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FinancialForce recently introduced FinancialForce ERP, a family of cloud-based software designed to support a variety of customer-centric businesses such as professional services organizations or companies that specialize in business and industrial distribution. Many of these types of businesses are midsize or small (having 50 to 1,000 employees) and can benefit from the integration of FinancialForce’s accounting, professional services automation, human capital management (HCM) and supply chain management (SCM) software. The company added the last two capabilities at the end of 2013 with the acquisitions of Vana Workforce and Less Software, respectively, which I commented on. Like FinancialForce’s, their software runs on the Salesforce1 platform, which means that integration of these elements was straightforward. It also enables companies that use or are planning to use salesforce.com for sales and customer service to simplify integration of those with the operational and back-office software, by enabling single sign-on, end-to-end process management and a single data source for reporting and analysis. This integration can significantly reduce or even eliminate the need to re-enter information into systems or to use spreadsheets, documents and email to manage processes. With all of the data available in a single system, creating reports and automating their distribution becomes easier. All of this, in turn, should cut the amount of time and effort spent on administrative and clerical functions and enhance the productivity of the organization.
From its inception, FinancialForce has had a two-pronged market strategy. Like all ERP vendors, it offers a suite of back-office functionality, but it also offers the option of buying separate component applications that address specific needs. Because all of the code within its suite is running on a single platform in the cloud, FinancialForce can offer an interoperable set of capabilities that can be purchased as a single application or in components. In the latter case, its sales order processing module can be used to bridge the salesforce.com cloud-based sales process to the user company’s on-premises ERP system. This enables companies to replace desktop spreadsheets or paper forms to pass order information from one system to the next – a time-consuming and error-prone process. The unified approach also makes it possible for buyers to acquire a full suite in stages, which may be more appropriate for their needs and budgets. FinancialForce’s recent acquisitions and their integration into the single offering takes the strategy a step further. Companies can buy additional component pieces (HCM and supply chain) that operate on the Salesforce1 platform. Moreover, FinancialForce now has a more comprehensive suite for two types of businesses, professional services organizations (PSOs) and distribution companies.
The recent release of FinancialForce ERP was designed to put additional emphasis on the suite offering. As an ERP suite, FinancialForce is suited for a variety of businesses, but two in particular are worth highlighting. One is PSOs (consultancies and the like) as well as stand-alone professional services organizations within a large corporation that need systems to manage their operations effectively yet interoperate with the parent company’s core ERP system. The integration of the accounting and human resources capabilities with professional services automation (PSA) software provides a way of simplifying the management of day-to-day operations while substantially reducing the administrative burden for record-keeping, accounting and compliance. These sorts of businesses are well-served by an integrated suite of capabilities that automate and manage the sales, staffing and project management elements of their operations, while increasing the efficiency, timeliness and accuracy with which they perform critical tasks such as customer billing. Once a professional services company expands past a handful of billing individuals, the administrative burden on the senior members of the firm can be anything from a nagging distraction that saps their productivity to a time-sink that diminishes revenues. The right software enables them to scale their business without having to make corresponding investments in administrative personnel. Human capital management is especially important for PSOs since people are the core of their business model. Applications like Vana Workforce have the potential to improve the effectiveness with which a PSO handles its members. For small to midsize consultancies, however, the use of human capital analytics is especially important for improving efficiency and productivity, as our research has shown.
The other type is business and industrial distribution companies. These tend to be sales-oriented and, as such, might already be salesforce.com customers. In addition to the financial management functions, FinancialForce ERP provides necessary capabilities that support some of the supply chain management aspects of their sales processes, including configure, price and quote (CPQ) to maximize revenues as well as efficient and accurate order fulfillment, and contract, inventory and supplier management. Note, however, that although FinancialForce calls this part of its offering SCM, the software does not have the full set of supply chain functionality offered by established vendors in this field.
Since FinancialForce ERP is a cloud-based application, it’s suited to the needs of companies that have outgrown small business accounting software packages and can benefit from having the ability to connect sales, marketing and customer service capabilities with their back-office functions. Many companies with 50 to 500 employees still use basic financial software packages because they hesitate to make the investment in an on-premises accounting package and the IT staff they would need to support it. But they are foregoing the operational and management benefits they could have by using more capable software that doesn’t require a large up-front commitment and ongoing reliance on staff to support an IT system. The Salesforce1 platform also incorporates Chatter, messaging software that facilitates collaboration in context among employees.
Companies with 50 to 1,000 employees, especially those in professional services and distribution, that have a fragmented collection of software for sales, accounting, order and inventory management, and HCM, should consider FinancialForce to address their needs. This is especially true for midsize companies that have outgrown their entry-level accounting packages and are held back by their limited analysis and reporting capabilities.
Robert Kugel – SVP Research
Our benchmark research on enterprise spreadsheets explores the pitfalls that await companies that use desktop spreadsheets such as Microsoft Excel in repetitive, collaborative enterprise-wide processes. Because people are so familiar with Excel and therefore are able to quickly transform their finance or business expertise into a workable spreadsheet for modeling, analysis and reporting, desktop spreadsheets became the default choice. Individuals and organizations resist giving up their spreadsheets, so software vendors have come up with adaptations that embrace and extend their use. I’ve long advocated finding user-friendly spreadsheet alternatives.
