The market for core financial applications (general ledger [GL], accounts payable [AP], accounts receivable [AR] and fixed assets [FA]) is populated with mature, functional solutions. The reference customers we surveyed were generally happy with their core financial management applications and vendors, and feel they have delivered value and benefits to them. There were no major shifts in the vendor landscape since we published the last MarketScope, although Unit 4 Agresso has consolidated its acquisition of CODA, which is now included under Unit 4 Agresso in this analysis. The overall relative vendor analysis remains unchanged, which reflects the maturity of this market. All the vendors analyzed in this MarketScope offer very credible solutions for large and midsize organizations, but there are differences among the vendors, primarily in their target market focus, technology platform and support for country-specific localizations. Organizations evaluating core financial applications should evaluate solutions based on their preferred technology platform and based on the ability of the vendor to support them in their chosen geographies, in addition to the usual functional analysis. Industry focus should also be a consideration for public-sector and project-centric organizations.

Software-as-a-service (SaaS) vendors have made progress over the last year, gaining an increasing presence in the market through better sales execution and product enhancements. NetSuite's shift of strategy to focus more on a financials-centric solution with the release of its OneWorld solution has increased its presence in the market, and although it did not meet the inclusion criteria this year, it is likely to do so in the next 24 months. Other SaaS vendors, like Intacct, Twinfield and Workday, continue to make progress with increasing customer numbers and additional functional capabilities, and Gartner continues to hear of new SaaS startups targeting the core financial applications space. Unit 4 Agresso released the first comprehensive core financial applications suite built on salesforce.com's Force.com platform this year through its CODA subsidiary, which may be a smart move as the majority of organizations we have spoken to that use, or are considering using, SaaS-based financials already use salesforce.com for CRM. While more midsize companies are starting to consider SaaS-based solutions, those that don't have experience with SaaS-based applications still have concerns about security and integration with on-premises applications. However, as more midsize organizations start to deploy SaaS-based core financial applications, experience from these implementations will help to overcome these concerns. Nevertheless, the SaaS vendors will not disrupt this market in the next five years because the existing solutions are so well-established and functionally mature. Instead, they will make a gradual encroachment in the market, and will eventually become established players in their own right. Open-source options have yet to make any impact in the core financial applications market, as they do not have the breadth of localization or depth of financial functionality required for midsize and large organizations.

Consequently, midsize organizations evaluating core financial applications can evaluate SaaS alternatives, as long as the vendor can provide the geographic and localization support they need. However, open-source offerings are still at the very early stages of maturity, and only technology-aggressive Type A companies should consider open-source alternatives.

This is a mature and established market. The functionality of modules, such as GL and AP, has been developed during the past 25 years and will remain largely unchanged in the future. However, changes will come in the underlying technology as service-oriented architecture (SOA) becomes a reality and as new delivery models mature. This market is mature because core financial management applications were among the first business applications to be computerized, and now form the "core" of all ERP suites, although the breadth of offerings from vendors outside core financial applications does vary. Although these applications are, in most cases, part of broader suites, they're still sold on a stand-alone basis to organizations that only want the core financial modules, or as part of a longer-term suite deal (many organizations purchase and implement the financial modules before implementing other aspects of an ERP suite).

As part of the research for this MarketScope, Gartner analyzed the financial application modules currently used by the reference customers we surveyed, as well as those they were considering as a potential future purchase. Figure 1 shows the results. Note that all respondents used the GL from their core financial applications vendors, so that is not shown in the table.

Unsurprisingly, nearly all respondents also use the AP modules from their core financial applications vendor. AR is also widely used, but slightly surprisingly, only around 70% use their core financial applications vendor for financial reporting and analysis (although nearly 12% may consider using this capability in the future). This shows that core financial applications can be challenged to provide more advanced financial reporting and analysis. In fact, this functionality falls more in the area of corporate performance management (CPM), so organizations evaluating core financial management applications must also consider how CPM applications will be deployed alongside these applications to provide more advanced reporting capabilities. Usage of project accounting (PA) is quite high, considering this is an "extended" module of core financials and is not applicable to all organizations. Many of the vendors featured in this MarketScope provide highly functional PA capabilities (along with other project-related functionality, such as time sheet entry), and the relatively high usage and focus on future usage shows the strength of these solutions. Any organization considering PA functionality should always evaluate the offerings from their core financial management applications vendors alongside specialist alternatives.

We also asked which other application modules the reference customers used from the vendors of their financial applications, and those they were considering as a potential future purchase. Figure 2 shows the results.

As expected, purchasing remains the most widely deployed, complementary functionality (because of its close process links with core financial applications, especially AP), but there's still some "best of breed" application purchasing going on. This is evident when considering e-procurement, which is a logical extension of purchasing. All the vendors in this MarketScope have e-procurement offerings, but the penetration among their existing users is low (around 25%), although nearly 20% would consider this as a potential future purchase.

The maturity of the market is indicated by the responses of customers to our reference survey. As part of this research, Gartner received responses from 112 companies in which we asked 27 specific questions in four sections which covered:

• Experience with implementing and using the core financial management applications
• Experience in working with the vendor, and their service and support capabilities
• How well the applications had supported change in their business
• Value for money and cost of ownership

The average results across the survey categories did not show any significant variation, ranging from 4.03 to 3.32 (where 5 is excellent and 1 is very poor), with an average score of 3.69 and a standard deviation of 0.22. This shows that core financial management applications are well-understood by the vendors and their implementation partners, and that the expected benefits were generally realized by the users. Although there were some areas where individual respondents marked the vendors quite harshly, overall, the respondents were satisfied with both the applications and their vendors. Figure 3 shows the response to the question "Considering product functionality, services, and desired outcomes for your implementation, please select an overall rating for your chosen financial applications." The options were:

• Strong Positive: Great solution, supportive vendor, highly recommended
• Positive: Good solution, better than we anticipated
• Neutral: Does the job as we expected
• Negative: Does the job but some issues either with functionality, implementation or vendor
• Strong Negative: Disappointing solution that was harder to implement and manage than we anticipated. Would not implement again given the choice

Just over 80% of respondents were either Positive or Strong Positive, and none was a strong negative. With average vendor scores ranging from 4.43 to 3.8, there are no significant differences between the overall rating for the vendors, and no vendor stood out as having any major challenges as far as references were concerned.

