The Most Promising Financial Software (Forrester TechRadar)

by Erin McCune on July 13, 2009

in Accounting, Erin McCune, Payables, Receivables, Research Round Up, Technology

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CFO.com summarizes the most recent Forrester “TechRadar” report on financial software. Not surprisingly, economic woes are driving businesses’ need for accounts receivable and collections software to help companies monitor their customers payment behavior. Budgeting and forecasting solutions as well as expense reporting tools are also in high demand. Accounts Payable solutions are up and coming and Treasury / Cash Management solutions continue to enjoy wide-spread adoption.

Excerpts follow:

The report characterizes these payments-related solutions as in the “growth” stage, according to CFO.com

Receivables and collections management. This category has leaped in success because of the recession. As companies fight off the debilitating effects, they’re keeping customers on shorter leashes for balances due. That is unlikely to change after the economy bounces back. In forecasting significant continued success for this technology, the report says, “Clear ROI on the collections cycle has enabled many companies to optimize [Days Sales Outstanding].” Meanwhile, the supply chain is evolving: vendor consolidation has eliminated some competitors, but enterprise resource planning system providers are said to be “giving specialists a better run for their money.”

Expense reporting. This technology could add more value if it were better integrated with spending and travel management processes, according to Forrester. “Greater benefits are available to users that seek reduction of travel expenditures via policy adherence and integration with travel booking solutions,” the report says. But growth prospects are solid, because while adoption and integration levels are high among large companies, many smaller ones are still using rudimentary, internally developed expense reporting processes.

Accounts payable automation is characterized as in the “survival” phase by Forrester, meaning that it’s been successfully proven in labs and pilots, but has yet to achieve widespread adoption. From my perspective, A/P automation and its ability to enable early payment or dynamic-discounting is one of the most compelling financial process improvement opportunities available today.

Accounts payable automation. This still-youthful set of technologies, also known as electronic invoice presentment and processing (EIPP), is on a path toward at least moderate success, in Forrester’s estimation. “In addition to the efficiency benefit of paper elimination, the automated matching of invoices with purchasing authorization and workflow for unmatched items has a big benefit to finance,” the report states. But adoption rates are fairly low so far, given corporate cultural reliance on paper-driven processes and, in some jurisdictions, tax requirements for retaining paper invoices.

Meanwhile, Treasury and Cash Management solutions are characterized as mature, with high adoption levels, particularly among large corporations

Treasury and cash management. The market for this kind of software has gone through significant consolidation, leaving a small number of players. In fact, demand for solutions may fall within the next 10 years as companies outsource treasury functions, and this product category may be the first to change from the “equilibrium” phase to the “decline” phase. At present, payback from an implementation can be fast, particularly where large asset values are at stake. ROI is based on maximizing portfolio returns while minimizing risks of exposure to market fluctuations. “Solutions are mature but continue to evolve to take advantage of open standards for integration,” Forrester writes.

Read the whole article at CFO.com or visit Forrester for details on the research report:

Financial Software’s Winners and Losers
David McCann – CFO.com
July 9, 2009

TechRadar™ For BP&A Professionals: Financial Management Applications, Q2 2009
Essential Business Needs Drive High Levels Of Value And Adoption
by Paul D. Hamerman with Andrew Bartels, Ralph Vitti
June 30, 2009

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