By Lisa Guerriero
Providers of financial applications increasingly embrace the latest trends, cloud and software as a service (SaaS), business analytics, and mobile access. These trends shape the development of financial solutions as well as the way in which businesses interact with software.
In many ways, these trends are linked, meaning developers need to create holistic solutions for clients. Integration is key, whether it’s making a Microsoft Excel file accessible on a tablet or making an on-premises system interact with the cloud in real time.
Providers of financial applications say the cloud offers advantages to their own operations, as well as to their clients.
“The trail to cloud solutions has been blazed by smaller, discrete point solutions and is gaining greater traction in broader applications. Having a clear understanding that software has to be developed ‘cloud first’ certainly delivers clearer direction. Successful solutions will be those that fully embrace these new imperatives,” observes Malcolm Fox, VP, product marketing, Epicor Software Corporation.
Dave Kasabian, CMO, Tagetik, says cloud-based solutions are usually easier to deploy, maintain, and support. “These advantages certainly translate into customer benefits; cloud-based solutions are generally more up to date, easier to upgrade, and easily scalable,” he notes.
In addition to a traditional SaaS offering, Tagetik’s Enhanced Cloud offers several benefits to ease clients’ transition to the cloud. These include a dedicated instance to provide an extra layer of database control; an environment for testing updates or system changes before roll-out; and giving the client the ability to choose when software updates or new features are implemented. “We believe that the most important differentiators are directly related to the solution’s functionality,” says Kasabian.
NetSuite’s cloud business management software is written using a single-code base, which means developers are always on the same page. “There’s no danger, as happens in the on-premises world, of developers working on multiple different versions of a piece of software,” says Daniel Miller, GM of software vertical and VP of finance, NetSuite.
Similarly, the company’s software uses a single data model, which allows developers to build customized functionality for their clients by combining different blocks of data from across their suite. The result, Miller says, is that new functionality is introduced more quickly, and systems can be integrated more easily within an enterprise.
Now that the cloud market is maturing, larger clients are more inclined to allow their data to live off-premises, says Wayne Snell, VP, Trintech. “As adoption of cloud-based solutions has become more commonplace and security protocols have matured, these same organizations realize that the efficiencies created by a cloud-based solution are highly advantageous.”
Integration is key. “Understanding that many of our consumers are tied to enterprise resource planning (ERP) systems such as SAP and Oracle, we knew it was essential to develop our software to be certified as fully compatible and integrated with these platforms,” observes Snell.
As the cloud begins to mature, it continues to push SaaS to evolve, and application providers can’t say enough about client benefits.
“If you are a fast-growing business looking for software to better run your business operations, SaaS solutions are a no-brainer,” says NetSuite’s Miller. He notes that the benefits of SaaS-based programs are extensive, including, “real-time visibility into critical business metrics; anywhere, anytime access through desktops, mobile phones, or tablets; integrated solutions that provide a complete picture of business performance, driving better decision making; improved productivity; automatic upgrades; no need for server maintenance, freeing employee time to focus on solving business problems; and lower up-front cost and total cost of ownership in comparison to on-premises solutions.”
A SaaS approach benefits clients by covering all the bases, Tagetik’s Kasabian observes, including infrastructure, back-end software, and regular updates that provide a better user experience and added features. “Customers also benefit from scalability and performance advantages. The best SaaS vendors constantly monitor and optimize both to ensure their customers have the best experience with the software,” he notes. Another advantage is security. Kasabian says SaaS applications offer better security than the vast majority of companies’ own firewalls. “Diligent SaaS vendors engage third-party companies to regularly audit performance and deploy the most rigorous security procedures to protect their customers and their own interest,” he explains.
One challenge to the cloud approach is making sure that vendors serving different function areas are integrated effectively, with mutual real-time data feeds between their applications—otherwise the customer shoulders the burden, notes Miller. “We ensure that through our SuiteCloud Developer Platform. Before any software upgrade, developers have to test that all their customizations and interfaces to NetSuite still work, keeping everything in sync and ensuring no functionality gets broken,” he says. The maturation of cloud applications is making it easier for developers to maintain customization in the face of software upgrades, and to handle tools for master data management, he adds.
While SaaS providers are, naturally, proponents of cloud solutions, they recognize that not every client is ready to migrate to a fully cloud-based financial application. For that reason, they usually offer versions of their solution—cloud, on-premises, and hybrid—that are analogous.
