In the current digital age, every software provider is either offering a cloud version of their tools or actively working in that direction. SAP is actively promoting its SAP cloud platform and is promoting both an on-premise and a cloud version of its main Enterprise Performance Management (EPM) tool - SAP Business Planning and Consolidation (SAP BPC). Oracle is going one step further and focusing solely on cloud services with its Oracle Fusion Cloud EPM. OneStream Software is offering flexibility when it comes to deployment options, either on-premise or in the cloud. Gartner is predicting an overall growth in adoption rates of cloud-based solutions and replacement of on-premise systems.
What are the main differences between an on-premise and a cloud version of a CPM tool and what benefits does the cloud service offer to its users? This article tries to answer these questions based on the cloud services offering from OneStream Software.
What is cloud computing?
Before going into the details of cloud CPM systems it is important to first explain what cloud computing is. Cloud computing is the on-demand delivery of computing services and resources over the Internet with pay-as-you-go pricing. It is made up of two dependent parts:
- the applications delivered as services over the Internet
- the supporting infrastructure of the data centers that enable the delivery of those services
The services in this case are often referred to as Software as a Service (SaaS). Various companies also use such terms as Infrastructure as a Service (IaaS) and platform as a Service (PaaS) when describing their cloud offerings, but for the purpose of this article, the differences between these terms are insubstantial.
The image above outlines the basic idea behind cloud computing and can be explained further using the OneStream Cloud solution as an example:
- The Microsoft Azure® Cloud Platform is the basis of the OneStream Cloud solution and so Microsoft acts as the cloud provider.
- The application delivered over the internet is the OneStream XF software itself and OneStream (the company) acts as the SaaS provider. OneStream also acts as the cloud user as it makes use of the Microsoft Azure® Cloud Platform services.
- A company using the OneStream Cloud solution for their consolidation, planning, budgeting, or other needs acts as the SaaS user.
Cloud vs. On-premise CPM solution
While the software that companies use and get is the same, the supporting architecture and costs are different for a cloud version and an on-premise version of the platform or service. Hereby the most important differences:
The computing resources available for the cloud seem limitless due to on-demand flexibility
When a company chooses to have an on-premise EPM system, it needs to have servers that will be used for the installation. These servers must meet certain requirements on the hardware resources that support the proper functioning of the EPM software: a specific amount of operative memory (RAM) and central processing units (CPUs) as well as available disc storage space. These requirements are calculated based on the number of users working with the system at the same time and the level of complexity of the setup.
The requirements calculation takes into consideration usage during peak moments which do not occur that often (usually once a month during the close period) with the usage dropping significantly through the rest of the month. The diagram below shows a typical load of an EPM system throughout the month.
With an on-premise solution the company needs to pay for supporting hardware throughout the month that will only be used to its full potential during the monthly close and stay idle the rest of the month. With a cloud setup, the resources are provided by the cloud provider and can be adjusted flexibly during peak hours or days.
The elimination of an up-front commitment by cloud users enables companies to start small and increase hardware resources only when needed
Many EPM system implementations are phased and the systems grow in complexity with time. A company might start by using only the consolidation functionality, add the planning functionality next year, and then expand with specialty solutions the year after. In a cloud setup it is very easy to increase resources supporting your system to meet the new needs of the business.
Other benefits related to system maintenance can also be outlined:
The administration of the system is no longer a headache.
When using an on-premise solution companies often need a specialized system administrator to manage the backend of the system, make database copies, configure backups and carry out any maintenance necessary. Some companies have an internal IT department that would take care of these tasks while others sign support agreements with consulting firms for this.
With a cloud solution a company no longer needs to bother with backend maintenance, as the service provider is responsible for all of those tasks.
Upgrading to the newest software version has never been easier.
With every EPM solution there are new versions released on a regular basis, as the tools keep developing and growing in functionality. If a company wants to make use of the new developments and latest features it would need to upgrade its’ EPM solution to the latest release.
With an on-premise solution an upgrade to the latest version of the tool can be a cumbersome process. Some releases are minor and can be as easy as a couple of clicks for the administrator. However, major releases usually require multiple changes to the system backend, for example, adjustments to the database server behind the software and further adjustments to the solution backend. More importantly, all of these changes would be the responsibility of the company’s IT department or subcontractor.
With a cloud solution upgrading to the newest version of the tool can often come down to posting a ticket to the solution provider. They in their turn will make sure that the upgrade goes as smoothly as possible and that the system is operational again as soon as possible.
The security of data in the hands of global cloud providers
Every company is worried about the security and safety of their confidential financial data. On-premise solutions allow the setup of a very thorough cybersecurity policy as all encryption and security settings are in the hands of the company and their IT department.
With a cloud setup the security and encryption of the data are taken care of by the software provider. However, most providers work with major cloud suppliers with efficient and elaborate security setups. The OneStream XF cloud solution runs on Microsoft Azure which is compliant or exceeds the rigorous international data security and data privacy regulations to maintain compliance and receive certifications (i.e. the ISO 27001 certification in Information Security Management).
What does OneStream Cloud offer?
As was mentioned earlier OneStream also offers a cloud version of the software that runs on Microsoft Azure.
With the use of flexible resources provided by Azure OneStream delivers a SmartCPMTM platform that can upscale and downscale resources so support the demand increases and decreases automatically and intelligently.
Guaranteed Data Security
OneStream makes use of the Azure security model and the Azure AD SSO multi-factor authentication.
Managed Cloud Services
In addition to that OneStream offers Managed Cloud Services to take care of your Azure® Cloud requirements and takes care of:
- Server maintenance
- Database restoration
- Application copies, monitoring and maintenance as needed
All of these benefits come with a responsive support center.
To sum up, a cloud EPM solution has many benefits in the area of backend maintenance and resource management:
- Vast computing resources available on-demand
- Flexible pricing mechanism based on resources used
- System backend administration handled by the service provider
- Easier updates to the newest version of the solution
- Incorporated high standards of data security and privacy
CPM Principal Consultant
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