FinancialForce, a business software company closely aligned with Salesforce (CRM), is teaming up with payroll software leader ADP (ADP) to offer that company’s payroll and human resources management services to its partners and customers.
FinancialForce itself specializes in accounting software, which along with manufacturing and inventory management software—constitutes a category known as enterprise resource planning (ERP) software. FinancialForce’s version of that software is built on Salesforce’s Force development platform, and so pairs nicely with Salesforce’s sales software, Fred Studer, FinancialForce’s chief marketing officer explains to Fortune. There are other links between the two companies. Salesforce’s venture capital arm, for example, invested in FinancialForce, which is now led by CEO Tod Nielsen, a former Salesforce executive.
FinancialForce’s software can also be readily adapted to take advantage of Salesforce’s Einstein software smarts and improved analytics
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Typically, sales people at large companies use software known as customer relationship management (CRM) to register, track, and close leads. Salesforce is the leader in this category. But those same business customers also typically use other ERP software from the likes of NetSuite, SAP (SAP), Oracle (ORCL), or Microsoft (MSFT) to run their back-end manufacturing, inventory, and accounting processes.
Microsoft hopes to parlay its widely deployed Office and Office 365 desktop applications to lure more corporate users to it lesser-known Dynamics business software. That is something that is of great concern presumably both to Salesforce CEO Marc Benioff as well as Nielsen.
Related: Here’s What Salesforce CEO Marc Benioff Said About Microsoft
FinancialForce is banking that more Salesforce customers will turn to it for those services. It already claims some Fortune 500 accounts in Cisco (CSCO), Mastercard (MA), and Visa (V).
“We extend the value of Salesforce’s customer management software into the back office,” says Studer, a veteran tech exec who spent time at Oracle and Microsoft before joining FinancialForce in March.
Toward that end, FinancialForce has announced updates to its financial management software intended to help customers comply with new accounting regulations around booking revenue. The ASC 606 regulations require that revenue booked from software subscriptions be recognized in a timely manner, and will be mandatory for publicly-traded companies by the end of 2017 and for private companies a year later.
“This means that every time a software vendor builds a contract or makes a quote, they have to start recognizing that revenue on their books right away,” Studer explains.
Related: This Former Salesforce Exec Is Now CEO of FinancialForce
All of this is to say that the company hopes a one-two punch of Salesforce and FinancialForce will compete well against Oracle—more specifically against NetSuite which Oracle acquired last year for $9.3 billion—as well as Microsoft and SAP, each of which offer both sales and back office software.
FinancialForce does have some human resources capabilities and will continue to support them for the foreseeable future, Studer says.
Related: Marc Benioff Touts Amazon as Salesforce’s New Best Friend
Constellation Research analyst Holger Mueller says the ADP partnership makes sense. While FinancialForce had some talent management and other pieces of the puzzle, it lacked payroll, which is where ADP is strong, Mueller notes. This deal, he continues, lets it use ADP and focus on where FinancialForce itself is strong. Generally, the category of human capital management software includes core human resources, payroll, talent management, workforce management, and benefits.
