How Slack would help Salesforce become a remote-work payments dynamo

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The early-2020 shock of suddenly displaced workforces has given way to a sense of permanence, a realization that everything from IT and security risk to payment processing will need a remote option for years to come.

That makes digital workforce collaboration apps like Slack acquisition targets, particularly for a company like Salesforce, which needs to compete with enterprise technology companies while making it easy for its clients to execute an “invisible payment” that’s embedded in cross-selling and marketing. More often than not, that mix of innovation means connecting data and payment technology with data analytics and back office functions that are in employees’ homes.

A Salesforce deal to acquire Slack could be announced as soon as Tuesday, according to CNBC and other media outlets. The acquisition would value Slack at about $17 billion, according to The Wall Street Journal, which would be less than Slack’s market cap of $24 billion on Monday morning. Salesforce did not return a request for comment by deadline.

San Francisco-based Slack combines digital office chat functions with an API and other open tools that allow staff to build workflows in the same user experience as messaging. Remote work creates different complications for billing, invoicing and collecting funds. These complications can benefit from easier communication that resides outside email, coupled with a digital transaction gateway that integrates payments with other parts of a company.

Slack has grown quickly during the pandemic, with 12.6 million installations so far in 2020, up about 50% from 2019, according to Sensor Tower. And about 42% of the U.S. workforce is working from home as of summer 2020, according to Stanford University.

Writing for PaymentsSource, Nvoicepay President Kristin Cardinali argues remote work makes paper checks and manual processing for supply chain payments untenable. In an earlier interview, Fattmerchant CEO Suneera Madhani discussed the importance of linking digital communication and technology deployment for merchant acquiring.

“Work from home is undergoing normalization which will continue for the next 18 to 24 months,” said Rodney Nelsestuen, a senior analyst at Aite Group. “There will be lots of changes and amendments to how institutions manage work from home, but collaboration will only grow in importance and users will continue to expect more functionality without adding complexity to their experience.”

In 2019, San Francisco-based Salesforce added an order management service that integrates sales, service and marketing with warehouse management, ERP and payments. The company’s goal is to streamline what comes after the “buy” button, a necessary step for everything from corporate procurement to online ordering even under normal circumstances.

The potential benefit of Slack is it’s easier to use than many back office digital collaboration systems, Nelsestuen said, adding Slack is intuitive for non-technical users. Slack’s clients include RBC, Uber, Intuit and U.K. challenger bank Monzo, and its Connect platform manages data security for collaborations between different companies.

“Slack is a more focused pure collaboration tool while Salesforce has grown into a full-throated CRM and, actually, a development platform for most any application you would want to build,” Nelsestuen said, adding Slack would give Salesforce a competitive alternative to Cisco’s WebEx and Go-to-meeting and Microsoft Teams. “Slack is fairly intuitive and simple to use while other collaboration tools have some legacy hangover. … Salesforce’s own collaboration tools are better used with additional internal systems and data. Thus, Slack provides a direct answer to Microsoft’s continued evolution of Teams.”

Salesforce has made two other recent acquisitions that have improved its ability to connect data to different parts of an organization, as well as to build a breadth of software for enterprise users. It spent $15 billion in 2019 to buy Tableau, a data visualization company, enabling Salesforce to offer integrations between transaction and consumer data with a business’ finance, operations and other functions. That followed Salesforce’s 2018 deal to acquire Mulesoft, adding connections to CRM systems.

And Salesforce has collaborated with Apple over the past two years to include iOS features and tools for Salesforce developers, providing access to Face ID, Siri and other functions.

“Salesforce is now reaching the stage of being a legacy system and while still innovating, buying Slack is somewhat of a leap ahead into the new collaboration world where user experience is more closely aligned with all the apps we use in our personal lives,” Nelsestuen said.

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