Apps for Business

CFOs in the Age of Cloud Computing

A report on cloud computing benefits to Asia Pacific businesses

Contents
Why Asia Pacific businesses are looking up to the cloud. Insight through research. What prompted this research. Cloud computing by definition. How companies view the cloud. What the research shows: 1. CFOs in Asia Pacific have a high awareness of cloud services. 2. The majority of Asia Pacific businesses are already adopting or are planning to adopt cloud services. 3. Finance decision makers know that cloud services provide quantifiable benefits to their business. 4. Over half of Asia Pacific CFOs believe that the CFO will become more influential in procuring and managing IT services. The CFO in the age of the cloud. Keeping ahead via the cloud. So where does this leave us? Appendix. 3 3 3 4 4 5 5 6 7 9 10 10 10 11

Why Asia Pacific businesses are looking up to the cloud.

Its no secret cloud computing is being eagerly and rapidly adopted across a diverse range of industries and territories, including Asia Pacific, where research shows it continues to achieve critical mass. As its popularity soars, companies yet to get on-board with this evolving technology face the eye-opening reality of watching their competitors with a cloud solution in place surpass them. Along with an awareness of the substantial benefits cloud computing brings to enterprises, our research shows that Asia Pacific CFOs are quickly recognising that cloud technology is not solely a matter for IT department consideration, but a decision-making process that directly involves them. Finance decision makers across Asia Pacific are realising that the adoption of cloud-based services will become crucial to the overall success of their organisations over the next 12 to 18 months. For CFOs in particular, the acknowledgment of benefits including dramatically reduced IT costs and increased workforce productivity underpins their consideration to adopt this technology.

Insight through research.

Google Enterprise Asia Pacific recently commissioned independent research firm, Vanson Bourne, to survey 400 CFOs and other top finance executives across Australia, Hong Kong, India, Malaysia, Singapore and Taiwan to gain insight into how these decision makers view the importance of cloud computing to their business. Our results show finance decision makers agree that adoption of the cloud within their business reduces operation costs, improves efficiency and empowers innovation.

What prompted our research.

The idea of new computing technologies having the potential to transform enterprises is nothing new. However, who decides whether or not to adopt these new technologies is an onus that is shifting. Knowing that senior finance decision makers constantly seek efficiency savings and new business benefits, our survey aimed to discover how their decisions are being affected by cloud computing. In the past it has been the organisations IT department that has directed the adoption of new technologies. However, our research took a different approach, and looked at the emergence and adoption of cloud computing from the viewpoint of the finance department, rather than from an IT perspective. CFOs and other senior decision makers within the finance departments regularly seek the most efficient, cost-effective ways to keep the organisation growing, and the extensive benefits and cost savings that come from implementing a cloud computing strategy continue to pique their interest.

Cloud computing by definition.

Cloud computing can be defined as a benefit-driven operations solution that delivers scalable IT resources via the web, as opposed to hosting and operating these services locally. These resources include tools, applications and services, in addition to the infrastructure in which these services operate. By deploying these tools and services over the web, companies and organisations can access resources on demand and significantly reduce (or possibly even eliminate) software and hardware costs. Additionally, a business IT capacity can quickly and easily adjust to changes and demands, making the flexible nature of cloud computing immensely appealing. Perhaps one of the most valuable benefits of the cloud is the ability for employees to access, update and share files, documents and data, and use software applications from anywhere there is internet connectivity. In effect, allowing a workforce spread throughout global locations to work seamlessly as one.

How companies view the cloud.

As findings throughout our research shows, cloud computing has the potential to bring quantifiable business benefits to organisations. Its not surprising that the vast majority of the 400 finance decision makers in Asia Pacific interviewed stated they have adopted or are planning to adopt cloud services within their organisation. Those who have adopted cited those quantifiable business benefits to include: increased flexibility, increased capacity and the ability to transform some IT items into operational expenses, as driving forces behind their decision to adopt. On average, respondents said that cloud computing provides them with business improvements of at least 18% in factors such as speed-to-market for products and services, rate of growth, process efficiency, and employee productivity. The movement towards cloud computing is now also making CFOs much more informed and involved in IT procurement.

What the research shows.

1. CFOs in Asia Pacific have a high awareness of cloud services.
Most finance decision makers in Asia Pacific are already aware of cloud computing, at least in name if not in detail (as seen in Figure 1). Our research shows that 91% of CFOs are reasonably familiar with cloud computing to some degree, with 14% being totally familiar with the term.

