Is SAP Still in SMB Stealth Mode? Watch Out, Changes are Looming

Many think SAP is just for the big guys. The company is the closest you get in the ERP market to a household name, and, after all, it was in the large enterprise where it made that name for itself. In reality though, SAP plays in markets that include companies of all sizes. A good 80% of its customers are in the small to midsize enterprise range. And yet today small to midsize companies in search of a solution don’t immediately think “SAP” and they will have a difficult time discovering all that SAP has to offer them.

SAP’s competitors perpetuate the “big guy only” misconception, along with  “expensive” and “complex” qualifiers. They are like a dog with a bone, refusing to let go, hoping to lead prospects away from the 800-pound gorilla. Pundits who largely follow the large enterprise space contribute as well, along with the publicity (both good and bad) from high profile customers that are also household names. But SAP must also share some of the blame because of one thing it is so very good at: Speaking in one voice.

SAP employees stay on message. And the message is couched in the native language of SAP, which is the language of IT in the large enterprise. Although the latest overarching message these days is “Run Simple,” that alone doesn’t say enough. SAPers either talk at such a high level of abstraction that it becomes meaningless (your world will be a better place), or they talk technology.

In speaking to the decision makers and business leaders in small to midsize businesses (SMBs), you might as well be talking Klingon. They have their feet firmly planted on the ground. They want to hear how a solution will solve their immediate problems, address their challenges and bring value to the business. They want specifics. And they want to buy from a company they can trust.

The combination of negative hype and the “one voice” of SAP also might lead SMBs to think SAP is a one trick pony, with only a single product to offer, one that is clearly beyond their reach. Nothing could be further from the truth. Not only does SAP have three separate and distinct ERP offerings, it also has other offerings that sit on the periphery, outside the boundaries of ERP. These include talent management (SuccessFactors), travel and expense (Concur), a supplier network (Ariba), analytics (Business Objects) and a front office (SAP Anywhere). And this is just a partial list.

Let’s start with core ERP. At the top is SAP ERP, which has been brought to market under different names during its evolution. But make no mistake; this is definitely a solution that is meant to satisfy the needs of the largest, most complex enterprises in the world. Older versions were known as SAP R/2 and R/3 but more recently it was simply referred to as SAP ERP or ECC, providing the core of a larger Business Suite(adding CRM, SRM, SCM and PLM to ERP). The latest incarnation is S/4HANA, which is both evolutionary and revolutionary at the same time. It provides the same functionality as SAP ERP but has undergone a rewrite to take advantage of the powerful in-memory technology of SAP HANA. This is the large enterprise ERP for which SAP is famous (infamous?).

But this is not a “one size fits all” solution. SAP also offers SAP Business One and SAP ByDesign. Up until recently, it also marketed Business All in One, but in fact that was/is not a separate product. It was a version of SAP ERP packaged with industry templates and best practices, purportedly designed to simplify the implementation, thereby making SAP ERP more digestible for the mid-market. Because it was essentially the same product but with a different name, it also added some confusion. SAP appears to be backing away from that branding. I think that is smart. Can SAP S/4HANA work for this midmarket? The answer is yes, particularly where that smaller, midsize company is a division of a large enterprise that has standardized on SAP solutions. But these will be the exceptions to the rule.

SAP is also getting smarter about how it targets these three products to different segments. SAP has formed an SMB team to specifically address the market of companies with 1500 employees or less, and has defined “small” as companies with less than 250 employees. It will market SAP Business One to small companies looking for an on-premise or hosted solution (partners will provide the hosting). It will be sold largely through partners, which will provide both advocacy and intimacy to the customer. SAP Business ByDesign is available exclusively as a multi-tenant SaaS (software as a service) solution supported by SAP itself. The target is generally the mid-market but can come down into the small company range for those interested in a true SaaS solution from SAP.

However, both SAP Business One and SAP Business ByDesign have suffered from a lack of respect in the market. Competitors often write Business One off, telling me they hardly ever see it in a competitive deal. And yet Business One is implemented in over 50,000 small companies around the world and SAP is adding about 1,000 new customers a quarter. That tells me there are hundreds of deals where these competitors never get invited to the party.

Rumors of the death of Business ByDesign have been rampant for years and unfortunately SAP has allowed its critics to have had a louder voice in the market than SAP itself. In the meantime, SAP has been (rather quietly) growing the installed base to about 1,000 customers, which is larger than many customer bases of some of those competitors. Respected journalists and analysts have recently admitted ByDesign is in fact not dead. I couldn’t/can’t resist saying, “I told you so.”

