Business Software Trends 2017
Enabling Step Change in Productivity
Approaching 2017, whilst having all the emerging and exciting technologies at our fingertips, it is easy to forget the continual struggle that corporates are facing to remove complexity & friction in order to drive increasing business value. Especially when it is done against a backdrop of ever changing economic conditions, geo-political uncertainties and changing in-country regulatory environments.
Artificial Intelligence (AI), Augmented Reality (AR), and Virtual Reality (VR), not to mention free to roam robots, are fun but the simple fact for most businesses is that these technologies will not have a general impact in the finance and operational backbones of a business in 2017. Despite this fact, our minds might boggle with the possibilities; for example like AR enabled fixed asset & stock count checks or the AR enabled ability to see device electric consumption, but we digress, especially when the key issue for corporates is about doing more with less and to focus on how to reverse that anecdotal 80% of finance & operational time on transaction processing and 20% on management.
Technological Advances Now Leveraged by Vendors for 2017 have been coming very fast, and to such an extent that a tipping point has been reached, where great value can be added to businesses after what seems like many years of incremental improvement. It is also important to realize that many things that can be done now in Q4 2016 were simply not possible 12 months back.
All advances relate to productivity improvements and use a combination of technologies, that when combined, are greater than the sum of the parts. These include processor architecture, compression, NOSQL and above all the fact that software is written by vendors to leverage the power of these features.
These advances are empowering corporates for the first time to implement the missing glue between systems to reduce transactional process friction. That is, of course, if they have that required management focus to sort the underlying issues.
Specific observations as to how technological advances will impact businesses in 2017 are as follows:-
Missing Glue Between Applications will come in the form of new types of transactional platforms that will be deployed between systems. These will be lightweight and very powerful to give ultra-fast processing capability, allowing auditable & repeatable processes to be undertaken at all levels within the business. This missing glue today causes a lot of important processes to be completed on single user spreadsheets in order to facilitate decision and management support, and is often the root cause of system friction highlighted in the above survey.
Ultra Fast Processing will Enable Granular Transactional Handling. Summary or Detail processing relates to the passing of data between applications. Often data, due to legacy issues, is passed in summary format due to processing speed constraints, which explains why so much time is spent on trying to build reports that contain some elements of the original data like project codes etc. Speed Increases and Big Data Handling remove that processing barrier and for some industries this is a game changer. For example latest FinTech processes are enabled, not only by this, but also by the technologies mentioned below and these technologies will also positively impact other sectors, like retail, that work with algorithms at a granular level.
Greater Application Configurability by End Users Not IT will see corporates really starting to leverage domain knowledge in finance to solve process bottlenecks, rather than relying more intensively on technical resources. Only a few vendors will provide real granular capability that leverages the requirements of finance with control, and segregation of duties to operate as a platform of change.
If you think about it, an application that is both easy to use AND granular in action is an oxymoron, so really it boils down to how vendors differentiate themselves as corporates need both.
Cloud Confusion Will Start to Be Less Foggy. Cloud will still be deployed and the demarcation lines between private cloud and public cloud will become even more fuzzy. Deployment options from application vendors will start to include cloudbursts, which is the ability to run a hybrid process, within an application, to leverage compute power in the cloud, but to store all data securely on premise. There will be continuing realisation that Cloud is not a panacea to solve all business issues but, simply, a deployment option to be considered in roll outs. Governments will continue to focus on privacy, and cloud to cloud integration will become more of the norm with larger cloud vendors being attractive even to financial services as security concerns move to the next level and data sovereignty issues become more mainstream. So overall benefits and disadvantages of cloud will become clearer and for you to have more clarity.
Application Architectures will Continue to Evolve to be more supportive of business needs and systems will move more towards becoming Online, offline, centralized and decentralized. This will bring extreme value to finance and operations and processes will only involve the users, as and when required, for decisions and oversight. Greater transparency into departmental issues will enhance operational capability.
Process Automation will be possible to the extent of automating a process to one button or no buttons across sub systems.
Corporates will struggle, at the beginning, to gain confidence in having a reduced or no user interface (UI), as applications move more towards being defined as complete stand-alone end to end processes with more limited user interactions.
