The cloud is a rolling thunder. It continues to be a transformative technology enabler, allowing us to do things that were previously unimaginable, and the pursuit of digital transformation has become a mandate for virtually every organization.
Yet cloud technology adoption to date has been haphazard. Businesses can easily acquire cloud applications with very little friction—in fact, it’s as easy as swiping a credit card. For services organizations, the result of this first wave of adoption has created a tangled web of technologies. Gartner estimates the average worker uses 5-8 cloud applications in addition to the technology platforms managed by the IT department.
This hairball of disparate technologies is detracting from the real potential of the cloud, further exacerbating the very problems they were initially deployed to solve. Businesses are less efficient, productivity has decreased, adoption is poor, and insights into the business are incomplete and inaccurate. With the speed and complexity of work today, it is increasingly challenging to operate within this fragmented environment.
Fortunately, there is a new cloud model emerging for a modern services organization. It is a point of view centered on the concept of systems of record. The following three steps will provide businesses with a lens to view technology choices that will allow them to leverage the vast amount of R&D spend in innovation taking place, while minimizing the hairball effect.
1. Start with a solid core
The digital skeleton of every business needs a backbone—a robust central technology that drives business functions forward.
Historically professional services organizations have utilized Professional Services Automation (PSA) modules bolted onto Enterprise Resource Planning (ERP) systems. These PSA tools lack the necessary capabilities to operate in today’s fast-moving economy. Most of the work happening in a services business today is happening outside of these legacy PSA systems.
In response, services firms have attempted to fill the gaps by deploying a patchwork of narrowly-focused applications in order to move the business forward with an expectation that they might someday be integrated. Those expectations were never met, and instead have contributed to increased costs and inefficiencies in the business.
This might be considered the first wave of SaaS adoption. The second wave overcomes these inefficiencies through integrated technologies. This represents the single biggest opportunity for services organizations today. By unifying all critical day-to-day operations for the majority of work on a single, core system, service organizations can now run an agile business that stays a step ahead and delivers the results they seek. Specifically, these integrated capabilities include project management functionality, collaboration tools that connect remote teams and subcontractors, the incorporation of key project accounting data, and long- and short-term resource management.
Unifying these core capabilities forms an operational system of record—a single source of truth for the business—that is the core of the services-centric tech stack.
2. Identify other critical systems
There are three other necessary systems of record that have already consolidated critical business processes in a services-centric tech stack—a customer system of record (often referred to as the Customer Relationship Management, or CRM, system), a financial system of record, and people or employee system of record (often referred to as a Human Capital Management, or HCM, system).
While these technologies are often already deployed in services organizations, they are typically operating independently of the operational system of record. Therefore, a solid tech stack strategy needs to consist of more than specific applications to support various business needs—it must present a logical plan to ensure the right information is seamlessly delivered through every part of the business through integration.
In this model, the operational system of record sits at the core of the services tech stack and other systems orbit and connect through it. This ensures that everyone is looking at the same data, no matter which system they are in.
3. Further extend through integrations
It’s true that it’s critical to simplify your application portfolio and reduce the number of integrations to the smallest number possible in order to unify business processes, lower cost of ownership, and reduce the number of skills required to support the systems.
However, services organizations often require a small number of specific technology applications relevant to the markets that they serve to augment the core technology. Therefore, in addition to the systems of record, many organizations will need to consider which other best-in-breed, cloud-based applications are required to improve performance in every functional area of an organization. That might mean, for example, that developers spend their time in an agile development tool such as Jira, or they require an expense management tool such as Concur.
When selecting new additional cloud solutions to extend the tech stack, compatibility and a thoughtful approach to the integrations are key. Each integration should be thought of in the context of the full organization. As Accenture notes, “If you only think about integrations as a way to pass data, then you’ll likely end up with multiple, redundant point-to-point integrations. On the other hand, if you think about the business processes that your integrations need to support, you can likely simplify your requirements.”
A solid tech stack
Building a tech stack is like building a stack of… anything. It needs to have a solid core to keep it stable. IDC forecasts that by 2020, two trillion dollars will be invested into digital transformation. Companies need to make sure that investment counts. An operational system of record, supported by robust and thorough integrations, can make businesses more productive, protected, and better able to adapt with rapidly changing business needs.