In the relentless pursuit of digital transformation, many industries have embarked on the journey toward building expansive, all-encompassing software platforms. The allure is obvious: a single, holistic solution that seamlessly integrates every aspect of business operations. However, this ambitious goal often results in software implementations that overpromise and underdeliver, failing to address specific needs effectively. This phenomenon is notably prevalent in enterprise banking and is now echoing in the accounting sector.
The Platform Pitfall
The core issue is not the platform itself but the path taken to achieve it. Comprehensive platforms inherently carry complexity. They require significant time, resources, and change management to implement, leaving enterprises exposed to high risks of failure and delayed time to value. The enterprise banking sector, for instance, aimed for platforms that could handle everything from customer relations to backend processing. However, these implementations often struggled under their weight, leading to an industry shift toward point solutions.
According to this McKinsey study, only 30% of core-banking systems were successful.
Learning from Banking: Adopting Point Solutions
In response to the challenges faced by overly ambitious platforms, banks began pivoting toward more focused solutions that address specific pain points effectively. These point solutions are not inherently closed systems but are capable of integration into a larger, cohesive whole, should the need arise. This approach reduces implementation risks, accelerates time to value, and allows banks to adapt more flexibly to changing market conditions. This strategy also reduced the risk of being dependent on key internal resources and leadership having the patience and commitment to see through these monolith projects.
In this article in Fintech Futures, one of the best ways to look at upgrading legacy solutions is through finding ‘quick wins’ which includes implementing solutions that are ready to show faster time to value. This in turn creates momentum, credibility and buy-in on the broader transformation efforts.
The Parallel in Accounting
Similarly, the accounting industry is encountering its platform-versus-point solution dilemma. Firms correctly recognize they are sitting on a large amount of valuable data within their client deliverables that could be used to make their team more efficient and show more value to clients. The strategy of having a place where clients and their service teams can symbiotically share data and analysis, combining document retention with value-added information, seems to make sense. Firms are uniquely positioned to do this with all the information they have.
However, after speaking to many of the top 10 firms, it is evident they are pursuing all-or-nothing approaches, where projects take years to deploy, while this complex infrastructure is built, and the initial goal of simplicity and time savings is lost.
By learning from banking's experience, accounting firms can benefit from integrating specialised point solutions that solve immediate problems while remaining open to future integration into a broader platform.
Embracing a Hybrid Approach
The question, then, is not whether to choose a platform or a point solution, but how to effectively blend the two. A strategic approach would involve:
- Selective Integration: Start with point solutions that deliver immediate value. Ensure these systems communicate effectively with one another and leave room for incremental integration into a holistic platform over time.
- Phased Implementation: Implement solutions in phases, demonstrating value at each stage, and gradually building toward a comprehensive platform.
- Scalable Architecture: Design systems with flexibility in mind, allowing individual components to be enhanced, replaced, or integrated seamlessly as business needs evolve.
A Path Forward
Ultimately, the key to successful software implementation lies in deconstructing the platform concept. This means envisioning platforms as dynamic ecosystems that can evolve over time rather than static monoliths that must be built in entirety from the start. By adopting this hybrid mindset, organisations in banking, accounting, and beyond can mitigate risks, enhance adaptability, and achieve quicker returns on their technology investments.
Author: Trevor Greenway
