Magic Quadrant for Cloud Financial Corporate Performance Management Solutions

Transcription

1 Magic Quadrant for Cloud Financial Corporate Performance Management Solutions Published: 29 June 2017 ID: G Analyst(s): John E. Van Decker, Christopher Iervolino Cloud financial corporate performance management solutions help the office of finance manage the financial close and apply appropriate controls throughout the accounting cycle. Application leaders should use this Magic Quadrant to identify vendors that are a good match for their business needs. Strategic Planning Assumptions Through 2020, 80% of large organizations and 25% of midsize organizations in North America and Europe will use cloud financial corporate performance management capabilities for financial consolidation and reporting, and enhanced financial control and automation, to replace legacy onpremises systems and manual processes. By 2020, 60% of the world's top 1,000 companies will be using cloud financial corporate performance management capabilities for financial consolidation and reporting, and enhanced financial control and automation, which will pose support challenges for organizations that persist with on-premises solutions. By 2020, cloud core financial management suites will integrate financial corporate performance management capabilities into their transactional solutions, which, by not requiring separate interfaces, will give their vendors a competitive advantage and pose a challenge to specialist vendors. Market Definition/Description The "Magic Quadrant for Financial Corporate Performance Management Solutions," which covered both on-premises and cloud solution providers been discontinued. It has been replaced by this "Magic Quadrant for Cloud Financial Corporate Performance Management Solutions," which is considered an entirely new Magic Quadrant. The financial corporate performance management (FCPM) market has shifted from mature onpremises offerings to cloud solutions as finance application leaders have sought improvements in financial close capabilities, enhanced cost control and efficiencies, greater application flexibility and

2 shorter time to value. In addition to providing these advantages, cloud FCPM solutions are typically easier to use and manage than the previous generation of on-premises offerings. Topics such as the timing of cloud conversions, cloud vendors' product roadmaps and cloud product selection now account for nearly all of Gartner's client advisory conversations about FCPM. Although on-premises options still exist, nearly all vendors have greatly de-emphasized them in their sales processes. An increasing number of vendors that previously offered both on-premises and cloud solutions have stopped selling on-premises FCPM solutions altogether. All the vendors in this Magic Quadrant deliver cloud FCPM cloud solutions. Whether they also provide on-premises solutions was not a factor in our evaluation of their positions in Figure 1. Nor is Gartner's cloud service definition aligned to any specific technical architecture (for example, one that enables multitenancy at the application level). Because users tend to value functionality primarily, and more are requesting cloud deployments, we have defined a number of cloud service attributes that vendors appearing in this Magic Quadrant had to show (see Note 1). In short, their cloud services must confer the benefits of SaaS upon their users, which requires the application software to be delivered and managed remotely, based on a single set of common code and data definitions that is consumed in a one-to-many model by all contracted customers at any time. The cloud services must be purchasable on a pay-for-use basis or with a subscription based on usage metrics. In addition, these services must be public cloud services that is, they must use shared resources to provide elasticity and support multiple consuming organizations. We identified three types of cloud service vendor that meet our inclusion criteria: Cloud-only vendors with cloud solutions that have been architected wholly or largely from the outset as cloud services. These typically have a multitenant application architecture. Traditional on-premises vendors with new "built for the cloud" solutions. Although these solutions have been built for the cloud, they may reuse functional code and platforms from the vendor's preceding on-premises offering. They also may vary in their degree of multitenancy. Traditional on-premises vendors that have made their solutions available as a cloud service. These services often support multiple deployment models (public cloud, private cloud and on-premises). They may use a provisioning layer that enables the vendor to deliver the service in a public cloud. Alternatively, they may support multitenancy at the database or OS level, and use virtualization techniques. This type of cloud service is broadly defined, and its vendors vary in how extensively they have rearchitected each strikes its own balance between the levels of effort required to reuse code, improve ease of use and add functionality. Vendors that use third-party cloud platforms such as from Amazon Web Services (AWS) or, more commonly in this market, Microsoft (Azure) face the challenge (and opportunity) of continually drawing on the rapidly increasing capabilities of these platforms. The cloud FCPM market is impacting the office of finance. Several trends fueled by technological change are enabling the office of finance to improve the financial close process in terms of effectiveness, efficiency and compliance. These have arisen owing to the emergence of the cloud FCPM market. Most of the associated capabilities are greenfield opportunities for organizations that Page 2 of 31 Gartner, Inc. G

