FinancialForce.com is a cloud applications company built on the Salesforce.com platform. Their apps include accounting and billing, PSA, ERP, HCM, inventory management, and SRP. At the Dreamforce conference, TrustRadius talked with Tom Brennan, SVP of Marketing, about the relationship between accounting and customer success management, the company’s recent funding, and the R&D advantage of working with the Salesforce platform, which Brennan sees as “winning the platform race.”
How did FinancialForce.com get started, and where is the company now?
The company started in 2009, with an investment from Salesforce and Unit4. Initially, the idea was to break down barriers between what Salesforce does, in the front office, with everything that goes on in the back office like accounting. FinancialForce.com’s main value is that front and back office apps are now on the same platform. For users that means one login, one set of workflow tools, and one set of reporting tools. From a data point of view, there’s only one customer record, so the information they put in Salesforce is the same they bill, invoice, and collect cash against as well. Companies have only one set of data to use for reporting; it greatly simplifies the business as a result. We started in the accounting space and then added professional services automation, supply chain and inventory, and human resources solutions last year as well.
Many of these products have been added through acquisitions. Is there a strategy behind the areas that you focused on with your acquisitions?
There are a couple things behind it. First off, the acquisitions were all Salesforce native apps. Usually, software acquisitions involve two different sets of code and two databases. That’s not the case here because we were partnering with all the apps before we bought them. We already had joint customers and the applications already worked together, passing transactions back and forth. So, it wasn’t the typical kind of acquisition that you see in this space.
Professional services automation was a big piece for us initially, and that app has been wildly successful. We run from mid-sized companies all the way up to companies like Hewlett Packard. Offering financial management and PSA together was great, but then we felt we needed to better provide additional ERP solutions for a lot of our customers who sell a product and a service. We got into the inventory side for those customers and then continued to add to the people side of our offerings with HCM, because service-based companies are people-centric. Now we’ve hunkered down on those main ERP apps, and we are filling in and adding more capabilities to them as we go.
So you don’t have plans to move forward into other spaces?
Not currently. From an R&D point of view, we’re going for more depth in our existing product lines. Plus, there’s so much that came to us from the Salesforce platform this week—that’s keeping us pretty busy for now.
Are there any themes to these new capabilities?
One of the best things Salesforce announced was Lightning Experience. For our whole set of applications, this means more than just a facelift. There’s lot of rich functionality to Lightning, but with a modern look and feel. By the middle of October, users will be able to choose between the classic interface or Lightning and frankly, that makes our products even more visually appealing than it was.
Also, we’re looking at usability—things like scrolling—and adding capabilities around that. We are also really excited about Components, which were featured in one of the Dreamforce Keynotes. Components allow users to build widgets and apps by pulling in different streams of information onto a dashboard.
We saw that you guys are adding in some BI capabilities and leveraging WaveAnalytics. Can you talk a little bit about that?
We’ve developed a bunch of prototype apps using Wave. Basically, Wave sits on top of all the data in our system, so we’re able to build dashboards to visualize and analyze that information. One of the apps is for supply chain-oriented customers, to measure delivery time and other key metrics for their business. Another is a financial app, focused on consolidating companies and letting users drill down into different operating divisions to see how they’re doing. We just showed this to a group of about 500 of our own users customers on Monday. We’re getting their feedback, which will give us some direction on how we can build out these apps from here on out.
Do these apps provide data visualizations?
Yeah. It’s a business intelligence tool but its strength is visualization. There’s no doubt about it. That capability is coming to our standard accounting product as well, and especially for SMBs, our financial analytics provide what decision makers really need. This look and feel is on our standard dashboards that we already have built. It’s very visually appealing and very graphical in how it expresses things. It just has a much more modern look to it.
Tell us a little bit about your customer base—who is your target customer?
Our customers range from small businesses to enterprise. Overall our product line is pretty wide, but in the small business segment, we sell primarily our accounting product. A lot of those customers aren’t ready for HR yet—if they have 15 employees or less, they can typically get by with spreadsheets.
Looking at the mid-market segment, that group of customers buys all of our products. That is our sweet spot for the full, FinancialForce ERP suite. In the enterprise segment, our primary product is the professional services automation app. We do a lot billing and revenue recognition up there as well. Most of the enterprise companies have not moved to full cloud ERP. They’ll take chunks of things one at a time; many will start out with FinancialForce PSA for example, especially if they have Salesforce running already. It’s a nice add-on to Salesforce, especially compared to moving to Oracle or SAP.
Within the mid-market are your new customers often purchasing a set of these products together?
