The financial close and reporting process is a critical one that ensures the timely and accurate delivery of financial results to internal and external stakeholders. Its many steps include collecting trial balances from multiple subsidiaries, converting currencies, performing intercompany eliminations, accounting for partial ownership, reconciling accounts, consolidating and reviewing the results, to name a few. Then reporting to internal external stakeholders – monthly, quarterly, annually.
Delivering accurate and timely financial results can be a key indicator of the effectiveness and overall health of an organization. Back in the 1980’s when I was doing this with arcane technologies – it took about 20 business days per month to complete the process. Fortunately, with today’s modern technologies the periodic financial close process is typically much shorter. In fact, a recent Finance Benchmark survey done by Ventana Research indicated that the financial close process has gotten shorter in recent years – with 63% reporting they complete the close in 6 days or less, an improvement from only 53% 5 years ago. Respondents attribute the improvement mainly to the automation of key tasks, especially things like account reconciliations.
State of the Financial Close Software Market
So what does the market landscape for financial close software look like? What new technologies are available? Who are the market leaders? These questions are answered by the 2019 Gartner Magic Quadrant report for Cloud Financial Close solutions1. While we prefer to view financial close and reporting as part of the broader corporate performance management (CPM) process, along with planning, budgeting and forecasting – Gartner tracks these processes and supporting solutions separately. They published their Magic Quadrant report on Cloud Financial Planning and Analysis solutions2 back in August, and in October the other shoe dropped when they published the Magic Quadrant for Cloud Financial Close solutions.
Gartner views the following as key components of the financial close process:
- Financial Consolidation
- Financial Reporting
- Reconciliation Management
- Close Management
- Intercompany Transactions
- Disclosure Management
To be included in the report, vendors must support at least two of the processes listed above. It’s for this reason, the Gartner Magic Quadrant for Cloud Financial Close solutions includes vendors such as Blackline and Workiva who don’t support financial consolidations but do support other components of the financial close process.
So what are some of the key trends highlighted in this year’s report? How is OneStream positioned in the report?
OneStream Rises from Visionary to a Leader
I’m happy to report, that in its third year being covered in the Gartner Magic Quadrant for Cloud Financial Close solutions – OneStream has made the move from being a Visionary to now being recognized as one of the Leaders in the market. This is amazing progress in a short period time – and we believe this recognition is a reflection of the rapid market adoption, high customer satisfaction, growing partner ecosystem, and capabilities of the OneStream platform and XF MarketPlace to support a wide range of requirements in the financial close process.
In the report, the Gartner analysts noted that OneStream outscored all the other vendors in the reference customer survey with respect to its solution’s value for money and received some of the highest scores for product satisfaction and overall capabilities. They also commented that our scores for Ability to Execute reflect high levels of customer satisfaction, as well as improved viability and market penetration. In addition, they said OneStream’s vision for its cloud FC solution is also strong because it can draw on platform capabilities across all FC processes.
In the press release announcing this recognition, OneStream CEO Tom Shea commented:
“We are proud to be recognized as a Leader in the Gartner Magic Quadrant for Cloud Financial Close Solutions. We believe this recognition validates the value our customers realize by adopting our unified OneStream XF platform to modernize and streamline their financial close, reporting, planning and analysis processes. This recognition, we believe, also validates the mission we started several years ago to develop a modern, unified, scalable and high-performance platform that can easily be extended as the digital transformation of finance continues to evolve.”
Other key trends highlighted in the report include the following:
- The increased willingness by the office of finance to put critical financial data in the cloud and the increasing adoption of cloud-based financial close solutions
- Gartner predicts that artificial intelligence (AI) machine learning (ML) and robotic process automation (RPA) will have a major impact on FC solutions during the next three to five years
- AI will be integrated into analytics and predictive models, along with ML, to address a number of important financial analytical tasks
- AI and ML will help these applications understand higher-level process issues and trends that may not be apparent with the current set of financial analytics
- RPA will deliver a new wave of process automation that eliminates manual processes/low-value clerical tasks from close processes
To learn more about the latest market trends in financial close solutions and why OneStream was recognized as a leader, access a complimentary copy of the report here.
1 Gartner Magic Quadrant for Cloud Financial Close Solutions, Robert Anderson, John Van Decker and Greg Leiter, 21 October 2019
2 Gartner Magic Quadrant for Cloud Financial Planning and Analysis Solutions, Robert Anderson, John Van Decker, Greg Leiter, 8 August 2019.
Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.