Six big observations from FinancialForce Accelerate
No marching bands, no flimflam, no sexy “futures” but lots of real progress that delighted customers. That was the FinancialForce show this week and it was a quietly solid show at that. Here are the six main takeaways to ponder.
Accounting/PSA software vendor FinancialForce held its annual confab in Vegas this week. The show was kind of like a diesel engine. A bit slow in starting but once it going, it purred.
Six big observations were apparent at the show:
#1 – Focus
FinancialForce CEO Tod Nielsen made a number of changes shortly after he took over at FinancialForce about two years ago. He replaced a number of executives, dropped the HCM products from the roadmap, and, began work on making the products easier for customers to use.
The changes appeared to get the company focused: focused on its core products (i.e., financials and PSA (professional services automation)) and focused on improving customer satisfaction.
That narrower focus can make for a bit of a boring user conference in the years that followed as many of the changes the company implemented weren’t as sexy as an AI-powered drone that drops 3-D graphical insights onto the conference goers below. And that was certainly what I experienced last year. And while analysts can be an impatient and pushy lot (guilty!), the fruits of that newfound focus were everywhere to be seen this year (see following sections).
Focus will be a big theme this year at other ERP/application software firms especially in light of Elliott Management’s interest in SAP. With private equity firms taking ever greater positions in software companies, they want management to use capital wisely. We’ll see more software executives getting spanked for wasting money on ill-advised or overpriced acquisitions or spreading R&D funds over too many products lines. PE and activist shareholder firms will expect software executive to:
- Deliver better operating results (but not necessarily via customer price increases)
- Possess better discipline in software executives killing off non-core or unsuccessful product/product lines
- Have more focused businesses
- Increase their attention to financial results
#2 Customer love
Like Workfront earlier in the week, it was next to impossible to find a disgruntled FinancialForce customer. That made me keep digging to find out why customers were so darn happy.
The answer it seems is tied to FinancialForce’s efforts the last two years to make the customer experience better. Part of that effort is in a program called Accelerate. In Michelle Swan’s diginomica piece, she writes:
FinancialForce describes Accelerate as "a long-term company initiative to deliver a connected product and services experience to accelerate customer value across all stages of the customer lifecycle." Similar to NetSuite's SuiteSuccess program, the goal of Accelerate is to get customers up and running on products faster, to lower adoption barriers, and to offer added value to customers so they stick around longer and buy more.
Specifically, the company has expended time and money to:
- fix the user experience (UX)
- focus a lot on customer change management issues with the products and product adoption
- tune methodologies and practices to drive faster implementations (and hence time to value delivery)
- tweak the partner channel to get better partners delivering better outcomes more consistently
#3 - Technology
The technology changes should not be underestimated in this though. The audience really liked new improvements to the products (e.g., more intelligent presentation of information users might want to see at the time of need). Users really liked new AI and other capabilities coming from Saleforce’s Einstein and the Lightning interface. FinancialForce Analytics functionality also got a big boost. Customers saw new capabilities to view financial performance and planning data (including smart forecasting capabilities). Interestingly, FinancialForce is providing these to existing customers without an added subscription charge. FinancialForce is trying to make it unnecessary for customers to acquire a third-party planning tool (e.g., Workday’s Adaptive Insights).
Other new functionality included:
- new workspaces for project managers and collections personnel
- consolidated billing and collections automation
- enhanced services forecasting
- new mobile expense app
- next generation Gantt chart functionality
- a connector between the PSA apps and SAP Concur’s expense management software
#4 – The numbers keep growing
FinancialForce leaders did share some financial performance numbers with us (under NDA). Suffice to say, the firm:
- added over 300 new customers
- grows at around 30% annually
- could IPO in 24 months, if it wanted to, but is seems that’s not a desire of management at this time
Executives appear to be monitoring Rule of 40 compliance as the company continues to grow revenues, retain customers and grow ARR. Whether profits or net margins are growing was not discussed.
One other number got my attention: CEO Nielsen met with 367 customers in the last year.
#5 - Professional Services everywhere
True confession time: I was a partner with services giant Accenture and I have covered PSA solutions a lot in the past. But, I mostly attend FinancialForce events to cover their namesake apps: financials.
This year though, the PSA apps were clearly the most showcased/discussed solutions at the event. The firm’s focus on services-based firms is strong as ever and product functionality enhancements helped the PSA products win a number of third-party accolades this year.
The PSA solutions will soon receive additional functionality due to a couple of recent partnerships FinancialForce made. One is with Asperato (for customer payments) and another with Zimit (for quoting, CPQ for services, Services catalog, pricing and proposal functionality).
#6 – The forward view
As mentioned earlier, FinancialForce exited the HCM space approximately two years ago. I’d advise CEO Tod Nielsen to revisit that decision. Here’s why: The financial and PSA apps are a lot beefier now and easier to implement than ever before. As a result, FinancialForce should be in position to shift some R&D resources to newer application areas. But, more importantly, FinancialForce has really doubled down on services-based firms as a key market it wants to exploit. Yet, the one thing all services firms have is people: people who need performance reviews, people who get paid, people who must be recruited/onboarded/developed/etc. That means these people-based companies need solutions that do more than match people to projects and track their project time.
Does FinancialForce need to develop its own HR/HCM solution? No, they could form an alliance with any of the zillions of HR providers out there. As to which HCM solution might work, we heard many existing customers are using BambooHR. We also heard of several divisions of larger firms are using Workday for HR (and sometimes for shared services finance). Or, FinancialForce could resurrect its old HCM solution, too. Bottom line: it’s time to round out the whole product solution set for a people-based product line.
I also think it’s time for FinancialForce to really amp up its Marketing, pipeline development efforts, channel partner composition and sales practices to move into more complex, bigger deals/accounts. The company’s functionality has improved and it’s time that FinancialForce upscale other parts of the firm to exploit this.
This was a NO DRAMA conference. It was also light on hyperbole, too. People were happy and enjoying themselves while learning a lot, too. I felt superfluous as there just wasn’t any undercurrent of issues lurking around the corner. And, that, folks, was a very good thing.
Next year though – I want to be blown away!