One of the first adaptations was for application vendors to use a spreadsheet (either a grid format or Excel itself) as a user interface. In these products users seem to be working in a familiar spreadsheet environment, but the interface is tied to an application that has controlled business logic, formulas and workflows, and the data is held in a relational or multidimensional database. This approach can give organizations the best of both worlds: the familiarity of a spreadsheet but in a structure that addresses most of the technological flaws inherent in desktop spreadsheets. Yet this approach isn’t always enough. It is fine for business processes in which a third-party application is the appropriate choice, but in many other situations where people collaborate using the same model, analytical methods and data, a spreadsheet – not an application – is the better choice. Moreover, our research finds multiple reasons why companies continue to rely on spreadsheets. More than half (56%) of participants pointed to user resistance to change, and many others cited a business case that wasn’t strong enough (that is, the benefits of switching did not merit the costs) and a related issue: that alternatives are too expensive.
In collaborative processes where a spreadsheet is the most practical tool, another alternative is a technology developed by Boardwalktech. The company’s Collaboration Platform (BCP) products support a secure, two-way exchange of data between multiple users.
Instead of having to collect multiple spreadsheets through the email system and then combine them, BCP users can automatically share information at the individual cell level when they want. For instance, working offline in a spreadsheet model individuals can enter actual results and evaluate changes to a forecast or plan, playing with whatever what-if scenarios they see fit. When finished, they can connect to the Boardwalktech server and click to share the updated information with others in the organization. Those people will have immediate access to the changed data.
This approach offers advantages to the way most organizations collaborate with spreadsheets. For example, the exchange of data between spreadsheet users is immediate and takes place at the cell level rather than replacing the entire spreadsheet. Thus, unlike when spreadsheets are exchanged through email, updates can be automatic and far more secure. When spreadsheets are connected through a server, contention (that is, two people trying to change the same data at roughly the same time) is an issue. Most server-based spreadsheets (such as applications built on an Excel server) deal with contention by controlling changes at the file or record-object level, employing a check-in and check-out methodology or record locking to control concurrency. This means that an entire spreadsheet or large portions of it cannot be altered until one person has finished making changes. This process can cause substantial delays. In contrast, BCP enables concurrent, multiuser collaboration at the cell level. Especially in larger spreadsheets shared among multiple users, that can cut down on delays in updates and changes because multiple people can be making updates to different parts of the spreadsheet at the same time.
Another attractive feature of Boardwalktech’s approach – especially when compared with collaborating on spreadsheets over email – is that individuals can share only a portion of their spreadsheet (even just the contents of a single cell) with other individuals. Adam, for example, may want to share only a few lines of summarized information from his forecast with Betsy, who needs it to drive some – but not all – of her projections in her part of the business. Adam and Betsy have different spreadsheets with different row and column structures, yet the shared data remains synchronized regardless of the changes they make to their individual spreadsheets. Colleen, a business analyst, may have a complex formula that every other analyst must use, and this formula will evolve over time because of changing business conditions. David and Ed will always be using the same, correct and up-to-date formula in their own, individual spreadsheets that used by others in the organization without having to check for updates.
Boardwalktech offers several prebuilt templates that support inter- and intra-business collaborative processes. For the latter, one area in which a third-party application often is not a viable solution is where analytical models of data and reports must be shared between companies. Cost, implementation times, existing software environments and licensing issues often make that impractical. Browser-based solutions may be more difficult for people to navigate through compared with a spreadsheet, especially if substantial amounts of data must be updated and people need to enter data across multiple dimensions. As well, people in different organizations may use incompatible approaches to modeling that reflect the different needs of their organizations. The ability to share only essential elements of spreadsheets without having to homogenize models and data structures eliminates serious barriers to collaboration. In addition, even within companies these issues can come into play, especially for cross-functional processes or among different business units.
Boardwalktech’s products include configurations for processes where spreadsheets are heavily used today. These include sales and operations planning (S&OP), trading partner collaboration, supply and demand planning and sales and revenue forecasting. For finance organizations the company offers treasury and cash management and tax planning as well as budgeting and planning. There is also a project and portfolio management offering, which can be used by IT organizations, facilities management, R&D and others to plan, assess and forecast projects and project-like efforts. These can be deployed singly or in combination. One of the advantages of implementing, say, a sales and revenue forecasting application along with budgeting and planning is that the sales forecasting can easily tie in with the budgeting, meaning that these top-line numbers, which are managed by the sales organization, can be updated instantly in the budget and at whatever level of granularity is necessary. As well, Boardwalktech’s IT Process Platform allows companies to take any spreadsheet-driven collaborative process and eliminate many of the inherent defects.
In 2013 Boardwalktech had couple of key steps forward with new integration framework using its ‘SuperMerge’ technology and advancements to configuring templates that are used for access and input. Both of which help further embrace and extend use of spreadsheets. For most organizations, spreadsheets are an indispensable tool but they are not always the appropriate technology, especially when used in repetitive, collaborative enterprise-wide processes. It’s important to understand their limitations and not abuse them. In some cases, third-party or internally developed dedicated applications are the right choice. In others, embracing and extending existing spreadsheet-driven processes is the most practical approach. If your organization is currently using desktop spreadsheets for some collaborative business process, it probably is putting up with a host of issues that are the inevitable result of the spreadsheet’s inherent shortcomings. If so, I recommend evaluating Boardwalktech’s collaboration platform.
Robert Kugel – SVP Research