3 previously relied heavily on spreadsheets and manual processes. The new cloud FCPM trends include: The growing availability of cloud office-of-finance-focused solutions that can be administered by the end user, mostly configured by the end user, and technologically managed by the cloud service provider with less support for integration and technology management by the IT department. Most cloud FCPM solutions are now marketed almost exclusively to the end user. The increasing willingness of the office of finance to put critical financial data in a public cloud. Some capability areas, such as disclosure management, have been almost exclusively sourced from cloud solutions for the past five years without any security breaches, which shows the viability of these solutions. The emergence of platform as a service (PaaS) offerings that provide a foundation for current and future applications, scenarios and blueprints from vendors, and that enable end users to develop their own applications and extend the platform through innovation into customized areas that can improve the office of finance. In the future, this trend will also enable vendors' partners to offer specialized intellectual property and further applications to meet clients' requirements. The increasing ability of cloud solutions from specialist FCPM vendors to integrate with both cloud and on-premises solutions in hybrid environments. The growing convergence of financial consolidation and reporting and enhanced financial control and automation (EFCA) functions in specialist vendor suites, as well as of cloud core financial management suites (covering general ledger [GL], accounts payable, accounts receivable and fixed assets) with FCPM offerings. These trends will continue to significantly improve enterprises' financial management by automating many manual processes and replacing customized solutions. Although financial consolidation and reporting applications have long been used, the other pillars of FCPM are greenfield opportunities for many enterprises. FCPM solutions help CFOs and other business leaders manage and optimize the financial close process. As defined by Gartner, the components of an FCPM solution support financial accounting processes to help achieve a corporate financial close. The FCPM market includes the following components: Financial consolidation: This component confers the ability to bring together financial information from multiple GL sources, while providing for eliminations for intercompany accounting and booking for joint-venture and non-gl businesses. It may include support for developing a financial consolidation instance, for the purpose of tax data provisioning, to help the tax organization prepare returns and plan. Even with a single GL, an organization may still have complex financial consolidation needs, but small and midsize organizations with limited legal entities may not require complex financial consolidation capabilities. Gartner, Inc. G Page 3 of 31

4 Financial reporting: This component provides financial accounting-based reporting to meet the demands of regulators, investors and tax authorities, and to inform the organization's operational and strategic financial management. Management reporting, costing and forecasting: This component provides responsibility reporting and cost accounting reports to the enterprise's managers, as well as inputs to disclosure reporting for investors. For management reporting, predictive capabilities are used to forecast financial reports, based on actuals and plans. These forecasts include predictions of external forces, such as market conditions influenced by economic and competitive dynamics, and changes in customer demand. Costing includes profitability analysis, but not the ability to perform profitability modeling (which is covered by strategic corporate performance management [SCPM]). Reconciliation and close management: This component confers the ability to manage the financial close, including activities spanning accounting cycles. Capabilities include the EFCA functions of reconciliation management, close cockpits that span ERP and post-erp processes, and journal entry control. Intercompany transactions: This component, which is also an EFCA function, confers the abilities to approve at a voucher level and to handle accounting transactions across multiple GLs and companies. This function works closely with intercompany reconciliation. Disclosure management: Another EFCA function, this component confers the ability to support multiple regulatory requirements for disclosure reporting, including extensible Business Reporting Language (XBRL) and inline XBRL (ixbrl) tagging. It may also provide board book capability and form the foundation for performance reporting within SCPM. This Magic Quadrant presents a global view of the primary vendors in the cloud FCPM market. Organizations using this Magic Quadrant for evaluation purposes must take this into account when applying its findings to their specific requirements. The fact that some vendors are classified as Leaders does not necessarily mean that these vendors' solutions effectively address all functional and technical requirements for all use cases better than those of vendors in the other three quadrants. Vendors in this Magic Quadrant vary in their ability to support different FCPM processes and use cases. Organizations show should draw up their own unique shortlists of vendors, in light of the complexity and scale of their requirements, and they may want to include vendors not profiled in this Magic Quadrant. This Magic Quadrant is not designed to be the sole tool to use when creating a shortlist. It should be used as part of an organization's due diligence, and in conjunction with discussions with Gartner analysts, a review of Gartner Peer Insights opinions and study of related Gartner publications such as "Critical Capabilities for Financial Corporate Performance Management Solutions." Page 4 of 31 Gartner, Inc. G

5 Magic Quadrant Figure 1. Magic Quadrant for Cloud Financial Corporate Performance Management Solutions Source: Gartner (June 2017) Gartner, Inc. G Page 5 of 31

