FinancialForce has declared another year of record growth. It saw revenues for its Financial Management solution grow by 40% and the addition of several well known organisations. Those wins included government organisations such as the National Audit Office (NAO) and the Financial Conduct Authority (FCA). In the commercial sector they revealed that The Warranty Group and Lieberman Research Worldwide selected their Financial Management solution.
Where is that growth?
That 40% increase was a result of FinancialForce selling several products within their portfolio to each customer. More than 80% of customers selected at least three products. This is a shift from historic financial systems purchases and shows that companies are looking at wider solutions across different business functions. What wasn’t revealed is what those solutions were and whether they also included the professional service automation solution that FinancialForce offer. The Financial Management portfolio includes Accounting and Finance, Revenue Recognition, Spend Management, Billing Central and Inventory Management.
Customer wins were also across different industries including hi-tech/technology/SaaS, non-profit, public sector, medical technology/healthcare technology and engineering. There is a growing number of companies transforming their businesses to meet the demands of the digital economy. This has driven the need to replace ageing legacy solutions. The portfolio products such as Revenue Recognition and Billing Central are especially important. FinancialForce claim that Billing Central is the most comprehensive billing solution on the Salesforce platform. It allows companies to offer traditional product and service billing mechanisms as well as the newer business models such as subscription and usage.
Is current growth enough.
There is no doubt that FinancialForce has had a successful year. The management team was invigorated with the appointment of Tod Nielsen as CEO and Fred Studer as CMO in the last year. The question is whether FinancialForce are being ambitious enough with their growth.
Raphael Bres, General Manager Financial Management applications at FinancialForce commented: “We’re proud to see all of our focus and investment in the financial set of our applications pay great dividends. We will continue the momentum we have created and work in partnership with customers to ensure we deliver exactly what they need to drive their success – which will always be the ultimate measure of our own success. This is reflected in our partner-led approach and continuous feedback loops with our customer base. We’re excited to approach the one thousand Financial Management customer mark.”
Is Bres ambitious enough? Against the significant threat that Oracle NetSuite is going to provide, FinancialForce needs to consider whether it needs to accelerate its international growth plans. There are risks associated with that though and FinancialForce does not have the budgets that Oracle are throwing at NetSuite. It will be interesting to see whether Nielsen considers whether he needs either additional funding or support from Salesforce to accelerate their growth. It also makes the possibility of Salesforce acquiring FinancialForce more likely.
Most ERP companies are talking about growth. The problem is that many of the legacy solution providers are only seeing single digit growth. FinancialForce is ahead of the curve but if it cannot reach into non Anglophone markets it could struggle to match its competitors.
Can it succeed?
Its latest marketing campaign offering NetSuite users an alternative is a questionable approach. Press and analysts were both unsure whether the approach was a good thing. However, it may draw unhappy NetSuite customers to FinancialForce and there some of those. However, not many of them attended SuiteWorld.
Studer may have hoped that more people left SuiteWorld with concerns than arrived. The reverse was true. Mark Hurd, CEO of Oracle gave a consummate performance during the keynote. In felt more in line with the NetSuite culture than Oracle. Jim McGeever, EVP, NetSuite Global Business Unit also stepped into the big shoes left by Zach Nelson. His performance was a surprise to many. Things are changing at NetSuite. While there are a few questions here and there, the mood amongst partners and customer was positive. NetSuite does not suit every company but it will soon have the capability to reach a far bigger market than before.
What FinancialForce does have going for it is the platform with whicH it is associated, Salesforce, and the breadth of its offering. Revenue Recognition and support for modern business models are a key reason for its current and future success. They are also ahead of the curve with their work on artificial intelligence. It will be interesting to see how developed the bot is that they showed at Dreamforce. This is an area where they currently have an advantage over NetSuite and some others.
FinancialForce is getting recognised for excellence
Those advantages have been recognised over the last year with several awards including:
- Director of Finance Awards – Financial Software Provider of the Year, 2016
- SaaS Awards – Best SaaS Product for Management Accounting or Budgeting, 2016
- International Business Awards – Best New Product of the Year:Software – Financial Management, 2016
- UK Cloud Awards – Financial Product of the Year, 2017
What FinancialForce has created is a solution that is CFO friendly. It helps to support and deliver the kind of business change that they expect. Accounting is changing and the days of the administration heavy accounts teams are long past. CFO’s need to play a strategic part in the business. Using the Salesforce platform FinancialForce users are able to provide a 360 customer view across the business.
FinancialForce has its work cut out this year. They need to deliver growth that is ahead of the rest of the market but also ahead of last years figures. There is a huge opportunity out there for them. According to Marketsandmarkets that opportunity is set to reach $29.84 billion by 2021. Getting their marketing message right could see them become a major player. It won’t be easy though.