Why are digital platforms important to CFOs?

3rd August 2015

FSN writer Lesley Meall considers how senior finance professionals can benefit from digital platforms. 




Using digital platforms is something that many of us do without thinking about it – as we hop backwards and forwards between cloud software applications, curated content, social media and websites. Amazon, Google Earth, iTunes, LinkedIn, Twitter and YouTube are among the many digital platforms which have built their success on making it easier for others to build on them. Their application programming interfaces (APIs) make it easier for other software products to interact with theirs and to build products and services that share processes and data – and co-create value. 

The potential benefits of the digital ‘platform’ approach not gone unnoticed by specialist developers of software and systems for those in (and around) the finance function. One of the earliest examples of successful exploitation of the platform approach is the cloud enterprise resource planning (ERP) system FinanciaForce.com. It is built on the Force.com platform which was used to build salesforce.com, which allows applications to be easily developed and then shared, exchanged and installed (with a few simple clicks) via the salesforce.com AppExchange online marketplace. 

The FinancialForce ERP and the Salesforce customer relationship management (CRM) system share the same infrastructure, database, development tools, reporting tools, user interface and user logins. “When companies use disconnected databases with different user interfaces, security models and reporting tools, they can end up spending more time and money syncronising data and figuring out how people and processes traverse across applications,” says Jeremy Roche, FinancialForce.com chief executive. 

A patchwork of systems may also make it difficult to identify and respond to opportunities as business grows. As organisations grow, departmental boundaries tend to become more formal and information can become more siloed and harder for find. This success can hamper future success by robbing organisations of the responsiveness, agility, and high speed collaboration that made them successful in the first place. Sharing a common platform and database across the front and back office, can help to keep everyone on the same page – and focused on customer service. 

“Because our invoices and proposals were generated from very different systems, they did not match, which was confusing for clients and delayed collections,” says David Hannaford, CFO at Milrose, a building code specialist (in the United States; US). “Now our proposals are generated through salesforce.com and match exactly our invoicing through FinancialForce, we have a clear history of all invoices and payments through the duration of a project,” he adds. It also takes much less time and effort to co-ordinate the central view needed to support joined-up decision making. 

The connectivity between these two CRM and ERP applications goes beyond product interactivity and data sharing. However, these are also an important feature of the platform approach. Many specialised business applications are available as ‘plug and play’ apps which come with pre-built or easily configurable ‘integrations’ with FinancialForce (here) and salesforce.com (here). Because ‘openness’ is in the DNA of platforms and the wider cloud ecosystem, some of these plug and play apps are also platforms; for example, Anaplan, the enterprise business planning system. 

The salesforce.com AppExchange offers various integrated Anaplan apps, such as incentive compensation planning, and territory and quota planning. As well as these apps (based on its business planning system), Anaplan also has its own platform. Ian Stone, Anaplan MD, UK and Ireland explains: “The Anaplan platform is an environment where business professionals can create, view and interact with Anaplan applications, whether these apps have been developed by their own organisation or acquired via the Anaplan App Hub.”

The App Hub offers pre-packaged apps built by Anaplan and its customers and partners. “We have created 20 applications in the time we’ve been using Anaplan,” says Jeff Brobst, VP, financial planning and analysis, McAfee. “Now that we’re in the cloud, our users are really in control, building sophisticated applications that are integrated with other plans and outside data sources,” he says. It helps, of course, that Anaplan apps are based on a set of business dimensions and rules, calculations, and customisable dashboards, and no programming is required to tailor them.

Nonetheless, the platform approach is not without its complications. The technology industry would not be the technology industry if the ‘platform’ term of reference did not (confusingly) mean different things to different people and in different scenarios. An operating system and the hardware it runs on can also be described as a platform; just in case the list of ‘platforms’ above hasn’t already muddied the water. There are also a host of integrated software suites (made up of individual software packages and enabling technologies), which also describe their ‘unified’ offerings as platforms.

Take the BlackLine Finance Controls and Automation Platform, for example. This supports the entire close-to-disclose cycle, by automating the processing, management and performance monitoring for some of the most complex, manual and repetitive tasks in finance, complementing other systems such as ERP and performance management. More than 900 global companies are using it to reduce the time and resources required to execute month-end closing, so it’s a platform that is clearly of importance to many CFOs.

Use of platforms is unlikely to diminish any time soon – even if the waters beneath them seem destined to become progressively murky.  Witness salesforce.com’s Salesforce1 Platform, which brings together three platforms: Force.com (for creating apps for salesforce.com), Heroku (a platform for developing cloud apps using various programming languages) and ExactTarget Fuel (a digital marketing platform). Even the ‘connected’ dashboards in cars are emerging as digital platforms. Only CFOs can decide how important platforms are – or which ones are most important.