- Cloud deployments dominate service-centric ERP sales, with less than 5% of Gartner clients interested in acquiring or maintaining premises-based systems.
- According to Gartner, the global ERP market will grow from an estimated $35.5B in 2021 to $50.9B in 2024, attaining a Compound Annual Growth Rate (CAGR) of 12.7%.
- Financial Management Solutions (FMS)-based ERP systems sales are predicted to grow from $13.15B in 2021 to $18.43B in 2024, attaining a CAGR of 11.94% (Gartner).
- Covid-19 forced a 4.6% reduction in global enterprise software spending this year, although projected worldwide enterprise software spending is predicted to rebound well, reaching $211B in 2021, increasing to $321B in 2024, achieving a 15% CAGR (Gartner).
CFOs Need Real-Time Revenue, Costs & Operations Data
Knowing how much of a revenue forecast is real and how each deal in the pipeline will affect financials is what professional services Chief Financial Officers (CFOs) worry most about today. Protecting professional services margins takes a multifaceted view of financial performance, starting with cash flow analysis, resource allocations, and improvements to the contract-to-revenue process.
Further steps to protect profitability need to include the ability to customize spending guardrails for projects, controlling spend in procurement, order & inventory management, and smoother sales-to-services handoffs. CFOs also want to know how much it costs to deliver an excellent customer experience and if it is worth it or not. Ultimately, they want real-time visibility across all professional services, financial accounting, and analytics systems to identify real-time risks to avert cost and margin drains on profitability.
Which Market Needs Defining Services-Centric ERP’s Future
The cloud has solidly won the platform war for services-centric ERP and professional services automation (PSA) ERP deployments across organizations of all sizes today. 95% of Gartner clients are steering conversations to cloud-based solutions over on-premise. That’s being accelerated by professional services organizations’ need to become virtual as quickly as possible.
Professional services businesses’ lifeblood keeps customer relationships strong with open communication, collaboration, and a true commitment to delivering valuable customer experiences. Cloud platforms, including Salesforces’ are proving effective in keeping customer relationships alive and giving professional services companies the platform they need to serve them.
The following market needs are defining the future of ERP in services-centric and professional services automation (PSA) ERP deployments:
- Capitalizing on AI’s innate strengths to aggregate diverse, unstructured data sets and deliver accurate risk assessments to revenue and cash flow. FinancialForce’s Risk Tracker represents the new tools being developed in response to CFO’s needs for AI-based real-time risk assessments based on multiple data sets. Based on the Salesforce Einstein platform, Risk Tracker relies on unstructured data from the FinancialForce ERP, PSA, and their Salesforce CRM chatter feeds. FinancialForce chose to rely on Salesforce Einstein from the platform to the presentation layer of the Risk Tacker. The result is an intuitive application that provides an aggregated view of risk that’s exactly what senior management teams are looking for in professional services. FinancialForce is making the Risk Tracker available for free on the Salesforce AppExchange. The following is an example of the Risk Tracker’s intuitive interface:
- CFOs need greater flexibility in personalizing reporting analytics that provides greater insight derived from AI and machine learning (ML) techniques. Advanced AI and ML algorithms can find emerging anomalies in financial data then provide real-time alerts to avert losses. Offering intuitive, systematic guidance on creating metrics and Key Performance Indicators (KPIs) combined with AI and ML designed in is another urgent need CFOs have today. Look for future releases of services-centric ERP systems to go beyond providing personalized metrics and have the ability to auto-detect errors in journal entries and reconcile them.
- Contract-to-revenue, including account reconciliation, are two areas where automating key tasks would deliver greater time and cost efficiencies with AI. FinancialForce’s recently announced Revenue Trend Prediction and Forecasting and Aged Analysis Report based on Salesforce Einstein is a step in the right direction by reducing manual reconciliation and data export for speeding up period close gets CFOs back their evenings and weekends at the end of the month.
- A greater reliance on modern user experience (UX) and Graphical User Interface (GUI) standards across services-centric ERP to improve usability and drive greater adoption. Nearly every ERP provider is spending R&D, engineering, and product development budgets to improve their user interfaces, role-based customizations, and persona-based workflows. User experiences must be transparent and identical across mobile, laptop, tablet, and any other device. Salesforces’ Lightning Experience (LEX) is versatile enough to support personalization without sacrificing speed. LEX Developer Guides provide templates and sample code to help developers get the highest performance possible.
- Improve services project management by using AI to identify and stop project overruns while providing real-time alerts of when contracts and key sourcing agreements are about to expire. Service project contracts, costs, and timelines create a challenging mix of constraints that can drain margin and reduce profits if there isn’t a process to optimize them. CFOs and their teams want more visibility into every Project’s earned value, actual costs, staffing, and resource management. FinancialForce PSA has a unique Project Burnup view powered by Einstein and embedded in the Project, limiting project overruns and warns when exceeding contracts. Integration to Slack adds seamless project collaboration and quick approval of time and expense PSA.