Embrace the Cloud, but do not lapse on security and operational risk.

by Joseph V. Singh

I had the pleasure of attending Salesforce’s Cloudforce Conference at the Javits Center on November 30^th.  We keenly follow the developments in the CRM space for our Financial Services clients, as this has been a focus area for the last five years.

For the Cloudforce Conference, it was mentioned that some 10,000 people registered, and from what I could estimate, about 5,000 or 6,000 people attended.  The keynote -- all two hours of it rather informative, was standing-room-only, and, of course, led by Salesforce’s dynamic CEO Marc Benioff.

Overall, the address centered on what was is described as the growing movement to leverage the Cloud to arrive at a state of engagement for a firm, its employees, and its customers, that is known as the ‘social enterprise’.  In an active social enterprise, information from internal production or transaction systems, CRM systems and records from social and business networks such as LinkedIn and Facebook will be used to improve corporate productivity, communication and overall enhance the experience of the firm’s customers.

A good portion of the address described Salesforce’s business collaboration product called Chatter.  Anecdotal cases of firms embracing a ‘social enterprise’ approach were presented by Burberry CEO Angela Ahrendts, Charles Phillips, now CEO of Infor, and another executive from GE Capital.  Overall, this was a tour de force for the Cloud model.

Over the last five years, the business case for moving many enterprise applications to the Cloud has become quite compelling in terms of cost savings, licenses and flexibility with respect to allocating application use incrementally to the number of end users.  Additionally, with numerous integrators that have built applications that sit on the Force.com platform (‘Cloud-Based offerings), there are a fair number of alternatives and accelerators that go against the case for in-house custom application development.  For instance, we have evaluated for our clients CRM offerings that are on the Force.com platform that cover the needs for Hedge Funds and Private Equity Funds in the Alternative Investment space and for Mutual Funds and M&A Boutiques in the Institutional Asset Management space.

Indeed, we are now recommending to our clients that rather than start at what is the basic core functionality of Salesforce (assuming they are intent on a cloud approach), that a coherent CRM strategy ought to lean towards their industry vertical.  Again, citing one of our focus areas, after the better part of half a decade, many niche integrators have done a yeoman’s effort in customizing for the buy-side world standard data sets, industry conventions and building bridges to industry and external third-party and customer data sets.  With an accelerated ramp-up time on the application customization side, the client could spend more time on data-cleansing and validation.

With the improved cycle time for a CRM rollout, and with the availability of ancillary streams of data from within the enterprise and from outside social networks courtesy of Chatter, more production, reference, industry and social information is becoming available than ever.  Granted a product such as Chatter is expected to sit within the secure walls of a firm, however, I wanted to end this note with a slight cautionary slant to keep us on our toes.

Care must be taken with respect to a firm’s application and information security and the management of overall operational risks.  The advent of Cloud-based offerings, while decentralizing the maintenance, sharing and interaction of different parties and information, also has the potential to open a company to unconsidered risk as more people (employees, customers and competitors) are interacting with more information, on a growing list of devices.

As always, GraceOne can assist Banks and Asset Managers in innovative ways.  Ask us about Business Advisory, Operational Readiness, IT Security and ways to lower your costs and implementation risks using our experience.