Can “Cloud À LA CARTE” GIVE CFOS A DIGITAL ADVANTAGE?
The last 10 years has witnessed a rapid transition from on-premise solutions to the cloud. In the main, it’s been a process of like-for-like substitution, for example, taking an on-premises ERP or CPM solution and replicating it in the cloud. But is such an approach providing an accelerated digital advantage or are businesses simply replicating end-of-life processes in a lower cost and more maintainable environment?
The cloud era has spawned a whole new generation of applications that are of more limited scope but at the same time, more deeply specialised and functional. Adding fuel to these developments is “cloud vertical” i.e., the increasing trend towards more specialised industry functionality in the cloud. So, organisations are no longer faced with a straight choice between cloud and on-premises but can choose from an à la cart menu of small applications that will potentially give them rapid digital differentiation and competitive edge.
The trend can be seen all around in the rapid proliferation of, say, purchase-to-pay, reporting, consolidation and budgeting applications. Take for example, Tipalti, HighRadius, Phocas, Konsolidator, Vena and Fluence, to name but a few. Even ERP systems which can seem impenetrable at times, are succumbing to the trend. Zucchetti, the authors of MagoCloud à la carte, invites businesses to design the ERP Cloud the way they want by choosing which functionality to include and select only modules that the business requires, for example, MagoCloud Financials Accounting, Sales & Purchase, Production, Warehouse, Logistics, and Store Management.
At the same time, cloud development in the vertical dimension is having a profound effect on industries as diverse as the automobile sector and health insurance. Ford the global automobile manufacturer has partnered with cloud vendors to develop cloud-based connected car application development services for the transportation industry. The platform features industry-specific solutions along with IoT, machine learning, analytics, and compute services that manufacturers can leverage to develop connectivity layers for their vehicles. According to Forbes, compliance and security requirements are driving industry verticals, especially in the health insurance industry.
The obvious question is whether cloud à la cart and cloud verticals are no more than the re-expression of the decades-old Best of Breed approach. However, there are some major differences. The best of breed approach didn’t live up to its promise because of issues of incompatibility, lack of interoperability and scalability. The cloud has, as it were, changed the dynamics of the Best of Breed approach.
The major cloud platforms (Microsoft Azure, Google Cloud and Amazon Web Services) provide infrastructures of almost limitless scalability. Data incompatibility and lack of interoperability tend to be features of the past. Many web services allow applications to be ‘snapped’ together more easily and data to be exchanged. So it is feasible for organisations to build up their applications architecture without fretting about isolated islands of information.
The big prize in all of this, is the speed with which businesses can migrate from legacy systems, by implementing bite-sized chunks of functionality that are differentiating while avoiding the trauma of a big bang approach to legacy replacement.
The twin trends of cloud à la cart and cloud verticals look likely to refresh an applications market with brand-new opportunities for making a step-change, accelerating digital transformation and supporting business differentiation.
By Gary Simon, BSc, FCA, FBCS, CITP
Chief Executive of FSN & Leader of the Modern Finance Forum on LinkedIn