A very interesting and informed discussion took place between Gary Simon (managing editor of Financial System News) and Michael O’Brien (General Manger of Financial Applications at FinancialForce.com) a few weeks ago about how businesses can transition to the Cloud and exploit the power of the ‘platform’ approach for innovation, scalability and collaboration as well as perfecting their processes. Some points and thoughts:
We are seeing a global economic revolution in consumer and customer buying habits. More than 50% of sales are transacted through mobile devices, and accelerating. Cloud technologies are not leading this change, but they are enabling it. The global economic recovery is being driven by smaller fast-growing businesses that are embracing this change and using new technology to out-compete with larger and more established companies.
Cloud applications offer significant advantages in scalability, cross-application connectivity, and real-time access to information. They are also (and perhaps most importantly) bring customers and suppliers closer to the heart of their business. Embedding Cloud technologies into the fabric of a new business, unencumbered by pre-existing infrastructure, is far easier than for large companies that will have to integrate it into (or replace) existing infrastructure.
Smaller businesses have a huge competitive advantage:
- No pre-existing infrastructure with a blank canvas for systems and process design.
- Cloud ‘pay as you use’ offerings are scalable with usage cost increasing on a variable basis, significantly reducing the up-front capital strain.
- Their business models are in many cases already internet and/or mobile based, with a management culture that already embraces new generation technology.
- As early adopters, they may already have gained the competitive market advantage when the big existing companies finally decide that “the water’s now safe to enter”.
Big business options?
- Evolve or die? Is having an established brand name, reserve capital and a track record enough?
- Traditional software providers are already rolling out cloud offerings, paired with their existing applications, making the transition easier and reducing risk.
- Consider incremental adoption, adding value-adding client interfacing applications first (i.e. CRM), before moving to back office applications.
- Solve existing process problems first. Building new infrastructure efficient upon a streamlined and efficient base is far easier and less costly than fixing existing problems parallel to a building a new environment.
Challenges in the Cloud
- Security issues around hosted data and access to that data. Both real and perceived.
- A rapidly growing range of vendors and offerings to choose from, so who do you choose?
- At what point does a company decide (or realise) that it’s ‘now or never‘ time?
- Do businesses have the necessary appetite for change required to take the big bang step and overhaul their entire systems architecture?
- When evaluating offerings, does a business choose the application, vendor, or hosting platform?
- Objective evaluation: every vendor will naturally tell you that their product is “the one”. Finding informed partners to help you choose your next step is itself a challenge….
Click here to go to the FSN website and watch the 30 minute webinar-based interview.