2019 Preparing for the Next Decade
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The world is changing quickly. Ubiquitous access to information has fundamentally changed the expectations of customers and business owners. As we get comfortable in having conversations with Amazon Alexa, Google Home or Apple’s Siri, we now want our business software to respond to our questions in an intelligent and human-like manner. In short, we are moving away from reports and dashboards to the next wave of technology that will help us focus on tasks that we are professionally trained for and also guide us in making the right and informed decisions. Your ability is important, but it's your agility in business that will determine your ultimate success. #AgilityTrumpsAbility Key points: · Chunkification has fully blossomed. But chunks are not sustainable in the long run. Problems with chunkification: o Customer have to pay more for all the chunks. o Integration of chunks can often be expensive and complex. May have to re-configure each app to play well with the others. o Single Sign-on hides the fact that you're switching to chunks, but has intermittent failures. o Digital plumbing "leaks" continue to frustrate users and adds support costs. o Customers want a "single throat to choke" for support o With no revenue from chunks, the only way for software vendors to monetize is to build or buy the chunks. o Big Bad Data - integrating data across multiple apps often creates copies of data that becomes out of date and/or inaccurate. When that data is aggregated into "Big Data" sets, the problems multiply and the quality of information is depleted. · The Big Convergence: The pendulum is shifting back away from Chunkification towards integrated suites with single databases as opposed to APIs that transfer (and copy) data from system to system.
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2019 Preparing for the Next Decade
- 1. Preparing for the Next Decade New Disruptions in Management Technology Doug Sleeter, Founder, The Sleeter Group
- 2. @dougsleeter About Doug Sleeter @dougsleeter Founder, CEO, of The Sleeter Group, Inc. Family Business for 21 years Thought Leadership on Accounting Technology Network of Accountants, Annual Conference Sold Assets To Diversified Communications in Feb 2015 Current Business Pursuits Evangelist for Digital Currency and Blockchain Tech Advisory Board Member for several companies Investor CPA Practice Advisor Editorial Advisory Board Top 25 Thought Leader Accounting Today Top 100 Most Influential People The CPA Practice Advisor Accounting Hall of Fame February 2017
- 3. Chunkification of Business Processes – 2002 Accountant Branded Secure Web Site GL, Reports & Dashboards 3
- 4. @dougsleeter A Fresh Perspective • Chunkification is in full bloom, but it’s not sustainable • Chunkification was needed for desktop systems, but with the cloud, there are better options • Bad data frustrates everything #BigBadData • Security issues are everywhere, users must figure it all out • Customer expectations have changed dramatically • AI, Machine Learning, and Natural Language Processing (NLP) are compelling, and they are changing EVERYTHING
- 5. @dougsleeter Chunkification is NOT sustainable • Complex for Users • So many apps, so hard to decide, so hard to configure • Upgrades more complex with multiple apps connected • Integration Challenges • Digital Plumbing Leaks • Copies of the same data in multiple databases – Sync issues • #BigBadData • Chunkified systems often cost much more • Security was mostly ignored • Connecting systems was the goal of chunkification, not security
- 6. @dougsleeter Customers want Single Throat to Choke • …. “Who you gonna call?” • Chunkification means dealing with several vendors for: • Technical support – which product is the problem? Who supports the integration when it breaks? • API changes may break some chunks • User interface looks different in each chunk • Costs – total costs often exceed expensive all-in-one systems • Down time during upgrades, often requiring consultant to help
- 7. @dougsleeter Software Company Business Model • Chunkification is not sustainable for software companies because: • APIs alone provide no direct revenue • Costs of adding and updating APIs is a never-ending cycle • Big vendors are beginning to build and/or buy the chunks to grow their revenues (e.g. Intuit acquired T-Sheets, SAP acquired Concur, Microsoft acquired MileIQ) • Incentives for big vs. small software companies is backwards • Little incentive for big vendors to accommodate innovation (often from small vendors) • Small vendors bear brunt of costs of implementing APIs • Small vendors bear brunt of support costs
- 8. @dougsleeter Customer Expectations • Customers expect instant access to: • Purchasing – Ecommerce with integrated payments • Support – online chat, email support, and/or self-serve troubleshooting • Online documentation • History of the business relationship – what have I purchased and when • Increasing comfort with “conversing with technology” • Amazon Alexa • Google Home • Apple Siri • We expect the technology to “know us.”