Figure 1: How familiar are you with the term cloud computing?

91

77% are in some way familiar with the term cloud computing 14% total familliarity with cloud computing 9% no familliarity with cloud computing

As outlined in Figure 2 below, the findings across Asia Pacific indicate that the majority also understand that cloud computing brings a41% valuable array of business benefits that include increased flexibility (61%), have implemented capacity (65%), and moving items from CapEx to OpEx (51%).

8% I dont know Figure 2: Summary of those who agree that cloud computing provides each of the 15% No, and no plans listed statements, analysed by country.

67
19% 39% 51 26 %
%

26% No, but making plans 11% No, but evaluating

28% 16 % Australia
Hong Kong
% India16

33% 31% 50 % 55% 6 % 50 % 56 % 40 % 24 % 34 % 26 40

% %

55% 58% 53
%

55% 53% 52%

56 % 40 %

25% Malaysia 10 % 14 Singapore

%

Yes, I was central to those decisions

30
%

53%

It can deliver Taiwan 6 % scalability 22% increased

20 %

It reduces the cost 72%integration of M&A

Yes, I was involved, but not central to them It lets us move some IT items No, not at all from a CapEx to an OpEx item

58%
Australia Hong Kong India Malaysia Singapore

65% 71 71
%

Australia
%

69

26 95
%

68 65
%

Hong Kong India Malaysia Extremely useful Somewhat useful Not at all useful Singapore Taiwan

3% 2% 50 38 5 5
% % % %

66 %

66 % 82% 75
%

31% 16 % 20 76 %
%

70 % 63 54
% %

It can deliver Taiwan 12%

increased exibility

It can deliver 12% increased capacity

These numbers are comparable to the perspectives we found in a similar research project conducted in Europe, which showed positivity surrounding cloud computing is rapidly becoming a global trend among CFOs. Though capacity is the most recognised business benefit, the potential for increased flexibility is most popular in India and Hong Kong. Broadly speaking, India emerged as most positive in their feelings towards all of the various benefit statements.

2. The majority of Asia Pacific businesses are already adopting with the term cloud computing % 14% total familliarity or are planning to adopt cloud services. with cloud computing

91

77% are in some way familiar

9% no familliarity with cloud computing

Figure 3: Have you already implemented or are planning to implement cloud computing within your organisation?
41% have implemented 77% are in some way familiar 26% No, but making plans with the term cloud computing 11% No, butfamilliarity evaluating 14% total with cloud computing 8% I dont know 9% no familliarity 15% No, and computing no plans with cloud

67 91

% %

% Australia 19% that 67% of 31CFOs 50 % already adopted cloud computing or are making Figure 3 shows surveyed have % % plans to do so. Additional findings show that of senior finance decision makers said they Hong Kong 39 6% 55 92% 41% have implemented knew their organisations cloud computing strategy, and as seen in Figure 4, on average 57% have % % % India 26 50 24 26% No, but making plans been either involved or played a central role in the decision as to whether or not cloud computing Malaysia 10 % 56 % 34 % % Yes, I was central to those decisions should be adopted. 11% No, but evaluating

Singapore Taiwan

15% No, and no plans Figure 4: How involved were you in the decision as to whether cloud computing should or should not be adopted by your organisation?
Australia Hong Kong Australia

67
20 % 6% 5% 19%

40 %

40 %

Yes, I was involved, but not central to them No, not at all

22%

8% I dont know 72%

69% 31% 66 % 82% 50 % 75% 56 % 40 % 22% 76 % 95

%

26 % 5% % 50 16 % % 24 20 % % 34 12% % 40 72%
Extremely useful Somewhat useful Not at all useful

India 3% % Hong Kong 39 Malaysia 2% % India 26 % Singapore 5% 5 Malaysia 10 % Taiwan 12% % Singapore 20 Taiwan

31% 55% 6 %

Yes, I was central to those decisions Yes, I was involved, but not central to them No, not at all

6%

Australia Hong Kong India Malaysia Singapore Taiwan

5%

69% 95
%

26 % 5% 31% 82% 16 % 20 % 76 % 12%

Extremely useful Somewhat useful Not at all useful

3% 2%
% 5% 5

66 %

75%

12%

As seen in Figure 4, there are variations from country-to-country on how involved CFOs are with their organisations adoption of cloud. 76% of those CFOs in India said they have been involved or were central to these discussions, compared with 50% in Australia. Almost 40% of respondents in Hong Kong said that they have played a central role in the cloud adoption decision, compared to only 6% in Taiwan and 10% in Malaysia. This variation roughly correlates with where that region is on the cloud computing adoption curve. Regardless of the territory, there is clear evidence that shows Asia Pacific CFOs are taking an active role in the decisions around adopting the cloud into their organisations.

