I’m Michael Krigsman, an industry analyst and the host of CxOTalk.
We’re here in Las Vegas at the FinancialForce.com conference called Community Live 2017.
And I’m speaking with Tod Nielsen, who is the CEO of FinancialForce.
Hi, Tod!
How are you?
Good, Mike!
How are you?
I am great!
So, this morning at your keynote, you spoke about the new service economy.
I did.
What is the service economy?
So, I talked about the evolution our industry has been going through, and how our experience
as consumers is changing from buying products to consuming everything as a service.
And, we spent some time talking about the op-ed piece that Mark Andreessen wrote in
2011 saying how software was going to eat the world, and how in just six short years,
we’ve not evolved into where more and more things are experienced as a service.
And so, going forward, I laid out the premise that services are devouring the galaxy.
And, the economy of how consumers and businesses buy from other businesses is changing completely.
The idea of having assets and owning physical goods is actually going to go away.
But, there’s going to be a day when people literally won’t own anything.
If you look at WhatsApp, that Facebook bought for $19 billion, it was sixteen developers
and then, 30 million users.
How a company could have sixteen developers and 30 million users and be able to build
this incredible service is something that we’re now seeing as reality.
And it will be important going forward.
And this is affecting companies in every industry.
You gave the example of Boeing.
Absolutely!
You know, Boeing used to be known for “Hey, we’re going to build jet planes.
Let’s go!”
And they buy their parts, and they’re jet engines.
And they’re finding from their suppliers that they actually are selling to Boeing the
engines at cost and they’re making their money on the maintenance and the upkeep and
all this stuff.
And any classic hardware companies, quote-on-quite like Tesla, and now realizing they’re really
a services company, and the hardware is simply a delivery vehicle for them to enhance their
services.
FinancialForce is a, can we say, a back-end software provider of ERP.
Although, you also now are touching the front-end, touching the users.
And so, why is this so important to FinancialForce?
Well, I think if you look at the market right now, we're seeing a couple of interesting
trends.
One is the adoption of cloud computing.
I've spent my career in the infrastructure and platform world, and I think we're now
getting to the point where businesses are realizing there's opportunity in the cloud
for them.
And there's no longer a point of if they go to the cloud, but when.
And so, it's a great opportunity for our customers to say, "How are we going to get our back
office?
How are we going to get our systems to the cloud so we can be more aligned and attuned
with the overall business?"
Second, with all the demanding changes, one of the phrases I said this morning was, “Speed
is the new currency.”
And, you know, businesses are saying “We need more, we need more, we need more,”
and when they look to their back office, their back office team is saying, “Sorry.
We can’t accommodate.
We can’t move that fast.”
It’s going to be viewed as slowing growth or preventing future progress.
And so, the back-office teams are saying, “What can we do to transform ourselves to
respond to the incredible demands that our businesses are giving us?”
So, this issue of speed is extremely important, and we hear the phrase “digital transformation.”
Absolutely.
This issue of speed is so important.
So, could you maybe elaborate on that dimension as well?
Sure!
So, speed is no longer the point of, "Hey, let's do a project that's going to take three
years."
So the idea of an SAP implementation that's going to take three years to go, that is so
yesteryear.
Now, businesses are saying, "What can we do to move fast?"
And so, I think what you're finding is companies are saying, "Okay, I'm going to be less picky
about the particular customization and I want to have a more curated path of technology
that's going to meet my needs, so I can move fast."
You know, every business I talk to is talking about incredible releases.
In fact, in the software industry, it used to be…
I grew up with Microsoft.
We would do a release every year, or every two years.
And then we went to quarterly releases, and that was a dramatic event.
And now in the cloud computing, when I was running Heroku when I was at Salesforce, we
were doing releases every day.
So, there's a certain amount of responsiveness and iteration and “in-the-game” that’s
important.
So, software and features as a set of curated functions.
It used to be viewed as here is a lump of clay, and let’s take time to mold and sculpt
it into what you…
And […] had ten-year, twenty-year implementation…
Exactly!
And no one is happy at the end.
And so, I have a view that going forward; it's more of a "Let's make a deal" approach.
Do you want door number one or door number two, and which is going to meet my needs?
And then, the focus is on configuration, not customization.
So, you can figure it can meet your particular needs or business model nuances, but not have
something that's completely customized and sending you down a rathole that you may be
able to get out of.
What advice do you have for customers who want to move to the cloud, who want to adopt
this kind of speed?
Yeah, I think the most important thing, and I talked a little bit about it this morning,
is in the IT world, there’s a triangle, a famous triangle of People, Process, and
Technology.
And it used to be that technology was the long pole in the tent.
And we’re now to a point where people and process are as important, if not more important.
And so, what I would say to people that are wanting to move fast is identify your vendors
or who you’re going to purchase products from, and lean in with them because success
is a team sport.
It’s going to require you to lean in and invest your time and actually deliver to let
them know what you need, and then expect them to lean in equally hard to provide you the
capabilities and functionality you need.
And together, you can be the yin and yang to actually deliver the success.
So, collaboration inside the organization is the key.
Inside the organization and with your partners, it is now a matter of…
The idea, “Oh, we’re going to be a partnership in this vendor-customer relationship,” it’s
no longer just a buzzword.
It is an important imperative for successful projects.
So, ecosystem is a fundamental part of this.
Absolutely.
The cloud is all about the network effect and bringing people together and as you're
driving these implementations, you can't do it alone.
No successful company will be an island; it has got to be working together as an ecosystem,
working together as a team to achieve that success.
I love that.
You can’t do it alone.
Tod Nielsen, thank you so much!
Yeah, thank you!