanced our decision-making throughout the organization.

Freeing up time to focus on strategic initiatives: “My role has changed drastically between year 1
and year 2 with TradingPartners. The focus of year 1 was clearly about building a strong and efficient
financial infrastructure. Implementing a cloud-based, multi-currency, multi-entity, time and expense
integrated financial system, developing my staff so their focus is on analysis and challenging my staff to
embrace change and innovate is the story of year 1. Year 2, my focus is strategic. Working closely
with our CEO, my time is now spent on growth of our business, the new products and services
developed to meet our clients’ needs and prioritization of our strategic initiatives within the resource
constraints that exist.”
“In addition, we just reduced finance staff headcount by 50%, rather than re-deploying existing staff. We
eliminated our U.K. finance department, and transitioned the finance team to the U.S. However, because
Intacct is so easy to use, we have an admin in London who is able to do finance function tasks. The cloud
allows us to monitor her activity and provide assistance to the UK admin as required.”
13
So how has Cloud helped to transform the finance function?
“The transformation of TradingPartners finance function is evident throughout the organization. Previously
the function of the team was 100% transactional. To an outsider, the department function was to reimburse
expenses and close the books. Moving to the cloud allowed us to automate manual processes, integrate
systems, enhance the quality and quantity of available data, and ensure processes are defined and adhered
to. With these improvements in place, the function of the department is now as a business partner; we are a
source for analytical information which allows the organization to make more informed business decisions.
The team can be relied upon to provide key performance measures that aid managers in running their
business units.”
“For example, one of the Key Performance Indicators (KPIs) that we developed measured the productivity
of our supply management (SM) team. As project timelines often overlap, the SM team’s productivity
traditionally experienced many peaks with long days and hours and then valleys of idle time. With cloud
based KPI reporting conjoined with the ability to compare productivity measurements across the globe, we
were able to assign projects more equitably, resulting in improved utilization of the SM team. The KPI
visibility enables TradingPartners to more easily share resources on a global basis.”
“The transformation of the TradingPartners finance department has allowed me to spend more time on
strategic issues and work closely with our CEO to grow the business. My #1 goal is business acceleration.
This has led to a CFO role which is one of leadership and performance management; clearly a transition from
a role as a process manager. My contribution to the organization has evolved and is now viewed as
strategic.”
Snapshot of Trading Partners:
Today’s Cloud Solutions
Prior Solutions On-Premise
Access/
Visibility
Slow and extremely limited
Anytime/Anywhere
“Live and Local”
Implementation
Time
Implemented prior to current CFO
30 days (non-consecutive)
Integration
Issues
Nothing was integrated
Expense reporting and time keeping are
integrated
Upgrade Costs
$1,000/year
$0
On-Going
Maintenance
$1,000/year
$0
Scalability
Very limited/
No G/L dimensional capability
Full multi-dimensional analysis/
East to scale
Days to Close
30 days
5 days
14
For More Information about Cloud
Nella, Bryan and William M. Sinnett. A User’s Guide to the Cloud. (FERF, 2011)
This “User’s Guide” seeks to answer questions about the Cloud, and to help executives plan an optimal
Cloud strategy. The objectives of this Guide are to:

Define Cloud technology;

Describe Cloud service models and categories of applications;

Describe potential benefits of the Cloud that can be achieved;

Describe potential risks and pitfalls of the Cloud;

Provide the right questions that financial executives should ask vendors, IT departments, and their own
staff;

Help customers evaluate vendors; and

Provide considerations for contracts.
Comparison Chart: Software Delivery Models
On-Premise Software
Application
Development
Application
Deployment
Implementation
Customization
Application Design
Upgrades
Integration
IT Support
Multi-Tenancy
Hardware
Requirements
Accountability
Cloud Solution
Developed for Windows-based
computing
Installed on the customer’s own
hardware
Developed for online delivery
Single vendor develops and operates
the applications – delivered via the
Internet
Faster implementation timeframe
Highly customizable and does not
break with application upgrades
Designed for the Web environment
Generally monthly or more frequently
Readily available via application
programming interfaces (APIs)
Generally included in the package from
vendor
Applications are designed to be multitenant
Delivered via a Web browser so
generally operating system agnostic
One vendor provides end-to-end
solution so accountability is inherent
Lengthy implementation time
Possible but expensive and
time-consuming
Monolithic client/server designs
12+ months
Can be difficult and expensive
Generally provided by the
customer
Not multi-tenant
Requires a specific operating
system environment
Vendor is responsible for the
software, IT department is
responsible for operations
From “The 2011 Buyer’s Guide to Accounting and Financial Software: New Factors to Consider”, by Intacct, 2011.
15
About the Author
William M. Sinnett is Senior Director, Research for Financial Executives Research Foundation, Inc.
(FERF). He received his Masters of Business Administration degree from the University of Pittsburgh. Prior
to joining FERF, he held positions in financial management with Mellon Bank and Carnegie-Mellon University
in Pittsburgh.
Bill can be reached at bsinnett@financialexecutives.org or (973) 765-1004.
About the Sponsor: Intacct
Intacct is the cloud financial management company. Bringing cloud computing to finance and accounting,
Intacct’s award-winning applications are the preferred financial applications for AICPA business solutions.
Intacct applications, in use by more than 5,000 organizations from startups to public companies, are designed
to improve company performance and make finance more productive. Hundreds of leading CPA firms and
Value Added Resellers offer Intacct to their clients. The Intacct system includes accounting, contract
management, revenue management, project and fund accounting, inventory management, purchasing,
vendor management, financial consolidation and financial reporting applications, all delivered over the
Internet via cloud computing.
Intacct is headquartered in San Jose, California. For more information, please visit www.intacct.com or call
877-437-7765.
16
Announcing the new FERF RESEARCH BLOG
FERF has now launched the FERF Research Blog. The purpose of the blog is to engage members in the
FERF research process. It will also serve as the new real-time resource for FEI members and financial
management professionals to interact in a peer-to-peer setting to resolve their accounting, finance and
management questions. Access the Research Blog at www.ferf.org.
About Financial Executives Research Foundation, Inc.
Financial Executives Research Foundation (FERF) is the non-profit 501(c)(3) research affiliate of FEI.
FERF researchers identify key financial issues and develop impartial, timely research reports for FEI
members and non-members alike, in a variety of publication formats. FERF relies primarily on voluntary taxdeductible contributions from corporations and individuals. This and more than 140 other Research
Foundation publications can be ordered by logging onto www.ferf.org. Questions about FERF can be
directed to bsinnett@financialexecutives.org.
The views set forth in this publication are those of the author and do not necessarily represent those of the
FERF Board as a whole, individual trustees, employees, or the members of the Advisory Committee. FERF
shall be held harmless against any claims, demands, suits, damages, injuries, costs, or expenses of any kind
or nature whatsoever, except such liabilities as may result solely from misconduct or improper performance
by the Foundation or any of its representatives.
Copyright © 2012 by Financial Executives Research Foundation, Inc.
All rights reserved. No part of this publication may be reproduced in any form or by any means without written permission from the
publisher.
International Standard Book Number: 978-1-61509-091-4
Printed in the United States of America
First Printing
Authorization to photocopy items for internal or personal use, or the internal or personal use of specific clients, is granted by Financial
Executives Research Foundation, Inc., provided that an appropriate fee is paid to Copyright Clearance Center, 222 Rosewood Drive,
Danvers, MA 01923. Fee inquiries can be directed to Copyright Clearance Center at 978-750-8400. For further information, please
check Copyright Clearance Center online at: http://www.copyright.com.
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