Industry-Specific Solutions

The core financial management applications marketplace is largely horizontal because there is a significant degree of common functionality across most industries. However, there are some unique requirements, especially in the public sector. All vendors in this MarketScope offer horizontal solutions and tend to specialize in several industries as optional parts of their solutions. However, several vendors only target specific industries and, therefore, were not included in this MarketScope. However, organizations in their target industries should include these vendors in evaluations.

CGI

CGI is a global provider of IT and business services. CGI develops and maintains core financial applications and broader ERP solutions targeted specifically at federal and state/local government organizations in the U.S. The main products are Momentum, which is focused on the federal government, and AMS Advantage, which is focused on state and local government, including K-12 school districts. Although both share fundamental aspects in the core financial applications, and both evolved from a common code base, specific features in each of the products meets the needs of different sectors, such as Advantage's state and local government grant management capabilities and Momentum's federal financial and acquisitions applications. Each solution includes a predefined chart of accounts for its specific client base. Both solutions are scalable to thousands of users, and CGI has nearly 300 federal, state, local, and education clients. CGI provided references that we included in the survey, and users rated CGI highly in the survey, with CGI gaining an above-average score.

Deltek

Deltek focuses on solutions for project-centric organizations. Its portfolio includes Vision, Costpoint and GCS Premier, all of which include core financial management applications. In addition, Deltek has a full suite of enterprise project management solutions targeted at the operational needs of project-centric companies.

Vision is a suite of business applications targeted at small and midsize professional services and consulting firms, and has a heavy project focus with associated resource planning, as well as time and expense tracking capabilities. Vision has been successful in architecture and engineering firms, but is also deployed by IT services companies, management consulting companies, and marketing communications agencies. Vision is a multicurrency solution, and with the release of Vision 6.0 in May 2009, the solution now has multilingual support. Vision will be translated into multiple languages in 2009, with French available in 3Q09, and Spanish planned by the end of 2009.

Costpoint is a more-scalable solution that has been sold to many U.S.-based government contracting firms, but also is suitable for larger, project-centric organizations. The solution is currently English-only, so it should only be considered by organizations based in English-speaking countries.

GCS Premier is a solution targeted at small U.S. federal government contractors.

The Impact of SaaS

Although the market for core financial management applications is mature, several new vendors are emerging that only deliver core financial management applications as SaaS offerings. None of these vendors met the inclusion criteria for this MarketScope, but we anticipate that they will start gaining more market share as their solutions mature and gain a wider customer base during the next two to five years. These vendors include the following.

Intacct

U.S.-based Intacct provides SaaS-based financial management applications, including project management and some supply chain capabilities. Intacct has continued to make progress over the last year, and now has around 2,650 customers and 20,000 users. It targets small or midsize businesses (SMBs) that have outgrown a Tier 3 solution, such as QuickBooks, and companies looking to move from on-premises, midmarket accounting applications to a SaaS solution. Intacct claims it is now starting to replace some of the on-premises vendors in midsize companies — its typical number of users is between four and 50. Intacct is architected to be multientity, multicurrency and multilingual, and is scalable to meet the needs of larger enterprises — it also supports complex financial consolidation. Intacct now supports double-byte characters sets, and does have some international language capability, although its primary sales focus remains North America. International organizations based in the U.S. or in English-speaking countries that are seeking SaaS-based core financial management applications could consider Intacct, although they should check language and localization support.

NetSuite

U.S.-based NetSuite targets growing and midsize companies, typically with 50 to 1000 employees, and had over 6,600 customers at the end of 2008. NetSuite is the most international of SaaS vendors, with employees in nine countries and versions available in English, Danish, German, French, Spanish, traditional Chinese, simplified Chinese, Russian, Japanese, Korean and Thai. In the past, NetSuite focused primarily on organizations seeking an ERP suite with integrated CRM and e-commerce capabilities, rather than core financial management applications. However, in April 2008, it released NetSuite OneWorld, which provides global financial management capabilities, including financial consolidation and complex multicurrency and tax handling. This enables NetSuite to compete more effectively with other core financial application vendors, and it has increased its focus on core financial management applications. NetSuite will now target divisions of large multinationals in addition to midsize organizations. NetSuite also acquired OpenAir, a SaaS-based resource management vendor, and has used this acquisition to create a solution targeted at project-centric organizations. Recently, NetSuite announced NetSuite Financials, a release of its financial applications in a modularized format targeted at organizations wanting to switch from midmarket on-premises offerings. Consequently, NetSuite should be considered by midsize organizations and subsidiaries/divisions of larger companies that are looking for SaaS-based core financials, and also by project-centric organizations looking for a broader solution.

Twinfield

Twinfield is a Netherlands-based company that was founded in 2000 to deliver financial application software using SaaS. Twinfield has developed several SaaS offerings (including online payment systems), but its financial applications have gained the greatest traction with more than 33,000 subscribers. These are focused on SMBs, and are sold by Twinfield and its partners, mainly in the Netherlands and the U.K. Many of these SMBs are accounting practices that recommend the software to their clients, and also provide hosted accounting services using Twinfield. However, Twinfield has architected its applications to be suitable for larger organizations with full multicompany and multicurrency capabilities, and recently added hierarchical reporting structures that allow users to support multiple reporting perspectives, e.g., based on, for example, U.S. generally accepted accounting principles (GAAP) and/or International Financial Reporting Standards (IRFS). Twinfield has translations available in English, Dutch, French, German and Hungarian, and continues to gain customers among midsize organizations in addition to its SMB clients. Thus, small and midsize organizations based in Europe and the U.S. can consider Twinfield.

