Myth: Cloud-based processes dilute differentiation | KPMG | AU

Myth: Cloud-based processes dilute differentiation

Myth: Cloud-based processes dilute differentiation

The reality: If an enterprise is focusing on internal processes as their point of differentiation, they are missing a huge opportunity to improve on what really matters to customers.

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Custom designed technology systems could be a point of pride for an enterprise, as there is a perception that having unique processes sets them apart.

“In the past, it was quite simple,” says Michael Alf, Director, KPMG Enterprise. “Enterprises would say, ‘Yes I use SAP, but I’m not like the other players in my industry. I differentiate my business through how we customise it to our processes.”

However, this belief could be holding organisations back from benefiting from the future of technology – in particular, the advances offered by cloud platforms.

“There is a perception that with cloud platforms you’re diluting your differentiation. However, the question today should be: is your technology platform still your differentiation? That’s the critical question,” he says.

The perception that you’re different

If your enterprise has its own way of paying accounts, hiring staff or keeping track of stock, you may feel this is a differentiating factor.

Alf gives the example of turning an order into cash, which is something every business needs to do.

“But people think they’re doing it differently because of their industry specifics. They say, ‘this is what makes us special’,” he says.

A more likely scenario is – as long as your systems work smoothly, and information is secure, most customers won’t be interested in how you get it done.

“What they will care about is that you have a strong standpoint on what your business delivers, what you stand for, and how you treat them,” Alf says.

Brad Miller, Partner, KPMG Enterprise, adds that focusing on being ‘different by processes’ prevents enterprises from being clear about their unique brand values, and innovating with customer service.

“It is shifting more towards the experience that a customer gets from engaging your brand or company,” Miller says. “Are you learning about me? Are you interacting with me? Processes will sit behind that, but it’s more about picking points of differentiation that resonate more with customers.”

The new way to stand out

It is clearly time to shift from a focus on being unique in processes, to looking at how you can maximise the advantages of new technology.

“Cloud is easier to implement, it’s easier to maintain, and by default it’s standardised and therefore you get better efficiencies. So what do you do with all those benefits? Do you decrease your time to market? Do you use that to innovate faster? Do you use it to work with the value chain more efficiently?” Miller says.

Miller explains that cloud-based platforms allow you to react more quickly to the changing expectations of customers – again setting your organisation apart.

“If consumers want to interact with a process differently, such as using Apple Pay, you can’t create that capability yourself. By being on a cloud platform that updates to offer these capabilities, you’re already part of the change,” he says.

To gain the most from this opportunity, Miller advises subscribing to a cloud platform that’s making an ongoing investment in meeting market demands. When updates become available, adopt relevant improvements as quickly as possible.

Alf adds that differentiation comes from mixing internal innovation with these new capabilities provided by the cloud platforms.

“When you look at the start-ups, they automatically go into the cloud, and do the most amazing things – basically replicating large organisations for a fraction of the cost and the effort. They mash different systems together, which are fully scalable, and do that on a minimal budget,” he says.

Benefits outweigh the old

If you believe that your custom-built technology systems and unique processes are your point of difference, you could be missing out on the flexibility offered by cloud platforms, and also failing to tap into what really matters to customers.

“The cloud-based processes do not dilute differentiation. The differentiation is now somewhere else, other than your processes. There are a lot ideas and innovation in an organisation, and cloud brings an opportunity to use it to create the best outcomes,” Alf says.

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