The market for financial EPM solutions is changing. There’s an undeniable shift to the cloud, where functionality can be easily updated and there are no upfront hardware or maintenance fees. You’ve probably heard all the benefits of migrating to the cloud. There’s also a new trend in the market — new players have joined the game, disrupting EPM technology with unified platforms.
Increasing Demand for Cloud Solutions
Gartner has found that more and more EPM customers are requesting cloud deployments. These deployments come with all the benefits of software-as-a-service (SaaS) — it’s managed remotely on a monthly-based subscription on a public cloud.
The three types of cloud service vendors identified by Gartner were:
Cloud only vendors: These vendors provide cloud solutions that were created from the outset as cloud services. These vendors have a “multitenant application architecture,” according to Gartner.
Traditional on-prem vendors with new “built for the cloud” solutions: These vendors have created solutions for the cloud; however, they might reuse functional code or platforms for their on-prem offerings. Gartner says that these vendors might also “vary in their degree of multitenancy.”
Traditional on-prem vendors making their solutions available in a cloud-based offering: These vendors support multiple deployment models, including public cloud, private cloud, and on-premises. Gartner points out that this type of service is “broadly defined” with some vendors using a provisioning layer to deliver the service in a public cloud. These vendors might also “support multitenancy at the database or OS level, and use virtualization techniques.” Some of these vendors might use third-party cloud platforms, like Amazon Web Services (AWS) or Microsoft Azure.
Advancements in Cloud EPM Technology
The finance office is seeing improvement to the financial close process due to the shift to the cloud and growing EPM cloud market, according to Gartner. The functionality of these cloud services is improving processes that once relied heavily on the use of spreadsheets. The new cloud financial EPM trends include:
A growing number of cloud-based solutions focused on improving the office of finance. These solutions can also mostly be administered and configured by the end user, while being technologically managed by a cloud service provider. There’s less need for integration support and technology management by IT.
There’s an increased willingness by the finance office to put integral financial data in a public cloud. Gartner notes that the past five years have not seen any security breaches, building trust in cloud-based solutions.
Platform-as-a-service (PaaS) is emerging, which provides a foundation for current or future applications, as well as scenarios and blueprints from vendors. PaaS allows end users to develop their own applications to extend their platform, thus further improving the finance office.
There’s a growing number of cloud solutions that can integrate with on-prem solutions in a hybrid cloud environment.
Financial consolidation and reporting enhanced financial control and automation (EFCA) functions are converging in specialist vendor suites.
Disruption in the EPM Industry
This year, the Magic Quadrant includes some new players making a wave in the world of EPM. With the biggest players pushing on-prem customers to the cloud, more organizations are considering solutions that were once outside the norm.
Many of these solutions include an integrated platform (like OneStream), promising to bring the office of finance together through shared technology. On these unified platforms, your financial close and consolidation solution will share the same space as your planning and forecasting solution. These solutions aim to make your finance functions more comprehensive and often include drill-through and drill-back capabilities.