Finance Month in Brief - November 2020

Profile picture for user brianssommer By Brian Sommer December 3, 2020
Summary:
The second of our two Month in Brief articles turns its attention to finance.

money
(Pixabay)

In the US, we recently celebrated Thanksgiving. For 2020, a lot of enterprise software vendors should be giving thanks, too: thanks for continued sales! This month, we heard of new applications being developed, growing revenue numbers, and, lots of innovation in the audit space.

Interesting Briefings

I enjoy hearing from new vendors, vendors I haven’t heard from in ages and the occasional update from a vendor that has some big news (e.g., an acquisition). Briefings in the last few weeks have had some interesting insights re: COVID and its effect on the software market.

Here are some of the more interesting conversations:

AuditBoard - There’s a new firm out there that’s making application software for auditors. It’s AuditBoard. But before you skip to another topic, I suggest you continue reading.

It seems that governance, regulation and compliance activities are getting pounded this year. The pandemic has triggered firms to move work and workers outside of the office and work remotely. Is customer data safe if it’s being accessed in your employees’ homes? Many firms made material adaptations to their business models just to book some revenue (e.g., full-service restaurants moved to offer online ordering and take-out service) but did their controls adapt, too? Some firms changed their production processes to make PPE products while other products were sidelined. Many firms saw disruptions in their supply chains and wonder if all-new suppliers conform to their supplier standards? And, of course, governments have been offering up all kinds of new care packages, office closing rules, regulations and more. Bottom line, compliance is an issue now.

In that light, AuditBoard may be one of the timelier launches of late. Recently, AuditBoard announced two new tools: a Resource Planning tool and a Policy Management application. These products are designed for large audit teams (i.e., of 20+ people), internal auditors and for complex multi-site/multi-national firms.

Brian
(AuditBoard)

AuditBoard is not trying to emulate the GRC products of big ERP firms. That’s apparent in their user-first and cloud design.

AuditBoard also conducted a recent study. In a press release that summarized some of the key findings, they stated:

a majority of audit and risk professionals believe the risk environment will continue to be dynamic and unpredictable in 2021, rather than returning to more stable pre-pandemic conditions. The top risk they cited for the coming year was of "economic conditions impacting growth,” followed closely by “cybersecurity threats.” The responses also illustrate the long-term changes audit and risk professionals will experience in their roles as a result of the pandemic, and how crucial those individuals will be in helping organizations overcome risk challenges despite gaps in enterprise risk management (ERM) programs.

Eprentise and the Audit world - Eprentise has been the go-to solution for M&A teams and private equity firms globally for more than a decade. They can do in days what integrators, accountants and others struggle with for months when restating, reorganizing, etc. financial records that require much work after a reorganization, divestiture or acquisition.

Eprentise’s product line is expanding and will soon include a new audit module. It’s different from the usual GRC application from an ERP firm and its usefulness to internal and external auditors looks solid. I’ll do a more detailed writeup on this after the New Year.   

Appian - I had a chance to chat briefly with Appian’s CEO Matt Calkins.  It’s been a while since I checked in on them.  Appian facilitates the development of low code applications and workflow process automation. Briefly, we discussed:

  • How the pandemic made agile application development a priority. While this has been evolving for years, recent events have accelerated this phenomenon.
  • Unifying different kinds of workers (not just apps), especially those now forced to work remotely, triggers a needed measure of collaboration on solution development and business events.

I asked Matt how the low-code phenomenon differed from the citizen developer movement of a few years ago. Matt discussed how without technical knowledge, the average person can’t build a powerful application, specifically, applications that must connect to commercial databases.

Matt sees Appian as a best of breed alternative to hyperscaler lock-in. Competitively, the company must deal with newer service ticket-based solutions (a la ServiceNow), older process automation solutions, startups (e.g., Unqork), and, RPA vendors. In differing ways, all of these firms/categories deal with bringing together different, diverse information assets.

