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Armanino’s Financial Advisory blog is your source for thought leadership around cloud ERP and accounting solutions and integrations. Supported by the Cloud Accounting Institute and numerous experts in cloud, finance, reporting, integration, compliance, and technology, Armanino’s Financial Advisory blog features must-read content on what’s happening in the finance industry, case studies, white papers, and much more.

June 23, 2014

Innovative Systems Integrators for the Disruptive Cloud

Posted by Lindy Antonelli

Innovative Systems Integrators and the Disruptive Cloud AgeLast week WIRED Innovation Insights reported Lou Guercia, CEO of Scribe Software had the opportunity to connect with Dave Burlington, cloud expert at Armanino, a valued Scribe partner, who offered excellent insights into the ways innovative systems integrators (SIs) are adapting to the disruptive Cloud age and the need for Cloud integrations.

Having first-hand IT leadership experience at innovative companies such as Comergent and Taleo, while building on his consulting years at with Andersen Consulting and Armanino, Dave laid out how SIs need to reevaluate the very nature of their implementation methods and client conversations. In his view, the Cloud has produced parallel revolutions for both businesses and SIs, transforming SIs from arbiters of implementation and software customization to long-term business partners and procurers of best-of-breed, pre-packaged solutions to specific business problems.

Given Armanino’s focus on today’s financial leaders, Dave explained how the cloud has brought about a fundamental shift in power from the Chief Technology Officer (CTO) to the Chief Financial Officer (CFO) as the Chief Experience Officer (CXO) role is becoming increasingly responsible for the optimization of core business processes through innovative technology solutions. Together, CFOs and innovative leaders within the SI community are forming powerful new alliances toward the enterprise of Cloud intregrations. Innovative system integrators empower CFOs through the implementation and adoption of business process-specific, best-in-breed technology solutions that are agile, flexible and quick-to-implement based on future-proof technology roadmaps.

Here’s Dave’s take on the forces causing these fundamental shifts and what IT consulting firms can do to adapt to these new cloud realities:

Disruptive Forces Changing the Role of the System Integrator

  1. CFOs as the New IT Decision-Makers: CFOs are supplanting a role traditionally held by IT and are now one of the key decision-makers on new technology investments. With CFOs at the center, SIs have to find ways to evolve their approach, skills and offerings to consult on and offer specific solutions that uniquely address the core business process challenges faced by companies today – from unified financial budgeting and planning, to measuring effectively the growth of a business.
  2. The End of Big IT Implementations: The dynamic pace of business, coupled with the need to harness ever-growing enterprise data, has made lengthy software evaluations and implementations an expensive and unsustainable practice.
  3. Flat IT Budgets: Dwindling technology budgets have caused businesses to look for agile and tried-and-tested IT solutions that don’t have prohibitive upfront costs.
  4. Unique IP Rules: The change in IT purchasing behavior has fostered new opportunities for the traditional SI business model allowing for one built around packaging unique IP as a product with recurring, repeatable revenue that drives down the cost of implementations.
  5. Rise of Siloed Cloud Systems: The cloud has changed who can purchase technology since line of business leaders can now have access to new applications in a matter of minutes. Although this real-time access to cloud-powered technology gave businesses an initial boost, it also created a new business challenge – silos of cloud applications. With most businesses having multiple financial cloud solutions the biggest opportunity for SIs in 2014 and beyond is to bring those cloud islands into an integrated, responsive and agile technology nerve center for the business.

Five Strategies SIs Can Pursue to Make the Most of the New Cloud Realities

  1. Become Partners to the Business: SIs must become partners to the business and help their customers with IT strategy, flexible design and architecture, all addressing the long-term technology roadmap for the business. This notion was covered in a broader consulting context in this must-read article by Clayton Christensen for Harvard Business Review, “Consulting on the Cusp of Disruption”. As Christensen points out, all types of consulting are at the point of disruption, with traditional, high-priced, “black box” advantages associated with top consulting firms ceding to open, data-driven consulting models based on incremental value. SIs must adapt their problem-solving to better align with that of the C-Suite and empower the CFO to successfully command the helm of new technology implementations based on agreed-upon, long-range IT roadmaps.
  2. Evolve from IT Shops into Business Solution Providers: SIs need to evolve into providers of pre-packaged, easily-configurable solutions specific to the pain points of customers and their businesses, and in the process move away from their traditional IT role as primarily software implementers, specializing in code. In the new cloud age, custom code gives way to flexible solution configurations that enable businesses to quickly adjust software and systems integration to their needs, in a matter of days, not months.
  3. Prepare for New Revenue Realities: Gone are the days of bloated IT budgets and lengthy IT implementations. The cloud has forced new realities on the consulting business model – moving it away from large upfront fees into smaller, recurring revenues derived from packaging and selling unique IP. Growth for progressive SIs will increasingly come from selling configurable, “smart” solutions that address specific cloud-to-cloud or cloud-to-premise implementations and integrations. For example, CFOs are no longer looking to separately manage financial and budgeting systems, such as Intacct and Adaptive Planning, two of the software leaders in the financial systems space. What CFOs are looking for are integrated end-to-end financial and budgeting solutions for their business. With over 300 integrated Intacct-to-Adaptive Planning solutions, innovative SIs such as Armanino are solving some of the most pressing issues for CFOs – giving them the real-time visibility into key aspects of their financial budgeting and planning functions.
  4. Become On –going Caretakers: It is no secret that most IT budgets are still spent on maintaining the IT systems rather than business innovation – a 2013 study by Forrester Research found that IT organizations spend 72% of their budget keeping the lights on while less than 28% is invested in new applications to drive revenue and differentiate the business. To fill the vacuum, SIs must become on-going caretakers for clients by assuming some of the traditional IT maintenance functions including solution upgrades and continued integration. Rather than implement and be done, SIs will continuously customize their solutions to evolving business needs.
  5. Invest in Repeatable IP: Since the industry is migrating away from big $100+M implementations of Siebel, Oracle and SAP, towards iterative, agile implementations, SIs must accrue and productize their deep understanding of business processes. In their new role as the partner to the CFO, SIs must package their unique knowledge and best practices into repeatable IP, formulating the underpinnings for sustainable, long-term growth for their business.

It’s a Brave New Cloud: Innovative Systems Integrators Will Be Its Champions

Innovative systems integrators will be the catalyst toward a truly integrated cloud for the enterprise. The maturing cloud will continue to shape SIs’ new role as long-term collaborators and creators of best-of-breed, pre-packaged, configurable solutions that help businesses and their leaders tackle challenges in real time, with maximum impact, and lower TCO. These SIs will enable businesses and internal IT to adopt proven, business-specific solutions quickly and at a lower cost than IT doing it themselves. Combing solutions with business process IP and integration, SIs will evolve into true business partners who not only help make the business more agile, but also enable internal IT to transition to their new role as IT as a Service – focused on delivering innovation and differentiation for the business. SIs’ unique expertise in providing true business solutions that are up and running quickly will provide organizations with the simplicity and support they need to do away with the cloud silos and reach right into the cloud’s integrated potential.

Learn more about what the cloud can do for you.

Lindy leads Armanino’s Cloud Accounting Solutions Practice. She is the Founder & Chair of the Cloud Accounting Institute and has over 25 years of experience in public accounting.

As the Founder and Chair of the Cloud Accounting Institute, a clearinghouse of information on software as a service (SaaS) and cloud computing, Lindy is at the forefront of the dynamic Cloud Technology landscape. She has published numerous blogs, whitepapers, and articles in this space.

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