In fact, the business people are often way ahead of their colleagues in IT when it comes to adopting many of the new business automation capabilities enabled by the cloud. They're the ones who are signing up for on-demand SaaS applications to improve speed of execution; who are issuing smartphones or tablets to their employees so they can work on the move; or who are agitating for more real-time information flows and analysis tools so they can stay on top of key metrics in their field of operation.
What matters most of all about the cloud is being connected, and thus cloud is having its greatest impact where there's a need for rapid information flows, enabling more fluid interactions both within the organisation and across the enterprise boundary. The phrase I've adopted to describe this effect and its consequences is Frictionless Enterprise — a topic I'll be writing much more about in future posts here on diginomica. Today, I want to focus in on how it's changing the enterprise applications landscape.
The way we talk about computing in the enterprise has been framed by the legacy of the client-server era, when huge strides were made in automating the established processes and core transactions of the enterprise. The cloud era is adding a powerful new set of application capabilities that are centered on evolving processes and outward-facing interactions. That's changing the nature of the application sets that enterprises are dealing with, even though the way we habitually frame our thinking is still stuck in a client-server groove.
It's important to take a fresh view of the core application sets that power business automation for today's enterprises. At the top of this article there's a graphical summary that aims to open out the old definitions and embrace new areas of innovation that are now emerging. Below I've summarized each of the key categories, with links back to articles I wrote earlier this year on ZDNet when I first explored these concepts and gave an overview of the leading cloud players in each field.
Financials and revenue
Because it's no longer necessary (or desirable, frankly) to consolidate all of an enterprise's core transaction systems into a single, monolithic whole, there's an emerging trend among cloud vendors for financials to become more of a standalone application, perhaps teamed up with one other closely related function, such as ecommerce, manufacturing, professional services automation, or analytics. At the same time, the cloud is proving to be an important enabler for new, usage-based revenue models and that has led to the emergence of a number of billing, subscription and revenue management vendors. You can read more about the leading players in ERP, RIP? Cloud financials and revenue management in 2013.
Digital marketing, sales and service
The word 'digital' at the front of the title is superfluous, really because all customer interactions today inevitably have a digital dimension — but I've emphasize that element because the impact on how enterprises engage prospects and customers is enormous. Read more of my views on the leading players in Son of CRM: cloud sales, marketing and service in 2013.
Collaboration, social and docs
We're just at the beginning of understanding the huge impact the cloud will have through its ability to automate collaboration across time and distance. These capabilities are such a novelty that many organizations are still making their tentative first steps and there are as many hits as misses in making this work. Find out my assessments of the leading cloud players in All together now: cloud collaboration, social and docs.
People, goals and identity
Since first writing about this application category I've added 'goals' to the title because the word captures the rising importance of performance management and motivational tools. What started out in the 1950s as computerization of payroll has today become a rich toolset for co-ordinating and directing teams in the furtherance of collective objectives. Identity is a part of this too, not only in terms of how people are recognised by the computer system but also in how they present themselves and are recognised by those they interact with. Thus LinkedIn is as much a part of this landscape as Workday, Cornerstone or Successfactors. For more on the leading players, read People first: Cloud HRM and talent management.
Resources and spending
Although the diagram above is flat, imagine it curving around into a carousel shape so that the outer edge of this final category connects back to the starting edge of the first. Resources and spending inevitably connects closely with financials and revenue. But the category also blends into people, goals and identity, especially with the rise of crowdsourcing and on-demand professional resources. This is a category where the connected fabric of the cloud has already brought huge changes, whether it's how supply chains are automated or how travel expenses are logged and claimed. Read more in Sourcing reinvented: cloud supply chain and spend management.
Big data and analytics
There are two sets of application infrastructure tools that straddle all of the five main categories. The first of these concerns data management and analytics. The term big data is a shorthand way of saying that there are more data sources than ever, many of them outside of the traditional structured databases that powered earlier client-server applications. The real-time environment of the cloud means that today, enterprise users want fresh data served up in a readily digestible format.
Integration and governance
The final infrastructure toolset concerns the knotty problem of getting all of the aforementioned cloud services working in sync to deliver reliable, trustworthy and compliant outcomes. It's a big area with many challenges still to be resolved. For now, business people are focusing on getting hold of the cloud applications that solve today's most pressing headaches. Tomorrow, the IT function will get landed with the job of stitching them altogether into a coherent architecture. This is a meaty topic that I'll be returning to in future posts.
Disclosure: Workday, SAP, Salesforce.com and FinancialForce.com are diginomica premier partners and Box is a diginomica partner at the time of writing.
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