6 Vendor Strengths and Cautions Adaptive Insights Adaptive Insights is a cloud-only SaaS vendor based in Palo Alto, California, U.S. It provides solutions for financial consolidation, financial reporting and management reporting. It does not offer reconciliation and close management, disclosure management or a specific intercompany solution. Adaptive Insights offers complementary integration with Microsoft Office. It also supports SCPM processes. Adaptive Insights is a Niche Player in this market. Although it achieves a high level of customer satisfaction, its Ability to Execute is comparatively low because its solution does not support the more complex FCPM use cases. In addition, Adaptive Insights has a much smaller customer base in FCPM than in SCPM. Reference customers for Adaptive Insights reported that their top-three product selection criteria were ease of use, quick and inexpensive implementation, and functional capability. Strengths As a cloud-only vendor, Adaptive Insights has extensive experience in cloud-related customer support, sales and marketing, and product development. It claims to have more than 3,500 cloud customers in production, but most of these customers use only its SCPM functionality; nevertheless, this presents an opportunity to upsell FCPM capabilities. Adaptive Insights provides a strong management reporting capability. It also has very good embedded analytics, which may be attractive to customers of all sizes, as well as being appropriate for the business units of large enterprises. Its other functionality includes in-context data visualizations; a built-in Microsoft Excel interface; and process tracking (but we have not seen this used for close management). As Adaptive Insights does not support on-premises implementations, it can focus its efforts exclusively on its cloud suite. At the same time as Adaptive Insights is attempting to attract more large enterprises to its FCPM solution, many of its midsize customers are selecting a single solution for FCPM and SCPM. Cautions Adaptive Insights is limited in its ability to support the more complex consolidation use cases. It is typically more suited to use by small and midsize businesses (SMBs) than by large ones. Most of Adaptive Insights' business is done in the U.S., although it does have over 650 customers from other countries (20% of its customer base), and it is expanding its global financial consolidation and reporting capability. Most of these 650 customers mainly use Adaptive Insights' SCPM capabilities, so prospective FCPM customers outside the U.S. should appraise its local capabilities. Page 6 of 31 Gartner, Inc. G

7 Although Adaptive Insights claims that 25% of its customer base is made up of large enterprises (31% of its survey respondents had more than $1 billion in annual revenue), its solutions tend to be used by individual business units and departments, rather than enterprisewide (its survey respondents reported having, on average, 131 users). Large organizations with enterprisewide needs, such as for extensive application governance, should evaluate Adaptive Insights references from organizations of similar size and process complexity, especially for country-specific financial consolidation requirements. Anaplan Anaplan is a cloud-only SaaS vendor based in San Francisco, California, U.S. It provides SaaS financial consolidation (including reconciliation, close management and intercompany transaction), financial reporting and management reporting capabilities. It does not provide disclosure management capabilities. Anaplan is a Niche Player in this market. Its relatively low score for Ability to Execute is based on the limited scope of its FCPM solution and limited adoption by customers. Reference customers for Anaplan reported that their most important product selection criteria were modeling and solution capabilities. Anaplan's FCPM products do not achieve the same market penetration as its SCPM solutions. Gartner views Anaplan's current FCPM capabilities as being suitable mainly for midsize customers in terms of scope and capability. Strengths As a cloud-only vendor, Anaplan has extensive experience in cloud-related customer support, sales and marketing, and in cloud product development and support. Anaplan can use the network of system integrators it has built for SCPM to extend its position in the FCPM market through marketing and referrals. Anaplan's surveyed reference customers scored it above average in nearly all areas, including "overall satisfaction with vendor," although shortcomings in terms of FCPM adoption and functionality restrict its Ability to Execute. The reference customers scored Anaplan in the top 25% of the vendors in this Magic Quadrant for "solution's ability to meet their needs," ease of use, application flexibility, and both sales and implementation experience. In addition, a very low percentage of these customers required ongoing support from Anaplan or from third-party consultants. Cautions Anaplan may not be an appropriate vendor for small organizations, due to its focus on selling to larger enterprises. At the same time, Anaplan still has only a very limited FCPM presence in large organizations. Very few global enterprises that use Gartner's inquiry service ask about Anaplan in connection with FCPM solutions. Gartner, Inc. G Page 7 of 31

8 Anaplan's scores from reference customers for application life cycle management (a capability released in 4Q16) and analytics were slightly below the average for vendors in this Magic Quadrant. Anaplan's reference customers were relatively few and generally not associated with the complex use cases that many of its competitors address. Prospective customers should check that Anaplan's reference customers have enough experience with the vendor to provide meaningful insight. BlackLine BlackLine is headquartered in Woodland Hills, California, U.S. It is a pure-play cloud vendor that provides solutions for FCPM functions. BlackLine Financial Close Management is a cloud-based solution that offers control over the financial close and reconciliation process by streamlining accounting workflows and ensuring accuracy and compliance auditability. BlackLine's reconciliation and close management products include Account Reconciliations, Task Management, Transaction Matching, Journal Entry, Consolidation Integrity Manager and Variance Analysis. BlackLine supports integration with over 40 ERP systems, including an SAP-Endorsed Business Solution. The BlackLine Intercompany Hub is a solution in which intercompany transactions are initiated, approved, validated and booked; it provides a centralized transaction repository with automated journals, invoices workflows and approvals. BlackLine is a Leader in this market. It is one of two vendors that have defined the cloud market for EFCA of FCPM during the past five years, and it is now reaping the rewards. BlackLine's reference customers gave it high scores for customer satisfaction and market execution. Strengths BlackLine products are sold exclusively using a cloud-based subscription model. Pricing is segmented for midsize and large organizations, based on the number of end users over a typical three-year contract. This model has helped to define the EFCA components of the FCPM market as primarily cloud-based, and benefits BlackLine because it does not have to support legacy on-premises solutions. BlackLine received above-average scores for execution from its reference customers, its highest score being for customer experience. BlackLine provides 24/365 live global support via , phone and an online support portal. Its support team is based in its U.S. corporate headquarters and in its London, U.K. office. Support is available in English, Spanish, Thai, Tagalog, French, Cantonese and Mandarin. BlackLine has always been an innovator in the FCPM space. It was among the first companies to develop and market an account reconciliation solution (in 2005) and a financial close solution (in 2006) to enable the management of close activities through an integrated package covering all post-gl closing activities. It has also been successful in establishing relationships with leading financial management service providers as part of finance transformation practices. Page 8 of 31 Gartner, Inc. G

