Cloud-native: The future of technology for finance teams

Business demands are rising, customer expectations are shifting, and finance agility is more essential than ever. To thrive, finance teams are leaving outdated finance technology behind to embrace the new era of scalability and agility.  

But before we dive into the new era, it’s important to understand the differences between monolithic and cloud-native technology that powers the software that finance teams use daily. While it may not seem important at first glance, what’s going on behind the scenes can impact how you enhance your operational efficiency and build a more resilient, agile organization that can thrive in the face of change.

What is cloud native?

Cloud-native technology is built specifically for the cloud from the ground-up. It enables companies to design, deploy, and manage applications that fully leverage the capabilities of cloud computing technology from leaders in the space, like Amazon. Unlike monolithic technology, cloud-native technology is built using loosely coupled, independent components that scale independently. This provides businesses with the ability to accommodate growth without the need to change capacity limits or make infrastructure changes because each component can be updated, modified, and scaled as required.

The cloud-native approach represents a significant advancement over monolithic technology, as businesses can take advantage of the potential of cloud infrastructure for more effective and flexible financial management.

What is monolithic technology?

Monolithic technology refers to applications and services that use tightly integrated components into a single codebase – functioning as one unified system. This technology has commonly been associated with legacy on-premises applications.

While monolithic technology has played a significant role in the evolution of software development, it presents limitations in today’s tech space. As financial operations grow and complexity increases, businesses require solutions that can effortlessly scale and handle vast amounts of data without compromising performance. However, as monolithic technology functions on a unified platform, it has limited resources which limits its ability to scale and adapt.

Monolithic vs cloud-native

To understand how monolithic and cloud-native technology differ, and determine which is the right for your business, let's compare the key differences.

What does cloud native technology mean for finance teams?

Cloud-native technology is designed to meet organizational needs at scale, delivering speed, agility, and resilience. A cloud-native financial planning and analysis (FP&A) solution addresses these needs by automatically scaling resources depending on number of users or peak business cycles, offering continuous updates, and delivering exceptional flexibility—all of which empower businesses to grow and adapt with ease. 

Finance teams invest a significant amount of their time in reporting, planning, compliance, and data analysis. While monolithic technologies can automate a lot of these processes, organizations still face challenges. From scalability to managing and analyzing large datasets and facilitating data sharing within teams.  

A cloud-native FP&A solution enables teams to:

• Reduce reliance on IT to manage the server or hardware: With a cloud-native FP&A solution, you no longer need to rely on IT to manage the server or hardware. The FP&A solution provider utilizes the latest cloud computing technology to push continuous updates and new features to the solution, without any downtime and risk of data breaches.

• Scale resources based on workload demand: During peak periods, such as month end close or budgeting season, a cloud-native FP&A solution can automatically allocate additional computing power to accommodate more users and data in the system, without compromising performance.

• Gain real time data insights for better planning: Continuously integrate with your external data sources to provide real time data updates which allow you to make informed decisions and quickly adapt to changing business conditions. This improves your financial planning and forecasting, as all data insights are right at your disposal.

• Easily collaborate across teams to make strategic decisions: Remove data silos and centralize data so all stakeholders can collaborate on the same data set, even if you are operating on a global scale. This allows better communication across departments for more aligned, strategic decision making.

The evolution of financial performance management

To further understand cloud-native technology and how far it has come, let’s look at the evolution of FPM software over time.

The advent of FPM began with on-premises software, requiring significant hardware and infrastructure management, with infrequent but large updates that were costly and time intensive.

In the early 2000s to 2010s, cloud-based technologies became the new standard, but as business needs and data volumes grew, FPM software had to evolve to keep up. Traditional monolithic systems struggled with scalability, flexibility, and data integration, which limit the ability to make real-time decisions.

By 2020, vendors began rearchitecting FPM software to incorporate cloud-native technology to offer more scalable, adaptable, and resilient solutions.

And by 2024, cloud-native technology became the benchmark for FPM to address the growing need for automation, scalability, advanced computing, and stronger security.

To meet the changing market demands and to further empower finance leaders to make smart, fast decisions that impact their business growth, our cloud-native solution, Prophix One FP&A Plus, is now available on Prophix One, a Financial Performance Platform. Prophix One FP&A Plus enables finance teams to:

• Improve planning and productivity: By eliminating data silos and manual errors, teams can work together, faster, to drive quicker scenario modeling and more accurate outcomes that will help you prepare for the future.

• Plan smarter and faster with unparalleled precision: With the latest cloud computing at your fingertips and the power of AI insights, FP&A Plus gives you and your team the flexibility to model anything and gain insights into your business like never before.

• Unlock a new level of planning: FP&A Plus goes beyond just saving time and reducing errors; it delivers new and innovative ways of planning and reporting to give you next-level insights to drive business performance.

• Future-proofed technology: FP&A Plus is engineered to always deliver the latest cloud computing technology.

Why is cloud-native technology the future of FP&A solutions?

A cloud-native FP&A solution is not just a solution for today, but a solution built for the future of finance. By leveraging the capabilities of cloud infrastructure, your business will gain faster implementation and updates, automation, and continuous innovation. Here’s how:

• Faster implementation and updates 
  Cloud-native FPM solutions are built to quickly adapt to changing business needs. Vendors can deploy new features, updates, and improvements without disruptions, ensuring the finance team can stay ahead of market shifts. For example, Prophix One FP&A Plus leverages the cloud-native architecture powered by AWS Graviton Processors, enabling the automatic adoption of AWS updates and optimization of cloud resources. This ensures minimal disruptions while allowing finance teams to implement improvements swiftly, leading to faster data-driven decisions and a competitive edge.
  
• Automation
  Cloud-native solutions automate more routine tasks such as variance analysis or data consolidation, by continuously integrating real-time data from various sources. This reduces the need for manual data entry, consolidation, and report creation, so that you can focus on higher value activities. Prophix One FP&A Plus incorporates an in-memory database that provides lightning-fast access to information, efficiently managing resources and adapting to varying workloads, so that you can spend more time analyzing trends and optimizing financial strategies.
  
• Innovation and future proofing
  Cloud-native solutions evolve with the latest technological advancements, enabling businesses to adopt new capabilities such as artificial intelligence (AI), machine learning (ML), and advanced analytics. Prophix One FP&A Plus supports innovation by continuously integrating new features and technologies that enhance financial planning, reporting, and analysis. With its in-memory computing engine, Prophix One FP&A Plus is well-equipped to support emerging technologies, so you can ensure your business remains up to date as it grows and adapts.

Work faster, plan smarter, think bigger than ever before with Prophix One FP&A Plus  

Transitioning to a cloud-native FPM solution is a transformative opportunity for businesses to stay ahead in an increasingly dynamic and competitive environment.

Cloud-native technology delivers the agility and innovation that finance teams need to keep pace with changing market conditions—something that monolithic technology can't keep up with. By fully leveraging cloud infrastructure, cloud-native FP&A solutions empower you to simplify processes, reduce risks, and drive smarter, faster decision-making. 

Prophix One FP&A Plus provides finance teams with the tools to bring these advantages to life.

Don’t let outdated cloud-based technology stand in the way of your progress. Start your cloud-native journey with Prophix One FP&A Plus today—so you can think bigger and drive faster business growth.