1. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. This publication may not be reproduced or distributed in any form without Gartner's prior written permission. If you are authorized to access this publication, your use of it is subject to the Usage Guidelines for Gartner Services posted on gartner.com. The information contained in this publication has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information and shall have no liability for errors, omissions or inadequacies in such information. This publication consists of the opinions of Gartner's research organization and should not be construed as statements of fact. The opinions expressed herein are subject to change without notice. Although Gartner research may include a discussion of related legal issues, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner is a public company, and its shareholders may include firms and funds that have financial interests in entities covered in Gartner research. Gartner's Board of Directors may include senior managers of these firms or funds. Gartner research is produced independently by its research organization without input or influence from these firms, funds or their managers. For further information on the independence and integrity of Gartner research, see "Guiding Principles on Independence and Objectivity."Usage Guidelines for Gartner ServicesGuiding Principles on Independence and Objectivity © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. This publication may not be reproduced or distributed in any form without Gartner's prior written permission. If you are authorized to access this publication, your use of it is subject to the Usage Guidelines for Gartner Services posted on gartner.com. The information contained in this publication has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information and shall have no liability for errors, omissions or inadequacies in such information. This publication consists of the opinions of Gartner's research organization and should not be construed as statements of fact. The opinions expressed herein are subject to change without notice. Although Gartner research may include a discussion of related legal issues, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner is a public company, and its shareholders may include firms and funds that have financial interests in entities covered in Gartner research. Gartner's Board of Directors may include senior managers of these firms or funds. Gartner research is produced independently by its research organization without input or influence from these firms, funds or their managers. For further information on the independence and integrity of Gartner research, see "Guiding Principles on Independence and Objectivity."Usage Guidelines for Gartner ServicesGuiding Principles on Independence and Objectivity Enhanced Finance Controls and Automation (EFCA) Fills the Gaps in ERP and CPM Processes John Van Decker November 2014

2. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Common Finance Technology Challenges “How do we improve finance control and efficiency?" "How do we compare process improvement over time?" “How can we reduce our dependence on spreadsheets?" “If we need Excel for special cases, how can we improve control?" “Didn’t we spend enough on ERP and CPM apps?" “Can we leverage the cloud and not buy another on-prem licensed product?" "What applications and technology assist with addressing all these issues?"

3. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. The Nexus of Forces Impacts All Business Applications It’s new! It’s cool! It’s cheaper! It’ll solve all our IT problems! Users in charge Cloud ERP Social Collaborative business processes Multi-enterprise commerce 24/7 Personalized BYOD Consumer-grade UI App stores Mobile

4. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. What Clients Have Told Us About Biz Apps We want our Global Applications equally on the public cloud, private cloud and on-premise The Cloud is dominating our thinking I want to ring-fence my MegaSuite The Business is now allowed to select applications Everything is going to cloud…isn’t it? I will keep core complex applications on-premise I am planning for a hybrid environment “As the world is more connected and the nexus of forces are reshaping the business ecosystem, IT ERP leadership focused on internal process control and optimization cannot cope with the current business situation.”

5. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Key Issues Intro to EFCA CFOs Perspective on Technology How Post Modern ERP Spawning EFCA Suites EFCA Capabilities and How to Leverage

6. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Key Issues Intro to EFCA CFOs Perspective on Technology How Post Modern ERP Spawning EFCA Suites EFCA Capabilities and How to Leverage

7. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. What is EFCA? Enhanced Finance Contol and Automation (EFCA) includes business applications that address: -Finance efficiency/process improvement -Automate recurring functions -Reduce the reliance on spreadsheets -Provide visibility into finance processes -Assurance for statutory/regulatory reporting (e.g. SOX) -Reduction in finance organization costs 7

8. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. What Has Changed? Solutions addressing "The Last Mile of Finance" and financial governance have expanded to include functionality currently missing from ERP and CPM platforms. These enhanced finance controls and automation solutions now are presenting innovative opportunities to improve the finance and operations functions. Beyond Finance! 8

9. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. What is the Scope of an EFCA Suite? Financial process and close management Operational and financial reconciliations Finance controls management Journal entry control Intercompany transfers/eliminations Collaborative tax preparation Finance Process ”BIG DATA” Analytics Disclosure management 9

10. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Key Issues Intro to EFCA CFOs Perspective on Technology How Post Modern ERP Spawning EFCA Suites EFCA Capabilities and How to Leverage

11. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Q05. Which three technology enabled capabilities are the most important areas of investment to your organization today in order of importance? n=210 SUM Most Important Technology Investment Today 47% 33% 31% 19% 18% 16% 14%

12. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Q08. What phase best describes the adoption of a Cloud, including software as a service (SaaS), model for each of the following business applications? Biz Apps Cloud Adoption n=varies, excludes Don’t know 61% Currently using or plan to 55% 53% 49% 47% 45% 42% 41% 38% 31% 28% 18%

13. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Q10. For each of the following business applications supporting the finance organization what stage best describes your organization’s adoption of mobile devices for that application? BIZ Apps- Mobile Adoption n=varies, excludes Don’t know 41% Currently using or plan to 37% 30% 28% 22% 19% 25% 8%

14. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. 14

15. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Q12. What role or function in your organization authorizes technology investment decisions? Roles Authorizing Technology By Study Not asked

16. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Key Issues Intro to EFCA CFOs Perspective on Technology How Post Modern ERP Spawning EFCA Suites EFCA Capabilities and How to Leverage

17. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. The Axioms of the Postmodern Applications Environment Expect significant disruption to the roadmap for your current products 17 The MegaSuite is dead, killed by cloud/specialist vendors. No vendor can build a MegaSuite to keep up with cloud/ specialists. Domain suites are emerging in the cloud. Integration complexity increases yet sidelined by cloud/specialist vendors.

18. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. End User Wish (IT dominant) One Suite One Instance One Vendor/Contract One Architecture Vendor Promise Buy into my Vision Suite Centric We Pre-integrate for You The MegaSuite Wish is Broken End User Wish (Business Dominant) Business Agility Focus Happy Users/IT Consumerisation Speed to Use: SeeITBuyITUseIT Architecture is IT’s issue Vendor Promise Buy into my Brand Multi Product/Service Centric Provide Integration Tools Past Future

19. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Trend: SourcingTime for Change – New Vendors Considered 70% will change their technology and sourcing relationships in the next 2 to 3 years for a variety of reasons: "IT sourcing strategies must be structured to enhance IT agility and address the needs of digital businesses. Organizations that don't adapt their strategies, and the competencies required to execute them effectively, will fail to achieve the value opportunities presented by a highly digitalized future." Ian Marriott, Gartner Research VP 57% Price/ Price Structure 55% Service Quality 52% Flexibility 46% Ability to Partner 45% Innovation 28% Scale 46% need to work with new categories of partners, e.g.: Mobility Big Data Cloud Analytics Digital Agency Social 21

20. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. "Potential benefits of cloud include cost savings and other capabilities, such as agility, innovation and time to market. It is often the latter that is the real impetus. These benefits are often less quantifiable, but are more and more commonly cited as the true drivers and value of cloud." David Mitchell Smith, Gartner Fellow Public Cloud Is Being Deployed to Support Agility Have made significant cloud investments 50% 14% 13% 10% 12% Agility Cost Innovation Quality Other Main Reason Payback 17

21. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Post Modern and EFCA POSTMODERN: The concept of a single ERP suite that meets all of an enterprise's needs, particularly in large, complex and diverse organizations, is no longer tenable. EFCA: Functionality has been largely ignored by ERP vendors and innovation has primarily been through niche/best-of-breed vendors. POSTMODERN: This will be a more federated, loosely coupled ERP environment with much (or even all) of the functionality sourced as cloud services or via business process outsourcers. EFCA: Market is dominated by cloud specialists. We believe that even if acquisitions were made by ERP vendors, this EFCA functionality will still be provided via domain cloud suites. 21

22. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Post Modern and EFCA POSTMODERN: Within five years, hybrid ERP environments will be the norm. Significant elements of ERP functionality will move to the cloud and coexist with the remaining core, on-premises ERP functions. EFCA: Hybrid environments are already the norm with those organizations that have purchased EFCA cloud solutions that integrated with their on-premises ERP. POSTMODERN: Increased diversity of delivery options, embedded analytics, mobile working and greatly enhanced user experiences are key to meeting business functionality needs. EFCA: Suites are continuously expanding in scope and delivery options to meet business functionality needs. 22

23. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Post Modern and EFCA - Integration POSTMODERN: Through 2018, multivendor integration and multienterprise integration complexity will increase, requiring new skills and technologies. EFCA: Suites have embedded integration capability, but rely on IT to effectively integrate the suites into ERP and CPM environments. 23

24. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Key Issues Intro to EFCA CFOs Perspective on Technology How Post Modern ERP Spawning EFCA Suites EFCA Capabilities and How to Leverage

25. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. The EFCA Product Suite 1.Financial process and close management 2.Operational and financial reconciliations 3.Finance controls management 4.Journal entry control 5.Intercompany transfers/eliminations 6.Collaborative tax preparation 7.Finance process/”BIG DATA” analytics 8.Disclosure management 25

26. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. 1. Financial Process and Close Management Manages finance and accounting processes from the beginning of the accounting cycle through final disclosure reporting. Includes: -Predefined templates/best practices to help set up the close designs -Drive remediation across financial and operational systems -Manage GL, operational and consolidations closes -Analytics -Workflow/process management 26

27. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. 2. Operational and Financial Reconciliations Reconciles GL sub-ledger control accounts, operational systems to sub-ledgers, customer accounts to billing systems, bank accounts and other balance sheet accounts throughout the accounting cycle. Includes: -Predefined templates/best practices to help set up the reconciliation designs -Drive remediation across financial and operational systems -Automated matching for a majority of the reconciliations -Analytics -Workflow/process management 27

28. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. 3. Finance Control Management Leverages the reconciliation matching engine to identify control problems. Can include finance Committee of Sponsoring Organizations of the Treadway Commission (COSO) management and collaboration with internal and external audit. Includes: -Predefined templates/best practices to manage financial process controls -Drive remediation across financial and operational teams -Analytics -Workflow/process management 28

29. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. 4. Journal Entry Control Manages entries for accruals, transfers/provisions, preparation of accounting entries and review and approval throughout the accounting cycle. Includes: -Predefined templates/best practices to help set up the journal entry processes -Drive remediation across financial and operational teams -Netting of account balances for multiple Jes -Analytics -Workflow/process management 29

30. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. 5. Intercompany Transfers/Eliminations Accepts, rejects and reconciles intercompany transactions, along with generating elimination entries for intercompany activities. Creates offset accounts for vouchers, posting to multiple ledgers. Includes: -Predefined templates/best practices to help set up the intercompany voucher/JE processes -Drive remediation across financial and operational teams -Netting of account balances for multiple Jes -Analytics -Workflow/process management 30

31. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. 6. Collaborative Tax Preparation Coordinates tax activities, including planning and preparation across the organization, ensuring compliance with tax plans in finance and operational areas. Includes: - Predefined templates/best practices to help set up tax collections processes -Drive remediation across tax, financial and operational teams -Analytics -Workflow/process management 31

32. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. 7. Finance Process ”BIG DATA” Analytics Identifies where process bottlenecks/questionable activities that need review are occurring. SaaS vendors are providing financial process benchmarks to peer groups and also providing XBRL peer comparisons. This includes leveraging Hadoop technologies to mine insights from a variety of data sources and will inevitably be called big data analytics. 32

33. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. 8. Disclosure Management Disclosure management includes the production of financial statements and reports; Assignment of XBRL tags, annual reports and board books as well as coordinating activities with outsourced publishers, and associated financial controls and compliance. Demand for disclosure management solutions is increasing, especially in the cloud. Today, the majority of implementations are for XBRL assignment; however, future solutions will better address broader investor/executive/stakeholder capabilities and reduce the time and resources required to produce and file financial statements while improving financial controls. 33

34. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Why Should You Consider EFCA Suites? ERP and CPM vendors will only cover certain functions of the scope. Building “net new” EFCA functionality will take years and most ERP vendors don’t have the expertise EFCA suites in the cloud will coexist with ERP and CPM suites. Point solutions may work but leveraging more than on application from a vendor in a suite may be more effective. 34

35. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Financial Management Apps Market Clock 2014 35

36. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner’s View of Finance BizApps Asset classes at the early phase of their market life can drive further improvements in the effectiveness and efficiency of finance processes. Financial management applications generally have a long useful life, especially where these are systems of record. The Nexus of Forces continues to drive interest in cloud solutions, and financial management SaaS vendors are experiencing higher-than-average growth rates. Several asset classes are evolving and changing, offering opportunities for incremental process improvements. 36

37. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. EFCA Market Momentum EFCA vendors have the highest growth rates in financial management biz apps market. Cloud barriers have been minimized for these applications. Large organizations accept smaller niche vendors. FMCS vendors have successfully integrated EFCA into their finance transformation practices. More functionality to come! 37

38. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. How Do You Convince IT? EFCA integration is effective from most vendors – heterogeneous apps that must coexist! Leading organizations are choosing applications based on FUNCTIONALITY first! Cloud in Finance is becoming the norm. EFCA cloud applications have been adopted by major organizations - satisfied security. Some ERP vendors have partnered with EFCA vendors to extend footprint. 38

39. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. In Summary 39

40. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Recommendations Choose EFCA applications based on functionality first but consider larger opportunity of an EFCA suite. IT should play a role of consolidating EFCA requirements and build future “suite” vision. Understand how reference organizations have achieved value using EFCA. Leverage best practices within EFCA suite – couple these projects with finance transformation initiatives. Consider extended value as suite capability will expand. 40