FinancialForce’s 2014 summer release incorporates improvements in mobile and collaboration features and provides enhancements to the planning dimension of its professional services automation (PSA) suite. In the last couple of releases the company emphasized expansion in the functional capabilities of its ERP suite, as I noted, focusing on human capital management and professional services automation as well as some supply chain automation capabilities.

vr_Office_of_Finance_16_next-generation_technologiesThe latest release uses the Salesforce1 platform to extend its mobile capabilities. These are increasingly important to executives and managers for reviewing information and drilling down into data such as orders, invoices and payments  to deepen understanding of the information. Mobile access also is useful for approving tasks or requests (such as expense report approvals or process review signoffs) regardless of where the users happen to be. Mobility is especially useful for anyone who is not always sitting at a desk or for connecting customers to the company in a secure and controlled fashion as they place orders or check on the status of their accounts. It is a capability that supports today’s “any time anywhere” management practices. However, FinancialForce has its work cut out in convincing finance departments that they need mobility. In our new Office of Finance benchmark research only one-third of participants said that mobile technology will significantly influence their future performance. (Only half have that opinion about cloud computing generally.)

Even fewer finance professionals are interested in technologies that promote and simplify collaboration, which is odd since most finance and accounting processes require collaboration. For that reason, I have argued that applications that support finance departments need a social media capability. Salesforce.com has been enhancing Chatter, its social business application, and FinancialForce has been adapting it to the needs of its target customers. Initially, social applications emphasized their broadcast capabilities, which is suitable for corporate-wide information, but collaboration requires narrow casting – making connections and information available to suit individual needs. This capability prevents people from being deluged with information (which substantially dilutes the collaborative value of a social application) and ensures that sensitive information is shared only with those approved to see it. FinancialForce also is making the actions more context-sensitive, able to understand which role or activity an individual is currently engaged in and which group or colleagues are relevant at that moment.

One important objective in managing a modern professional services organization is to minimize administrative overhead, for example for billing professionals (such as time and expense tracking). Professional services automation software is designed to do that as well as make it easier to manage the process of selling and fulfilling professional services from end to end. PSA also facilitates billing and accounting, ensuring accuracy and speeding up the receipt of funds. The enhancements announced in FinancialForce’s recent release aim to improve professional services group’s ability to manage staffing.

PSA suites that include resource and capacity planning also make it possible for professional services managers to monitor the availability of people to deliver contracted services. Resource utilization is especially important in determining the effectiveness and profitability of a professional services group. Lean staffing can generate fatter margins, but it can disappoint customers if resources are not available; an inability to optimize professionals’ time can quickly generate losses. Training is usually essential for new hires, so they’re not immediately profitable and companies are slow to let go of trained individuals when demand is slack. So it’s important for executives to have visibility into potential demand for services. Since FinancialForce’s PSA software runs on the Salesforce1 platform, professional services managers can look beyond already contracted services. They must be able to monitor potential resource demand (or lack of it) by extrapolating sales funnel data into forward-looking capacity calculations. As deals enter the pipeline, it’s possible for a manager to determine whether enough people with the requisite skills are available to fulfill the services demand. Where there is more demand than supply, these organizations can achieve a balance by adding people or determining how best to spread workloads. An important advantage in making these calculations based on the pipeline of business is that it provides necessary lead times to identify and hire the talent needed to meet demand. Not having such forward visibility can produce delays in starting projects because of a lack of resources (creating client satisfaction issues and limiting revenues) or guesswork about hiring needs (potentially diminishing profitability by underutilizing services personnel).

FinancialForce is a cloud-based application, so it’s particularly well suited to the needs of companies that have outgrown their 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. It can help midsize businesses – especially those selling business services – grow while minimizing the need to add administrative staff. Many companies with 50 to 500 employees still use basic accounting packages even though they have outgrown their process management, reporting and analytical capabilities because they hesitate to make the investment in an on-premises accounting package and the resources necessary to support it. Maintaining an existing accounting package might appear the safe choice, but it foregoes the operational and management benefits that more capable software can deliver. Cloud-based software usually entails a smaller upfront commitment and does not require ongoing reliance on staff to support a system. FinancialForce also is well suited for larger companies that have a professional services group with 30 or more employees who bill their time and expenses, especially those who engage in discrete projects. Salesforce.com users of all sizes can find FinancialForce components useful in automatically connecting their Salesforce.com processes with other enterprise systems in a managed and controlled fashion, without having to re-enter data. I recommend that they consider how this vendor’s products can help meet their needs.

Regards,

Robert Kugel – SVP Research

“What’s next?” is the perennially insistent question in information technology. One common observation about the industry holds that cycles of innovation alternate between hardware and software. New types and forms of hardware enable innovations in software that utilize the power of that hardware. These innovations create new markets, alter consumer behavior and change how work is performed. This, in turn, sets the stage for new types and forms of hardware that complement these emerging product and service markets as well as the new ways of performing work, creating products and fashioning services that they engender. For example, the emerging collection of wearable computing devices seems likely to generate a new wave of software/hardware innovation, as my colleague Mark Smith has noted. This said, I think that the idea of alternating cycles no longer applies. It would be convenient if we could assign discrete time periods to hardware dominance and software dominance, but like echoes as they fade, the reverberations are no longer as neatly synchronized as they once were. Moreover, adoption and adaptation of technology by consumers reflected in the design of work, products and services always lags – and lags in different ways, further blurring the timing of cycles.