Workday

Workday focuses entirely on SaaS-based enterprise applications, starting with human capital management (HCM), but subsequently releasing financials, purchasing and other applications. Workday applications are XML-based, and use Workday's own object management server in place of a traditional relational database — this manages data and application logic in memory (MySQL is used for persistent data storage). Workday now has around 80 customers in total, including 10 financials customers (four of which are live). Although initial customers were existing HCM users, Workday says it is now selling combined deals where financials is the "lead" product. The functionality of Workday Financial Management has moved on from the first release in August 2007, and now includes some basic multicurrency consolidation, although individual companies operate in a single base currency (but can process transactions in multiple currencies). Complex multicurrency and financial consolidation capabilities will be added later in 2009. Workday's target market is midsize firms and some large enterprises, typically with revenue between $75 million and $2.5 billion. The solution is now available in eight languages, including English, so U.S.-based organizations with some international operations can consider Workday, although those with complex multinational requirements should wait until the more advanced functionality is available.

On-Premises Vendors and SaaS

Several existing on-premises vendors are offering SaaS-based alternatives. A significant development this year was Unit 4 Agresso's release of a suite of core financial management applications on salesforce.com's Force.com platform through its CODA subsidiary. CODA had already made a limited release of order entry functionality, but in April 2009, CODA released a broader core financial management applications offering, covering GL, AP and AR. The functionality is based on CODA's on-premises solution (CODA Financials v.11) but is a ground-up development on the Force.com platform. Priced at $125 per user per month, this is the first suite of core financial applications available on the Force.com platform. This is a smart move by CODA, because the vast majority of organizations we have spoken to that are considering SaaS-based core financial management applications already use salesforce.com. CODA 2go is tightly integrated with salesforce.com, sharing a common user interface (UI), so CODA sees the salesforce.com as a potential target. CODA 2go currently has a small number of live users in the U.S., Canada, U.K. and Australia, and is only available in English at the present time, although it has been architected to be multilingual. Consequently, midsize organizations considering SaaS-based core financial management applications should consider CODA, especially if they already use salesforce.com.

Exact Software has also expanded the market for its SMB SaaS offering in the Benelux region, and SAP showcased progress that some of its charter customers have made with its Business ByDesign SaaS offering at Sapphire in May 2009. Although this is only available as a suite offering, we anticipate that, at some point, SAP will offer the core financial management applications on a best-of-breed basis. However, SAP has not yet announced a general availability date for Business ByDesign. Epicor's new product, Epicor 9, has been architected to support multitenancy, and Epicor plans to launch an on-demand offering later in 2009.

Open Source: Still in Its Infancy

Several open-source solutions are available that include core financial management applications, such as Compiere (www.compiere.com ) and Openbravo (www.openbravo.com ). However, the value proposition for these solutions is more focused on the ERP suite message, with an emphasis on flexibility and adaptability. Organizations currently deploying open-source ERP applications tend to be technologically aggressive Type A organizations that are prepared to build and extend the functionality to meet their specific business needs through the community model. Although some customers deploy less than the whole suite, to date, there has been little interest in these solutions from midsize and large organizations seeking core financial management applications, primarily because the community model is less-well-suited to developing the advanced localizations for sales/purchase taxes and regulatory reporting (although language translation is commonly undertaken within the community). We expect the open-source vendors and partners to focus on delivering this functionality through their commercial module options, which will help these solutions mature and gain more market traction. However, SaaS solutions are significantly ahead in their penetration of the core financial applications market, and that has continued this year.

Core financial management applications are a significant part of the ERP market. In 2008, the global ERP market was worth $23.8 billion, of which $10 billion was financial management systems. Gartner doesn't publish separate market data for the core financial applications portion of this, but we estimate that it was in the area of $6 billion to $7 billion.

These applications provide visibility into an enterprise's financial position through automation and process support for any activity that has a financial impact. These applications also provide financial reporting data as needed by local and international regulations. Core financial management applications are generally sold in suites, and this is a mature market. Niche specialist vendors struggle to survive in this space. According to Gartner software market research definitions, the core financial management applications consist of the following four main modules:

• GL: As the heart of any accounting system, the GL module records and aggregates the financial impact of transactions in accordance with user-defined classifications (account code analysis and transaction code analysis). It produces financial accounting reports (such as the trial balance) in accordance with GAAP.
• AP: This records and tracks invoices or payments due to suppliers, contractors or employees (except payroll disbursements), and manages the payment of these items. It also supports purchase tax and withholding tax processing.
• AR: The AR module records invoices or any other obligations due from customers, and manages the collection of payments to settle these items. Also manages disputes where customers partly pay invoices, and tracks statistics on a customer's payment history to aid in credit management.
• FA: This module tracks the financial value of FA in an organization, enabling the production of an auditable "asset register." It maintains a history of accounting events that occur during the life of an asset (such as depreciation and revaluation) in accordance with GAAP. It also maintains a physical location of the asset for auditing purposes, but doesn't encompass asset maintenance.

In addition to the core financial management applications, organizations may require additional "extended" financial functionality, as described below. Although these aren't part of the "core" application set, most organizations evaluating financial applications require some or all of these additional modules, which are closely tied to core financial management applications.