Vendors will, however, allow processes to be run and paused in training mode step by step, so that users can collaborate on continual improvement initiatives and additionally will provide on screen messages that do not appear on distributed reports that will facilitate process validation for the task owner.
Digitisation of Core Customer Experience (CX) Processes will be somewhat thwarted by legacy systems and this issue will put the spotlight on solving these constraints. In essence, this is going to cause Finance or Operations to think outside of the box and to work with smaller passionate vendors and perhaps even will see traditional applications becoming the new middle-ware for the purposes of cut- off and auditability. This is going to be easier to solve, than most realize at this time due to the availability of these newer technologies, but for sure fear, uncertainty and doubt will make finance and operations think very carefully through the processes.
Primary Data Flow and Secondary Data Flow considerations are a good way to tackle digitization. Primary Data Flow is where data is created for the first time, whilst Secondary Data Flow utilizes the existing Primary Data for other reasons. Examples of the latter might be for 1) Complex Tasks including commissions, allocations, segmental reporting etc. and 2) Complex Processes including budgets, consolidations, and cash flows. All of these processes, when isolated and streamlined, will have a very major impact on productivity. This will continue to be a journey, not a one off implementation.
Ability to Process in Real Time c.f. Processing in Arrears is here today or at least the software capability is. The reality, however, is that this is not on the mind of the CFO at the moment. The benefits are real, in that they enable the creation of a nimble and agile company, but at this time CFO’s are overwhelmed with simply too many frictional processes to solve and this is all done, of course, against a backdrop of corporates looking to increase productivity through reduced human resource levels within finance and operations. Complex Tasks and Complex Processes, as described above, will start to benefit in 2017 from these lightweight applications that allow end users to define processes from data collection, through all simple and complex transformational process flows, to reporting & visualization, all with actionable contextual alerts and business simulation capability.
Continual Monitoring of Functions in the form of alerts, at least in the back office, is a bit dated and over rated in terms of who uses it, whilst Complex Event Processing (CEP) is well known to larger organisations in non back-office scenarios for certain key customer experience (CX) areas. Going forwards new technologies will make this available across sub systems, to be leveraged by Virtual Assistants / Software Robots and at much reduced price points.
Virtual Assistants will really make a difference and when you are asked “does your system work for you or do you work for your system?” the answer will certainly not be as one sided as it is today.
Virtual Assistants will certainly bring more dimensions to Continual Monitoring of Applications. They will be able to monitor any stage of a process and trigger activity in the form of a contextual actionable alerts, and /or workflows, with actions being dependent on the actual situation. The fact that they are available throughout the process changes the game.
At the beginning of a process they might be involved in collecting the physical data files from operations and be able to automatically escalate in cases where there is non-timely receipt of the required files; or even check received files for content; a simple example might be the matching of brought forward balances to carried forward balances from last month.
During the process they will enable production of ranked product sales either for that submission or for all submissions and be able to start workflows for corrective action in any process flows in the event that sales are too fast or too slow. They are very useful for HQ to gain operational insights over remote entities.
At the end of any process, involving month end reporting packs, they can rank variances by entity, region, or globally for quick assimilation of details by process owners or stakeholders.
Business Simulations and What If Capabilities will arrive and be more practical than ever and will run in real time to produce ranked results of options. They might also be used to upload trailing data to run 2017 processes to see what sort of alerts might be generated by the system for the purposes of fine tuning system responses with resource levels.
BPO Decisions might therefore be easier to make as granular data becomes more understandable more quickly, thereby allowing better more informed decisions to be made as to whether to outsource a process or even to compare resource levels for each managed BPO process across entities, depending upon which side of the BPO fence you are on.
Smart Forms Within Processes for collecting budget data, or other data can be started by subsidiaries or HQ. They can render zero footprint, for the user or user group in hand, based on the task in hand AND the situation within that task. For example, in the supply chain this is useful for changing direction on a dime and having all new processes followed by operations immediately. Processes can be deployed 3,2,1 or 1,2,3 meaning that a head office can deploy processes to subsidiaries with all logic handled at HQ or logic may be handled by the subsidiary to produce end user results that are sent to HQ. They would even handle smaller but important processes like supplier audits, a task that is often hard to fit into corporate processes.
