In an age of technology innovation, cost pressures, and demanding customers, cloud-native finance applications help companies compete. In a global Capgemini survey of banking leaders, 88% said cloud-native applications improved their organizations’ agility, and 84% said they helped increase revenue and cut operating costs.
“It’s more important than ever for companies to be nimble and flexible,” says Scott Freedman, director of marketing for Sage Intacct. “Cloud-native applications provide that capability, regardless of demand.”
Cloud-native apps are an important part of a cloud migration strategy. For many organizations, the global pandemic accelerated cloud migration plans, as it underscored the need to adapt quickly as employee and customer needs change. Foundry’s 2021 Digital Business study found that 86% of small/midsize companies have adopted or plan to adopt a digital-first approach to business processes, operations, and customer engagement.
But the transition hasn’t gone smoothly for everyone: 22% of respondents to the Foundry study said their company’s legacy systems were not integrated with new applications, hampering digital transformation efforts. And 23% said their digital and business strategies were not aligned.
Part of the challenge comes from the type of cloud migration path they’ve chosen. Moving to cloud-enabled versions of traditional on-premises applications provides some benefits. But this “lift and shift” approach with financial systems can also expose the limitations of applications that weren’t designed to handle today’s complex, distributed, scalable environments.
“Demands on the system can lower speed and prevent users from interacting smoothly with product features,” explains Freedman.
Cloud-native applications, by comparison, are built from the ground up to take advantage of cloud functionality, flexibility, and scale. “With cloud-native applications, workloads can be shifted to different servers without disruption or information loss, providing a better customer experience,” says Freedman.
It’s not just customers who benefit. Financial teams can better handle surges in demand, not only during monthly closes, but when the business makes other changes, such as acquiring a new company.
Cloud-native applications also increase security and compliance. Built for automation, they can deliver bug fixes and security patches faster, plugging the holes hackers are eager to exploit.
They’re better able to keep up with changing financial compliance requirements, keeping companies out of trouble and creating a clear and objective audit trail.
Where cloud-native applications really shine is with their integration capabilities. To gain deeper insights into their operations and develop new capabilities, companies are increasingly connecting their internal financial applications and tying business processes to partner services. Using software containers, developers can seamlessly connect internal business processes with partner applications, creating an ecosystem of microservices that can enhance productivity for teams and introduce new product features to customers.
Containers also enable development teams to quickly make improvements to discrete processes, such as billing or payments, without having to re-engineer a long chain of dependencies, as they would have to do with a monolithic on-premises application.
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