• PA: This offers ability to monitor expenditures against projects, using expenditure classifications and time periods that differ from those used in the GL, but are immediately reconciled with them. PA systems support project managers (for example, expenditures analyzed by work breakdown structure and life to date), while posting financial information from the same transaction to the appropriate GL period and cost codes. PA systems also should provide project billing functionality, and enable invoices to be produced using various billing methods, such as percentage complete or milestone achievement.
• Treasury and cash management: This provides functionality to manage projected cash flows, currency exposure, hedging and increasingly in-house banking and cash pooling. This functionality doesn't emulate stand-alone treasury workstation software, but rather provides the cash management capabilities that in-house treasury functions need to manage corporate cash balances and movements.
• Reporting and analysis capabilities: In addition to the reporting capabilities provided with the four main modules, users of financial applications expect advanced reporting and analysis capabilities. These include integration with Excel and other desktop reporting capabilities, the capability to perform multidimensional analysis of financial data from many perspectives, and the capability to create data marts/data warehouses (based on the financial data model) that enable financial data to be analyzed with budget, forecast and nonfinancial data.

Although the MarketScope inclusion criteria focused on the core financial applications, vendors' capability to deliver extended financial management abilities also were assessed to provide a more-comprehensive analysis. The MarketScope does not cover functionality like reconciliation management, which is increasingly part of financial governance solutions.

It is important to note that this MarketScope does not include budgeting, planning and forecasting (BP&F) functionality. Finance users often think of budgeting as a function of a GL, but BP&F is not and should not be functionality that is part of the GL. True enterprise planning is beyond the capability of a GL system, and would create an unacceptable processing burden at key times (such as month end). BP&F functionality should always be considered as part of a CPM suite, although budget data can be imported from BP&F applications into a GL and used for commitment and budgetary control in the GL. Several vendors that deliver BP&F functionality don't deliver core financial management applications, so any evaluation must look at these aspects of functionality as separate (but linked) projects.

The inclusion criteria were set to include only vendors that target midsize and large enterprises in more than one geographic region. Many small vendors provide country-specific solutions for SMBs, but these vendors were excluded because the span of the MarketScope is global.

The following inclusion criteria were used:

• Provide a suite of financial management applications that includes (at least) GL, AP, AR and FA. In addition, functionality for projects, as well as cash and treasury management, will be taken into account. Some specialists still focus purely on FA software, but they were excluded because they don't offer anything other than FA software.
• Provide financial management applications that are suitable for any organization, regardless of industry. This MarketScope has a horizontal focus, and will only include vendors that market their financial applications to organizations seeking core financial management applications. This research does not cover vendors that offer financial applications only for specific vertical industries or subsegments of the market. The financial management applications may be part of a larger ERP suite, but they must be capable of being sold and marketed on a best-of-breed basis — that is, without the rest of the ERP modules. Vendors that sell financial management applications as part of a larger ERP offering are not included in this MarketScope.
• Target their financial applications at midsize and/or large organizations. These applications should be targeted at organizations with revenue of at least $25 million per annum and upward, and at organizations that have at least 10 concurrent users of the core financial modules (GL, AP, AR and FA).
• Have at least 100 live users that have bought and implemented the financial management applications on a stand-alone basis (that is, not as part of an ERP purchase with other modules, such as supply chain and manufacturing). Users that purchased the financial management applications with indirect procurement and/or HCM modules (if offered) can be included in this count.
• Generated at least $25 million in revenue (licenses, maintenance and services) associated with core financial management applications during the past year.
• Live customers in more than one of the following geographic regions: North America; South America; Europe, Middle East and Africa; Asia/Pacific and Japan.

In this MarketScope, we are rating vendors rather than individual products. Most of the vendors evaluated have more than one core financial application, which is a reflection of the consolidation that has occurred in the market over the last 10 years. The vendors all position the products in their portfolios as targeting specific segments of the market, rather than as competing with each other, and we are, therefore, evaluating vendors on the capabilities of their overall portfolios to address the market. Organizations evaluating core financial applications should consider the product from each vendor that best meets their needs, and should not consider multiple products from the same vendor.

Overall Market Rating: Strong Positive

The market for core financial management applications is mature. The majority of vendors evaluated in this MarketScope have been in the market for many years, and the "relative" newcomers (such as Microsoft) have acquired well-established vendors and products. All solutions are functional, have established customers that have been using the products for many years, and also have access to implementation skills. In addition, internal development of core financial management applications is not a viable option, because no internal application development team could deliver the functionality that exists in packaged applications. The core financial management applications remain the most widely deployed modules of ERP suites. Consequently, users can be confident that they have a choice among proven, functional solutions in a well-established market. The emergence of SaaS-based solutions will have an impact during the next two to five years, but this won't disrupt the market, because it will take time for the SaaS vendors to build the necessary functionality and user base to convince Type B (mainstream) and Type C (conservative) organizations that they're viable alternatives to the traditional vendors (see Table 1 and Figure 4).

The evaluation of geographic strategy includes an assessment of the number of countries for which localized functionality is provided. It should be noted that the requirement was that at least some local requirements should be supported by the vendor or its partners. This does not mean that all possible tax, regulatory and other local requirements are provided. Organizations must evaluate their specific localization requirements against the functionality provided by the vendors.

COA Solutions is a U.K.-based company. Although privately held, COA Solutions releases annual financial information, and in the year ending on 31 March 2008, annual revenue was £55.7 million, increasing 10.3% and earnings before interest, taxes, depreciation and amortization (EBITDA) was approximately £12.4 million. COA has built a portfolio of software applications through acquisition, which includes HR and payroll, document management and business intelligence (BI)/performance management, in addition to its core financial management applications, OpenAccounts, e5 and eFinancials. COA Solutions' strategy is to provide a broad range of business applications with a vertical focus on service-centric private companies, public-sector and not-for-profit organizations.

