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Enterprise Financial Management:
Solutions for the Office of the CFO
September 2018
Kirk Mahoney, Grady Kidder & Todd Clapp
2
Enterprise Financial Management Overview
CFO
Finance & Accounting Departments
Accounting
Invoicing &
Collections
FP&A Pr...
3
Enterprise Financial Management / Office of the CFO Software Market Map
Enterprise Resource Planning
Finance & Accountin...
4
Finance & Accounting Dynamics
• CFO’s ownership of ERP data put them at
the center of enterprise’s Big Data
initiatives
...
5
Finance & Accounting Technology Trends
• ERP mega suites will give way over time to
best-of-breed point solutions in the...
Please send any inquiries to kirk@catalyst.com
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Catalyst Investors has a long-standing history investing in businesses at the intersection of SaaS and financial services & technology, with most recent examples including MINDBODY (payments & business management SaaS for health & wellness businesses), Clinicient (revenue cycle management collections, EMR, and practice management SaaS for physical & occupational therapists), and Fusion Risk Management (business continuity SaaS sold to financial institutions and other F1000 enterprises). Lately, Catalyst has spent more time researching the FinTech sector and has published two reports to broadcast the team’s findings:

• FinTech Market Overview – a primer that segments the FinTech ecosystem based on end-market and business model (e.g., enablers vs. replacers)

• Enterprise Financial Management: Solutions for the Office of the CFO – a deeper look into software and tech-enabled services enabling businesses and their finance function to work more efficiently

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Enterprise Financial Management: Solutions for the Office of the CFO

  1. 1. Enterprise Financial Management: Solutions for the Office of the CFO September 2018 Kirk Mahoney, Grady Kidder & Todd Clapp
  2. 2. 2 Enterprise Financial Management Overview CFO Finance & Accounting Departments Accounting Invoicing & Collections FP&A Procurement Human Resources Investor Relations Capital Markets Risk Mgmt. Treasury Payroll & Benefits Other Departments Typically Reporting to the CFO Logistics General Counsel • Enterprise Financial Management is comprised of software and tech-enabled services businesses providing workflow, information services, or outsourced solutions for functions reporting to the Office of the CFO • This report specifically focuses on those related to finance, accounting, and risk functions • Adjacent functions, often reporting to the CFO, include HR, procurement, legal, and logistics
  3. 3. 3 Enterprise Financial Management / Office of the CFO Software Market Map Enterprise Resource Planning Finance & Accounting Platforms A/R, Invoice & Collections Accounting & Close FP&A & Budgeting A/P ShareholdersPayroll & Benefits HCM BI & Analytics SCM, OMS, & Inv. Mgmt. Tax Treasury & Risk Working Cap. Expenses Via API integrations, Finance and Accounting Departments are increasingly abstracting out functionality to best of breed point solutions Finance and Accounting Point Solutions End-to-end software suites for accounting and finance departments – typically focus on bookkeeping and accounting data storage Note: this landscape is intended to be a representative sampling and is not an exhaustive list. Please direct inquiries to kirk@catalyst.com.
  4. 4. 4 Finance & Accounting Dynamics • CFO’s ownership of ERP data put them at the center of enterprise’s Big Data initiatives • However, CFO’s remain skeptical of their ability to leverage all of the data they have – only 16% of CFOs consider their companies to be highly data driven in their strategic decision-making [1] CFOs as the Chief Data-Driven Strategy Officer ERP Data ML & Big Data Technology Pricing Sales & Marketing Ops. & Logistics • Due to strong economic growth as well as the 2017 tax reform, CFOs in the US are currently in a growth mindset, with 90% reporting conditions as good [3] • Optimistic CFOs foster an ideal climate for selling innovation and experimentation [1] Economist Intelligence; The Data Directive Focus on the CFO [2] AICPA 2017 trends [3] Deloitte; 2018 Q1 Global CFO Signals; North America Optimistic CFO • After growing at a 5.5% CAGR from `02-`10 (largely due to increased demand for CPAs post Sarbanes-Oxley) growth has slowed to 2.5% over the `10-`16 period • We anticipate that trend continuing as the percentage of graduates pursuing degrees in software and data continues to grow Declining Labor Force Growth 45.1K 46.6K 44.7K 49.7K 53.8K 64.2K 66.5K 68.6K 82.2K 82.0K 79.5K 0 50 100 2000 2001 2002 2003 2004 2007 2008 2010 2012 2014 2016 US Accounting Graduates [2] Bachelor's Master's 64% 18% 57% 18% CFO Mindset [3]
  5. 5. 5 Finance & Accounting Technology Trends • ERP mega suites will give way over time to best-of-breed point solutions in the cloud, driven by APIs • Over the intermediate term, incumbent ERP systems will continue to serve as persistent systems of record APIs & Microservices • Rather than automating entire jobs, AI solutions will automate repetitive tasks and processes thereby enabling businesses to better leverage their workers’ knowledge-based skills • Cloud ERP systems offer significant benefits including cost, agility, and maintenance • SMBs and service-based industries have been relatively fast adopters with large enterprises and asset heavy industries lagging Task Automation ERP Moving to the Cloud [1] Forrester Research; Vendor Landscape for SaaS ERP Applications, 2017 [2] EY; Robotic process automation in the Finance function of the future 6% 14% 16% 18% 6% 13% 19% 23% 2012 2013 2014 2015 Firms’ Plans to Use SaaS to Complement or Replace ERP [1] Already SaaS Plan to Replace with SaaS within 2 Years Other Reponses Monolith MicroservicesHybrid Architecture Robotic Process Automation offers exceptional benefits to finance departments [2]: • Higher Quality • Low-to-zero defects • Fewer compliance considerations compared to offshoring • Clear audit trails • Lower Costs • 50-70% cost reduction for high frequency repeated tasks • 1/3 of the cost of offshore FTE; 1/10 of the cost of onshore FTE
  6. 6. Please send any inquiries to kirk@catalyst.com

Catalyst Investors has a long-standing history investing in businesses at the intersection of SaaS and financial services & technology, with most recent examples including MINDBODY (payments & business management SaaS for health & wellness businesses), Clinicient (revenue cycle management collections, EMR, and practice management SaaS for physical & occupational therapists), and Fusion Risk Management (business continuity SaaS sold to financial institutions and other F1000 enterprises). Lately, Catalyst has spent more time researching the FinTech sector and has published two reports to broadcast the team’s findings: • FinTech Market Overview – a primer that segments the FinTech ecosystem based on end-market and business model (e.g., enablers vs. replacers) • Enterprise Financial Management: Solutions for the Office of the CFO – a deeper look into software and tech-enabled services enabling businesses and their finance function to work more efficiently

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