Chief Product Officer Dan Brown(left) and CEO Tod Nielsen at FinancialForce Community Live
Chief Product Officer Dan Brown(left) and CEO Tod Nielsen at FinancialForce Community Live

Midmarket ERP applications vendor FinancialForce is reinforcing its emphasis on professional services automation, while stepping up efforts to win the race for transforming the back to front-office business processes with enhancements from advanced analytics to personalization.

The moves follow a raft of new releases (four over the past 12 months) that closely align FinancialForce with its key investor Salesforce by incorporating features like Salesforce Einstein for analytics and its Lightning user experience into its core offerings.

For the past decade, FinancialForce has made significant inroads into the PSA market with hundreds of customers including big companies like Cisco, IQVIA, and JLL that have purchased hundreds or even thousands of seats. Currently, FinancialForce reaches an estimated $125 million in annual revenues and close to 1,500 customers, nearly doubling its size since 2016. PSA now accounts for as much as 60% of its revenues.

At its recent Community Live event, Dan Brown, chief product and strategy officer of FinancialForce, was unequivocal in its ability to deliver No. 1 professional services automation and the only customer-centric ERP. The assertion was noteworthy coming from someone who joined FinancialForce in September 2017 after spending nearly a decade at Microsoft leading its ERP product lines.

 The race to dominate the PSA market is becoming more intense than ever. Over the past year, Microsoft has been beefing up its Dynamics 365 Cloud services with embedded ERP capabilities for finance and operations and project service automation, essentially wrapping its popular Dynamics CRM apps with the best attributes of its ERP offerings including AX, GP and NAV into a single Cloud bundle. Since the unveiling of the all-encompassing packaging in 2018, Microsoft has signed hundreds of these customers running D365FO for finance and operations and D365BC for business central, the same group of users that FinancialForce is targeting.

Upping the ante, Brown said FinancialForce has delivered over the past year dozens of new features like skills hierarchy and skill sets, PSA-specific analytics, and Gantt 2.0 for project management to round out its best-of-breed PSA positioning.

FinancialForce is embracing Salesforce’s technologies like Einstein and others to deliver a much richer experience for users with new functionality like consolidated billing and collections automation as well as role-based workspaces with embedded analytics. Raphael Bres, vice president, product management of FinancialForce, said it is making such enhancements like role-based workspaces available to customers at no additional charge in order to raise the bar for rivals like Microsoft Dynamics 365FO.

In addition to Salesforce, FinancialForce is signing up scores of ISV and integration partners in an expanding ecosystem that includes developers like asperato for payments, Zimit for quoting and Conga for contract lifecycle management, along with long-time partners ADP, Appirio, and Avalara.

Such openness to other ISVs is critical to FinancialForce. Some of its customers might prefer to run collaboration tools like Slack over Salesforce Chatter and FinancialForce supports both. The recent changes in its ownership structure is also giving FinancialForce more flexibility to pursue new PSA and ERP opportunities.

CEO Tod Nielsen said PE firm Advent International now owns 57% of FinancialForce, taking over the stake previously held by European ERP and PSA vendor Unit4, which has never clearly defined how and where the swim lanes between the two should be drawn. Technology Crossover Ventures (TCV) and Salesforce own the remainder of FinancialForce.

Nielsen added FinancialForce continued to show growing momentum by signing more than 300 new customers as its renewal rate hit 92% last year.

The bottom line is that FinancialForce has a lot riding on its growing presence in the PSA market by capitalizing on the strengths of Salesforce, whose CRM is widely used by professional services divisions within tens of thousands of technology and software companies. At the same time, FinancialForce is considered a neutral player in the ERP marketplace, unlike the restraints or prerequisites of Microsoft, Oracle and SAP, along with their proprietary technology stacks that they have placed upon their customers.

For example, IQVIA, a health information and clinical research company with 55,000 employees, is rolling out FinancialForce across its many divisions, which include the former Cegedim unit in Europe. Before it became part of IQVIA, Cegedim, an on-premise CRM vendor for the life sciences vertical, competed against Salesforce. Now IQVIA is standardizing on Salesforce for CRM and FinancialForce for PSA even as it struggles to run different ERP instances of Oracle and SAP on the back end, according to our Buyer Insight Master Database.

List of FinancialForce Customers

Customer Industry Empl. Revenue Country New Product
Cincinnati Bell Media 3500 $1.29B USA FinancialForce ERP
Consolidated Edison Utilities 15591 $12.03B USA FinancialForce ERP
Cvent Professional Services 2500 $187.0M USA FinancialForce ERP
Daily Mail & General Trust Plc Professional Services 9600 $2.60B United Kingdom FinancialForce ERP
Marketo Professional Services 1177 $210.0M USA FinancialForce ERP
NewVoiceMedia Professional Services 360 $65.0M UK FinancialForce ERP
Avid Technology Media 1670 $677.0M USA FinancialForce PSA
Blackbaud Professional Services 3156 $730.0M USA FinancialForce PSA
Cincinnati Bell Media 3500 $1.29B USA FinancialForce PSA
Hewlett Packard Enterprise Professional Services 66000 $29.50B USA FinancialForce PSA
Hyland Software, Inc. Professional Services 2100 $600.0M USA FinancialForce PSA
JLL Construction and Real Estate 82000 $7.93B USA FinancialForce PSA
NewVoiceMedia Professional Services 360 $65.0M UK FinancialForce PSA
Red Hat Professional Services 7950 $1.53B USA FinancialForce PSA
Salesforce Professional Services 21587 $6.67B USA FinancialForce PSA

Source: Apps Run The World, June 2019

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