“We certainly see some of our customers taking a hybrid approach and that’s not going to change any time soon. Organizations with hybrid environments tend to have made significant investments in on-premises software which they’ve then also heavily customized,” notes Miller.
Other clients may want to keep key applications on premise, and have the resources in place to do it effectively, says Kasabian. Companies working in heavily regulated environments, such as pharmaceuticals, are examples of this. In addition, many companies “have initiatives to outsource their infrastructure to the cloud in ways that give them control of their environments,” he notes.
Trintech’s primary solution is cloud-based, and Snell agrees that the SaaS approach holds myriad benefits. To him, the drawbacks are usually “emotional” ones, such as those resulting from publicized data breaches. “When analyzed, one realizes that with the sheer volume of data flowing daily across the globe, these are truly the exception, not the rule,” says Snell. “Although this is changing, many Trintech clients currently take a hybrid approach towards their systems, allowing the ERP or other back-office type technologies to remain behind the firewall and run their financial close efforts completely within the SaaS environment. This breaks down the borders/barriers across the organization, allowing instant access to appropriate financial information at any time from anywhere in the world.”
Most providers agree that applications need to be adapted to suit the customer’s needs—not the other way around—and hybrid solutions are not going away.
Epicor says solutions need to be tailored to fit the client’s needs, whether on-premises, cloud-based, or a hybrid. They also need to be adaptable if the customer’s needs and resources change. “At Epicor, we believe in the concept of choice by delivering a single solution regardless of how it is deployed,” explains Fox. “With Epicor, as company situations evolve, the deployment model can also evolve without needing to switch to a different solution.”
3C Software, though not currently a SaaS provider, believes a dual approach is often a logical choice, and one they’re happy to be part of. “We believe that there is room for both SaaS and on-premises solutions. Speed and performance are just as important as access to information, so we find that a combination of the two often give the best option for companies with complex costing and profitability analysis needs,” explains Matthew Smith, president/CEO, 3C Software.
If the cloud serves as a vessel for a company’s information, data tools are what makes it rain—though the cloud isn’t the only way to access information for analysis.
Trintech’s Snell says automating financial procedures has freed up executives to focus on capitalizing on data. “Being free from these daily burdens, management now has the time and visibility through dashboards to focus upon analyzing that data and ultimately leveraging the results to create greater operational efficiencies across their organization,” he notes.
Seal Software’s Contract Discovery and Analytics solution deals with unstructured text. It locates all contractual documents from the enterprise and then automatically extracts key terms and clauses, “rendering them for easy review, and populating other corporate solutions including customer relationship management and contract lifecycle management with these critical terms and clauses as needed,” explains Lloyd Alexander, VP contract strategy, Seal Software.
When a user “asks” the system a specific question about contract terms, the Seal solution responds—utilizing language extraction, non-standard clause detection, and clause combinations—by locating all relevant terms for the user to review. Alexander says the result is that, when leveraged on an ongoing basis, Seal Software clients can uncover “those key pieces of information residing in unstructured contracts that can greatly impact a company’s risk exposure and revenue.”
At 3C Software, the solution assesses a client’s data to promote understanding of the raw information, but also to anticipate what’s next for the company. “Scenario analysis and predictive modeling capabilities are a part of just about every implementation of our solution. It’s not enough to report past performance anymore. Finance leaders need the ability to quickly understand the impact of changes to guide their decisions; and the tools to perform this analysis must leverage real data and use assumptions consistent with the company’s business process,” observes Smith.
Using its ImpactECS platform, 3C Software customizes solutions for multiple industries, including financial services.
Tagetik also believes financial applications need to leverage data to promote better decision making by clients. “They should facilitate financial and operational performance management, tying the key indicators across departments. Intelligence should also be embedded to turn raw data into a valuable asset for the CFO,” says Kasabian.
He cites Tagetik’s analytic functionality as key to that mission, allowing users to model the effects of different investment scenarios, financing options, production capacity changes, and other variables. “The full impact on profit and loss, balance sheet, and cash flow can quickly be modeled giving the full picture of various scenarios. All of this resides directly in Tagetik so there are no external, offline monster spreadsheets with static data and PhD-level Microsoft Excel formulas to manage,” offers Kasabian.
In-memory technologies help by allowing a solution to process large volumes of data in real time, notes Kasabian, adding that Tagetik “is the first corporate performance solution to run natively on SAP HANA.”
Many businesses are just beginning to capitalize on their financial data.
