Technology & Innovation
Finance apps built for the cloud open new doors
This is the last in a three-part series where we address the main hurdles facing finance today and identify some tools and technologies that can help you overcome these hurdles. In the prior two posts, we first identified why solutions in place might be hurting more than helping. Then we explored how cloud-based solutions can lead to better connectivity, more innovation, agility and efficiency. Now it is time to tie this altogether to conclude that new, modern finance apps, built for the cloud, can indeed open new doors and create competitive advantage for financial leaders in today’s global, digital economy.
The Internet has changed the world. It has leveled the playing field, allowing even small companies to create a global presence, opening doors to unprecedented global opportunity for all. But be careful what you wish for because with that opportunity comes new responsibilities and new challenges. The Internet, coupled with new technology, has brought about this new global, digital economy, which has accelerated the pace of business and the pace of change. With that acceleration comes the need for faster decision-making. But making the wrong decisions faster doesn’t help. The right decisions are insightful, data-driven and often collaborative.
New Software to Meet New Challenges?
Software that pre-dates this new global, digital economy was designed to run in the classic back office. In the true sense of the phrase, back offices are closed and confined. Yes, they have windows and doors, but both provide limited visibility and access that simply won’t work well for the finance leaders of today who need full visibility and connectivity.
Yes, some of these traditionally on-premise solutions have been lifted and shifted to the cloud. But have they been re-engineered to reflect financial leaders’ need to be just one click away from answers any time, from anywhere? Instead of modeling that “closed door” environment, financial applications that were born in the cloud model the new open office environments that are preferred today, in order to foster transparency and collaboration. Secure access to cloud financial applications simply requires access to a web browser and proper credentials. So, whether you are keeping tabs on expanding operations across the globe, working remotely, or are simply “on the go,” you are never out of touch.
But beyond the need for instant and continuous access, there is also the need for configurability, speed, and agility.
Don’t Customize – Configure
For decades now financial leaders have favored fully-integrated financial applications. But for almost as many years, those legacy solutions were monolithic structures, which were rigid and slow to change. At best they were an 80% fit, leading to invasive customization.
Those born in the cloud were most likely to have been designed to operate in a multi-tenant environment, where there is only one instance of the software itself. Because everyone runs a common set of code, successful SaaS solution providers have invested heavily in providing configuration capabilities to tailor and personalize business processes. This has the added benefit of eliminating invasive customization’s that wind up being costly and build barriers to continued innovation.
Innovate More… and Faster
This is especially important today. Last year the 2018 Mint Jutras Enterprise Solution Study found 90% of companies believed they faced some level of risk in their businesses and/or industries being disrupted by new innovative products, new ways of selling or pricing existing products or services, entirely new business models, or some combination of all of the above. And then of course there are still the more traditional disruptive factors like expansion and growth, organizational restructuring and regulatory changes, just to name a few. Those haven’t gone away.
All this disruption can have a cascading impact on business application requirements, making agility—the ability to easily adapt, innovate, evolve, and change—even more important than current functionality. Software delivered as a service (in the cloud) is certainly one of the ways innovation is delivered and consumed faster and more easily.
Add to this a component-based architecture, and you gain the ability to add new features and functions without disrupting the core application, sometimes even with low-code or no code. In the past solutions were monolithic structures. This meant different functions needed to move forward together to take advantage of new innovation. But this took a massive effort to coordinate all departments. What if accounting needed some new features to respond to looming regulatory changes, but other departments weren’t ready and able to move forward?
How does a component-based architecture help? For those nontechnical readers, think of akin to constructing a solution from a set of Lego building blocks. Purists hate this analogy, and yes, it is an over-simplification. But it is an effective analogy that resonates with most business users that don’t have the interest or inclination to dive deep into technical jargon.
Think about how you build a structure from Legos. Each Lego block is made of the same kind of material and is attached (connected) to the other Lego blocks the same way. In many ways they are interchangeable. But by choosing different colors and sizes, and connecting them with a different design, you can make a structure that is very unique. And once constructed, if you want to change it, decoupling some of the blocks and replacing them doesn’t destroy the parts that are not affected. There is far less disruption introduced than if you had constructed it with a hammer, timber and nails.
This provides a level of agility, configurability and extensibility to today’s applications that help us respond to growth and change.
Open New Windows to Gain Visibility
Financial applications built for the cloud should also provide added visibility to data that was previously locked behind those closed doors. Legacy solutions were notorious for being easier to get data into than answers out of, and visibility into that data was seen only through the lens of a rear view mirror. The cloud not only unlocks the doors to operational and transactional data in your enterprise applications, but also creates new windows to expand your view.
The cloud is your gateway to include both structured and unstructured data available from outside of your back office. Structured data might come from a service (e.g. credit ratings, indices, stock prices, etc.), your bank, or from your customers or suppliers. Unstructured data can be just about anything else, including sentiments from social media, breaking news or other virtually any kind of data available from the Internet. As you expand your reach, it will become painfully obvious that traditional reports won’t be enough to allow you to fully leverage that data for informed decision-making. You will need the kind of modern technology on which born-in-the cloud financial applications are built, in order to gain the insights provided by the kinds of AI with cognitive and predictive analytics we spoke of in our first post in this series.
As we wrap up this post, along with our three-part series, it is time to recognize once and for all that legacy solutions built on old, outdated technology only serve to lock the doors and close the windows to your back office. It is time to unlock those doors and throw open the windows for a new breath of fresh air, but still retain control of your data and your business. Finance applications built for the cloud, based on component-based architectures are the key to greater flexibility, more innovation and most importantly, added visibility and transparency. Isn’t it time finance leaders came out from behind closed doors?
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