A Few thoughts about how the digital revolution is changing the world of business Finances.
Have you ever heard someone say that things like big data or the internet of things are merely pop music in the history of IT technology and will soon be replaced by the next flashy trend – ultimately they will disappear as fast es they came up? I have heard people say stuff like that. Not often, but still. There were a lot more skeptic voices a few years ago, talking about how the internet of things and a semantic web were directly derived from a college boy’s Sci-Fi stories. Some of those people I know in person grew a lot quieter over the years, recognizing that modern IT technology affects a lot more people than just some stereotypical IT-geeks.
In this time, those trends and changes in the world of technology are widely accepted. But many people still underestimate the impact they have, especially on the business world. In my segment, which is finance solutions, the problem seems pretty prominent. This may be my own perception being a newcomer to the area, but I feel many people think – just because there is an overflow of data or just because people have smartphones now, it doesn’t mean that businesses need to change the way they handle their finances. Some say big data is mainly an issue of data storage and maybe a bit of analysis – but it’s not a finance thing. Industry 4.0? Web 3.0? thats not for me. Or: “It might be the internet of things, but thats just not ‘my thing’.”
When thinking of the digital revolution many of us just think about a change in opportunity. The connectivity between all of us, the mobility solutions that enable us to handle our complete daily business from wherever we are – industry 4.0 or a (semantic) web 3.0 – all of that, in our heads, is a change of opportunity. You can share cars and find drivers just by clicking a few buttons in an app. You can find, book and pay for vacancy on the road. You can pay online for services that you use from your smartphone and send money transactions in messenger apps. You can pay for services and items via thumbprint on your mobile phone, not only online but in the shops as well. Imagine being a business and not only your customers use service to buy or order items with you, but your employees use solutions like this to manage their own daily business. And then imagine being the poor guy who needs to bring those numbers together for any kind of financial report.
In the last years, it was mainly a problem of handling finances in the review-mirror. You were almost unable to see danger ahead, you couldn’t make reliable predictions about you financial results before the certain time period was over and predicting the impact of upcoming transactions on your overall financial dynamics was mostly guesswork. But it was still managable. Don’t misinterpret these lines – those are challenges well worth adjusting to and well worth investing in software solutions to solve. But the one thing we need to understand is – handling business finances this way might – for some business – become utterly impossible. Because the data mass will only grow. And imagine a world where everybody and everything is connected via a web 3.0 in which smartphones not only help handling your daily business but are able to do it for you. Image the pure sum of transactions a finance software (or a spreadsheet-guy) will have to handle. If a business doesn’t work in realtime by then (with solutions that can handle enourmous numbers of transactions), and is connected to customers and suppliers via an electronic business network so, the business is going to have a problem. In the end, not adapting to the changes will not mean being behind the competion. It might mean not being able to steer the business into the future.
I think this is a great time to set the course. And I probably don’t need to say what I think would be best to do that ;-).