FinancialForceX - the evolution of FinancialForce and the professional services software space
- We may be witnessing an inflection point in financial accounting software vendor FinancialForce and it’s a good one. Here’s the latest news on their evolution.
The bounceback from last year's COVID-19 downturn is part of a slingshot effect that will catapult service businesses forward this year. That's the opportunity outlined by FinancialForce CEO Scott Brown in yesterday's opening keynote of the vendor's FinancialForceX virtual event. As usual, the event also saw the company unveil forthcoming updates to its products. Here's my take.
FinancialForce is an interesting applications software vendor. The company's roots date back to an experiment by CODA software executives to build a new, next-gen financial software solution (here's the 2008 launch press release). The products they created were called CODA2Go and were built on the Salesforce platform, Force.com. In short order, the product line was renamed FinancialForce and the company got investment monies from Salesforce and others.
In later years, the firm has had a few changes in leadership and ownership — you can read all of diginomica's coverage here. Through it all, FinancialForce has remained close to Salesforce and brought much of its functionality closer to Salesforce's CRM applications and tools. FinancialForce even uses Salesforce's Lightning UX.
In recent years, the product line has made a shift to add people-based or services functionality to the suite. This vertical focus included significant PSA (professional services automation) functionality, originally acquired from Salesforce integrator Appirio in 2011. Today, the company is announcing a number of enhancements/new modules to the product line that significantly extend that functionality.
New functionality for services and success
Services Estimation — This functionality is new to the FinancialForce Professional Services Cloud. According to FinancialForce:
The new feature gives organizations the flexibility to estimate non-productized services and model detailed project requirements to deliver an accurate and achievable estimate. Services Estimation also offers the ability to do bottom-up or top-down estimation, such as figuring out how many people are needed on a project, how long the project will take, and the right rates for the project. Additionally, organizations have the ability to do what-if analysis and gain greater visibility into the sales cycle. For those organizations using Salesforce CPQ, the new Services Estimation capabilities will work seamlessly alongside.
While you might think that estimating services should be easy, it isn't. There are a myriad of problems one encounters as:
- The ‘ideal' staff for your project are already assigned to another project and your project might not succeed without them.
- The team you want involved is unavailable and you might need to use higher priced individuals. This adversely impacts the project's profitability.
- The sales person wants to get the deal sold (and earn a commission) and might be tempted to create an incomplete scope of work to keep project costs low. Unfortunately, the project manager won't be able to get the work done at the proposed cost.
- The customer needs to have the work completed by a certain date but your team's other commitments prevent this from happening.
- Every sales person in the firm is proposing to use the same overbooked resources.
- And on and on ...
You can't really have a great services operation unless you have a tool that can estimate costs, ensure all planning steps are present, gives visibility to staff availability, identifies potential staffing conflicts and more.
Customer Success Operations — FinancialForce is releasing another new module that is aimed at as-a-service firms that want to ensure a greater degree of customer success. According to FinancialForce, CS Ops Cloud:
... simplifies and systematizes all customer success operations activities, giving stakeholders a repeatable, predictable way to gain control over their customer success initiatives. By displaying a complete, coordinated picture of the entire customer lifecycle, CS Ops Cloud enables stakeholders across the organization to collaborate, then quickly derive key insights and take decisive action that drives the 'Big 4' of customer outcomes: satisfaction, retention, expansion and referrals.
The company also announced a new report builder, enhanced revenue recognition functionality, an e-invoicing partnership with Storecove and other capabilities today.
Probing FinancialForce performance
In an analyst briefing on the product news, I asked new FinancialForce CEO Scott Brown about the increasing depth of functionality within the product line and what it would take to see FinancialForce move upmarket. Specifically, I noted that FinancialForce walked away from a potential mid-market deal I introduced to them in 2015 even though I believed their accounting, consolidation and revenue recognition functionality was solid then. Since that time, their functionality has only gotten stronger and stronger. So, when will the firm fill out ‘the whole product' (a Geoffrey Moore term) to make the move into upmarket deals a reality/certainty?
Scott indicated that they now have a leader in-house to develop an upmarket partner ecosystem. He added that much of their new deal flow in Western Europe is being led by partner firms there. FinancialForce is also creating a partner training curriculum and will be moving to certify its partners.
Scott also added that Financial Force is looking to speed up its ‘implementation velocity'. Currently, about half of its new customers are operational in 100 days.
We also learned that:
- The company had an outstanding Q1 this year materially surpassing their own expectations. Many deals, quite surprisingly, were initiated and closed all within the quarter.
- The company has a new CFO. His background is interesting as he has been part of three initial public offerings. Is this an insight into a potential IPO for FinancialForce? I suspect their investors would like to see a liquidity event soon.
- The company believes customers and prospects are on a journey whose steps include: digitalization to innovative experiences to customer insights to enterprise agility
- Their consolidation functionality is now more automated than before
While most of you can't imagine how bad virtual user conferences and analyst briefings have been the last 18 months, most of them have been unbearable. This briefing, in contrast, was a joy to attend. It wasn't overly produced/slick. It wasn't a festival of meaningless buzzwords uttered by vacuous talking heads. This briefing was fast, to-the-point, honest and filled with news. We even got to ask questions!
I think FinancialForce's new CEO actually understands the situation well and knows what needs to be done to move FinancialForce upmarket and to ever greater sales numbers. And, on a related note, I believe FinancialForce's Chief Product Officer, Dan Brown (no relation) seems to be hitting the right notes, too.
I would like to see FinancialForce:
- Develop more leads from sources beyond Salesforce.com referrals
- Create implementation partnerships with larger systems integrators/channel partners/resellers especially those that could implement solutions for multi-national customers
Salesforce.com and FinancialForce have worked very well together for many years now. And while both product lines are very tightly integrated, I would expect that we'll see more competitive overlap as each firm seeks to expand its own footprint. This may require some excellent communication, co-ordination and diplomacy so that the great relationship continues to grow. That said, each firm needs to focus any competitive angst towards other firms, especially ERP vendors with similar designs on the services space.
Bottom line: good news from FinancialForce but execution savvy will become quite important if it wants to grow, go public and maintain a great rapport with Salesforce.