- 9. @dougsleeter What Customers Want • As customer expectations change, our business system requirements are changing too. • We want our systems to SERVE us: • Turn data into meaningful, actionable information, within proper context • Develop new insights by comparing large data sets over time • LAX – real-time gate assignment technology uses AI/ML to respond to changing conditions • Netflix suggests movies, Amazon says “customers also bought…” • Answer questions posed in natural language, perhaps in multiple languages
- 10. @dougsleeter From Data Storage to Actionable Intelligence Actionable Intelligence Knowledge Information DataData Alone is Inert No Intrinsic Value Organized, Structured Data Becomes Information Contextualized Information Becomes Knowledge Knowledge, with Insight becomes Actionable Intelligence $1,000,000, $700,000, $500,000 Last Quarter Results: Sales: $1,000,000, Total Costs: $700,000, Salaries: $500,000 Net Profit last quarter was 30% Salaries accounted for 71% of costs To improve profits next quarter, we should consider a layoff.
- 11. @dougsleeter Globalization • According to SBE Council* • Nearly 96 percent of consumers live outside the U.S. • Two-thirds of the world’s purchasing power is outside the USA. • There is a significant opportunity for small businesses to go global. • Small businesses must GO WHERE CUSTOMERS ARE. • They need: • Software that is global, yet localized • Streamlined international payments and compliance services * https://sbecouncil.org/resources/going-global/_
- 13. @dougsleeter History of Disruptions 1494 Paper General Ledger Luca Pacioli 1980s Accounting Software QuickBooks, Great Plans 2003 Chunkification APIs and Digital Plumbing 2010 Blockchain and Digital Currency Bitcoin, Ethereum, etc. 2020 Cloud Management Systems AI, Natural Language, Global
- 14. @dougsleeter The Paradigm Keep Shifting The Term Computer is Changing • In the future, computers won’t just store the data we put in… • Computers will: • Capture data for us, • Organize it, • Clean it, (and keep it clean) • Protect it from hackers • Put it into the proper context for human consumption • Serve up actionable intelligence • … As opposed to simply spitting out formatted data
- 15. @dougsleeter The Big Convergence • In the coming decade, we will see more: • Suites of software from single vendors with multiple “modules” • Automation of data capture • Machine Learning to add context and insights to our data • Natural language driven – • Ask questions, get smart answers • Request actions, software will take care of the rest – even driving hardware for us • Robotics and Artificial Reality • Machines in manufacturing, automobiles, warehouses, etc. • Machines creating artificial worlds in which we will be entertained, communicate and work
Editor's Notes
- Adoption rates of cloud and mobile accounting solutions are going through the roof, but for many small businesses the cloud is still a scary place to store data and operate a business. A big part of the resistance is that today's internet lacks a "trust layer" to provide security, identity management, and data validation. The next frontier in accounting technology will be filled with increased automation of transactional data, global commerce solutions based on digital currency and blockchain technology, and renewed focus on security and identity management. In this session, Doug Sleeter will open your mind to the compelling technologies that will drive solutions in the future. As Doug says, your ability is important, but it's your agility in business that will determine your ultimate success. #AgilityTrumpsAbility
- I’d like you to take out your cell phones and get on Twitter. Throughout the session, if you like something, or have more to add, please tweet it, and add my @dougsleeter with #AgilityTrumpsAbility to the post. I’m currently NOT working full time and this gives me time to ponder the past 30 years of my career, and hopefully apply this experience accurately to what I think will drive us to transformation in the future. My experience at Adobe and Apple in the 1980s essentially implanted a certain perspective on the future into my DNA, and I’ve always strived to give my customers a view into what I see coming in the 5-10year timeframe. This presentation will definitely open your mind so some huge, exciting changes coming in that time frame, or maybe even sooner as long as the innovators are left alone to work out the bugs and build a truly bullet-proof solution.