OpenAccounts and eFinancials are midmarket financial suites. OpenAccounts scales up to 200 concurrent users, while eFinancials scales up to several hundred concurrent users (and has been benchmarked at 2,000 concurrent users) and e5 scales up to 1,000 concurrent users. OpenAccounts is targeted at service-centric and project-focused organizations, and has strong PA and billing capabilities, while eFinancials has a long track record with local government, healthcare and midsize public-sector organizations in the U.K. The e5 product has a long history as one of the original (and leading) best-of-breed financial application suites with cross-industry applicability, but COA Solutions now focuses new business for e5 on larger public-sector organizations. None of the solutions has treasury management functionality.

COA Solutions has over 1,400 users of its financial applications. All applications are being developed and supported, although most of COA Solutions' net new license activity is focused on OpenAccounts. In the reference survey, OpenAccounts scored significantly higher in all categories than eFinancials and e5. Overall, COA Solutions products ranked average in the reference survey. Although the solutions are multicurrency and multicompany, they are only available in English, and COA Solutions is only targeting English-speaking geographies. Consequently, public-sector organizations in the U.K. and midsize companies based in English-speaking countries should evaluate COA Solutions.

Rating: Positive

U.S.-based Epicor was founded in 1984 as Platinum Software and focused on financial applications. Epicor has built and acquired a broad portfolio of ERP, CRM, supply chain management and professional service automation software solutions targeted at midsize companies and divisions of the Global 1000, and its revenue in 2008 was $487.9 million. Historically, Epicor's portfolio contained two suites of core financial management applications: Epicor Enterprise and Epicor iScala (Epicor acquired Scala Business Solutions in 2004). Both products are parts of broader suites, but each set of financial applications has a particular focus. Enterprise is a suite of midmarket financial applications with strong PA targeted at English-speaking countries, while iScala has strong international capabilities and is often sold as a second-tier ERP system for organizations that want a financial-focused solution in their smaller subsidiary operations. iScala is available in 34 languages and is deployed in 146 countries. iScala has a more-flexible coding structure in its GL (10 segments, compared with four segments in Enterprise), and also has the capability to manage different GL code structures in a single instance, making it more suitable for supporting multinational organizations. Both systems will scale to around 500 concurrent users (Epicor has benchmarked the next version of iScala at 1,000 concurrent users), but neither solution has treasury management systems. Epicor scored slightly below average in the reference survey, but overall references were generally positive.

In December 2008, Epicor released Epicor 9. This a successor to all its ERP products and has been architected on a .NET-based SOA architecture with a completely new set of core financial management applications. These include global financial management capabilities that support complex multicurrency and multinational operations, offering more sophisticated functionality than the current Epicor offerings. Epicor 9, therefore, represents a comprehensive midmarket ERP suite that can be considered by organizations looking for a broad ERP suite or a financials-centric solution. Tools will be provided to help Enterprise and iScala users migrate to Epicor 9, but there is as yet no experience of the complexity of the migration. Epicor 9 is still in the early stages of adoption, with around 15 live customers, but it is the product that Epicor proposes to new customers. However, it does not have the full language and localization breadth of iScala yet. Currently, 15 languages are available in Epicor 9, but Epicor plans to add three to four languages each quarter. Consequently, midsize organizations looking for core financial management applications should consider Epicor 9, but must check availability for their required geographies. Also, organizations that are not keen to be among early adopters should allow more time for Epicor 9 to become established in the market.

Rating: Positive

Established in 1984, Exact Software is a Netherlands-based provider of business software solutions for SMBs. Its offerings include ERP, CRM, CPM, project management and electronic workflow, and revenue in 2008 was €261 million. It has several SMB accounting offerings that are sold on a local, country-specific basis, along with ERP solutions for midsize companies, such as Exact Macola ES and Exact Globe. However, the primary midmarket financial management applications are part of the Exact Globe ERP suite. These are suitable for midsize organizations, but they also have strong international capabilities, and are targeted at multinational companies that want a second-tier solution focused on financial applications for their smaller subsidiaries. Exact Globe is used in 100 countries, and Exact provides comprehensive localization for 34 countries, with partial support for two more. It also provides support for Middle East legislation that can support nine more Middle Eastern countries, with some implementation work. Twenty-one languages are supported, including Arabic. Exact is focusing more on Exact Synergy, which complements Exact Globe and provides Web-based HRM, CRM, logistics and workflow capabilities. It also includes financial consolidation capabilities that support consolidation across multiple Globe instances, along with reporting and analytics. Exact is bundling Synergy and Globe into a specific midmarket offering.

Exact Globe will scale to more than 200 concurrent users and has broad functionality, including PA, resource management, and time and expense management. Exact scored below average in all categories, particularly in how users viewed the implementation experience. While this is not a significant cause for concern, users should check references in their geographies to gauge the skill level of implementation support. Exact can be considered by midsize companies in all geographies (although they should check specific country availability), and by large multinational companies that need a financial management system for smaller subsidiaries.

Rating: Positive

Infor, based in the U.S., is a global business application vendor that generates over $2.1 billion in annual revenue. It has grown rapidly through acquisition, and its portfolio includes the following core financial management solutions: SunSystems, Infinium, Masterpiece, GEAC E-Series, GEAC M-Series, SmartStream, Anael and Elevon. Although Infor continues to support established customers on these acquired products and to deliver enhancements, its primary product line for new business accounts is SunSystems. Infinium is still specifically sold to the hospitality vertical industry in the U.S. (focusing on casinos), while Anael continues to be sold in France. SmartStream continues to be enhanced, and will be SOA-enabled later in 2009.

SunSystems is a product with a long heritage; it has particular strengths in the ease of configuration and maintenance of the GL code structure, and also has good financial reporting and analytics (performance management query and analysis). SunSystems 5.4, released in 2008, is SOA-enabled and can leverage the Infor Open SOA framework. Infor is still supporting and enhancing SunSystems 4, which is better-suited to organizations with simple needs. Infor plans to SOA-enable SunSystems 4 in the future. Infor will be releasing an Advanced GL capability in mid-July that will provide better centralized, consolidated financial analysis and reporting in multi-instance deployments and will work with SunSystems through the Open SOA framework.

