Counting the
cost of finance transformation

Challenges and solutions

Institutions that prioritize technology and innovation may look to finance to bear the flag for digital transformation in their institution, leading the way for other key departments.

While Cloud solutions often offer long-term cost savings and increased value over time, there may be significant upfront costs associated with planning, migration, implementation, and potential vendor lock-in that should be considered, such as:

^{Challenges of finance transformation}

Cost of bespoke solutions

The specific needs and priorities of the institution will influence vendor selection and capability priorities.

By opting for a tailored or bespoke solution institutions risk increased design costs, delay in delivery, slow adoption and ongoing development costs. Those finance platforms with built-in industry best practice and standard accounting routines or reporting out of the box deliver faster time-to-value.

Budget constraints

Higher Education institutions often operate on tight budgets, making it challenging to allocate funds for Cloud migration.

Larger institutions with more complex financial operations may allocate a higher percentage of their budget to finance systems. It is generally accepted that finance systems are a significant cost for Higher Education institutions. While there's no exact figure, estimates suggest that it could range anywhere from 2% to 10% of the overall transformation budget.

Governance and control

Cloud computing involves a shared responsibility model between the Cloud provider and the institution. This can lead to concerns about data governance and control – ensuring compliance with regulations and managing risks associated with cloud-based systems requires careful planning and oversight.

Technical expertise and skill gaps

Some institutions may lack the necessary technical expertise to effectively manage a Cloud or SaaS transformation program.

Deployment and training staff to use new Cloud tools and processes can be time-consuming and resource intensive. Securing 3rd party expertise may increase initial costs, but will speed up delivery and adoption, therefore reducing the overall costs and increase time to value.

Cultural resistance to change

Some employees may be resistant to change and may be hesitant to adopt new technologies and Cloud adoption may require significant process re-engineering, which can be disruptive and time-consuming.

Overcoming the challenges of finance transformation

To increase the effectiveness of any transformation program you need to conduct thorough due diligence and careful planning.

Institutions should evaluate Cloud providers thoroughly, considering their security practices, compliance certifications, and service-level agreements as well as industry capabilities, knowledge of industry requirements, and connectivity to industry-specific data sources.

IT must work with the C-suite to develop a comprehensive Cloud strategy that outlines the organization's goals, identifies potential risks, and forms mitigation strategies. The plan should cover all the systems in use today and how they behave in a Cloud-only environment, or if they have already been superseded by Cloud-native applications.

HR should also invest in training and education to empower staff with the necessary skills to use Cloud-based tools effectively and securely. Keeping staff engaged from the outset and through process change is essential, to remove roadblocks and increase adoption and execution of digital transformation strategy.

Collaboration between IT and finance teams should be prioritized to ensure a smooth transition to the Cloud, bringing all stakeholders together to share knowledge and skills will enable strategy to be executed, and adapted as necessary, easily.

By addressing these challenges and implementing best practices, Higher Education organizations can successfully adopt Cloud solutions for finance and reap the benefits of increased efficiency, cost savings, and improved decision-making.