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Given some of the current forces yanking the global economy to and fro, it’s probably fitting that the proverb (or is it a curse?) “May you live in interesting times” is said to have originated in China.
Current trade tensions between China and much of the rest of the developed world—notably, but not exclusively, the U.S.—and the uncertainty regarding the looming British withdrawal from the European Union are just two factors making it increasingly difficult for companies to manage their businesses.
To this concoction of chaotic conundrums you can add the mix of emerging technologies not only disrupting industries but also dismantling the very walls that once separated them.
As in politics, all economics are local. In other words, the mix of global events and secular trends means business leaders have to react more quickly than ever to seize a new opportunity or fend off a new challenger. This is particularly the case for corporate finance executives, who must facilitate—if not lead—radical, turn-on-a-dime business transformation amid the interest rate, currency, and regulatory gyrations that dominate their world.
How Cross-Border Payments Will Change
Corporate finance pros need to anticipate how Brexit might change cross-border payments across Europe, or how a trade war between China and the West might force their business to find one or several new suppliers, or how their company can create a new revenue stream from a new business model while continuing to operate their old one.
Fortunately for business leaders, they can use those same forces of entropy to increase their companies’ ability to react and even drive change and disruption for their own benefit.
Cloud applications are at the heart of the most important emerging technologies, including the Internet of Things, artificial intelligence and machine learning, and blockchain, each of which offers businesses better insights into customer behaviors, trends and likely desires, at a much more personal level than ever before. They can make it easier to trace the provenance of goods and the receipt of shipments and to automate payments in ways that meet new regulations.
What makes cloud applications uniquely important is that they allow technology providers to add new features and adapt to changing regulations much more rapidly, without subjecting customers to the old upgrade and integration clap-trap so prevalent in the on-premises software world. This is particularly true of ERP applications, the backbone of corporate planning, supply chain, and financial processes, whose regular updates in the cloud are critical to most businesses’ agility and adaptability.
Subscriptions for Car Usage
For example, car manufacturers looking to offer customers monthly subscriptions to their vehicles—and not just sell them—need to accept new forms of payment and recognize new forms of revenue. Only cloud-based financial applications can quickly provide such a backbone.
Cloud systems also offer businesses new features quickly, allowing them, for example, to remain compliant as trade agreements are signed—or, as in the case of Brexit, are dismantled.
In other words, “you need the ability to operate in several business models simultaneously,” said Juergen Lindner, a senior vice president at Oracle. For example, cloud applications allow companies to keep pace with ever-changing international financial reporting standards, “versus the cement shoes of the on-premises world—good luck keeping that up to date,” Lindner said.
At the center of everything—Brexit discussions, disputes with China and its Huawei telecom manufacturer, dealings with ever-more-empowered consumers—is, as usual, data.
Great Global Data Divide Not Getting Any Better
As Fortune’s Alan Murray writes in a post-Davos column: “The Huawei brouhaha makes clear that, regardless of how the current U.S.-China trade dispute gets resolved—or for that matter, how the Trump presidency plays out—the great global data divide will only get deeper, and challenge business and government leaders for a generation to come.”
Of course, data is at the heart of the most important cloud-based emerging technologies, including the aforementioned IoT, AI and machine learning and blockchain.
“With sensory devices being embedded in almost every device now sold, businesses can glean new insights into how customers are using products, identify peak usage times for certain services, and develop new pricing strategies as a result, leading to new upsell and cross-sell opportunities,” Lindner said.
Those capabilities will also create new and ongoing challenges with regard to data governance, privacy and security. However, companies cannot overlook the opportunities.
And as political and technology battlegrounds shift, cloud technologies will continue to offer business leaders the flexibility of employing emerging strategies across the globe, including in their own backyards.
Michael Hickins is regular eWEEK contributor and a former editor with eWEEK and The Wall Street Journal.