We recently released our Outlooks for 2019 across the various Mercator advisory services, and in the commercial & enterprise payments version, the overriding point was digitalization across the corporate financial process delivery system. The foundational themes around which this connectivity is executed includes:
- Digital Connections – cash cycle transaction services and alternative lending capabilities should converge.
- Harnessing Data – unlock the vast potential for better processes and services with artificial intelligence.
- Easier Interaction – adapt to the new industrial ecosystem and deliver what clients want.
- Risk Management – fundamental to the industry, requiring ongoing focus and investment.
The Challenge
The referenced posting we are discussing here, appearing in IoT Evolution, echoes the points that we make in our Viewpoint as well, providing some further perspective as to why digital transformation is critical, as well as reasons for failed efforts.
‘Digital transformation is moving from theory to practice and many enterprises are ramping up their capabilities for competitive survival. Enterprises are irreversibly changing their ecosystems and adopting heterogeneous and highly independent technologies. During this process, they are acquiring spiraling technical debt and crippling complexity. Without integration capabilities, they are failing to get the ROI they expected.’
Without integration, enterprises face:
- Massive Backlogs: Enterprises have more workflows than their IT or business teams can deliver. They face a backlog of applications, processes, and business logic which need to be developed.
- Legacy Debt: Enterprises realize they have significant legacy IT resources onpremise which are being used in parts. It is not feasible for enterprises to lift and shift these tools in one go. It is hard to integrate these systems with cloud based technologies and support new initiatives.
- Scarce Resources: Digital transformation requires specific skills. Enterprises need to invest in hiring or training or filling skill gaps.
- Uncertainty: Digital transformation models suffers from inertia. Enterprises adopt digital technologies without changing their culture. Developers developing code at a faster rate and testers trying to safeguard organizational interests run into conflict with each other.’
Organize Data
So in our view the corporate financial transactional flow provides an opportunity to form a logical digital transition methodology that aligns with what we believe to be a convergence of latest gen tech capabilities. The rich transactional data reservoir is not particularly useful if left in silos, essentially dropping overall behavioral trends to the floor, thereby narrowing the field of vision for greater performance measures. Transactional data in useful form then feeds the rapidly developing machine learning capabilities, driving better results throughout a life cycle.
‘Leading enterprises are using the continuous integration ability for addressing strategic integration needs for faster deployment, lower operational cost, and improved time to value. The Solution streamlines the SMAC components of digital transformation. Rapid integration minimizes complexity and smooths out the path to digital transformation. Enterprises can set up a future-ready architecture that helps them in getting through the next quarter century of success.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group