A Modern Finance Case Study – Cloud or On-Premise

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• Understand more about the cost, service, functionality,

technology considerations and business benefits when

looking at on-premises systems and cloud-based offerings.

• Comprehend the various evaluation criteria and how they

relate to each deployment option.

• Appreciate how the resulting deployments provide a

reduced reliance on spreadsheets, shortened period-end

reporting cycles, and accelerated reporting, enabling

Finance to spend more time on value-added analysis

Learning Objectives

After attending this event you will be able to:

Event Notes

• The slides are available under “Handouts.”

• We will send you links via email to the presentation and

the recording within 24 hrs.

• For CPE/CE/CPD: Answer all polling questions and

remain for the duration. Credits awarded in 24 hours.

– Questions on credits? Email [email protected].

• We want to hear from you! Ask questions for the Q&A

session at the end of the event.

• Please take the short survey at the end of the webinar.

Ask, Share, Learn – Within the Largest Community of Corporate Finance Professionals

A Modern Finance Case Study –

Cloud or On-Premise?Craig Schiff, CEO, BPM Partners

Joey Perrone, Director FP&A, Aeglea Biotherapeutics

Ronel Marbella, Director Product Strategy, Prophix

Cloud or On-Premise?

Definitions

Cloud:

– A SaaS, cloud solution provided as the standard and only

approach for all of a vendor’s customers (multi-tenant)

– An on-premises product hosted for the customer by the vendor

through a third-party (multi-tenant and single-tenant)

On-Premise:

– An on site internally hosted and operated application that is

physically installed on a company’s server

Overview

On-premise Cloud

Full suite available Yes Yes

Unlimited # of users Yes Yes

Unlimited database Yes Yes

Vendor ability to deliver solution fit

to unique requirements/processes

Yes Yes, unless

custom code

required

Well-defined product roadmap Yes Yes

Availability and Performance

On-premise Cloud

Performance maintained despite adding users or data

No Yes, except for hosted applications

Vendor SLA for uptime No Yes

Vendor proactively monitors performance and availability

No Yes

Redundant data centers No Yes, in most cases

Hourly backups No Yes, in most cases

Upgrades

On-Premise Cloud

Always on latest software version No Yes (it’s required), but may vary for hosted application

Pace of innovation (frequency of upgrades)

6 to 12 months, longer for some

Quarterly, in most cases

Vendor fully responsible for upgrades No Yes – customer option to test the upgrade in a non-production environment

Security

On-premise Cloud

Immediate security patches In some cases In most cases

Third-party audits In some cases In most cases

Penetration testing In some cases In most cases

Designed with security as an

overriding priority

No Yes

Inside the firewall Yes No

Available Offerings

Every major vendor has a cloud offering

today

Some vendors are cloud only

Some vendors have both on-premise

solutions and cloud solutions

Some vendors have a single product that

can be deployed on-premise or hosted

The BPM Pulse

Cloud or On-Premise Market Feedback

BPM Pulse Survey

2016 Edition

Approximately 300 valid responses

Largest group of respondents in North America

Across all industries, largest group of respondents in

manufacturing, healthcare, financial services, not for

profit, services, retail, higher education

Company size: half midmarket, followed by

large/enterprise, and then small

Mix of finance, IT, and operations respondents with

largest group in finance

Cloud/Hosted Solutions

Source: BPM Partners 2016 BPM Pulse Survey

65% Yes

35% No/Maybe

Key Data

Cloud Priority


Benefits of Cloud (Buyers)



Benefits of Cloud (Owners)


Cloud BPM Users

Cloud Concerns


Cloud Timing


Cloud Laggards

Certain Industries

– Government

– Financial Services

– Healthcare

– #1 Reason – Security Concerns

Larger Organizations

– Abundant IT staff, investment in existing on-

premise applications, control

Cost Considerations

License fee + annual maintenance vs.

annual subscription

Hardware/personnel costs

Years for comparative analysis

Cash flow benefit

Operating expense vs. capital expense

Cloud Years



Cumulative Costs Over Time

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

On-premise 150,000 175,000 200,000 225,000 250,000 275,000

Cloud 50,000 100,000 150,000 200,000 250,000 300,000

Assumptions: 50 user system

On-premise: $ 125,000 one-time license fee; $ 25,000 annual LR&M

Cloud: $ 50,000 annual subscription

Cloud Source


Bottom Line

Reasons to Choose Cloud:

– Company priority to move to the cloud

– Limited IT resources (personnel/hardware)

– Need easy access from anywhere

– Desire frequent and automatic updates

Bottom Line

Reasons to Choose On-Premise:

– Industry/company not ready for the cloud

– IT resources readily available

– Want to control updates/with less frequency

– Looking to minimize recurring costs

Bottom Line

Deployment Choice is Ideal:

– Focus on business requirements

– Can start with on-premise and move to cloud

when ready

– Most common vendor offering

Performance Management is Valuable

Regardless of Deployment Approach

Primary Drivers for BPM


How satisfied are you with budgeting?


