Latest FinancialForce release aims to help services businesses mind their margins

Despite the pessimistic outlook coming from some tech industry luminaries, cloud ERP and PSA vendor FinancialForce sounded an optimistic note in a briefing ahead of shipping its Winter 2023 Release today. The company is growing "at a very healthy clip," says Scott Brown, CEO, posting double digit growth in its last quarter in both bookings and revenue, which continues the trend in place since he joined the company two years ago. The impact on the broader market of rising inflation and revenues under pressure only serves to underline the need for its products, he believes:

Our solutions have become even more important for customers in this environment, because as the cost of resources that they staff with go up, they've got to use resource utilization better, they've got to do margin accreditation better, they have to do progress billing better, they have to do project management better.

Today's release continues to round out the product's automations and analysis for services businesses, with a growing emphasis on optimizing end-to-end processes, particularly opportunity-to-renewal and requisition-to-renewal. The end-to-end scope has broadened alongside an expanding product footprint in the past two years, adding services estimation to complete the journey from opportunity in Salesforce into services delivery and billing in FinancialForce, while a new FP&A product has added planning and budgeting. The final element is Customer Success (CS), providing templates and playbooks to guide successful outcomes. The company now calls this end-to-end architecture its Services-as-a-Business (SaaB) platform.

Services as repeatable building blocks

At the heart of the SaaB philosophy is the notion of bringing together relevant data to maximize value delivered. As Dan Brown, Chief Product and Strategy Officer at FinancialForce, told diginomica recently, services organizations need to harness connected digital technology so that they can do a better job of tracking the economics, operational effectiveness and customer impact of their services.

As part of this transition, services organizations should define their services as repeatable packages for inclusion in a digital catalog. In the FinancialForce platform, this then enables automated processes that run from the Services CPQ estimation tool through to PS Cloud, the Professional Services Automation (PSA) product, as William Spice, Senior Director of Product Management for PS Cloud and CS Cloud, explains:

Services CPQ is all about creating margin-enhancing estimates quickly and providing a seamless, two-way relationship with PSA. As you're building out your estimates in Services CPQ, we know about the roles, the individuals, the rates, the rates per region, the skills that are in our catalog, the products that are in our catalog, and all that intelligence that we have in PSA already to let you build estimates quickly. And then as you build out those estimates, translate all the detail of the estimate — who's involved, the distribution of hours, skills — and translate those directly into projects to get staffed and delivered, with no gaps at all.

Services such as implementation, training and support can be defined as products in a service catalog which then become the building blocks for creating an estimate. The resource costs already built into those product definitions allow service businesses to quote fixed-price contracts based on achieving a specific margin, as an alternative to pricing based on time and materials. Spice elaborates:

One of the interesting things we can now do with using products is, you could bring this in on a time and materials basis — the product has all the details of what roles we need when, for how long — but we can also drive it around fixed-price quoting, so we can decide that it's necessary to attain a 60% margin on our training work. What this will do is automatically adjust the detail of everything in this product to make sure we're hitting that 60% margin.

The integration with PS Cloud means that when the quote becomes a project, the resource requests are based on the assumptions built into the quote, whether it's executed as a single project or as multiple projects delivered separately by the implementation, training, or other teams. It's even possible to recommend a specific individual when building the quote, which will flow into resource planning as a suggestion.

New tools for resource planning

There is a long list of enhancements in the latest release, too many to list in full. One of the most notable gives resource managers greater flexibility and control within the staffing process, through a feature called Work Planners, as shown in the image at the top of the article. A new 'assignment details' view allows managers to adjust assignments based on changing demand and supply, viewing either by project or by resource. Resource managers can also access a new match settings panel to adjust the priorities the intelligent staffing algorithm uses for resource planning. Once assignments are confirmed, they can then be imported to calendars via a new sync connection to GCal, with Outlook to follow. For more accurate data while work is in progress, new features support real-time time entry and intelligent tracking with automatic timecard entry.

New features in the Cloud ERP product include the ability to schedule upcoming changes to billing in an ongoing contract, and to schedule additions to the Chart of Accounts. There are more built-in tools to ease the bank reconciliation process. A new period-end close template helps manage multi-entity scenarios, and there are new options to share report definitions for easy deployment.

FP&A has new features in headcount planning, which became available for planning by resources in the summer, and can now also be organized by role. There are new reports for spend by category, both as an overall total and per supplier. Budgets that include sensitive items such as headcount or salaries can now be shared to specific individuals, controlling access to the content.

FinancialForce is also keen to make sure that its own service delivery is up to scratch, and continues to evolve its delivery program called Accelerate. Dan Brown comments:

We're a service economy company, we deliver our products through services — the product is the service, the service is the product. So the way that we engage from a full customer lifecycle is very important for us. We have a number of investments in our customer lifecycle experience hub, that helps facilitate going live very quickly. We have done quite a bit to make our implementations as turnkey as possible, helping customers facilitate when and how they update our software, giving them much greater flexibility in how they do that.

My take

The broadening of the product footprint beyond core ERP is a phenomenon we're seeing across the board as technology vendors seek to tailor their offerings to the industries they serve. With its PS Cloud product, FinancialForce has always had a particular focus on services organizations, while its close alignment with Salesforce has made it a natural choice for SaaS vendors to select its ERP Cloud. It is now doubling down on that skew in its customer base, adding Services CPQ to provide end-to-end automation for services organizations, while developing CS Cloud, its Customer Success platform, to provide end-to-end service delivery that's in tune with the emerging XaaS model of customer engagement. This is a wise strategy at a time when technology buying cycles appear to be extending but there's still a strong demand for products that help optimize operations and revenues.