Ventana Research Analyst Perspectives

California Blue Shield Foundation Uses FinancialForce to Improve Finance Effectiveness

Posted by Robert Kugel on Jan 2, 2013 11:23:02 AM

As I’ve noted before, it’s common for CFOs of companies that are transitioning from being a small to a midsize business (that is, when they grow past about 100 employees) to find that the entry-level accounting package that they have been using no longer fits their needs. This software may be inexpensive to purchase and easy to use but it lacks many of the customization and business process management capabilities that become increasingly important as organizations grow. The transition from such an application is especially difficult when it involves an on-premises system, because the up-front and ongoing costs of implementing and using these can be daunting. Usually, the shortcomings start off as minor annoyances for companies that have between 100 and 500 employees and grow over time, and usually the pain increases with the number of employees and the volume and complexity of the underlying business. Yet because of the cost, finance executives usually don’t want to migrate to a new system until their old software threatens the orderly management of the business or becomes an overwhelming burden on finance operations. For that reason, increasingly we are finding companies choosing to migrate to a cloud-based ERP system sooner in their evolution because it is usually a more affordable and easier transition than using on-premises software.

The Blue Shield of California Foundation, which won the 2012 Ventana Research Business Leadership Awards in the Chief Financial Officer category, found itself in this position. The foundationVR_2012_LeadershipAward_Winner_Logois one of California's largest health philanthropies, supporting organizations that deliver health care and address the needs of the underserved and victims of domestic violence. Its finance department had been using QuickBooks, but the software was becoming increasingly difficult to use in a distributed operation, and there was no easy way to integrate it with other systems the foundation used to run the business. CFO Scott Travasos and his team decided they needed a more sophisticated system that could deliver up-to-date information to executives.

The BSCF team wanted to move to the cloud so they could have an affordable yet sophisticated system that allowed executives the ability to easily see financial dashboards and reports, and that supported remote and mobile users. Earlier, the foundation had elected to adopt the cloud platform that won the 2012 Ventana Research Technology Innovation Award for Cloud Computing category, so that it could work in a single applications and data infrastructure. Since its IT organization had already evaluated the security of the Salesforce cloud (and therefore did not have to take another set of rigorous assessments) and because it offered a common look and feel with other, already deployed applications and reports, the Foundation chose FinancialForce Accounting, a Salesforce-based package.

FinancialForce Accounting changed the way the foundation’s finance department works. After migrating to the more sophisticated package, the organization was able to streamline the close process, remove bottlenecks from processes through better and more automated management of work flows, and enhance financial performance visibility. It enjoys better access to data anywhere, anytime, which supports more fact-based decision-making. For instance, the application presents key business metrics to individual executives using alerts and conditional formatting so they can quickly spot issues that need their attention. Finance department employees can now work remotely if necessary. Training is easier in the current environment since the larger number of people using the system can train new employees.

BSCF also elected to utilize Salesforce Chatter to foster better collaboration and more effective execution of core finance department processes. Since Chatter can be tied to specific projects and invoices, when questions arise, employees can more easily determine the history of a particular issue because they don’t have to dig through email or paper files. And because it’s especially easy to use, employees are more likely to make notes as situations arise, so there is more background “chatter” stored for people to refer to later on. This is especially useful and engaging for people under 40 who increasingly expect this sort of capability because it’s natural to the way they interact with electronic systems.

In any business that is transitioning from being a small to a midsize one, one of the biggest mistakes that a finance executive can make is sticking with an entry-level accounting package. Until there were cloud-based solutions, it was easy to justify waiting because of the cost and the need to manage a more formal IT infrastructure associated with such packages. Today, that’s no longer an issue. Finance executives have been wary of cloud-based systems because of potential security and reliability problems. These are legitimate concerns, of course, but they ought to be considered in context. On-premises systems have vulnerabilities too and are not inherently safer. Large, inexpensive thumb drives make it possible for an employee to walk out with a company’s on-premises financial and customer data in a matter of minutes, and on-premises systems are vulnerable to fire, flood and other catastrophes. I believe every company that is using entry-level accounting software and beginning to run up against its limitations should look into a cloud-based alternative, especially if buying, deploying and maintaining an on-premises system is a daunting prospect.


Robert Kugel – SVP Research

Topics: Planning,, ERP, Human Capital Management, Office of Finance, Reporting, close, closing, Operational Performance, Business Performance, Cloud Computing, Financial Performance, Workforce Performance, Financial Performance Management,

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Robert Kugel

Written by Robert Kugel

Rob heads up the CFO and business research focusing on the intersection of information technology with the finance organization and business. The financial performance management (FPM) research agenda includes the application of IT to financial process optimization and collaborative systems; control systems and analytics; and advanced budgeting and planning. Prior to joining Ventana Research he was an equity research analyst at several firms including First Albany Corporation, Morgan Stanley, and Drexel Burnham, and a consultant with McKinsey and Company. Rob was an Institutional Investor All-American Team member and on the Wall Street Journal All-Star list. Rob has experience in aerospace and defense, banking, manufacturing and retail and consumer services. Rob earned his BA in Economics/Finance at Hampshire College, an MBA in Finance/Accounting at Columbia University, and is a CFA charter holder.