Yes. We have a lot of customers that fall under what we call SRP (Services Resource Planning), and that’s typically accounting, professional services automation, and the hub CRM, and now we’re adding HR onto that as well. We sell that collection a lot. For distributors or value-added resellers (like a Cisco reseller—we have lot of customers like that) we’ll provide the whole inventory set of products plus financial, typically. In some cases, they’ll buy PSA too, because they sell a technology product, like a router, along with installation. Those are the main combinations we see. But some customers just buy financial, some buy just HR, and that’s the beauty of this. You can do it in components; you don’t have to buy them all.
FinancialForce.com received funding earlier this year. What are your plans for using that funding?
TCV and Salesforce Ventures were the funders on this—$110M total. By and large, we’re investing it across the company, because we’re growing quite rapidly. We had 450 employees last year, and we’ve added about 250 more this year. We’re putting people in R&D, consulting, professional services, support, and sales. We only added a few people on marketing, but they’re good ones. The growth has mostly been with those front-line positions.
What is the advantage of being built on Salesforce?
It’s like they’re our R&D organization. They build all the platform technology, and we focus on the business apps. This is really nice, because at the big companies I’ve been within the past, we had to worry about running our own platform. We don’t have to do that—it sort of rolls out to us for free, in a way. All of our competitors have to compete with Salesforce at the platform level, whereas we can focus on the apps.
Is there a risk in that strategy as well?
There is always a risk with every platform, whether we choose to do that on our own or not. But right now, my money is on Salesforce. They’re winning the platform race.
Are there trends in the technology space in general that drive the decisions you’re making?
There are some technology-driven things of course, like the whole social/mobile trend. In terms of business trends, we’re seeing companies getting top-down orders to synchronize their sales and services teams in order to improve the customer experience. That has been the impetus for companies like HP to buy our professional services app, because their salespeople and their services team were disconnected. The line is: you can sell what you can deliver, and you deliver what you sell.
You’re going to get better customer satisfaction if those two groups are in sync. What happens is that a sales team would sell something without knowing whether they had the bench to actually support it, and meanwhile, the consulting team is sitting there with no idea about what’s going be coming at them from a project perspective. For HP and companies like them, it was a matter of trying to smooth out the relationship between those two groups.
From a business perspective, there’s a lot of that type of thing going on. At Dreamforce, a lot of people are talking about Salesforce as a customer success platform. That leads into our value proposition very easily. Buyers aren’t looking for a new accounting system unless they have a very good business reason to do it. We get a lot of customers who grew up with Quickbooks.
Are most of your new customers greenfield, or are they coming from somewhere else?
In the bottom part of the market, we are mostly replacing solutions like Quickbooks, so those customers are coming on at entry level. They’ve typically had a lot of problems with reporting, the chart of accounts isn’t deep, the multi-company capability wasn’t very strong, or they’ve run into volume problems. A lot of them used Salesforce to sell something, but then a completely separate accounting system, and they had to re-key things from the Salesforce into the other system. As they tried to grow, their transaction volumes grew and they had to add more administrative people to deal with that. To avoid this redundancy and scale more effectively, they come to us.
PSA is the same way. A 50-person consulting firm gets to the point where spreadsheets can’t do it anymore. They can’t manage it all; they can’t even see their projects. It’s a huge stress that gets very painful at that level. We have some customers smaller than that, but 50 seems to be the number that knocks it over. HR picks up around 140 employees, again, where spreadsheets run out. They probably have a real HR Director and they need a secure record-keeping system.
Farther upmarket, we see a lot of legacy systems. People are getting tired of throwing their maintenance dollars away without even receiving much functionality, and they’re moving towards cloud for the rest of their business. Many of these customers have also built their own secret-sauce apps on the Salesforce platform, alongside CRM. Switching to our components makes sense for them, because we integrate with all of that.
Who do you see as your competitors?
Do you have customers who aren’t using Salesforce?
Yes. We do sell outside the base as well, but our value proposition resonates more easily when the customer is already using Salesforce. With Salesforce and any other product, they’d have to integrate. Most of our competitors are using multiple clouds; they’re not really one cloud.
But we also sell the platform to companies who are not using the CRM. Sometimes this happens with professional services. For example, we have a land surveying company where the engineers use our PSA app, but they’ve changed all the fields for their industry and they don’t use CRM at all. They like having the ability to tweak things, and the convenience of reporting and dashboards. In the PSA space, we see that use case quite a bit.
To share your own user insights about a FinancialForce product, write a review on TrustRadius. For more information about FinancialForce products and support, visit their website www.financialforce.com.