After carve-outs or spin-off events, newly formed companies typically keep (often onerous) short-term contracts to retain access to the resources and expertise of a parent’s back-office system.
Such arrangements usually make bad financial sense. They can also spell trouble for the consistency and timing of service. Ultimately, by keeping their operating and strategic processes fused with those of their parent organization, new companies significantly delay their steps towards full operationalization.
Certain new companies will turn to on-premise systems to achieve integration. However these complex and costly structures can take years to set up—especially across multiple back offices—while the time wasted on streamlining and customization further delays the arrival of the consistent processes to facilitate growth.
Our research has shown that disruption to business models around the world remains event-driven, while compliance with shifting government policy and tax structures along with the impact of emerging competitors remain the leading drivers of change. Consequently, new companies should be striving for integrated consistency, and a quick move away from parent systems to set themselves up for maximum agility in the face of market disruption.
Cloud automation offers newly carved-out companies the chance to move away from parent systems more quickly. It provides the foundation of a full target operating model around which back offices can readily be adapted, delivering the technology to support new processes, full reporting capabilities, and the ability to organize from a shared services or center of excellence perspective.
Cloud automation allows for the swift implementation of systems to address the organization’s HR, procurement and finance needs, while the removal of manual processes and data management characteristic of older, on-premise structures enables consistency and mitigates risk. Further, the company CFO is able to shift their focus from reporting to data analysis and understanding, allowing them to draw insights that can inform strategy and help drive business change.
In seeking to ensure timely independence from their parent company, new companies must consider taking advantage of the cloud. A cloud-based platform can help propel the organization towards next-level savings, efficiency and risk management, while allowing for the necessary agility to facilitate change and adapt to disruption.