Leadership within almost every company today is keenly aware of what is necessary to sustain growth and longevity in today’s digital economy.
However, recognizing and achieving that long-term success are two very different things.
To keep pace, companies are being asked to make quite drastic changes in foundational processes and in the systems through which those processes run.
Changing neither equates to corporate disaster, but making alterations to only one of the two isn’t much better for your firm’s ultimate success.
To semi-quote ‘Breaking Bad,’ no half-measures.
Less Product Ownership Means Wholesale Company Change
Less and less consumers today are interested in owning products, preferring instead to simply consume. This means the more traditional product-based revenue models upon which so many corporations made their bread and butter are now being left behind in favor of recurring-revenue, usage-based and other more modern revenue model flavors.
The change required by companies transitioning from the old revenue models of yesteryear to all the modern models made possible by technological advances and an expanded spectrum of customer choice will be felt company-wide, if done correctly.
Changing to a more service-based business model can impact your pricing plans, contracts, product design, accounting and the organizational infrastructure supporting these groups, to name a few.
Making those wholesale changes without updating the systems through which all your company’s critical financial processes flow is equivalent to getting all dressed up in your most elegant evening wear yet hopping in a Ford Pinto to get to the party (assuming you make it there).
Embracing Change Means Embracing Technology
A willingness to embrace new technologies and processes is a good first step of corporate adaptability, but it’s just that – a first step. Aging systems will hold back your enterprise from truly thriving and remaining competitive in a digital economy.
The following are a few obvious signs your company needs to consider changes to your financial systems:
- Dysfunctional workflows and processes – make sure your necessary capabilities are able to adapt to future needs and not just the limitations of your legacy technology.
- Stalled growth – your company’s top-line growth should also equate to a lower cost of operations if you’re truly technology-ready.
- Inability to make dynamic changes in real-time – the fundamentals of dynamic systems are rapid ability to address bandwidth adjustments during peak utilization periods as well as seamless flexibility and scalability. Your team’s great ideas to be implemented should not be held hostage to the limitations of the systems involved.
- Failing IT productivity – you’ll know your IT technology is in a faltering state when the team running it must devise workarounds for the software or requires additional time to patch or fix the software just to meet your current needs.
- Siloed systems – the digital economy is one leaning into openness and integration. For your teams to be productive and successful, they cannot be left behind in isolated silos. Most modern platforms have APIs and integration points built in, often with pre-built integrations to most popular systems in order to approach peak IT modernization. Your company’s mission-critical systems should follow suit.
- Reliance on orphan applications – you’re asking for trouble, not to mention heightened security risks, if your company’s core systems are based on an application no longer supported by its developer.
It’s no wonder spending on digital transformation technologies and services is expected to reach $1.78 trillion in 2022, up from $1.18 trillion in 2019, according to market data provider Statista.
What Innovation Means
In order to be competitive and innovative, each and every company must figure out individually what digital transformation means for their business.
“Traditional work models do not provide the agility, scalability, and resilience required by the future enterprise,” said Holly Muscolino, a research VP at IDC for a spending guide released in June of this year. “To drive growth and competitive differentiation, organizations will invest in technologies and services that power automation, human-machine collaboration, new organizational structures and leadership styles.”
A lot of organizations are not getting their transformation right because their focus may only be on transforming their revenue model without accommodating outdated legacy systems. Alternately, they may modernize their core financial systems, yet the models through which they operate remain stuck in the past.
Technology is a key driver – both for your revenue models and your internal financial systems. You’re only addressing half the battle if you modernize one without the other.
To learn more about the role RecVue can play in helping companies modernize, contact us and we’ll discuss the part we played as global car rental leader Hertz integrated its billing and partner payment processes across 43k franchise offices, in total handling over 4.5M rental agreements each month.