Enhancing internal controls to boost ERP cloud value

For many finance leaders, the move to the cloud is driven by a clear business case: greater efficiency, scalability, and cost savings. But alongside that opportunity comes a new set of challenges around ERP governance and risk management. As organizations modernize ERP systems, cloud-related risks can quickly emerge if control design is treated as an afterthought rather than a foundational element of the transformation strategy.

Our newest CFO Insights examines the role that CFOs can play to ensure that robust ERP internal controls are integrated throughout the cloud implementation lifecycle. Here’s a quick look at some factors that can drive success:

• Treat ERP governance as a core design requirement: Some teams may assume that legacy controls will translate to a cloud environment or defer controls until late in the program. Integrating ERP internal controls from the outset helps address some of the heightened risks, such as data loss, corruption, and unauthorized access.
  
  
• Drive cross-functional collaboration: Close coordination among CIOs, CFOs, and other business leaders helps ensure alignment between cloud ERP initiatives and broader organizational objectives.
  
  
• Embrace automation: Many cloud solutions feature advanced automation and monitoring capabilities. These features can allow CFOs to leverage automated internal controls for data mapping and validation, segregation of duties, and maintaining detailed audit trails.
  
  
• Establish third-party oversight: While a third party might take over most of the cloud infrastructure, CFOs may want to clarify the division of responsibilities and secure roadmap details. In addition, the company should get and review the right assurance reports from its vendors and make sure it understands and addresses any complementary user entity controls (CUECs) the vendor says the company is responsible for. This helps support SOX compliance and management’s review of internal controls over financial reporting.
  
  
• Drive careful and effective communication: Managing a cloud migration can be a long and complex undertaking, necessitating clear guidance from top leadership. Along the way, it’s up to CFOs to ask hard questions about the scope, delivery, and ownership of internal controls to effectively mitigate ERP migration risks.

For more on why CFOs should modernize internal controls to mitigate cloud ERP risks, download the full article.