Addressing the Back-Office Challenge

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I think the major shift is that the developers are recognizing that every feature and function, every additional dollar invested in enhancement, needs to be 100% tied to the value it brings to a customer’s business—within the context of the four pillars of digital transformation.

Changing the World of Business Apps

You might be surprised, or maybe you won’t be, that Business Apps have traditionally focused on features and functions. Developers have been in the weeds of step-by-step processes within an organization. Functional support was the primary development goal. But what we now see is that the developers’ program of work is being led by a product development organization that has taken a step back and asked customers what can the apps do to help them zone directly in on these areas of real business value.

Will this feature empower employees to make better decisions, or work more smartly, achieve more? Does it improve your engagement with your customers, or does it help you run more efficiently and effectively? Lastly, does it support you as your business reorients around the opportunities that the advances in digital technology afford you?

Here we see a focus in the Microsoft world regarding adding features that integrate with the back-office systems that use AI, for example. Sales forecasting is another example, where your sales history can be pushed into the cloud and utilize AI to create forecasts for the future. This aims at making new technologies accessible in a way that naturally fits into the classic ERP solution. We are also seeing functionality around augmented reality, such as the ability to use HoloLens as part of your service maintenance programs.

Next, I think it what it offers is an alternative to the multi-year projects of monolithic proportions where you have to wait forever to start realizing the value of the investment made and often the business has changed in the meantime. The concept is to disaggregate components of the application into value streams that carry specific workloads, and at the same time, ensure that everything is underpinned by a common data model that provides for smooth integration. In my opinion, there is a ways to go, if ever, to see a complete separation by value stream, largely because the primary benefit of ERP / business applications is in fact that tight level of integration. But the point is as much about being able to implement one component, such as sales force automation, or financials, on a journey to a complete system deployment, as it is about the ease of integration. That platform, that Common Data Model, allows you to bring together apps and have them work together naturally, even if they’re from different vendors.

Coming to a point where you accrue return on your investment has been designed into these new products. In addition, and we’ll cover this later, implementation specialists like Sikich have retooled their methodologies to amplify this urgency, deliver faster, be more agile, and break projects into more easily digestible chunks. They create a program of ongoing improvement rather than the old swallowing the elephant whole approach.

Democratizing the Apps

Another way this shift in back-office apps will impact you is the effort vendors are making to democratize the creation of solutions. We’re using terms like “opensource,” even “crowdsourcing.” We’re using community marketplaces, we’re seeing the proliferation of apps out of Microsoft like power apps, which is a low code tool to extend the Microsoft Dynamics suite that doesn’t require specialized programmers. Another favorite Microsoft app is Microsoft flow, another low code tool that supports the creation of workflows within or between various solutions.

These are all targeted at organizations who need to build in flexibility and agility, workflows and processes that expand the base applications to systems of competitiveness and innovation. But, and this is the big but, they do this without compromising the integrity or the upgradeability of the underlying business apps.

You want your custom app to be interoperable with your ERP’s billing system? You want to use Salesforce.com for your customer relationship management? You want to use Workday for your Human Resources Management? You want to run SAP at your corporate head office but something more flexible at your subsidiaries? Certainly, Microsoft is now recognizing that they cannot build everything for everyone, and you see now in the Microsoft marketplaces connectors many of the solutions they used to deem as competitors.

Anyone who knows the history of Microsoft leadership will know this is a complete U-turn from days gone by and is a huge step forward for partners like us who focus on assembling the best overall solution for their clients.

Before I move off the topic of democratization, I think another good example of this is the pushing of functions in the BI tools down into the hands of the operational people. Too often BI is thought of as an executive tool, but with these modern apps, BI visualizations are equally applied to the day to day work of operational people across the board, helping them to do a better job, and providing them access to the tools that can drive operational excellence from the shop floor.

The Shift to Platforms-as-a-Service

Lastly, one of the large shifts that the framework and the cloud and the effort in democratization has enabled is to the true SAAS environment and the continuous update cycle.

This is the idea that your next business apps acquisition will likely be your last. Never again, the business moving forward, and the application being left behind stuck in the electronic concrete that is modification and customization or simple exhaustion. The new apps are being updated every six months. And the architectural infrastructure is being put in place to ensure that keeping pace with those updates is the new normal. Automated testing processes. Loosely coupled apps that are integrated with a level of flex.

Historically, most ERP users adopted every second or third major release. The years in between often resulted in their systems failing to keep pace, and upgrades got more and more expensive, feeding a cycle of neglect. It is not uncommon for us to be speaking with high-tech manufacturers who are using systems designed and configured 15 years ago.

I want to pause here and say to anyone reading that this idea of no more upgrades and systems for life, beg of you to consider very carefully the vendors you chose for your next generation business application. Think hard about whether you trust that they have the momentum to keep pace with your business over the next 5, 10, even 15 years. In the past, buyers of these systems spent 90% of their time trying to prove out that the software they were buying could mimic every key business process. Today, savvy buyers are spending at least half of that time evaluating the long-term strategic direction of the vendors they are evaluating, with an understanding that if they wait around to verify every feature and function or to close every functional gap, they’ve already lost the battle as their business needs are not standing still.

Reverting back to the first point I made—about mapping each business process solution to a value stream that either enhances customer relationships, better empowers employees, optimizes operations, or helps the velocity of revenue streams—with this as your north star, how much is it worth to agonize over how you get there?

Ready to discuss your back-office challenges? Our experts are ready to help!

This publication contains general information only and Sikich is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or any other professional advice or services. This publication is not a substitute for such professional advice or services, nor should you use it as a basis for any decision, action or omission that may affect you or your business. Before making any decision, taking any action or omitting an action that may affect you or your business, you should consult a qualified professional advisor. You acknowledge that Sikich shall not be responsible for any loss sustained by you or any person who relies on this publication.

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