FinancialForce and the quest to remake midmarket ERP for a digital world

Profile picture for user pwainewright By Phil Wainewright November 2, 2018
Summary:
The latest release from FinancialForce builds in analytics and billing in the quest to remake midmarket ERP as agile and connected for a digital world

Businessman working on ERP using smartphone and laptop © Wright Studio - shutterstock
FinancialForce yesterday released the latest version of its midmarket ERP suite, comprising financial management, billing and the previously released professional services automation (PSA) application. With built-in analytics and a brand new user interface thanks to the Salesforce platform on which FinancialForce is built, this marks a significant iteration of the product. But it set me thinking about the nature of ERP and what vendors have to do to meet both the functional needs and the budget constraints of modern midmarket enterprises in a digital world.

When the term was originally defined, enterprise resource planning (ERP) was concerned with organizing and tracking business operations in a much more predictable world than today's digitally accelerated business environment. A modern ERP suite has to be far more agile and connected than its forbears ever were. The focus is less on enterprise silos, static resources and centralized planning — instead, the acronym should stand for end-to-end engagement, response and performance (maybe call it E3RP).

In the modern ERP suite, all of the traditional characteristics — reliability, governance, security — are taken as read. On top of that, people are looking for a new set of requirements that help them prosper in a digital world — real-time data, joined-up automation, self-service on the move, rapid analysis and the ability to change direction mid-stream.

Analytics bring finance teams on board

Cloud-based ERP products like FinancialForce are well suited to delivering these requirements. But it's so different to the traditional ERP world that not every business is yet ready to embrace it — people and processes have to change as radically as the underlying technology. Finance teams are particularly averse to change, which is one of the factors that has made cloud ERP a tough sell in the past. In most companies, these changed ways of working have come first to customer-facing sales and operations teams, and only later permeate the finance function.

The addition of analytics in this latest release could be a gamechanger in bringing finance teams on board. I had a preview of the new analytics functionality in September from Raphael Bres, VP Product Management, when I concluded:

[F]inance people already do a lot of reporting and analytics as a routine part of the value they bring to a business. The market that FinancialForce addresses will therefore see the benefit of doing these activities within a near real-time dashboard that’s embedded in the financial application. Especially when, as Bres showed me, they have point-and-click configuration options to select the KPIs included in the dashboard, and a huge library of visualization options that transform on demand.

At a stroke, this is giving finance teams a real-time, self-service dashboard view into data that previously took time and effort to collate — thus enabling them to analyze and react much faster. They can then take part in the end-to-end collaboration and engagement that more customer-facing functions have already adopted through their use of Salesforce, FinancialForce PSA and other connected products. All of this is enabled within the new Salesforce Lightning user experience, which brings improved ease-of-use and flexibility.

Midmarket ERP for a digital world

There's another aspect of modern ERP that's important in the market sectors that FinancialForce serves, across professional services, non-profit and digital technology. None of these are traditional product-based industries, focusing either on services or, in the case of digital technology, often adopting a Software-as-a-Service (SaaS) or similar model. They are on the leading edge of a wider trend that diginomica calls Everything-as-a-Service (XaaS), in which products and services are delivered within a digitally connected, continuous relationship with customers.

These businesses need flexible, end-to-end processes for managing service contracts and recurring billing alongside more traditional transactions. The new FinancialForce release includes consolidated billing of multiple revenue streams and automated processes to optimize collections and renewals in this type of customer relationship.

Targeting midmarket businesses, FinancialForce also has to work within the budgetary constraints of such organizations. This is one of the attractions of the native integration between its own applications and Salesforce Sales Cloud, Service Cloud and Community Cloud, all of which are built on the same Lightning platform.

A new addition in this release is the Integration Hub, which adds standardized, packaged API integrations to a selection of third-party business applications — the first to be made available is SAP Concur expense management. This sidesteps the cost of buying separate third-party integration tools such as Dell Boomi, Jitterbit or Salesforce's own recent acquisition MuleSoft. This is in addition to the existing integration to ADP's HCM applications, delivered as part of a partnership announced last year.

Midmarket prospects who aren't already Salesforce customers may however balk at the significant extra cost of adding the Einstein Analytics capabilities discussed earlier. This requires adding a Salesforce license, at more than twice the cost of FinancialForce Financial Management on its own. Unsurprisingly, FinancialForce will target this at existing Salesforce customers or at high-end prospects looking to analyze large data volumes, Bres tells me.

My take

Cloud ERP for the midmarket is a highly competitive market where there are many players of various sizes — several of them, including FinancialForce, are diginomica partners, as you can see from the partner newsfeed that appears on our content pages. But it's also a market that's in a state of substantial flux. Traditional ERP is too limited to serve its needs, but those needs are changing fast, and no one is quite sure where all that change will end up. The reinvention of midmarket ERP for a digital world has not yet run its course.

We have some opinions at diginomica on where it's all heading, some of them covered in our content on XaaS and the overarching framework of frictionless enterprise. The essence of this is to use automation and collaboration to give people the information and resources they need to get things done.

This latest release from FinancialForce makes some important strides in this direction. The adoption of the new Lightning user experience is a big step and it provides the platform for delivering the impressive functionality of Einstein Analytics. At the same time, there's some useful rounding out of XaaS-friendly billing capabilities and a simpler way to extend the ERP core with third-party add-ons.

The challenge for every vendor in this market is to keep moving fast enough to satisfy emerging needs while still delivering a product that remains relevant and affordable. FinancialForce seems to have met the challenge this time round and must keep moving forward by building on that advance.