Who is Appian selling to? Matt says a number of their sales are to CIOs. Like in the current events discussed above, these executives are looking for tools to quickly spin up new apps, new productivity enhancements, etc.  To that end, Appian has a number of new applications to help firms track/manage Covid incidents (see graphic below).

BS2
(Appian)

 

Anaplan  - I had a chance to chat with Anaplan’s Jason Loh this month.  I’ve been looking forward to this call as I’ve been interested in hearing of customers that use big data with today’s EPM/CPM products.

Our conversation started with Jason’s contrast of the economy of 2008 (an economy of opportunity) with today’s economy (an economy of necessity). That change underscores why big data, especially non-transactional data, is key to driving revenue gains today. Firms need every bit of insight into customers, market trends, etc. to understand what customers need, when they’ll need it, under what terms will they acquire new products/solutions, etc. It’s these insights that improve sales execution and reduce customer acquisition costs. These insights can also head off customer losses to competitors.

Jason spoke of how customers were using Anaplan’s Predictive Insights tool with third party data. One customer he mentioned is seeing their average deal size now 3.8X prior deals.  Another customer, a technology firm, is using the software to predict which trial customers of theirs will convert to a paying subscription. That customer is using dark data (i.e., large data sets that the customer has but hasn’t used to mine insights from yet) with the Predictive Insights tool.

Predictive Insights came to Anaplan via an acquisition in the summer of 2019.  Anaplan has also developed PlanIQ. PlanIQ has, among other things, a strong AI/ML connection to the Anaplan HyperBlock and to other AI engines (e.g., Salesforce’s Einstein).

Jason mentioned that customers are utilizing macro-economic data, weather data and other big data in developing contingency and other plans. He believes these new capabilities are helping firms avoid ‘regrettable attrition’ in sales and revenue losses.

Planning

The current issue, November-December, of Harvard Business Review has a number of great pieces. The Risks You Can’t Foresee kicks things off with an examination of “novel risks”. If you wonder whether your firm, industry or country can be struck by a black swan event or a perfect storm again, read this piece.

CPM/EPM vendor Anaplan announced its third quarter results. Their highlights included total revenues of $114.9 million (an increase of 28% year-over-year). Subscription revenue was $104.7 million (an increase of 31% year-over-year). The company also reported that:

  • Anaplan and Google Cloud announced a new go-to-market partnership to offer the Anaplan platform on Google Cloud.
  • Anaplan introduced new intelligence capabilities for predictive forecasting and scenario planning using PlanIQ with Amazon Forecast.
  • Anaplan announced a multi-year deal to support Shell with digital transformation.

CPM/EPM vendor Planful has an analyst summit this week.

Finance/ERP vendor Unit4 may get sold next year. Bloomberg reported that private equity firm Advent International, the owner of Unit4, has already received a sale inquiry. Apparently, Advent tried to sell the company in 2018. Advent also has a position in FinancialForce (other investors include Technology Crossover Ventures and Salesforce Ventures).  Unit4 competitors will likely use this press story to sow fear, uncertainty and doubt (FUD) among Unit4’s sales prospects.

ERP vendor Oracle had an analyst event that got everyone up to speed on Oracle’s Cloud ERP progress. There’s been a lot written about Oracle lately on diginomica:

The analyst event had a number of proof points re: the market uptake and implementation successes that Oracle was having with its new Cloud ERP applications. What we saw were slides and slides detailing individual customer implementation successes and more slides re: recent Oracle ERP wins in numerous verticals.

If Oracle acts reasonable towards customers and prospects, it has a real opportunity to take market share away from competitors. They also seem to have impressed upon their channel partners that dedicated implementation practices, shorter installs, etc. are the way forward in new ERP deals.

My take 

Planning and Audit products dominated the product announcements this month but Oracle’s market successes with its new Cloud ERP products may have been the real story of the month. I wonder if Santa will bring us some new enterprise software news gifts next month. Until then…