BPM System Users


Important Features

in a Financial Consolidation Solution



Benefits Received


www.prophix.com

Aeglea BioTherapeutics

Company Background

Operating since December 2013

Website: www.aegleabio.com

Head office location: Austin, Texas

Number of employees: 30

ERP: NetSuite

Description: Aeglea BioTherapeutics, Inc., (NASDAQ: AGLE) is a biotechnology company committed to developing enzyme-based therapeutics in the field of amino acid metabolism to treat rare genetic diseases and cancer.

http://www.aegleabio.com/

www.prophix.com

Webinar Speaker

Joey PerroneDirector FP&A

AegleaBiotherapeutics

Responsibilities

• FP&A – budgets/forecasts

• Treasury

• Cash management

• Investor relations

• Management reporting

www.prophix.com

Business Challenges

Symptom #1:

• Difficulties for Finance to react (let alone be proactive) in a dynamic environment

Underlying problems:

• Aeglea, a pre-revenue company, relies on external funding

• When a financing event occurs, strategic and operational plans will change, allowing us to grow and expand

• Need to be able to quickly update forecasts to align with new strategy

www.prophix.com

Business Challenges (cont’d)

Symptom #2:

Challenges running clinical trial budgeting

Underlying problem:

Inherent complexity of clinical trials, which are unique and difficult to predict and manage

Symptom #3:

Struggles with cash management

Underlying problem:

Need to allocate cash to projects to drive value

www.prophix.com

Weighing Potential Solutions

Desired features of a potential solution:

• Ability to aggregate department/project budgets/forecasts dynamically

• Ad-Hoc financial analysis

• Management reporting

• Adjusting prior year financials to align with current organizational structure

www.prophix.com

Weighing the Cloud vs. On-Premise Implementation

• Aeglea is a strictly cloud-based company

• No investments in on-premise systems

• No internal IT staff

• Need for access anywhere with Internet service

• User-friendly interface

www.prophix.com

Implementation

• My second Prophix implementation • Entire implementation took ~40 hours• Worked with Prophix design architect who helped

me think big pictureo Focus: design to solve today’s problems and tomorrow’s

problems

• Implementation went extremely smoothly and we have rolled out Prophix to Accounting for ad hoc and reporting purposes

• Workflow will be rolled out in early 2017 to the larger company

• No huge challenges, looking forward to rollout of new functionality in early 2017

www.prophix.com

First 90 Days (Until Now)

• Load 2017 budget• Basic reporting• Personnel planning• Cash forecasting• Rolling out to Accounting

as flux analysis tool• Project reporting

Integration• Manually load data from our NetSuite ERP

into Prophix• Looking forward to automating this in

early 2017

www.prophix.com

Automating Finance Processes

Prior Processes

It would typically take two weeks to:

• Roll up individual budgets

• Produce personnel projections

• Project reporting

• Set out cash requirements

• Make final adjustments

www.prophix.com

Automating Finance Processes (cont’d)

Budgeting

• Consolidating department/project budgets

• Adjusting historical financials

• Conducting personnel planning

• Project Reporting

Forecasting

• All of the above + quarterly updates to the budget

www.prophix.com

Automating Finance Processes (cont’d)

Reporting

• Flux analysis reports

• Trial expense reports


• Profit & loss statements

www.prophix.com

Improved Analysis & Decision Making

Improved Analysis• Clinical trial costs


• Quicker consolidation

• Personnel planning

Data-Driven Decision Making• Project teams are able to track project expenses

• Reporting is distributed more quickly and answers are provided more timely

• ‘Buy ups’ to the budget are implemented more quickly

www.prophix.com

Avoid relying too heavily on external

consultants . You can lead this

internally!

Keys to Maximizing CPM Software

Earn buy-in from senior

management –from the start!

Train your team to

ensure change management

Ensure the end users

understand

the templates

About Prophix

Established

in 1987 by finance

executives

Laser focused

on the Corporate

Management Software

(CPM) space

Prophix empowers

organizations to bring

together all data sources on

a single platform

More than

3,000 customers in

over 100 countries

Headquarters:

Toronto area, Canada. Other

locations: UK, US, South

America, Denmark, Germany

Recognized by

industry analysts for a superior

user experience

Cloud or On-

Premise?Choosing what’s right for your Organization

Ronel Marbella

Director, Product Strategy

www.prophix .com

Recap of Perspectives

Functionality and vendor delivery capability should be the top two criteria in selecting a BPM/ CPM/ EPM solution

After the above, the choice of Cloud vs. On-Premise depends the other factors and on the organization’s unique situation

www.prophix .com

IT strategy

What Are the Organizational Considerations?

Ease of implementation/ use

ERP/ GL/ data source location

Broad vs. localized access

Recurring or up-front costs

Ability to manage/ support

Security

www.prophix .com

Limited ability/ resources to secure

Cloud-only or pursuing cloud strategy

ERP/ GL/ other data already in cloud

Distributed user base

Lower cost of entry/ OpExpreference

Limited IT resources/ ability to support

Organizations that Choose Cloud…

www.prophix .com

Industry standard security in-place

On-premise strategy

ERP/ GL/ other data mostly on-premise

Localized user base

CapEx preference/ seeking greatest ROI

Existing IT resources/ ability to support

Organizations that Choose On-Premise…

www.prophix .com

It’s All About CHOICE

Many different reasons drive choice between Cloud and On-Premise

Organizations should choose the solution that enables them to meet the needs of their unique situation

Thank You

Q & A

• Thanks to our speakers

• Join us at www.proformative.com to continue the

conversation with your peers in our community

• If you want an introduction to today’s speakers

or sponsor, tell us on the survey!

A Few Final Items

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