Cloud-enabled vs cloud-native: understanding the key differences
While both cloud-enabled and cloud-native solutions offer benefits over traditional on-premises software, they differ significantly in their architecture and capabilities.
Let’s break it down:
This framework is drawn from Sage’s own explainer on cloud-enabled vs. cloud-native software.
Cloud-enabled software is a start, but…
Cloud-enabled SaaS budgeting refers to a traditional budgeting solution re-hosted in the cloud.
This is also described as a “lift and shift” application.
Although it sounds innovative, it’s more of a jerry-rigged approach than a true innovation—like upgrading your trusty (and rusty) bicycle with an electric motor.
While it’s a step up from purely on-premises solutions, it comes with limitations:
- Limited functionality compared to on-premises versions
- Potential struggles with complex, automated workflows
- Challenges in integrating with third-party applications
- Time-consuming and costly workflow adjustments
Cloud-native accounting software was born and bred for this
On the other hand, cloud-native SaaS budgeting solutions are specifically designed for cloud use.
They offer much more flexibility, scalability, and real-time data integration.
And unlike cloud-enabled options, you’ll never get halfway through a forecast model and suddenly have the whole thing short out on you.
Cloud-native software offers:
- Enhanced flexibility and scalability
- Seamless real-time data integration
- Better handling of complex, distributed environments
- Easier integration with other business systems through APIs
Cloud-native applications are built to take full advantage of cloud technology, offering a more robust and future-proof option for businesses looking to optimize their financial planning processes.
The impact of cloud-native solutions on financial planning
Cloud-native financial planning solutions offer significant advantages that can have a pretty big impact on how businesses handle their finances.
One of the most important benefits is real-time financial visibility.
With could-native software, CFOs and their finance teams have access to up-to-the-minute financial data, allowing them to make informed decisions based on the most current information.
Another key advantage is automation.
Time-consuming tasks like invoicing, expense tracking, and financial reporting can be automated instead of keeping your team up all night.
This not only makes everyone happier but reduces the risk of human error—because tallying up expenses at 1am with the aid of an energy drink is never a good idea.
For teams that work remotely, which is now commonplace, cloud-native options greatly enhance collaboration, leading to better communication and more efficient workflows.
Finally, scalability is a huge advantage of cloud-native financial planning.
As businesses grow, these solutions can easily scale to accommodate increased data volume and more complex financial processes without requiring an infrastructure overhaul.
So if you want financial planning software that grows with your business, without having to learn (and train on) something new every year, cloud-native is an investment with long-term value.
Challenges and considerations in adopting cloud financial planning software
Hopefully, the benefits of choosing could-native financial management options are clear, but implementing any new system of course has challenges.
Data migration
Data migration is often one of the biggest hurdles to overcome.
Transferring historical data to the new system can be so complex and time consuming that you’d rather not even start.
But if you have a solid data-migration strategy in place, you can make sure that no critical information is lost in the transition.
User adoption
Similarly, user adoption can be a challenge, as employees may resist new workflows or interfaces.
Providing comprehensive training and highlighting the benefits can help smooth this transition.
System integration, security, and compliance
Ensuring smooth integration with existing business applications and compliance requirements is key.
Cloud-native solutions typically offer better capabilities in both areas, so it’s an important factor to consider during selection.
Table of Contents
Key Takeaways
- Cloud-enabled software is a traditional, on-premises application “lifted and shifted” into the cloud — it gains some cloud benefits but keeps its original architecture and limitations.
- Cloud-enabled solutions can struggle with limited functionality, complex automated workflows, third-party integrations, and costly, time-consuming workflow adjustments.
- Cloud-native software is built specifically for the cloud from the ground up, offering more flexibility, scalability, and real-time data integration than a lifted-and-shifted product.
- Cloud-native financial planning gives CFOs and finance teams real-time financial visibility, automates time-consuming tasks like invoicing and expense tracking, and improves collaboration for remote teams.
- Cloud-native solutions scale to accommodate more data volume and complex financial processes as a business grows, without needing an infrastructure overhaul.
- Adopting a cloud-native platform still comes with real challenges to plan for: data migration, user adoption, and integration with existing systems and compliance requirements.
Summary
The distinction between cloud-enabled and cloud-native comes down to how the software was actually built, not just where it happens to run. Cloud-enabled options are on-premises software moved to the cloud without a redesign, which means the same functional and integration limits tend to follow along. Cloud-native financial planning software is architected for the cloud from the start, which is what unlocks real-time visibility, automation, and scalability that hold up as a business grows.
For a business choosing financial planning software, the practical takeaway is to look past the “cloud” label and ask how the platform was actually built — and to go in with a plan for data migration and user adoption, since those are the real friction points regardless of which option is chosen.
FAQ
What is the difference between cloud-enabled and cloud-native software?
Cloud-enabled software is traditional, on-premises software that has been moved, or “lifted and shifted,” into the cloud while its underlying architecture stays largely the same. Cloud-native software is designed and built specifically for the cloud from the outset, which is what gives it greater flexibility, scalability, and real-time data integration.
What are the limitations of cloud-enabled financial planning software?
Cloud-enabled solutions can offer more limited functionality compared to their original on-premises versions, struggle with complex automated workflows, face challenges integrating with third-party applications, and require time-consuming and costly workflow adjustments.
What advantages does cloud-native financial planning software offer?
Cloud-native financial planning software offers enhanced flexibility and scalability, seamless real-time data integration, better handling of complex or distributed environments, and easier integration with other business systems through APIs.
How does cloud-native software improve day-to-day financial planning?
Cloud-native software gives CFOs and finance teams real-time financial visibility for faster decision-making, automates time-consuming tasks like invoicing, expense tracking, and financial reporting, and improves collaboration for remote finance teams.
What challenges should a business expect when adopting cloud-native financial planning software?
Common challenges include data migration — transferring historical data without losing critical information — user adoption, since employees may resist new workflows or interfaces, and ensuring smooth integration with existing business applications and compliance requirements.
Is cloud-native financial planning software more scalable than cloud-enabled software?
Yes. Cloud-native solutions can scale to accommodate increased data volume and more complex financial processes as a business grows, without requiring the kind of infrastructure overhaul that a cloud-enabled, lifted-and-shifted system would need.