9 Cautions BlackLine's prices have increased significantly during the past couple of years, especially after its initial public offering, although this has been in line with the overall increases in end-user prices seen across this market. BlackLine makes separate charges for storage, but we have not seen this pricing approach rolled out consistently across its established users or new customers. BlackLine's midmarket pricing appears high, when compared to FCPM vendors that target SMBs. However, BlackLine can be very competitive when competing against multiple vendors. Its international capability is still emerging, so prospective customers should check that it offers local support where they need it. BlackLine's premium pricing for transaction matching for reconciliations is often a concern for companies negotiating with it. We have encountered many cases where organizations chose to limit the amount of reconciliation matching, which can lower the value of the implementation. Board International Board International, which is co-headquartered in Boston, Massachusetts, U.S. and Chiasso, Switzerland, is traditionally an on-premises vendor, but has recently delivered solutions rearchitected as a cloud service. It offers solutions for financial reporting and consolidation and management reporting. Its cloud solutions use Microsoft Azure. Board International is a Niche Player in this market, because of its relatively limited Ability to Execute (which includes market penetration) and vision. Board International is used by both midsize and large organizations and can support enterprisewide use (its reference customers were split evenly between those with annual revenue of less than $1 billion and those with annual revenue of more than $1 billion). It also has business intelligence (BI) capabilities in its PaaS offering, which can augment management and financial reporting capabilities. Board International's reference customers reported that their top-three product selection criteria were ease of use, functional capability and modeling capability. Strengths Board International's reference customers scored it above average in all areas, including "solution's ability to meet their needs" and "overall satisfaction with vendor." It also scored in the top 25% of vendors in this Magic Quadrant for application flexibility, performance, integration and analytics. Board International's position as a Niche Player is due to its relatively low penetration of the cloud FCPM market and its limited application set for financial consolidation customers, compared with its competitors. Board International's financial reporting capability is strong, due to its global perspective and knowledge of international requirements, when compared with some North American vendors. Gartner, Inc. G Page 9 of 31

10 Its management reporting is also strong, as a result of its BI capabilities and its roots in onpremises applications. Many existing and prospective Board International customers also use its platform for BI reporting. They see this as a strength when selecting it as a platform for FCPM (the same is true of Board International's SCPM offerings). Cautions Board International's cloud FCPM offering is relatively new, so many of its customers have not been in production very long (less than one year for 63% of its surveyed reference customers). The cloud FCPM offering is early in its life cycle, and there are a limited number of partners and reseller channels to bring it to market and implement it. Prospective clients should check that this vendor's reference customers are experienced enough with its cloud offering to provide valid insight. The relatively low penetration of Board International's cloud FCPM solution also requires those considering it to make extensive reference checks to ensure it has the local and regulatory functionality they need. Board International offers fewer process- or business-domain-focused prepackaged applications than other vendors in this Magic Quadrant, and requires more use of PaaS capabilities. Organizations considering Board International should be aware that more consultancy skills are likely to be needed to meet their functional requirements. Prospective clients will need to build many of the consolidation capabilites they require. Furthermore, Board International's product does not fully support complex global consolidations and financial reporting. Host Analytics Based in Redwood City, California, U.S., Host Analytics offers a cloud FCPM platform that supports financial consolidation, financial and management reporting, analysis and collaboration. The vendor has been successful in deals where complex consolidation and reporting capabilities are required. Host Analytics is a Leader, due to its maturity in the cloud-only market, its high customer satisfaction scores, and the ability of its products and consulting teams to support the more complex use cases. It received above-average scores from its reference customers for product strategy and customer experience. Reference customers for Host Analytics reported that their top-three product selection criteria were functional capability, ease of use and analytics. Strengths Host Analytics delivers a robust FCPM cloud solution and does well in cloud-related customer support, sales and marketing and product-related areas. It has not had to support legacy onpremises products for several years, and its current solution has been architected for the cloud. Page 10 of 31 Gartner, Inc. G

