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FinancialForce: The new services economy

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24th May 2017
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New FinancialForce chief executive Tod Nielsen recently revealed the cloud application company’s strategy at its Community Live event in London.

At Nielsen's first public speaking outing since his January inauguration, the former Microsoft and Salesforce executive focused on where he sees the technology market going rather than on product.

“Services are devouring the galaxy,” Nielsen said. “I believe we’re entering a new phase in the economy, not just the tech industry, and that is the new services economy.”

He went on to explain that products will soon cease to exist and users will instead want the convenience of a utility rather than dealing with maintenance and upfront costs.

“I think we’re going to be at the point where some day in the future balance sheets for companies are going to be very, very sparse, because nobody’s going to own any assets,” Nielsen added.

Citing disruptive players like Uber and Airbnb, as well as smaller entrants like dog walking service Rover, he said every business is turning into a service-based business.

He added that companies will need to look at subscription, usage and managed service models in the future.

This is backed by CFO Magazine’s findings that 70% of CFOs say more than 50% of their revenue now comes from services, which include professional services, subscription-based services, service-level agreements, managed services and usage-based contract.

Nielsen predicted that a year from now, this will increase to 90% of CFOs quoting services as 75% of revenue.

According to Nielsen, businesses have passed data and security concerns around moving to the cloud and that now the biggest issue is the speed of change.

“We’re at a point on the technology graph now where humans are behind. How can we get over this mismatch between what humans can adapt and where technology is?” he asked. “We have enough tech now to get us where we need to go. The focus and energy needs to be put around people and process. Speed is the new currency. You may fail, but fail fast and try again. Experiment, be agile and make sure your back-office systems and your company is supportive of this sort of adaption that is necessary to be successful in this new services economy.”

Nielsen and his executive team are in the process of refining FinancialForce’s strategic vision, but he reassured customers that it would be able to adapt to any business model and new revenue stream in the years ahead.

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