3. Finance decision makers know that cloud services provide quantifiable benefits to their business.
Figure 5: Percentage of those who believe that each of the listed factors is a quantifiable benefit from adopting cloud computing.
59% 50% 48% 46% 46% 26% 21% 7% Reduced IT maintenance costs

Reduced operational costs Reduced IT spend Improved process eciency by better internal collaboration Increased employee productivity by better internal collaboration and access to information

Reduced M&A integration costs Enabling fast growth by delivering scaled-up infrastructure and thereby integrating companies brought together through M&A activity

I dont see cloud delivering any of these business benets

93% of the Asia Pacific CFOs interviewed believe that cloud computing provides their business with at least one of the benefits outlined in Figure 5 such as reduced IT maintenance costs, reduced IT spend, downscaled operational costs, flexibility, scalability and improved process efficiency.

Figure 6: Where do you see cloud computing in relation to the success of your business in the next 12 to 18 months? (analysed by country).
Australia Hong Kong India Malaysia Singapore Taiwan

91% 100 % 99% 98% 90 % 84

%

9%

1% 2% 10 % 16 %

Important Not Important

Contribute to corporate strategy

66 % 9% 25%

Similarly,Ability Figure 6 shows that on average 94% expressed that cloud computing is going to be crucial to to innovate 63%of their organisation over 9% 28% 12 to 18 months. the success the next
Budget
35% 45%
%

20 %
%

Increase Decrease

28Percentage of those 39 33 Change Figure 7: who believe that No each of the listed traits provides significant business benefits to their organisation.
%

Headcount

Australia Hong Kong India Malaysia Singapore Taiwan

54 % 64
%

35% 26 24 % 24 %
%

11% 10 % 15% 61% 18%

68%

The reduction of the numbers of servers, the software cost, the number of sta can signicantly reduce IT costs. The exible capability that can be turned up, down or o depending upon circumstances. The latest versions of the applications needed to run the business are made available No change to everyone as soon as they are available.

61% 58% 58
%

More Inuential

37 26 %

% 5 61
%

32%

42%

60% 60%

Lessis inuential Connection always on and therefore reliable when we need it.
During a recession, cloud computing oers a exible cost structure thereby limiting exposure. With cloud computing, the costs can be much more exible than with traditional methods. Improved mobility: data and applications are available to employees no matter where they are in the world. Cloud computing is more cost eective than traditional methods. Could computing improves collaboration, hence reducing our time-to-market/improving our product development.

60% 59% 54 % 53%

We have already seen that senior decision makers believe that cloud computing can deliver increased flexibility and capacity, and as Figure 7 shows, we questioned further to discover which particular characteristics of cloud computing the CFOs surveyed consider more important than others. Top of the list is cloud computings ability to reduce costs, though narrowly behind this is the potential to be flexible, delivering the latest software versions, the always-on nature of access to data, a flexible cost structure and improved mobility.

59% 50% 48%

Reduced IT maintenance costs

Reduced operational costs Reduced IT spend

Australia Hong Kong India Malaysia

91% 100 % 99% 98

% %

9%

1% 2%

Singapore 90 half of Asia Pacific CFOs 10 Important 4. Over believe that the CFO will become Taiwan 84 16 Not Important more influential in procuring and managing IT services.
% % %

Cloud computing also has an impact on what is expected from a CFO in the future. Figure 8 shows that on average 56% of Asia Pacific CFOs believe that as IT increasingly becomes an issue of procurement, Contribute to corporate strategy this will, in turn, result in the CFO becoming more influential in the procurement and management of % % 66 9% 25 these services. Ability to innovate
63% 9% 28%

Budget
35% 45% 20 %
%

Increase

Decrease Figure 8: Given that cloud computing increasingly turns IT into an issue of Headcount 28 39 33 No Change procurement, do you think that the CFO will become more influential in procuring and managing IT services?
% %