SunSystems is targeted at midsize companies and scales up to 350 concurrent users (although it has been benchmarked at up to 1,000). It has good core financial functionality, but relies on partner products for time recording and project billing and staffing, as well as treasury management capabilities. It also has strong international capability, with Infor providing localization and translation for nine countries, and partners providing translation and localization for another 16 countries. Infor has a good global support network with direct and indirect sales and implementation in all regions. Consequently, SunSystems is often deployed as a second-tier system in subsidiaries of large multinational companies.

We believe that Infor currently carries at least $4.5 billion in debt, used primarily to fund acquisitions (Infor has indicated that this figure is materially overstated but has not provided additional information). This is a highly leveraged company by enterprise application software vendor standards. Gartner suggests that users bear this in mind in discussions with Infor and seek assurance that it has the wherewithal to execute on the components of its strategy that are relevant to their specific strategic requirements. However, the SunSystems applications are mature, and Infor also scored well in the reference survey, coming above average in most categories. Consequently, SunSystems can be considered by midsize companies in all geographies (although they should check for specific country availability), and also by large multinational companies that need a financial management system for smaller subsidiaries.

Rating: Positive

Lawson is headquartered in the U.S. and in Sweden, with total revenue of more than $852 million in fiscal-year 2008. It has two main product lines: S3 (targeted at service-centric industries) and M3 (targeted at product-centric industries). Although M3 contains robust financial functionality, it's only sold as part of an ERP suite offering, so this analysis covers S3 financials only.

S3 financial applications have a long heritage and a good depth of functionality, but S3 lacks cash forecasting and treasury management functionality, although cash forecasting and in-house banking are planned for a future release. Originally targeted at midsize organizations, S3's breadth and scalability have expanded, so S3 is now suitable for larger organizations. Consequently, S3 is often evaluated as an alternative to SAP and Oracle. Lawson scored above average in the reference survey in all categories except ability to support business change, which was slightly below average. Overall, users were positive about Lawson S3.

There have been no significant changes to the scope of functionality for S3 financial applications in the last year, but Lawson released a new version of its Smart Office desktop environment in April 2009, along with a new Enterprise Search product for S3. This allows users to search structured and unstructured data across the Lawson S3 applications, Lawson Business Intelligence and the user's own desktop. S3 scales to 1,500 concurrent users, and has been benchmarked to 4,000 concurrent users. S3 is fully multicurrency and multilingual, but Lawson has had limited success with selling S3 as a global financial management solution. It's currently localized and translated for the U.S., Canada, the U.K., Ireland, France and Sweden, while partners provide versions for Spain, Venezuela, Tanzania and Nigeria. Lawson does not currently have plans to increase the scope of international localization. However, some S3 customers have deployed S3 financials on a global basis as a corporate financial management system in the English language (one customer has deployed S3 in 110 countries in this manner). Consequently, Lawson can be considered by large and midsize companies in North America, Northern Europe and France, and by large multinational companies implementing global financial solutions primarily in English.

Rating: Positive

The Microsoft Dynamics business unit has a portfolio that includes four business application suites, all of which have core financial management applications. These are as follows:

• Microsoft Dynamics GP is part of a broader ERP suite, and Dynamics GP financial applications are targeted at midsize companies, primarily in English-speaking countries. Although versions are available for all Latin American countries, except Brazil, there are no other international versions (except one, which is provided by a partner in some Middle Eastern countries). However, Dynamics GP is fully multicompany and multicurrency, and is suitable for international organizations operating in English. Traditionally, Dynamics GP has been targeted at midsize organizations with up to 200 concurrent users (Gartner estimate; see Note 1), but in recent releases, Microsoft has been increasing scalability and adding functionality that will appeal to larger organizations.
• Microsoft Dynamics SL financial applications are targeted at midsize project-centric and distribution companies. It has been localized for six countries, along with general capabilities for Latin America and Southeast Asia, and is available in U.S. English and Latin American Spanish. Microsoft's primary focus is North America and Mexico, but partners are deploying in countries outside this focus area. Dynamics SL scales up to 300 concurrent users and has good PA capabilities, along with time recording, billing contract management and resource management. Over the last year, Microsoft has increasingly focused on meeting the needs of federal government contractors.
• Microsoft Dynamics NAV is a suite of business applications that includes core financial management applications. Earlier versions of Dynamics NAV were known as Microsoft Navision, and initially, Navision's focus was more on financial applications, but over the years, it has expanded into a comprehensive midmarket ERP suite. Consequently, Dynamics NAV financial management applications are typically sold as part of an ERP suite, but there are still some financials-only sales, and Dynamics NAV is still widely deployed as a second-tier ERP solution in subsidiaries of large multinational companies (where the focus is usually on the financial and order management applications). Dynamics NAV is targeted at midsize companies with up to approximately 200 concurrent users (Gartner estimate). It is available in 28 languages and has localizations for 42 countries, although only 14 of these country versions are currently available for the latest release (Dynamics NAV 2009).
• Microsoft Dynamics AX is like Dynamics NAV in that it is part of a broader suite, but is more scalable than Dynamics NAV, so it is targeted at midsize and large organizations. Dynamics AX can scale up to about 1,000 concurrent users (Gartner estimate), and Microsoft has benchmarked it for 3,000 concurrent users, although one user organization plans to have 6,000 concurrent users in a single instance (they are not yet live). Dynamics AX is available in 25 languages (plus variants of English, French, German, Italian and Spanish), and has localizations for 36 countries, although only 28 of these country versions are currently available for the latest release (Dynamics AX 2009). The rest will be made available in 2009. Dynamics AX 2009 included enhancements to support financial management in multisite, global deployments.