11 Host Analytics' reference customers scored it above average in most areas, including "overall satisfaction with vendor." Their scores also placed it in the top 25% of the vendors in this Magic Quadrant for application governance/life cycle management. In addition, a low percentage of these customers required ongoing support from Host Analytics or third-party consultants. Host Analytics is viewed as having a comparatively mature cloud solution for FCPM, and its product is able to support the more complex use cases. Now that many of its competitors are aggressively moving to the cloud, its offering is seen as being a more stable and proven platform that can support large, complex organizations. Cautions Host Analytics' reference customers scored it below the average for vendors in this Magic Quadrant for performance and implementation experience, although these scores should be considered in light of the vendor's focus on the more complex use cases. Organizations with complex requirements should pay special attention to related project considerations. Most of Host Analytics' customers are in North America (96% of its surveyed reference customers were based in that region). Prospective customers outside North America should evaluate customer references from their own region and appraise local product, consulting and support capabilities, and regulatory requirements. Host Analytics' analytic and model-mapping capabilities are less sophisticated than those of other vendors with modeling offerings in this market. Although Host Analytics has made improvements in these areas in accordance with its product roadmap, prospective customers with extensive analytics and shared-modeling needs should evaluate its products carefully. IBM IBM, which is based in Armonk, New York, U.S., is a traditionally on-premises vendor that has moved its FCPM capabilities to the cloud. IBM's FCPM cloud portfolio includes IBM Cognos Controller for financial consolidation, and IBM Disclosure Management, a collaborative platform for multiauthor reports, narrative analysis, presentations and performance reporting. These solutions have been rearchitected to make them available in the cloud. IBM Cognos Controller focuses on the midmarket and consolidations outside the U.S. IBM is a Challenger in this market, due to its brand awareness with CPM products in the cloud. As IBM grows its cloud customer base and continues to expand its cloud capabilities, its reference customer scores have potential for improvement. IBM's position for Completeness of Vision is enhanced by above-average scores for its geographic, sales and product strategies, as well as its business model. However, its limited demonstration of complex use cases, and the limited market penetration of its on-premises Cognos Controller product, limit its Ability to Execute in this market. Reference customers for IBM reported that their top-three product selection criteria were functional capability, flexibility and compatibility with Microsoft Excel. Gartner, Inc. G Page 11 of 31

12 Strengths IBM has many large customers, a global reach, a large ecosystem of implementation partners and an extensive service organization, along with broad business domain and industry expertise. Scores from IBM's reference customers for implementation and "solution's ability to meet their needs" were above the average for vendors in this Magic Quadrant. IBM can draw on its strong base of partners for system implementations. IBM can exploit its success in the SCPM market (specifically in getting its Cognos TM1 users to move to IBM Cloud Analytics) to encourage more on-premises FCPM customers to move to its cloud solutions. This will improve its market share. Cautions IBM's reference customers scored it below the average in most areas, except for implementation and "solution's ability to meet their needs." They placed it below the average for vendors in this Magic Quadrant for ongoing maintenance effort, application governance/life cycle management and "overall satisfaction with vendor." IBM's cloud customers in this market include a range of company sizes, but its reference customers tended to be smaller organizations (67% of those surveyed had less than $1 billion in annual revenue) with below-average numbers of users (the average being 89). Larger organizations should therefore carefully evaluate the capabilities of IBM's cloud offerings to ensure they satisfy all their needs. About half of IBM's reference customers reported that their applications required ongoing support from IBM or a third-party consulting organization. This is in contrast to many other solutions in this market, and may raise questions about the maturity of IBM's cloud platform. OneStream Software OneStream Software, which has headquarters in Rochester, Michigan, U.S., draws on its track record of delivering a highly functional on-premises financial consolidation solution to help it deliver a cloud solution. Additions to its platform include applications for financial reporting, consolidation, management reporting and, most recently, reconciliation. OneStream Software offers a robust platform that includes a set of solutions that can be configured and extended to meet the user's needs. OneStream Software is a Visionary in this market. It is a relatively small vendor, which partly explains its low position on the Ability to Execute axis, but it received a good customer satisfaction score. It is in a strong position with regard to innovation, given its ability to use its cloud SaaS platform in multiple areas of FCPM (and SCPM). Reference customers for OneStream Software scored it above average for its ability to meet their needs. Page 12 of 31 Gartner, Inc. G