Australia Hong Kong India Malaysia Singapore Taiwan

54 % 64 % 61% 58% 58% 32% 26 %

35%

11%

26 % 10 % 24 % 24 % 15% 18% 37% 5% 42%

More Inuential No change Less inuential

We also asked if the widespread adoption of cloud computing would result in an increase or a 91% 9% the IT department described in Figure 9 below. Few decision decrease in any of the functions within within the finance function believe that cloud computing would result in decreases in the IT Hong Kong makers 100 % departments importance. India 99% 1%
Australia Malaysia Singapore Taiwan

98% 90 % 84 %

2% 10 % 16 %

Important

Not Important Figure 9: Do you think that the widespread adoption of cloud computing will result in an increase or a decrease in any of the following within the IT department? Contribute to corporate strategy
66 % 9% 9% 25% 28%

Ability to innovate
63%

Budget
35% 45% 39% 20 % 33%

Increase Decrease No Change

Headcount
28%

Australia Hong Kong India Malaysia Singapore Taiwan

A further revelation was made by%noting the fact that 63% of CFOs expressed the view that the use 54 % 35 11% of cloud services would then free up the IT department to innovate, and increase its contribution to 64 % 26 % 10 % corporate strategy.
61% 58 58 32
% % %

24 % 24
%

15% 18% 37
%

More Inuential
%

No change Less inuential

26

42

The CFO in the age of the cloud.

The research shows that CFOs are being presented with the opportunity to get involved in the decision whether or not to implement a cloud computing strategy into an organisation. Findings suggest that CFOs who are lagging behind in adoption consideration and understanding, run a very real risk of putting their organisation at a distinct disadvantage. Our research also found that CFOs who say they are very familiar with cloud computing have a better understanding of the business benefits that cloud offers when compared to those that are less familiar who risk being left behind. We have also seen evidence that suggests the CFO may become more involved in strategic decisions concerning IT procurement. As seen in Figure 8, these figures vary by country. More than half of those surveyed in Australia, Hong Kong, India, Malaysia and Singapore believe that the CFO will become more influential over IT procurement as a result of cloud computing, compared to 32% of those in Taiwan. Nonetheless, in every country surveyed, only a small minority believe that the CFOs role in IT decisions will become less influential.

Keeping ahead via the cloud.

Cloud computing has been around long enough now and reached a degree of maturity that the benefits are visible, significant and affect the entire enterprise. As a result, we have found that throughout Asia Pacific, there is real momentum gathering around the decision to adopt cloud-based solutions. While a great number of CFOs understand that cloud computing brings multiple benefits, the opportunity remains for a large number of them to increase their level of understanding, their level of influence over IT procurement and to increase the growth and success of the business.

So where does this leave us?

The reality is, the cloud revolution is here to stay and research suggests that the days of IT services running cloud-free are well and truly numbered. Findings that 67% of Asia Pacific organisations have already adopted or are planning to adopt the cloud supports this. CFOs and finance decision makers need to adapt and adopt in order to remain competitive, simply because they are living in a time when their influence is expected to extend over the technology of business and the business of technology.

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Appendix.
Research methodology
Google Asia Pacific commissioned independent specialist technology market research company, Vanson Bourne, to undertake the research upon which this report is based. 400 interviews were carried out in August and September 2012 with senior decision makers within the finance functions of enterprises (defined as those businesses with 500 employees or more). Interviews were performed in each of the following countries: Australia (80 interviews) Hong Kong (80) India (80) Singapore (60) Taiwan (50) Malaysia (50) Data was collected by online interview, using a rigorous screening process. Respondents came from a wide variety of business areas; hence, the content of this report can be considered to be a snapshot of enterprises in each country as a whole, rather than covering specific sectors. For reference, respondents in this survey fall into the following sectors: Financial services, including insurance (86 interviews) Retail (35) Transport (12) Telecoms & utilities (22) Media & entertainment (12) Healthcare & pharmaceuticals (34) Manufacturing (90) Business and professional services (38) IT & Technology (28) Mining & natural resources (9) Public sector (34) Results discussed in the main narrative are based on the entire sample.

2012 Google Inc. All rights reserved. Google and the Google logo are trademarks of Google Inc. All other company and product names may be trademarks of the respective companies with which they are associated.

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