All Dynamics products provide treasury management functionality through partner products. Dynamics NAV also relies on partner products for cash management and cash forecasting, although this is planned for inclusion in a future release (no specific date). The Dynamics range is sold entirely through partners, and it is common to find that partners have created specific localizations for industry and country requirements, in addition to the core functionality provided by Microsoft. Dynamics scored below average overall in the reference survey, although not significantly so. Dynamics GP got the best scores, scoring above average in all areas except in the ability to support business change, where it was slightly below average. Consequently, large and midsize organizations should evaluate the Dynamics portfolio based on their size, business needs, geography and the local Microsoft partner network.

Rating: Positive

Oracle has three financial application product lines, each of which is part of a broader suite: E-Business Suite (EBS), PeopleSoft Enterprise and JD Edwards EnterpriseOne (JDE). Oracle also is developing a next-generation solution called Fusion Applications. However, the first release of the Oracle Fusion Applications was not delivered as originally indicated in 2008, and Gartner still considers the Oracle Fusion Applications a development project. Oracle indicates that it expects early adopter uptake in 2009 and general availability in 2010. Oracle is also continuing to develop and support the established products, and to actively sell them to new customers under its Applications Unlimited strategy, and the delay to Fusion Applications does not appear to have impacted its existing applications business in a major way, although it may have been a factor in the slow uptake of EBS R12 .

• Oracle EBS Financials is part of a highly functional ERP suite. Oracle's first applications were financials, and Oracle has a long heritage in delivering financial applications to midsize and large organizations. The financial functionality is rich and includes treasury management. EBS is modular, so it is common to find EBS Financials deployments without the full suite. EBS Financials has been deployed in 145 countries and has good international coverage (Oracle provides localizations for 49 countries, with partners providing localizations for another seven countries). It is highly scalable and can support thousands of concurrent users. It is, therefore, widely used by large multinational companies to run global financial operations on a shared-service basis. R12 contained several major enhancements to strengthen the functionality for single-instance global deployments. Uptake of R12 among the existing user base has been slow, and the release has suffered from quality problems, although Oracle states that quality issues should now be addressed. The reference survey respondents were all R12 customers, and their rankings did not indicate major concerns. One reference specifically commented on having seen quality improvements as they moved from 12.0.4 to 12.0.6. Oracle also recently announced the general availability of 12.1.
• PeopleSoft Financials offers sophisticated and comprehensive financial applications, including treasury management. These are highly scalable (up to 10,000 concurrent users) and targeted at large and midsize enterprises. Since becoming part of Oracle, PeopleSoft Financials now tends to focus sales on particular industries, primarily financial services, professional services, retail and public services (mainly in the U.S.). PeopleSoft Financials is strong in North America, but has relatively less international coverage, as compared with EBS and JDE, with localized and translated versions for 18 countries (including two maintained by Oracle local development teams and one supported by a partner). Although it's less widely used than EBS or SAP for single-instance global financial management systems, some large multinational companies have standardized on PeopleSoft Financials (which can also support large shared-service deployments).
• JDE started as a financial application solution and grew into an integrated ERP suite. Although the focus is more on selling a suite solution, many JDE customers only use the financial modules. The functionality is comprehensive, but not quite as rich as EBS or PeopleSoft; for example treasury management functionality is provided through integration with PeopleSoft Enterprise Treasury solution rather than a specific JDE module. Release 9.0 was announced in 2008, and this included enhanced data relationship management in financials, significant performance improvements to allocation functionality and an adapter to Oracle Business Intelligence Applications (OBIA) for financial analytics. The JDE solution generally has been targeted at midsize companies, although it's scalable to more than 200 concurrent users. Although typical JDE user organizations have between 50 to 200 concurrent users, Oracle is seeing an increasing trend for JDE users to consolidate their finance systems, and has a client with 600 concurrent users in a centralized implementation. JDE also has good international support, with localized versions provided by Oracle for 35 countries. Today, Oracle is seeing more momentum for JDE sales in countries outside the U.S.

Oracle has built a strong portfolio of financial applications that enables it to offer coverage of many industries and geographies. Large and midsize organizations should evaluate Oracle solutions based on size, geography and industry. However, midsize organizations with small IT functions may find the scope of the EBS and PeopleSoft technology footprints to be challenging. Oracle scored below average in the reference survey, and was slightly above the bottom-rated vendor. Of the products, EBS fared best, followed by JDE. However, PeopleSoft fared worst in the reference survey, with below-average scores in all categories, which were significantly below average in the service and support category, primarily with regard to ease of upgrade and ease of applying patches. Consequently, organizations considering PeopleSoft should check references closely to gauge the feeling of other users. However, this caveat is not significant enough to diminish Oracle's overall Strong Positive rating, which is merited by its breadth of functional support and wide global coverage.

Rating: Strong Positive

Sage is a global provider of business application software, with revenue of £1,295 million in fiscal-year 2008. It has built a large portfolio of applications through an aggressive acquisition strategy, and most solutions are targeted at small businesses that fall outside this MarketScope. However, Sage has several ERP solutions that target midsize companies, including Sage Accpac, Sage MAS 500, Sage X3, Sage Line 500 and Baurer (in German-speaking territories). These are broad-function ERP systems, but Sage MAS 500 and Sage Line 500 have financial management applications that are often sold on a stand-alone basis. Sage MAS 500 scales to approximately 200 concurrent users (Gartner estimate), and is sold primarily in North America and Australia, while Sage Line 500 can scale to several hundred concurrent users (Gartner estimate). Sage Line 500's primary sales focus is in the U.K., but it is also sold internationally and is available in six languages.