Epicor’s Fox believes that although analysis tools can accomplish things that would have been complex and daunting in the past, many enterprises aren’t yet making the most of data—let alone big data. “The current usage of big data has yet to really cross the chasm from ‘analyst hot topic’ to ‘customer imperative,’ particularly in the mid and upper-mid market,” he observes. “Many organizations have not fully come to terms with meeting more modest demands for more traditional information analysis and business intelligence.”
Fox believes vendors of financial applications can help by providing tools for clients to make sense all their data with “a reasonable level of structure,” from their internal systems. “Quickly making sense and identifying trends within such internal data and then being able to model that data to deliver insightful projections remains a largely un-fulfilled requirement, though recent advances in data storage and visualization tools are moving us much closer to real-world solutions,” he says.
Seal Software’s mission has been to move clients beyond a familiarity with the concept of big data, to emphasize the value of intelligent data within their contracts. “2015 will focus on empowering the end user to configure their own unique models to quickly and dynamically access the data themselves,” forecasts Alexander. “Furthermore, we will continue to enhance the end-user capabilities in leveraging this data to drive intelligent decisions.”
Trintech’s Snell believes the demand for accurate, comprehensible data will continue to grow. “Regulatory requirements combined with the need to satisfy stakeholders have created a sense of urgency around data and accuracy. These global pressures will only continue to increase.”
The Mobile Mandate
For providers of financial applications, a priority is making sure their services and products can be optimally utilized on any device. “The focus is on the enabling architecture and technology foundation to readily support the growing range of devices in use within the organization today,” says Epicor’s Fox. “Responsive design and continuity concepts—such as handoff from Apple—are becoming increasingly essential to deliver engaging solutions that can be consumed the way users want to work.”
Kasabian agrees that financial tools need to do more than just show up on a tablet or smartphone screen. “It’s not enough to make a solution technically accessible via mobile devices; the user experience needs to match the capability, navigation functionality, and screen size of each mobile device,” he notes. Tagetik 5 utilizes HTML5 so users can interact with Tagetik on any computer or mobile device.
Solution providers need to keep pace with technology trends, says Trintech’s Snell. “Put simply, if our clients are using tablets and mobile devices to manage their financial operations, our solutions must be enabled to run on these platforms. That is why we launched Cadency Mobile to allow our clients to not miss a beat when they are on the move.”
Access to cloud-based operations is important to delivering more mobile-ready services, according to NetSuite’s Miller. One of the company’s goals is mobile development across its entire cloud business management suite.
The shift to mobile also influences changes in the payment space, according to Miller. “I believe we are seeing the start of a transition here with U.S. banks finally moving away from paper-based checks. In part, mobile is driving that move and it’s a change that will continue to expand from B2C to include more B2B to support much higher transaction values,” he observes, noting the debut of Apple Pay and increased usage of the Bitcoin.
Trends Shape B2B
Data leveraging, cloud solutions, SaaS, and mobility all influence the way enterprises function, and part of that is the way they interact with other businesses. “Consumer trends such as mobility, collaboration, and the cloud strongly influence business applications. No company can ignore the pressure from users for applications that work across the device or devices of choice, and help drive greater collaboration with a light footprint that can be accessed virtually anywhere,” says Fox.
The cloud/hybrid approach often comes back into play in the way B2B enterprises interact with their clients. “What we’ve found in B2B enterprises is a desire to stratify how they interact with their customers, which plays to a hybrid environment.
The push for data, in turn, fuels B2B trends. “While consumer trends don’t specifically impact our product development path, the types of analysis we provide directly affects how our customers compete in the marketplace,” notes 3C Software’s Smith.
The emphasis on mobile also influences B2B applications. Businesses want B2B applications that are simple, easy to use, and enable a mobile workforce. “If software providers don’t keep up with consumer trends, they risk providing obsolete solutions that don’t meet the requirements of today’s end user,” says Miller. NetSuite’s “self-serve” B2B e-commerce capability allows NetSuite clients to reduce sales costs by having customers complete their own renewals and upsells. “Many of these high-volume orders require zero touch and resemble a B2C-like model,” adds Miller.
Tagetik’s Kasabian, too, has observed mobile access and real-time analytics affecting B2B financial applications—as well as user expectations. Other trends of note, he said, include the demand for self-service and on-demand reporting, ongoing demand for faster processing, customized interfaces for business users and stakeholders, expectation for greater levels of integration, and an overall consumer-like look and feel.
Financial applications have come a long way, but they’re still evolving. Users want information accessible anywhere—delivered in real time. Making that process a smooth one, and making it possible when multiple systems are in play, will continue to be a goal in the next year. SW