We live and work in a network society. “Humankind is now almost entirely connected, albeit with great levels of inequality in bandwidth, efficiency, and price,” says sociologist Manual Castells. Virtual life is becoming more social than physical life. Our ease with the web’s multidimensionality has led to a mass migration to ‘social’ networks and communities that people have constructed for and by themselves – and when sites try to impede free communication we soon abandon them for less restricted spaces. This network society presents challenges and opportunities for businesses says Lesley Meall, FSN writer.
As customers and consumers, we are all aware of the innovation and investment in customer-facing, front-office systems that has supported a revolution in how we connect and collaborate to research products, services, providers, and others’ experiences of them. Now, we may be at the brink of another revolution, as ‘social’ software, networks and communities reshape processes, systems and expectations in and of the back-office.
Examples of what can be achieved when back-office functions use technology to move closer to their customers include: Pokémon GO (if you haven’t captured the business/finance potential of Lures, Google it now); Lego Ideas (capturing and creating value from enthusiastic amateurs with an interactive product development platform); and a charity, Camfed, using cloud-based business and finance software as a ‘platform’ to connect and sustain a community of activists and activist investors (here).
Luxury retailer Burberry is often cited for a high profile reversal of fortune it attributed to its combined and connected use of social, ecommerce, analytics and enterprise resource planning (ERP) software and the associated process improvements and cost savings. Research by the FSN Modern Finance Forum on LinkedIn found that linking front and back office systems also enables CFOs to spend less time on transaction processing, to make quicker decisions and be more involved in strategy development.
Lately, Burberry has struggled to maintain performance improvements amidst changes in consumption levels and customer demands. These challenges are exercising the entire retail sector and in ways that will resonate in the near future for almost all commercial and non-commercial entities – and by extension, their CFOs and their finance function. As retail enterprises tend to walk ahead of other sectors along the bleeding edge of digital transformation, we can learn from their experiences.
Many retailers already exploit social channels to build communities, use analytics to support data-driven decisions and rely on cloud-based IT infrastructure. People First in Digital Retail: Accenture Technology Vision for Retail 2016 uses five ubiquitous technology trends to demonstrate the direction of travel and Retail Technology Vision also explores transformative trends, such as the emerging ‘internet of me’, a reimagining of the workforce and the role of digital platforms.
“Retailers have been impacted by digital a couple of years ahead of other industries, and that impact has affected other parts of the business, such as supply chain and commercial functions,” says Andrew Long, retail technology strategy lead, Accenture. Accenture notes the importance (in retail) of being digital platform providers, “facilitating data flow and system access to select business partners…to participate in a larger eco system and unlock new revenue streams”. FSN research shows that CFOs also want this.
However, it calls for a shift: away from the complex web of point solutions, point-to-point connectivity and ‘non-elastic’ infrastructure that characterises many enterprises in many sectors, to something more agile and more integrated. Beyond the appeal of rapid cloud deployments with low up-front costs and near instant access, it can be difficult to get the most from an infrastructure that locks information into disparate and disconnected islands.
Some cloud software and services promise a solution, but CFOs need to choose carefully. “CFOs need to judge not from the standpoint of an individual application or sub-process, but take a wider perspective of the platform on which they reside,” suggests Gary Simon, FSN chief executive officer. A lone budgeting application may be effective, but less so than one that is part of an integrated business intelligence and corporate performance management system on a single cloud platform.
Specialist products can enable the seamless transfer of information between multiple cloud (and on-premise) applications and processes (and their associated islands of data). However, digital platforms – such as those from Anaplan, Infor (Mongoose) and salesforce/FinancialForce – may be a more effective way for CFOs and those in and around the finance function to collaborate in communicates built on integrated data, software and processes, in the enterprise and among key stakeholders on the outside.
FSN outlines some of the reasons why digital platforms are important to CFOs here. For example, by making it easier for software products to interact and easier to build products and services that share processes and data. A recent FSN article about software developed during a three day ‘hackathon’ organised by Louis Vuitton (using the Anaplan platform) offers some insights into what is possible (and how fast) using digital platforms. Not all cloud products and services are created equal.
By thinking strategically, CFOs who are buying into the cloud may avoid incautious decisions or commitments. “In an unseemly rush to exploit the advantages of the cloud some CFOs are throwing caution to the wind, by deploying financial processes in multiple clouds that will create ‘islands of information’ that they may regret for decades to come,” says Simon. In the network world we are all connected, but as Castells notes, we are still plagued by age old inequalities.