13 Strengths OneStream Software has a functionally robust solution for financial reporting and consolidation. It competes effectively against much larger vendors in this area, and its solution has been implemented by large enterprises. Since the same solution is available in a public cloud, midsize and large enterprises should consider it if they have considerable requirements for financial consolidation. OneStream Software is growing rapidly and has a strong mind share among finance professionals. In addition, it is good at targeting large organizations that are struggling with complex legacy, on-premises financial consolidation implementations. Although OneStream Software still has only a limited number of implementations, its reconciliation management capabilities have enabled it to displace some of the implementations of EFCA vendors. One of the company's main strengths is its provision of a platform that can be extended into multiple areas of CPM. Cautions OneStream Software focuses on North America and EMEA, and has limited exposure elsewhere. It needs to develop partnerships with midsize and large system integrators to extend its reach around the world by, for example, accessing more support for local languages and local regulations. As OneStream Software is still a relatively small, privately held company, prospective customers should undertake due diligence on its viability, in comparison with more established vendors. OneStream Software has not yet taken external capital to fund operations, and it operates efficiently from a financial management perspective. As OneStream Software has not received capital from external investors, this limits the funds available to communicate its presence in the market. Despite some successful targeting of customers, limited awareness of its brand means that OneStream Software often does not appear on shortlists seen by Gartner. Oracle Oracle, which is headquartered in Redwood Shores, California, U.S., has a long track record as a leading vendor in the FCPM market, due to its on-premises market penetration with Hyperion solutions, which are in widespread use around the world. Oracle is now focused on delivering these solutions' capabilities in the cloud, and on achieving functional parity between its cloud solutions and on-premises products. Oracle's offerings include the Oracle Financial Consolidation and Close Cloud Service (FCCS), Oracle Account Reconciliation Cloud Service (ARCS) and Oracle Enterprise Performance Reporting Cloud Service (EPRCS), which addresses narrative reporting needs. Capabilities for disclosure management are not yet available from Oracle in the cloud. Gartner, Inc. G Page 13 of 31

14 Oracle is a Leader in this market, due to its global coverage and market traction in several areas of FCPM management reporting (EPRCS), reconciliation management (ARCS) and financial consolidation. Oracle's reference customers scored it above the average for this Magic Quadrant for geographic strategy, sales and product strategy, as well as business model. Oracle scored well for Ability to Execute, due to its aggressive release schedule and sales support for its new cloud FCPM solutions, although complex consolidation implementations in the cloud were limited at the time of writing. Reference customers for Oracle reported that their top-three product selection criteria were functional capability, solution flexibility and the fact that they were also using other Oracle products. Strengths Oracle has many large customers, a global reach, a large ecosystem of implementation partners and a large service organization, along with broad business domain and industry expertise. Oracle is able to exploit these attributes to increase the market penetration of its cloud FCPM products. Oracle will continue to build functionality into its FCPM products, and plans to make FCCS's functionality equal to that of the on-premises Hyperion Financial Management product within the next year. This should meet the demand for cloud financial consolidation from large organizations, which typically lags behind that arising from SMBs. Oracle has a large base of on-premises Hyperion Financial Management users to migrate to the cloud. For this migration to occur, it will need to highlight examples of large customers that use its cloud FCPM products. Cautions Oracle's reference customers rated it below the average for vendors in this Magic Quadrant in most areas (although better than in surveys conducted for prior Magic Quadrants). They placed Oracle in the bottom 25% of vendors in this Magic Quadrant for "overall satisfaction with vendor." About half of Oracle's reference customers reported that their applications required ongoing support from Oracle or a third-party consulting organization. This is a concern, because one reason for moving FCPM solutions to the cloud is to benefit from a more user-led support model. Oracle's cloud customer base in this market includes a range of company sizes, but 65% of its surveyed reference customers had less than $1 billion in annual revenue. Large organizations should evaluate the capabilities of Oracle's cloud offerings to ensure they satisfy their specific needs. Page 14 of 31 Gartner, Inc. G

15 Tagetik Tagetik, which is headquartered in Lucca, Italy was acquired by Wolters Kluwer Tax & Accounting in March 2017, and subsequently renamed CCH Tagetik. The acquisition announcement indicated that Wolters Kluwer will bring together its corporate offerings with those of CCH Tagetik within its Corporate Performance Solutions business unit. The impact of this acquisition was not evaluated for this Magic Quadrant. Tagetik is a Visionary in this market. It was among the first traditionally on-premises FCPM vendors to configure its solution for SaaS deployment. Tagetik Cloud can use AWS or Microsoft Azure cloud environments. Tagetik supports financial consolidation, intercompany reconciliation, financial reporting, management reporting, disclosure management, close management, and a framework for account reconciliation and tax provisioning. Tagetik has always had a strong on-premises solution for global financial consolidation. Because Tagetik's cloud and on-premises solutions are functionally the same, opportunities for Tagetik to use its cloud consolidation capabilities should increase as cloud consolidation becomes more mainstream. Tagetik has grown in North America with its cloud solutions, which are now growing faster than its on-premises solutions. Reference customers for Tagetik reported that their top-three product selection criteria were functional capability, ease of use and solution flexibility. Strengths Tagetik's background means that its cloud solutions are more robust than those of many other FCPM vendors, including the newer market entrants. It has also demonstrated success (particularly in Europe) when addressing complex regulatory, enterprise risk and sustainability reporting requirements in the cloud with its Collaborative Office product. There is an opportunity to extend this success globally. Tagetik's customer reference scores for "solution's ability to meet their needs" were above average. Most of its customers view its FCPM solution as robust and able to support complex use cases. Tagetik has been successful at competing in the on-premises FCPM market against many of the leading vendors. It will be able to draw on this success to help it to compete in an expanding cloud market. Cautions Tagetik's customer reference scores position it as below average in some areas, and in the bottom 25% of the vendors in this Magic Quadrant for application governance/life cycle management. To some extent, this is attributable to Tagetik's addressing of complex use cases. Organizations should evaluate references for similar use cases and complexity. About half of Tagetik's survey respondents reported that their applications required ongoing support from Tagetik or a third-party consulting organization. This is a concern, because one Gartner, Inc. G Page 15 of 31

