The New Brood of Best-of-Breed

Today's Best-of-Breed software market offers more to dazzle CFOs than ever before. The pace of innovation is fierce, slackening only when vendors pause to digest their gains after the waves of consolidation that periodically sweep over each sector.

The governance, risk, and compliance (GRC) category, for example, continues to attract new entrants and to generate a bewildering variety of applications for mandates ranging from email retention management to enterprise risk management. John E. Van Decker, research vice president with Gartner Inc., points to a burst of innovation around reconciliations management: “Financial governance software is starting to bring together process-management-type solutions for all of the activities that you need to do before you close the books. These may or may not be managed in larger systems, but you need some type of process to line up these activities and ensure that these things are done. A company may need to do hundreds of reconciliations to provide assurance that the numbers are accurate.”

Software initiatives of all kinds are under close scrutiny in the current tighter economic conditions, but the news hasn't all been glum for the point solution providers. The Economic Stimulus Act's bonus depreciation provisions were a boon for vendors in the fixed asset management space, whose products help companies master the intricacies of depreciation accounting and capital budgeting. And firms that can present their products as cost-containment tools are thriving.

Plus, a best-of-breed package can be an attractive option for companies that don't want to take on a mammoth project at this point. Many organizations are “looking for something that can provide incremental steps to value,” Van Decker notes. “We're also starting to see more use of software-as-a-service, where companies may want to do something on a 3-year basis, but with the understanding that by the end of that period they will have implemented a much larger set of applications.”