“How are we performing compared to our closest competitors?” is a constant concern for CFOs seeking to drive growth and profitability. Yet it is a stubbornly difficult question to answer. Traditional benchmarking services are expensive and time-consuming, added to which they frequently ‘straight-jacket’ businesses into a narrow range of performance measures that leave nagging doubts about the validity of any conclusions drawn. But the advent of ERP and other financial applications in the cloud seems set to transform finance functions - and possibly the cloud software industry as well.

1. 5 Reasons why benchmarking-
in-the-cloud is set to
revolutionise the finance
function

2. 1. Cloud vendors are sitting on a gold-mine of data
“True” cloud vendors that offer a single application that
is shared by thousands of businesses (so called multi-
tenanted software) have a treasure trove of
anonymised, real-time data about how their application
is being used.

3. 2. Cloud vendors can tell you objectively whether
your processes are efficient
An ERP vendor could tell you, (compared
to other companies of similar size in your
business sector and geography) whether
you take longer than average to, for
example:
Turn sales quotes into orders,
or
Whether your ratio of staff deployed in the ‘quote to
cash’ cycle relative to your annual turnover is below
or above average.

4. 3. It opens up new vistas of comparative performance
and KPIs
Some cloud vendors are thinking very creatively about
generating a new era of benchmarking and KPIs.
Jo Sutton, of Xledger a popular cloud-based ERP and financial
management system suggested to Gary Simon, CEO of FSN, that they
could use anonymised data from their customers to provide comparative
benchmarks about the supply chain in different industries/countries, for
example, which are the dominant suppliers, who delivers on time and the
average days of credit taken.

5. 4. It’s already happening in real-time
Last month, BlackLine a leading provider of
cloud-based finance controls and
automation software, announced what is
believed to be the industry’s first cloud
analytics software designed to give CFOs,
controllers and accountants the real-time
data needed to benchmark, analyse and
improve the efficiency of the financial close
process.

6. Traditional benchmarking services have been largely limited
to large enterprises that have the time and financial resources
to participate in complex benchmarking surveys. But with
new KPIs and benchmarks virtually ‘falling out’ of cloud
vendors’ databases in the normal course of business then this
raises the real possibility of providing affordable competitive
benchmarking services to SMEs for the first time.
5. It puts benchmarking within the reach of SME
businesses

7. Read the full article on LinkedIn Pulse
https://www.linkedin.com/pulse/5-reasons-why-benchmarking-
in-the-cloud-set-finance-function-simon