To some extent 2013 can be viewed in terms of a technology race. Momentum had been building around process, e-invoicing, payments and the possibility of Big Data in the cloud for a few years, but 2013 witnessed the building of connected, broad business platforms. The benefits were large and far reaching, but were perhaps not as coherent, or as widely understood as they might have been. In other words, the noise was causing confusion. And where there’s confusion, business opportunities lose traction.
So 2014 is going to be all about outcomes, at least, that’s Tim Minahan’s (CMO, SAP Cloud), view. For example, business will no longer focus so much on the how, but will look for solutions which will be able to provide and forecast accurate outcomes to their business decisions and processes. In an economy which is still fragile, it’s crucial for any organisation to be able to accurately assess corporate risk. So, at a recent SAP event in Covent Garden, I asked Tim how doing business in the cloud can address that, and what we can expect the cloud to deliver generally this year.
Business will become more predictive
Companies will harness disruptive technologies of the day to see the future and proactively shape it to their advantage. Leveraging the convenience and agility of the cloud, the connectivity and insights of social and business networks, the speed and power of in-memory analytics, and the accessibility of mobile - leading businesses will have the ability to predict the future with confidence. This will enable them to assess the right response and have the flexibility to quickly adapt their business processes to capitalise on these market dynamics and stay ahead of the competition.
IT will become more strategic
Research firm IDC predicts that by 2016, line-of-business (LoB) executives will be involved in 80% of all new IT investments and will function as the lead decision makers in more than half of those investments. Smart IT organisations will not only partner with LoB teams, but they will become more business savvy. In the future, IT leaders will shift from a focus on technology implementation and maintenance to business process assembly and innovation.
Platform will matter
Businesses will start scrutinizing the wider IT environment and instigate a drive towards greater simplification. That means, companies will not only look for broader cloud business process suites as described above, but they will also expect these applications to look and perform in a similar way, and interact with one another seamlessly. Finance, IT, and other business functions will begin to question the costs, risks, and longevity of today's typical cloud environment, where a host of discrete, process-specific apps are strung together through a series of loosely-coupled integrations that need to be maintained and upgraded overtime. Instead, savvy companies will start to demand an application portfolio built on a common cloud platform that unifies all their apps, data, and processes with a common data model.
One trick ponies will be put out to pasture
Companies will replace discrete process-specific cloud applications with broader end-to-end cloud process suites. Increasingly they will look for a complete and integrated source-to-settle suite that can enable a more thorough spend management strategy.
Not everything will move to the cloud
Companies will no doubt accelerate their adoption of the cloud in 2014 and beyond. But they’re not going to rip and replace everything they’ve already got. Instead, businesses will look to extend their existing technology investments with cloud applications and infrastructure to enable new processes and gain new insights, or reach new markets that are not possible or efficient at scale in on-premise environments.
The cloud as an innovation platform
The days of building a business case to move to the cloud based on total cost of ownership alone are over. Companies will increasingly look to invest in the cloud as their innovation platform – as a way to enable new processes and achieve new insights that enable them to run their business in an entirely new way – not just do the same old things using a different delivery model. Some examples might include collaborating on orders, invoices, and payment with customers and suppliers in real-time. It may also include harnessing the collective transactional and relationship information available on business networks or the knowledge of crowds accessible through social collaboration tools.
In short, there is no doubt that the cloud will become more prevalent in all aspects of business, and with the development of systems which are highly integrated and built with analytics and predictive outcomes at their core – this year, businesses are likely to overcome much of the confusion over the benefits of investing in the cloud. In fact, adoption approaches are likely to look far different over the coming year or two than they have done over the last five.