- Chunkification Prior to 2005 or so, the accounting software market was dominated by large, all-in-one accounting products such as QuickBooks, Sage 50, 100, 300, Microsoft Dynamics, etc. All of these products include General Ledger, AR, AP, Payroll, Inventory, and most of the functions needed by small and medium sized businesses. While these products were built to solve the horizontal needs of most businesses, they do not provide the vertical, industry-specific customizations needed by nearly every business. The new crop of products and technologies, nearly all of which are cloud-based, are “chunkifying” those large systems into separate business processes to provide more specific functionality and verticalization. These chunks “talk” to each other via sophisticated software connectors known as application programming interfaces (APIs) so they can be connected together into a custom system, aligned with the specific needs of the business. Chunkification is compelling. With such broad adoption of the cloud and mobile devices, developers can now focus on deep functionality and integration that customers demand. And business owners gain incredible benefits from this chunkification because they can pick the best match for individual parts of their system instead of having to compromise with the warts in some areas of whichever product they choose.
- Today’s solutions are just cloud versions of yesterday’s processes For the most part, today’s solutions, even the cloud-based ones that are popular now, are really just software implementations of yesterday’s paper-based, banking-centric, double-entry, manual processes. In my opinion, this is what is holding the entire industry back. It prevents vendors from truly delivering solutions that meet changing customer demands and delivering on the needs from vertical markets. The idea that all businesses could use the same software is naive at best because every business has their unique business process needs. Force-fitting a standardized software into every business eventually runs into unbearable friction between what the business needs and what the software can do. Chunkification: As early is 2006, I began predicting that Chunification would blossom in the coming years. The reasons we needed chunkification were: All-in-one products were “out of gas” as far as being customizable enough for individual businesses Vertical markets were increasingly off-loading important functions away from accounting software and using custom apps and/or Excel All-in-one products were almost all desktop, and therefore unable to deliver on the anytime-anywhere, mobile and cloud based functionality But are accountants really recommending chunks or just closing their eyes to the reality? Is it a pendulum? There is increasing evidence that the pendulum is shifting back towards all-in-one solutions. This makes sense because with cloud solutions, the options for growing a suite of software on a single platform, with a single database is compelling. Bad data frustrates everything And since data has “context” wherever it is stored, moving data between systems, often causes BAD data to multiply Beware of big bad data! It’s a completely different speech, but of all my worries, it’s BAD data that tops the list. Because big data is really just an aggregation of small data, and as many of you can attest, we have lots of bad “small data” in our accounting systems, CRMs, and social media feeds. Security is a huge concern across all these connected systems. Often the digital connections fail to abide by security policies set in any of the component software solutions.
- Chunkification solutions, however valuable they may be, are still somewhat complex for users. There are often many apps in each category and it’s difficult to know which solution is best for your business. Also, configuring the overall system with multiple “add-on” apps is often complicated and most businesses need a consultant to get everything set up and configured correctly. Integration Challenges Digital plumbing is the current challenge Everyone is challenged by connecting data between software solutions. APIs are maturing, but still lacking in many areas Even when connecting systems together, we’re frustrated by how the connections often fail to really solve the problem. Costs When you add up all the costs of a system that includes multiple apps, the total cost often exceeds (significantly) the “old world” single-app solution Security When APIs were first developed in the early 2000s on desktop systems, the whole issue of security was mostly ignored. The goal was simply to get the apps to talk to each other, and security was something that would have to wait till much later. And of course, if you don’t build security into the system from the beginning, it’s next to impossible to bolt it on later.
- As customers have gained experience using systems with multiple apps all connected together via APIs, many have concluded that what they really want, is a “single throat to choke.” That is, a single company they can call when any part of the system breaks. They want support from one place, they want the software to look and act the same from module to module, and they want to minimize downtime when problems occur, or when upgrades become available.
- Software companies are also realizing that the chunkification world is not ideal for them. APIs do not provide any direct revenue to the software company, and the costs of developing and maintaining their APIs is a never-ending issue. There is increasing evidence that larger companies (Intuit, Microsoft, SAP, etc.) are either building their own “chunks” or buying smaller vendors so they can increase their revenues and provide a better overall customer experience. The “incentives” for the different sized companies is backwards. You would expect the implementation and support costs to be borne mostly by the bigger companies (e.g. Intuit, Microsoft, Sage, etc.), but in practice, the smaller companies are bearing the brunt of the costs. Both in terms of developing APIs and supporting customers who have integration issues.
- Your action steps: Study what’s changing Stay curious Don’t let the “techiness” intimidate you Remember, no matter what you’re good at, it’s your agility that will determine your success. Thank you for your attention today