16 reason for moving FCPM solutions to the cloud is to benefit from a more user-led support model. Although Tagetik can support a range of customer sizes, proportionately more midmarket organizations use its cloud solution than its on-premises solution. Large organizations with enterprisewide needs should evaluate references from organizations of similar size and process complexity. Although Tagetik's Intercompany Cockpit is focused on process flows for EFCA, it lacks the high-volume complex-transaction matching capability of leading EFCA products. Trintech Trintech, which is headquartered in Dallas, Texas, U.S., offers Cadency, a solution delivered as a SaaS subscription through a secure private cloud, and ReconNET, a high-volume matching product. Both are now cloud-only offerings. In 2016, Trintech acquired Chesapeake System Solutions, a competitor in the field of reconciliation management, and has since integrated Chesapeake's product into Cadency. Many Chesapeake customers are moving to the consolidated Trintech product. A Cadency subscription grants access, at a single price per user, to all of the software's components (Certification/Reconciliation, Journal Entry, Close, Compliance and the Cadency Console). A Cadency Advanced Matching option provides access to ReconNET capabilities. Cadency's Certification/Reconciliation component offers a graphical dashboard that presents managers with key performance indicators about the reconciliation process. Close is the close management portion of Cadency. It provides the ability to track multiple close calendars and separate workflow assignments by entity and account structure. Cadency, together with the Advanced Matching capabilities of ReconNET, handles intercompany transactions. Finally, Trintech recently introduced a Disclosure Management module to extend its comprehensive solution portfolio, but too late for evaluation in this Magic Quadrant. Trintech is a Visionary in this market, because it has an integrated suite of FCPM functions that draws on a common business process platform that excels in comparison to its competitors. Strengths Trintech has strong reconciliation management capabilities that are suitable for large organizations with complex needs. Its product suite addresses many areas of EFCA and is a good choice for organizations that want to address multiple areas of FCPM. Trintech's integrated Cadency suite offers organizations the opportunity to extend their FCPM solution footprint without having to acquire separate products on an a la carte basis. As new functions are enabled, organizations can use the same platform to acquire the additional SaaS seats they require to bring applications to new users. Trintech is a profitable company that demonstrates financial efficiency. This has improved its viability score in this Magic Quadrant. Page 16 of 31 Gartner, Inc. G

17 Cautions Trintech does not spend as much on marketing as its main competitors in this market. As a result, it may be less visible than others, and has yet to achieve its desired level of brand recognition and market awareness. It does, however, benefit indirectly from others' marketing expenditure, as this increases awareness of EFCA and the need for reconciliation, close, compliance, journal entry and intercompany solutions. Trintech's suite positioning and pricing deter organizations that just want one capability, such as reconciliation. Furthermore, at times, Trintech's per-seat SaaS prices are higher than that those of its competitors. On the other hand, if the customer uses multiple Cadency functions, this could result in a lower total cost of ownership. Of the vendors in this Magic Quadrant, Trintech has the lowest level of customer satisfaction, according to the survey of reference customers. This may be due to recent changes of ownership in the organization and a lack of communication about its acquisition of Chesapeake. Workiva Workiva is a public company with headquarters in Ames, Iowa, U.S. It generated revenue of $179 million in 2016 and has over 2,800 cloud customers in production. These figures compare favorably with those of many other vendors in this sector. Workiva's main offering is Wdesk, a cloud-based PaaS platform that also has FCPM applications for disclosure management, management reporting and reconciliation management. It was released in 2010 and is used by over 70% of the world's top 500 companies. Many Workiva customers have developed custom applications to address other financial tasks such as chart-of-accounts maintenance and analytical undertakings because Wdesk supports the creation and combination of text documents, workbooks, presentations, dashboards and charts. Workiva is a Leader in this market. This is due to its provision of a product usable in many areas of FCPM, and the fact that finance organizations can use its platform for many specific use cases for which more traditional products are inadequate. Reference customers for Workiva reported that their top-three product selection criteria were ease of use, functional capability and performance. Strengths Workiva has extensive experience in cloud-related customer support, sales and marketing. Reference customers consider it above average in nearly in all areas, including "overall satisfaction with vendor." Its scores place it in the top 25% of the vendors in this Magic Quadrant for implementation and sales experience. In addition, a low percentage of its reference customers have required ongoing support from Workiva or a third-party consulting organization. Workiva is very successful at penetrating enterprises with compliance applications in multiple regions, and then upselling to a much more extensive FCPM capability and vision. For example, Gartner, Inc. G Page 17 of 31