Adding to the messiness, technologies enter the market and evolve in ways that seem designed to embarrass pundits. In the 1990s, Bluetooth was supposed to be the next big thing for wireless connections; Wi-Fi wasn’t on most radar screens. Today, Bluetooth has an important role, but Wi-Fi is bigger. Some heralded technology breakthroughs sink without a trace. Sadly, that has been the case for multidimensional spreadsheets like Javelin and Lotus Improv. Other technologies appear, are used in trendy ways and then become mainstream. Instant messaging and chat immediately replaced passing paper notes in class for teenage girls. While somewhat passé in this role today, they have become an essential tool in the workplace. Of course the rate at which technology is incorporated into mainstream business use varies greatly. The Internet became central to business and commerce at an astonishingly fast pace while earlier inventions such as voice mail took about a decade to become universal.

vr_sparse_use_of_advanced_analyticsSoftware has dominated as a driver over the past two decades, but devices and business process changes have become increasingly important in amplifying the impact and producing knock-on effects that spur innovations of all sorts. Smartphones and other mobile devices might have become another Minitel except that there were programming tools and business models in place (including the absence of top-down control and regulation) that spurred ingenuity, substantially enhancing the value of these devices and making them highly adaptable to personal preferences and individual business needs. Rapid and broad adoption of mobile devices has been driving change in business software to enable companies to utilize the value of these devices. Yet there are plenty of examples of how organizations have failed to change how they conduct business. Our benchmark research finds that companies have been slow to adopt better methods facilitated by information technology for planning and budgeting, closing the books, managing the workforces or handling customer interactions. Software-driven change will come in these areas over the next decade, driven in part by a generational shift as baby boomers retire, and more attention will be paid to cognitive ergonomics and the resulting increased attention to the design of the user experience in business computing, such as gamification.

Innovation in business often takes longer to appear than futurists hope. One part of today’s answer to the “What’s next?” question includes all the things that software marketing departments have been promising over the past decade or so that haven’t come to pass yet. Usually, this is because there is some confusion on the part of vendors between “easier” and “easy.” Many innovations and enhancements in business software have made them easier to use but not easy enough for mainstream adoption or easy enough to spur process innovation or a change in management practices. One example is advanced analytics. There have been steady improvements making it possible for many kinds of users to employ them in business, but most users today require advanced degrees or specialized training (although I have some hope for new mass market tools on the horizon). Consequently, our research finds that two-thirds of companies make little or no use of advanced analytics.

vr_ibp_few_companies_have_interactive_reviewsAnother example is in business planning. For all the discussion about changing budgeting and planning, practices have remained pretty much the same over the past two decades. One way to make planning and budgeting more useful is to make reviewing results more actionable. This could be accomplished more easily if organizations could immediately drill down into the details of the results rather than having to wait for follow-up information or debate what the likely causes might have been. Yet only about one-fourth of participants in our business planning research are able to get to the numbers behind the numbers while the meeting is under way. Improved software technology is making this easier to do. For example, many ERP vendors have changed the basic architecture of their systems to make them capable of handling transaction processing and analytical tasks at the same time. But technology alone will not make a difference. It will take a change in management and demand that periodic reviews be highly interactive to make a difference.

Even with hidebound management techniques, it’s likely that new devices coming to the market will be major sources of innovation, either those that complement existing business practices and consumer demands (which are obvious candidates for rapid adoption) or as a speculative venture. The loudest buzz is around the Internet of Things. This is an amorphous concept at the moment, and there are considerable technology hurdles that must surmounted for it to become practical (notably the limited address capacity in the IPv4 standard). Still, the concept has a good deal of theoretical appeal when one extrapolates the value already realized by increasing the scope of people-to-machine connections (such as for monitoring processes or the health of devices) and the variety and number of machine-to-machine control and instrumentation (for example, automatically tracking physical assets and optimizing machine performance by monitoring conditions).

As I mentioned earlier, wearable computing is another emerging area of innovation. Thus far, it has had more allure than demand, but that was true also for the personal digital assistant, which had a few notable flops before catching on and becoming a mass-market device, eventually to be subsumed into the smartphone. Devices are already being worn for health, entertainment and augmented reality purposes. Bracelets, fobs and glasses have considerable scope for use in business settings, for consumer applications and for wellness. Glasses and wrist devices in particular have the ability to augment the utility of any computing device as sensors or for input/output. A computer screen is rather like a keyhole through which one “looks” into the computing device. Dual screens are now commonplace because this expands the breadth of view of the user. Glasses can broaden the scope of view considerably more, improving the ergonomics and expanding the utility of any computing device. Any of these devices could augment the capabilities of software applications. They will give software designers added scope to enhance the capabilities and usability of applications.

So the answer to “What’s next?” in business computing probably is “ A lot – and sooner rather than later.” There’s a tendency to view current technology in terms of the major advances of the past. If that is any guide, today’s information technology will soon appear pitifully primitive. Consumer use of technology has outstripped that of business, in part because multiple individual needs are generally less difficult to serve than that of an organization and the tasks the technology performs usually are far less complex: They’re apps, not applications. Yet business computing is on the cusp of a fundamental shift in which devices and software are powerful enough to adapt to the needs of users. In the past, business computing was defined by the limits of information technology and required that businesses adapt to those limitations. Everything from a richer and more enjoyable (or at least less painful) user experience to the transformation of accounting systems from paper-based analogs to a truly digital ledger has the power to change for the better how businesses operate.

Regards,

Robert Kugel – SVP Research

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