When it comes to the adoption of enterprise cloud technology, many companies are “barely out of the first inning.” That is what Oracle Vice President of Technology Robert Shimp told VentureBeat and that the same prognosis was repeated, in optimistic terms, at the Oracle OpenWorld conference in San Francisco.
Cloud adoption, and the obstacles IT functions must address to invest in cloud solutions, are not just relevant to IT, but also to chief tax officer and tax functions that deploy tax automation to enhance the value they deliver to the organization.
At Open World, leaders at enterprise software giant Oracle confirmed that the company’s transition from a product company to a services company is well underway. Although cloud-technology adoption – in the form of software-as-a-service (SaaS), platform-as-a-service (PaaS), and infrastructure-as-a-service (IaaS) certainly has significant room to grow, Oracle is very bullish on cloud technology’s prospects.
Tax executives should be aware that IT spending has been relatively flat in recent years, in part, because as much as 80 percent of enterprise technology budgets are spent on “keeping the lights on” – the upkeep and maintenance of existing systems. In the vast majority of cases, these systems and applications are pretty long in the tooth: one conference presenter at Open World shared a data point showing that the average age of an IT application in a Fortune 500 company is 21 years old. In addition to keeping the lights on and upgrading legacy technology, IT functions are also challenged to integrate new social, mobile and analytic (i.e., big data) technology.
Cloud technology can deliver significant cost-savings, powerful functionality improvements and other benefits to companies – especially their tax functions, as my Vertex colleague Nancy Rieti has written, Cloud Matters to Tax. Getting cloud adoption out of the early innings, as the presentations and discussions at Oracle OpenWorld confirmed, requires companies to address their legacy-technology challenges.
Please remember that the Tax Matters provides information for educational purposes, not specific tax or legal advice. Always consult a qualified tax or legal advisor before taking any action based on this information.