Financial Management Software Pushes Out Boundaries

The economy being what it is, you'd expect that innovation in financial management software had come to a standstill. Not so, if you've been following the tech news or Internet Evolution lately.

Conventional financial management software aims to streamline processes; allow for real-time budget updates; reduce data entry; give immediate visibility to general ledger and financial statements; and visibility of resources to provide informed and rapid decision-making. But the latest push in the financial services industry is to break out of familiar ways of doing business and use software to help identify and exploit new sources of revenue.

Let's start with PayPal , which this week opened up its APIs, launched a new developer portal, and introduced services designed to expand functionality for multiple recipients and on multiple platforms.

The buzz here is matched by the scope of the company, which processes more than $60 billion worth of transactions a year, mostly through eBay Inc. (Nasdaq: EBAY), but also through other e-commerce partners that use its Merchant Services system. The company is betting that executives will adopt its widely used infrastructure instead of considering partnering with Amazon.com Inc. (Nasdaq: AMZN) or Google (Nasdaq: GOOG) Checkout.

CEO Scott Thompson highlighted how PayPal's services are being used in different verticals like healthcare (MedPayOnline) and banking (Fidelity National Information Services), as well as media and entertainment (PlaySpan). After watching his presentation, I expect PayPal and its partners to make massive investments into mobile financial services platforms that will help merchants in multiple sectors stay competitive.

The other big news this week came out of the Enterprise 2.0 Conference, where financial compliance provider Garland Group revealed its RiskKey platform for banks and credit unions. The collaborative compliance management platform uses Web 2.0 technologies to bring transparency and legitimacy to banks.

CEO Brad Garland told me that in addition to integrating with old IBM Corp. (NYSE: IBM) AS/400 computers and integration with Microsoft Corp. (Nasdaq: MSFT) SharePoint, the company is looking at Google Wave as a way to create living documents for its customers. Radical thought, considering most banks (and most businesses) still use simple spread sheets and email for analysis and communications.

Lastly, CACI International was awarded a $29 million multiyear contract extension to support financial management functions of the Joint Staff Comptroller at the Department of Defense (DoD). The company has had a long relationship with the U.S. military, but is now adding procurement and acquisition capabilities in addition to the financial resources and expertise already in place.

What's evident here is that innovation is not stopping during this financial rebuilding period. If anything, enterprises are looking for more breakout systems to help them manage their financial decisions.

Thankfully, financial management software is rising to the task.

— Michael Singer, Senior Editor, Internet Evolution. His focus includes executive issues... What's top of mind for CEOs, CIOs, and CTOs?