However, the main Sage product line considered by organizations that want core financial management applications is Sage Accpac ERP 500, which is scalable to approximately 500 concurrent users. This is a long-established, midmarket ERP system used by around 40,000 organizations globally. Although it is a broad ERP suite, it has comprehensive core financial management functionality that is often sold and implemented as a stand-alone. The financial functionality support multicurrency and multicompany operations with consolidation across multiple charts of accounts, although it does not have treasury management functionality. Sage provides localized versions for 11 countries, while partners provide another 37 country versions. Sage also has an extensive network of third-party developers that provide additional functionality that is sold and supported by Sage or its resellers. For example, advanced allocation functionality in GL is provided as a partner product.

Sage products are sold through a partner network, and the country-based approach of selling products can be challenging, especially for multinational organizations. However, midsize organizations should consider Sage based on their geography and the local partner network. Sage scored very well in the reference survey, being the highest-rated vendor overall. Sage's scores were above average in all categories, but were significantly above average in service and support, which is indicative of the strength of its partner channel and the close relationship these partners build with their clients.

Rating: Positive

SAP's core financial applications have been developed over many years, and although they are part of SAP ERP 6.0 suite, they are the most widely deployed modules in SAP's product set and can be used on a stand-alone basis. The applications have comprehensive financial functionality, including treasury management, for large and midsize organizations. SAP states that around 1,500 clients now use its treasury functionality, and this will be a focus area for future development to strengthen the value proposition against specialist treasury vendors.

SAP's financial management portfolio also includes project management, real estate management and financial supply chain management. The applications are highly scalable to tens of thousands of users (Gartner estimate), and are widely used by large multinational companies to run global financial operations on a shared-service basis.

SAP has strong international functionality, with 45 standard country versions and eight add-on country versions (these provide country-specific functions to complement the core products, which may be supported by a partner and may not be available for each maintenance level). SAP's reputation as a Tier 1 solution means that many midsize companies are wary of evaluating it, but SAP has many customers in this space. Its SAP Business All-in-One offering (delivered by partners), with preconfigured business scenarios and deployment accelerators, has helped SAP gain midsize customers in several industries. Recent functional enhancements have included improvements in intercompany reconciliation capabilities and enhanced integration between treasury and GL, with posting of all transaction and position data to enhance compliance reporting.

Overall, SAP came slightly below average in the reference survey. Users ranked SAP above average for service and support, and slightly above average for value for money. However, SAP was ranked below average in the other categories, especially in ability to support business change. In the reference survey, SAP's most positive reference came from a user with between five to 25 concurrent users, which is an indication that SAP is not purely for large, Tier 1 organizations (especially for a financials-centric implementation). Consequently, large and midsize organizations should evaluate SAP, but midsize organizations with small IT functions may find the scope of the SAP technology footprint to be challenging. SAP offers hosted options for organizations that want to minimize the required IT support.

Rating: Strong Positive

Unit 4 Agresso is a Netherlands-based business software company that offers a range of business applications and Internet design services, with total 2008 revenue of € 393.6 million. Unit 4 Agresso offers two main core financial application suites: Agresso Business World (ABW) and CODA (which it acquired in 2008). Both are maintained and developed through separate subsidiaries, have different technology platforms and do not share any common aspects of financial management functionality. Since the acquisition of CODA, Unit 4 Agresso has focused the products in different market segments, although both are still generally suitable for midsize and large companies. In addition, Unit 4 Agresso delivered the first set of SaaS-based core financial management applications developed on salesforce.com's Force.com platform under the CODA 2go brand (see "The Impact of SaaS" section of this research).

ABW is a comprehensive ERP solution that covers financials, HR, payroll, project management, purchasing, field service and asset management, CRM and business process automation. The financial applications can be sold on a best-of-breed basis and offer comprehensive financial functionality, including strong PA supported by resource planning and time recording. Treasury management is the only functionality provided through a partner product. ABW is well-suited to service-centric organizations, public-sector firms and higher education, and, in particular, Unit 4 Agresso focuses ABW on dynamic organizations that have to deal with change in their business environment, emphasizing the flexible underlying architecture of ABW, which includes an integrated data, business process and analytics model that enables business users to make changes without extensive IT support. Agresso has more than 2,900 customers and is deployed in 100 countries, although the majority of its customers are based in Europe and the U.S. The software is localized for 16 countries in Europe, North America and Australia, and is available in 17 languages, but does not have localizations for other Asia/Pacific countries outside Australia. ABW continues to exhibit strong growth rates in core financial applications, and recently we have seen increased interest in ABW as an alternative to SAP and Oracle for large, service-centric organizations that are looking to centralize global financial operations. Midsize organizations based in Europe, North America and Australia should consider ABW, and larger, global service-centric organizations should also consider ABW, but should check localization and language availability against their deployment plans.

CODA has a range of solutions targeted at the CFO. Its core offerings are financial management applications, but it also provides financial analytics, financial consolidation, cash management and process control capabilities. It has two financial management suites: Financials is targeted at midsize and large companies, and Dream targets SMBs, primarily in the U.K. (Dream was not included in this analysis due to its SMB focus). Financials is a functionally comprehensive solution, although it requires partner products for treasury management. Financials has more than 2,800 customers in all geographies, and Financials v.11 is fully Web-enabled with a CODA-designed Web services workflow engine that enables CODA processes to be integrated with other applications. CODA emphasizes its ability to easily integrate with other applications for organizations that want best-of-breed financials linked with a complex and changing set of operational applications. It scales to more than 1,000 concurrent users (CODA has benchmarked 5,000 concurrent users), and has localizations and translations for 16 countries (including China and Brazil). Midsize and large organizations should consider CODA, although they should check specific country availability.

Unit 4 Agresso products scored well in the reference survey, scoring above-average marks in implementation, ability to support business change and overall recommendation. Its service and support rating was below average, but across all categories in total, Unit 4 Agresso was above average. There was no significant difference in responses between ABW and CODA, which is evidence that both product sets are functional and mature.

Rating: Positive