Mobile Apps c.f. Progressive Web Apps deployment battle will warm up. They, on the surface, do the same task but with a different style of interface, the first requiring a download from an app store and the second a web link. Corporates have been experimenting and learning, all the way through, with for example deployments of Human Resource Employee and Management Self Service Apps and these have challenged corporate policies not to mention vendors. For example browsers are not created the same, as they have different levels of support for HTML5, causing deployment issues in the field and often corporate policies have meant that these latest industry browsers were not supported by them or the vendor going into 2016. Related and general security issues has meant more focus in this area by corporates and vendors for 2017.
Advantages and Disadvantages of Apps c.f. Web Applications are under scrutiny within corporates, as is Cloud.
As technology progresses there is going to be an interesting debate about which way to go and today both have a place. Mobile Apps give a richer CX, but web apps have moved forward to enable a more complex CX, primarily driven by speed increases that enable more operationally specific processing capability to be incorporated into these smart forms. For 2017 mobile apps will probably be seen in customer facing applications whilst internal processes will go progressive web as it will offer cheaper deployment options not to mention zero footprint options ie no local application installs. Ultimately there may be some hybrid options available like we are starting to see in WeChat Lite Apps.
Application Look’n Feel and Number of Clicks to achieve a goal is something very positive to come out of the mobile revolution and digitisation will certainly enable better, simpler and less complex UI’s, helping to push applications to become the new middleware.
Visualisation Tools will Move Towards a Commodity. In 2017 we will see further reduction in costs and more freemium models. Whilst tremendous advances have been made on turning disparate data to insights, deployments have been largely departmental with decisions still often being made on gut feel, due to the lack of availability of the right level of granular data. Now that these can be solved means that these tools will become more pervasive in operations and finance and will be deployed in processes that reconcile back fully to the underlying corporate data.
Workflow Technologies will Improve. Historically a challenge to implement and change, as deep rooted, workflow typically has been great operating at an inter-departmental document level, say between Department B and Department C, to ensure completeness. It is still, however, lacking in intra-departmental workflow flexibility and granularity within departments, meaning more spreadsheets. The technologies discussed in the above paragraphs will allow software companies to start adding significant value and in a way that makes process change easier to achieve within a department. There will also be other light workflow options, like those emerging in messenger applications mentioned above, that can be leveraged to facilitate the more simple corporate processes.
CRM and Finance Applications will converge more for payables and receivables, at least for more detailed reporting and validation purposes, enabling both to be leveraged for business opportunities. This is another example of more data sources and more convergence to enhance leverage capability.
The technologies discussed above will change how corporates operate:-
Operations and Finance will, of course, both benefit from the technologies and both sides will see greater interactions between departments like Finance and Human Resources, as data is combined to give more meaningful insights. Data sources will continue to increase rapidly with more examples being from social media, employee fitness bands, smart cameras, Internet of Things (IOT) and they will continue to expand at great speed to enable even more productivity changes and more validation steps to ascertain at multiple levels the operational health of the business.
Proactive Not Reactive Processes will Eventually Rule and there are many examples. Consultants fully occupied and charged out and that have taken no holiday can be sorted before they vote with their feet and consulting teams might be priced per job meaning more accurate KPI performance in the longer run. Another example might be an aged approved but open positions listing, ranked in order of perceived business impact, as this often gets lost in the day to day hustle and bustle.
Cyber Security Concerns will drive change in larger corporates through government & professional body regulations that mandate expanded guidelines on defenses that will raise costs; i.e. always be on the latest versions and run updates to keep bugs patched.
Security, when we look back with hindsight, will look scary as we realize how vulnerable our corporate systems were to both the dark web and knowledgeable insiders.
Cyber Risk Insurance Risk will drive corporates to spend more time educating staff, probably on the back of reduced premiums for cyber risk, but at the same time new hacking techniques will keep us busy especially those that are social in nature.
For Corporates in 2017 there is unprecedented opportunity for digitisation and to remove process friction in both operational and back office processes for value creation. We are now amidst a deep step change in technology which, when leveraged by the C Suite, will enable an organisation to become agile and nimble, as well as competitive or be disrupted if not. A game changer either way!
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