FSN Interviews Jeremy Roche, CEO FinancialForce.com

1st February 2013

FSN Interviews Jeremy Roche, CEO FinancialForce.com

FinancialForce.com is a leader in the rapidly growing market for cloud-based financial management and professional services automation (PSA) applications.   The business, is jointly owned in the United States by Salesforce.com and UNIT 4 (both publicly quoted companies) imbuing the organisation with a unique combination of the latest thinking in cloud deployment and a deep heritage in the provision of dependable accounting applications.  In this interview,  Gary Simon, FSN’s managing editor talks to Jeremy Roche, FinancialForce.com CEO about the company’s strategy and how the latest developments in cloud, social tools and mobile delivery are redefining how successful companies do business. 




So what is FinancialForce.com’s strategy?

“In a nutshell we are a cloud applications company dedicated to building back office applications in the cloud that allow organizations to grow and scale their operations quickly and cost effectively as well as leveraging social and mobile technologies”, says Jeremy Roche.

But is FinancialForce.com  highly differentiated from the cluster of small cloud-based vendors such as Twinfield, Xero, E-conomic and others?

 “We rarely compete with these companies or even the QuickBooks and Sage. We see ourselves as the natural progression when organizations have outgrown low-end bookkeeping and accounting systems.  If we meet these companies in competition then one of us is in the wrong place,” says Jeremy.

“We sell to organizations with 50 employees or more although we do have smaller businesses in our user base.  Our largest customer for our accounting application has 300 users.  When it comes to professional services automation, for example consultancies, the spread can be anywhere from 40 consultants to several thousand users.  Our biggest customer has 5,000 users.”

So why aren’t other global software vendors persuaded by the merits of a cloud business?

“Because it’s difficult” replies Jeremy.  “UNIT4, our parent company, wanted to maximise the benefits of its investment in accounting software and Salesforce likewise wanted to maximise its investment in the Force.com platform.  But it’s economically and operationally challenging to move from a business model predicated on an upfront perpetual software licence to an annual subscription model in which the revenue is earned well into the future.”

“I think the FinancialForce.com venture was visionary.  The temptation could have been to simply slide a cloud business in with everything else, but how does it create market space for itself? So we decided to set up a separate entity – unlike say, SAP and Oracle”.

“It also requires a change of mindset and metrics.  The planning horizon stretches out at least two or three years as the impact of new business now isn’t truly felt until some way into the future,” adds Roche.

“The cloud market is also less clearly defined.  The competitor landscape changes all of the time because the barriers to entry are so low,” he adds. “Our biggest threat is the competitor that we haven’t seen yet,” he adds.

The benefits of the cloud are compelling – so why is there so much market inertia?

“Large companies with, say,  wall-to-wall SAP and Oracle can find themselves locked-in, unable to make wholesale change in their ERP systems and unable to take advantage of newer more functional applications in the cloud that could not only save cost but also add to top line growth.”

“So for these companies we focus on complete business processes that can be moved to the cloud, for example, billing, or time recording.  And with our open architecture we can post the resulting journals back to their traditional on-premises ERP or general ledgers.”

“On the other hand, smaller companies are more inclined to move the whole of their accounting function into the cloud.”

Interestingly Jeremy is noticing a widening gap appearing between the demands faced by companies at the leading edge of e-commerce and the capabilities of their ageing ERP investments. The shift from traditional bricks and mortar retail trading to e-commerce is having a profound effect.

“We are seeing retailers, media companies and others in fast growing consumer markets coping with quickly changing business models that generate transactions in type and volume that on premise ERP systems simply cannot handle.  Companies will have no option but to move to the cloud.”

What about the integration issues?

“We are quite happy to work with companies that have multiple or hybrid computing environments. We often integrate to other cloud or on-premises based apps. We are not tied to the Force.com (Salesforce.com platform) or the suppliers in that arena, though of course we have pre-built interfaces to many of the applications in their AppExchange. We’ve also rolled out a new tool call ClickLink™ which allows customers to quickly integrate apps, including their own custom apps, without writing a line of code. ”

“In fact UNIT4’s heritage in ‘Best of Breed’ applications (primarily through Coda Financials) has given it a head start in managing the complexities of multiple vendor environments.  The only difference is that now these environments are more likely to straddle the cloud and on-premises world.”

“In effect the cloud is an enabler of best-of-breed solutions.  We are coming full circle and best-of-breed is becoming more popular than monolithic ERP.”

How is the cloud influencing the way that people work?

“I’m excited by the cloud’s potential for profoundly affecting the way that businesses work, particularly when combined with mobile technology and embedded social tools.”

“All our applications are mobile but it’s a complex environment as devices continue to change. As developers we have to contend with a large variety of device sizes and operating systems.  At the moment we focus on iOS and Android.  But the business case for each device depends heavily on the application.  You’re not going to browse dashboards and management reports on a mobile phone but that’s an ideal application on an iPad.  On the other hand a consultant in the field using a PSA application will welcome the ability to record an expense as it’s incurred or submit a time sheet entry as he is rushing through an airport terminal holding a phone.”

“Social tools hold out the prospect of huge leaps in productivity and knowledge sharing but the “social” label can sometimes be unhelpful in a business context because it is easily misinterpreted.  So, for example, our collaborative project environment in our PSA application is simply called a Project Wall.  It’s a place where consultants can share project information with each other and even ‘turn the wall around’ and share information with their clients.”

“All of our applications come embedded with “Chatter” as part of the Force.com platform. Embedded social tools hook people and processes together.  Even a journal entry can be the focus of collaboration in the finance department, allowing users to record the reasons behind the journal and the judgments made at the time.  Other users can go back to the transaction and immediately understand why it was posted, what issues were discussed and by whom.  So embedded social capability can not only strengthen the audit trail but also encourage knowledge sharing,” Jeremy concludes.

FinancialForce.com is an exciting company in the cloud space for accounting systems.  But unlike many start-up vendors in the field its strength is derived from its deep heritage in best of breed accounting, its formidable technical capability in integration and cloud-based deployment, coupled with the backing of two well regarded public companies.  For the moment its credentials look virtually uncontested in the upper mid-market and as the cloud gathers strength, FinancialForce.com looks well poised for growth.


Gary Simon, Managing Editor, Financial Systems News (FSN)