By most accounts, spending on cloud computing will grow over the next decade. One estimate holds that cloud-specific budgets will grow six times faster than other tech spending through 2020.\nFor most companies, the big question is not if but when they will adopt cloud computing for the bulk of their IT operations, including the enterprise resource planning (ERP) software they use to manage inventory and product manufacturing.\nApplications don\u2019t get much more mission critical than that, and up until recently conventional wisdom was that fear of change would keep ERP applications running on premises and not in the cloud.\nThat thinking has shifted of late.\nThere are several reasons for the change. Recently, my colleague John Foley sat in as Mark Hurd and Ray Wang \u2013 Oracle CEO and Constellation Research founder respectively \u2013 discussed why ERP\u2019s future is in the cloud.\n[Disclaimer: the author is an Oracle employee.]\nCloud ERP eases financial reporting\nOne driver is that CFOs love the idea that cloud ERP, empowered by artificial intelligence (AI) technologies like machine learning, can automate routine financial management jobs, and cut dependence on custom reports, Hurd said.\nIf all the required information is in a cloud, the need to integrate several data \u201csilos\u201d is less than in traditional ERP scenarios.\nCloud ERP also enables financial types to get faster reports. Wang said he sees finance staffs wanting to go from monthly to weekly to daily reports. Cloud ERP deployment enables all that and eliminates the need to wrangle multiple spreadsheets.\nRegulatory compliance is another, related, factor pushing ERP to the cloud. In the newly released Constellation Research\u2019s 2018 CFO Priority survey a healthy 41.9% of respondents identified compliance as a top priority.\n\u201cThe compliance world is increasing,\u201d said Hurd. \u201cAll of that has to be automated. And AI-driven reporting dramatically cuts the time and resources needed to meet compliance requirements.\nCIOs should care about what CFOs want because many of their concerns \u2013 on security, on compliance\u2014overlap. In addition, many CIOs report to CFOs.\nRisk management is yet another top priority for CFOs (close to 37% ranked it so). AI-driven ERP can help corporate leadership determine what a company\u2019s risk is in a given scenario as well as what its appetite for risk is, Wang said. And then, the system would recommend a best course of action taking those factors into consideration.\nReached separately to talk about this issue, Wang told me that cloud infrastructure provides businesses with the most modern and efficient way to run their important software applications.\nAI plus ERP makes a winning combo\nBusinesses that opt for cloud over on-premises deployment are able to tap into lower cost computing power at any given time. The fact that cloud software gets regular automatic updates is another benefit.\nCloud-based ERP systems can also use machine learning to help customers not only run their existing operations more efficiently, but potentially also identify \u201cnext best actions,\u201d Wang said.\nThat means the company could find new profit opportunities.\nSifting through reams of internal and third-party data, for example, a cloud-based ERP system could recommend the optimal pricing on a given product. If a company prices a widget (or a car or a doll) too high, it will lose sales. If it sets the price too low, it hurt profit. The big win, to maximize sales and profit, is getting that price just right.\nWang said the advent of cloud plus AI is fundamentally changing the way people buy technology. As he put it during his conversation with Hurd, \u201cThe intersection of ERP and AI is shifting the way people are buying. They\u2019re not buying a finance system; they\u2019re buying the ability to ask a question.\u201d\nGoing forward, people will not be purchasing software so much as they will buy insights, he added. They want the system to serve up the next best action.\n\u201cI\u2019m not buying a finance system but the ability to ask questions like \u2018do I add 100 people in marketing or do I add $10 million in budget?\u2019\u201d\nThe combination of powerful cloud infrastructure and smart software could thus lead to truly expert systems that can guide companies to make the best decisions using the best data and best infrastructure available.