18 in the U.S., we estimate that Workiva has over 50% of the market for Securities and Exchange Commission (SEC) extensible Business Reporting Language (XBRL) business, and many of its customers are acquiring more Wdesk seats to use the product in other areas of FCPM (and SCPM). Workiva's focus on the office of finance enables it to use innovative solutions for FCPM. This is apparent, for example, from its "last mile of analytics" initiative, which helps organizations gather financial and operational information from various analytical solutions and produce a consolidated performance report. Cautions Most of Workiva's customers are in North America (all of its surveyed reference customers were based there). Prospective customers elsewhere should evaluate customer references for their region and appraise local consulting and support capabilities. Although Workiva is used by both midsize and large organizations, and has customers with hundreds of users, its solutions tend to be used tactically within business units and departments (reference customers reported having 54 users, on average). Workiva is now targeting a much broader FCPM value proposition, as well as selling outside the finance department, which will increase its enterprise presence. Workiva's market presence is global, but not uniform across all regions. Although many of its North American customers are deploying its solution in their international units, Workiva needs to develop more partnerships with resellers and financial transformation consultancies to achieve a uniform global presence (it has established partnerships with Host Analytics and Workday, which will improve its market penetration). Vendors Added and Dropped We review and adjust our inclusion criteria for Magic Quadrants as markets change. As a result of these adjustments, the mix of vendors in any Magic Quadrant may change over time. A vendor's appearance in a Magic Quadrant one year and not the next does not necessarily indicate that we have changed our opinion of that vendor. It may be a reflection of a change in the market and, therefore, changed evaluation criteria, or of a change of focus by that vendor. Added Not applicable, as this is a new Magic Quadrant. Dropped Not applicable, as this is a new Magic Quadrant. Page 18 of 31 Gartner, Inc. G

19 Inclusion and Exclusion Criteria Product Capabilities To be eligible for inclusion in this Magic Quadrant, vendors had to: Support at least two components of FCPM (as defined in the "Market Definition/Description" section). Deploy FCPM solutions as a cloud service (see the cloud service attributes defined in Note 1). These solutions may not be deployed on-premises or as a managed cloud service. Actively market and sell these cloud solutions to small, midsize and/or large and/or global organizations. Actively market, sell and deploy these cloud solutions on a stand-alone basis, regardless of any additional bundling with broader ERP suites or other applications. Market Presence To be eligible for inclusion in this Magic Quadrant, vendors had to: Have at least 25 organizations in production using the cloud service in production environments. Vendors had to be prepared to provide evidence of sufficient production customers. If a vendor chose not to disclose this information, Gartner was at liberty to use its own market research and insights from public sources to judge that vendor's eligibility for inclusion. Have generated at least $3 million in booked subscription revenue from the cloud FCPM SaaS offering(s) (that is, excluding any revenue from on-premises, hosted, managed cloud service or other deployment models) between 1 January 2016 and 31 December 2016 (or whichever 12- month accounting period most closely aligned with that period). Unrealized recurring revenue was not included. If a vendor chose not to disclose revenue information, Gartner was at liberty to use its own market research and insights from public sources to judge that vendor's eligibility for inclusion. Actively sell and market the cloud solution (and have live users of the cloud solution) outside the vendor's home region in at least one of the following regions: Americas, EMEA or Asia/Pacific. Vendor Viability To be eligible for inclusion in this Magic Quadrant, vendors had to: Be financially viable and profitable, or have a realistic path to profitability. Gartner, Inc. G Page 19 of 31

20 Evaluation Criteria Ability to Execute The following criteria and weightings were used to evaluate vendors' Ability to Execute: Product or service: Core goods and services offered by the vendor that compete in and serve the market. This category includes product and service capabilities, quality, feature sets and skills (offered natively or through OEMs), as defined in the market definition and possibly further detailed by other criteria. Overall viability: Includes an assessment of the vendor's overall financial health, the financial and practical success of the relevant business unit, and the likelihood of that business unit continuing to invest in and offer the product within the vendor's product portfolio. Sales execution/pricing: The vendor's capabilities in presales and sales activities, and the structure that supports them in this market. This criterion also includes deal management, pricing and negotiation, presales support, and the overall effectiveness of the sales channel. Market responsiveness/record: The vendor's ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers how responsive the vendor has been over time. Marketing execution: The clarity, quality, creativity and efficacy of the execution of marketing programs designed to deliver the vendor's message to influence the market, promote its brand and business, increase awareness of its products and services, and establish a positive identification with the product, brand or vendor with buyers. These programs may include, among other elements, a combination of advertising, promotions, thought leadership, word of mouth and sales activities. Customer experience: Relationships, products, services and programs that enable clients to succeed with the products evaluated. This criterion includes the ways in which customers receive technical support or account support for those products. It also includes ancillary tools, customer support programs (and their quality), availability of user groups and service-level agreements. Specifically, the Magic Quadrant survey asked reference customers to rate their overall satisfaction in the following areas: Sales experience Implementation experience Ease of use Application flexibility Performance Integration Analytics Page 20 of 31 Gartner, Inc. G