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FinancialForce targets professional market

23rd Mar 2011
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Cloud applications provider FinancialForce has introduced a professional services automation (PSA) offering that builds on its purchase of Appirio's professional services arm last December.

Appirio’s PSA applications have been rebadged as FinancialForce Professional Services Automation and represent the developer’s first move into new vertical markets. Plans are in hand for a follow-up release that links the Cloud financials functions to’s CRM offerings. This version will be called Service Resource Planning (SRP).

A program that originated from UNIT4’s CODA division in Harrogate, was the first financial application to migrate to Salesforce’s development platform. It subsequently relaunched as a joint venture between UNIT4 and Salesforce, with the latter taking a majority stake.

Tom Brennan, the firm’s new vice president of product marketing, explained the rationale behind its change of strategy: “We see wider opportunities to develop applications in the market beyond accounting, but because we use the platform, unlike most of our cloud rivals that are trying to compete with Salesforce, we can focus on the applications and don’t have to worry about the plumbing.”

Brennan explained why it prioritised professional firms for its first vertical market release: “We found that Salesforce has a penetration level of about 35% in professional services, which is attractive to us, especially because a lot of people are using a lot of fragmented systems: one for CRM, one for PSA and another for accounting. But both accounting and PSA have to be really customer-focused so it’s important to have an effective end-to-end solution.”

To reflect the importance of the new business line, the firm set up a Professional Services Enterprise unit last month and appointed Todd Bursey, former head Appirio’s enterprise business, as its general manager.

Accounting and PSA will be FinancialForce’s “short-term focus” over the next year, according to Brennan, but the firm also intends to move into up to three new verticals.

“We’ve got lots of opportunities to capitalise on. Some units take more concentration and resources than others and the PSA product has specific broad and deep functionality. Others will be more of an add-on to accounting and so will go into that unit,” he concludes. “But we’ll certainly be targeting more verticals as we define ourselves as an applications company. We want our applications to be as vertically focused as they can be.”

Brennan joined the company last month along with new financial controller Jim Carney, who was previously vice president of financial operations at Comcast Cable Communications. has 75 staff split between offices at headquarters in San Mateo, California; Manchester, New Hampshire; and Harrogate, Yorkshire. Development work is centred at the Harrogate office, which is likely to become the company’s European headquarters as it expands during 2011.
Brennan acknowledged that software as a service (SaaS) take-up was slower in accountancy than in other sectors such as CRM, email and collaboration tools. Accountants may be “naturally more conservative”, he said, but the situation was changing as more companies moved to “virtual” ways of operating to reduce overhead costs.

“The biggest adoption areas are among those customers realising that they need to automate the gap between CRM and accounting,” said Brennan. Many customers were start-ups that relied on pay as you go systems to manage costs during their early phase growth.

NetSuite, too, is already targeting the PSA market. In a recent blog NetSuite product strategy vice president Edward Marshall had a pop at his rival’s claims. “SRP is a great idea — that’s why NetSuite invented the category and has been offering SRP to the professional services industry for nearly a decade,” he wrote.

“NetSuite customers of all sizes - from 10 resources to more than 10,000 - use our sophisticated Cloud solution to help streamline their business. We haven’t encountered either FinancialForce product in the marketplace, which leads me to believe that they are targeting very small companies that need rudimentary functionality. I imagine that customers locked on a captive platform feel required to live with the limited solutions available on that platform, and that the FinancialForce offerings fall into that category.”

Following it's December deal with FinancialForce, Appirio has spent some of its windfall acquiring implementation consultancy Infowelders. The acquisiting is expected to boost Appirio's mobile cloud development capabilities and add six applications to its family of reusable software components.


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