Today is a game-changing day for FinancialForce.com and a red-letter day for the entire cloud ERP industry. When any investor commits $50 million to finance a company’s growth, you know that investor believes there’s a huge market opportunity ahead. Such investments are not uncommon these days in the enterprise cloud applications sector. But I believe it’s a signal that cloud ERP – and our specific variety at FinancialForce.com – has now reached critical momentum.
Announced today, this investment comes from funds managed by Advent International, one of the largest and most experienced global investment groups dedicated solely to private equity. The commitment of an additional $50 million for the growth of FinancialForce.com is part of a broader investment in FinancialForce.com’s majority investor, UNIT4, which is currently in its closing stages.
Backing of this quality and quantity is an indicator of what is coming next in ERP. After years of market consolidation and stagnation, the ERP space, and particularly FinancialForce ERP, is poised for tremendous growth. I believe there are four reasons that explain why.
1. Cloud ERP is now the default
Just a few years ago, we spent our time persuading prospects on the virtues of the cloud and why it was better than on-premises based solutions. Today, the cloud has become the default choice for new application deployments.
The conversation has shifted from “why cloud?” to “which cloud?” While other applications such as CRM achieved this mindshift years ago, the time has finally come for cloud ERP to be adopted by the masses.
2. Salesforce1 is the platform
Our answer to the “which cloud?” question is another reason why FinancialForce ERP is on such a steep trajectory. We built our apps on Salesforce1, the cloud platform that has enabled salesforce.com to leap into Gartner’s top 10 list of software companies.
While we always felt we made the right platform choice, it’s gratifying to see that thousands of companies now realize they can run their whole business – not just CRM – on the Salesforce1 platform. You can combine your systems of engagement and systems of record in one cloud. Maybe that is what the 1 in Salesforce1 really means?
3. ERP has to be customer-centric
Third, we have taken a customer-centric and social approach to ERP which is in lock step with most companies’ business strategies. The impervious, change resistant and anti-social ERP apps of the past won't cut it in this Age of the Customer. The mindset needs to shift from focusing on internal resource management to delighting customers that are a click or a tweet away from your competitors.
In short, old ERP doesn’t play nice with others, including your customers.
4. It’s time for a change
Many companies are waking up to the fact that their systems are more than 15 years old, purchased in the 1990s before the Y2k scare. Sure, there have been new coats of paint applied over the years, but the underlying apps are basically the same.
Traditional ERP suppliers have not been able to adapt and companies are coming to the realization that their competitive differentiation is reliant on old technology designed for a different era. More and more companies are coming to the conclusion it is time, not for yet another painful upgrade, but for a real change.
I believe these are the key reasons why FinancialForce.com is poised, as our CEO Jeremy Roche has long said, “to do for ERP what salesforce.com has done for CRM”.
I could go on, but I feel I should leave the last word to our customers. Companies like gasket manufacturer Chambers Gasket & Manufacturing, whose VP of operations Chris Kenny has said that putting everything on one platform “means we can be more responsive to the customer, not just on a quote or sales inquiry, but on orders and production, invoices and credit approvals and everything in between.”
Or ebusiness service provider Crown Partners, whose director operations Kevin Barth told us that implementing FinancialForce applications has transformed the business:
“In 2014 we are forecasting that we will nearly double our revenue while only increasing our back office resource by around 20%. FinancialForce has given us the ability to track an opportunity from when it enters our pipeline to collecting cash, something which just wasn’t possible with our previous system.”
These customer stories give me even more reason to argue that cloud ERP is lifting off – and with a $50 million boost today to help send it on its way.
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