This might all seem like SAP 101 to veteran industry observers. But it also might come as a surprise to learn that your typical decision maker and business leader of a small to midsize business doesn’t follow the (ERP) space that closely. Those business leaders are too busy following their own industries. So they are easily confused by the progression of product names and even more easily confused when target markets for different products overlap. And they are not well equipped to distinguish hype and myth from reality. To convince them one way or the other, you have to understand how they approach software selection and you have to speak their language. And you have to speak it loudly and clearly. That is where SAP has not done a good job.

I am optimistic that is about to change under some new leadership at SAP. Barry Padgett took over as President of the SMB team last July. He came over from the Concur team, bringing a new perspective. Barry “gets” SMBs. They need a lot of the same features and functions that their larger counterparts need, but they don’t have the large IT staffs or the deep pockets. They expect products to work seamlessly – open and connected. They don’t go out looking for technology. They go out looking for solutions to problems and answers to questions. They expect value. They need to see a path forward. And to connect with them, you need to be talking in terms they clearly understand.

Barry and his new CMO Mika Yamamoto (who came to SAP from Amazon) also understand how most software searches begin these days. Much of the legwork and due diligence is done before a prospect ever engages with a potential solution provider. Today an online search for solutions for SMBs does not lead directly to SAP. And even if you land on SAP’s website, there is no clear path to show you what you need or how SAP can help. So clearly SEO and website redesign is top on Mika’s priority list.

But both Barry and Mika know that it can’t end there. They must have a louder voice than their critics. And remember all those products in SAP’s portfolio that sit on the edges of a solution: talent management, supplier networks, analytics, travel and expense, eCommerce (front office)? SMBs have the same kind of needs as their larger counterparts in all of these areas. But they don’t have the internal expertise to assemble a solution that is not already seamlessly connected.

It is not enough that these edge solutions are available from SAP; they must be both affordable and integrated to SAP Business One and SAP Business ByDesign. These kinds of connections are certainly on the roadmap, but they can’t come too soon.

The Internet has leveled the playing field, allowing SMBs to participate in a growing, global market. But many won’t be able to compete effectively with their existing solutions. This opens up a world of opportunity to SMB solution providers. Look at the success SAP has had in the small to mid-market already. I am not advocating the SMB folks at SAP go off message, but I am advocating they articulate that message in a different voice. That voice needs to be loud and proud. They need to keep the dialogue going with existing customers and keep the development engines churning. While I also believe there is plenty of opportunity for all those with good, solid, technology-enabled solutions, if the new leadership team can deliver on these fronts, they will truly be a force to be reckoned with.

 

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IFS Helps Customers Accelerate Out of The Curve of Digital Transformation

Making Asset Intensive Industries Lighter on their Feet

Asset intensive industries are quite likely to be capital intensive industries. Cost of entry is steep, but once you are an established player, you are tempted to hit cruise control. Living in a world where product lifespans tend to be measured in decades, growth and change come slowly. Or at least that’s the way it used to be. The digital economy has thrown you a curve. And when you are speeding down the business highway, a serious curve causes you to hit the brakes in order to safely negotiate the turn. But if you are riding a performance engine, there is nothing more exhilarating than accelerating out of that curve.

Digital technologies of today, those that serve to connect operations, people and processes through the power of the Internet, fuel that performance engine. Eighty-two percent (82%) of manufacturers participating in the 2016 Mint Jutras Enterprise Solution Study agree and 86% understand that embracing digital technologies is necessary for survival. And yet, we find the vast majority still coasting or riding the brakes when it comes to digital transformation.

IFS, a global enterprise applications company specializing in solutions for asset intensive industries, is setting out to help its customers accelerate out of the curve. Asset intensive businesses are very likely to be sitting on vast amounts of data gathered from products, assets and equipment. Yet few are able to leverage it fully. IFS IoT Business Connector, recently introduced at the IFS World Conference 2016, helps bridge the gap between data collection and analysis and between analysis and action. Through plug and play connectivity with the Microsoft Azure IoT Suite, customers can identify actionable observations that can trigger user-defined, automated or semi-automated actions for predictive maintenance, service management, asset management and manufacturing.

Need a Little Push?

As noted above, the majority of manufacturers today have an appreciation for the significance of digital technologies. In our 2016 Mint Jutras Enterprise Solution Study we asked survey participants how much they agreed with various statements about these new, advanced technologies (Table 1).

Table 1: How strongly do you agree or disagree with the following?

ifs-table1Source: Mint Jutras 2016 Enterprise Solution Study

Only 3% to 6% disagreed at all with any of the statements above and a relatively small percentage was neutral. The majority of manufacturers understand that digital technologies can be truly transformative. This data is consistent with data collected by IFS from its customers on perceptions about the Internet of Things (IoT) in particular. According to IFS, 86% of its installed base realize the importance of IoT, but 40% have no IoT strategy in place.

Mint Jutras actually finds these findings refreshingly candid. When we asked survey respondents how well prepared they were for the digital economy, we found a high level of confidence, with over half (58%) of all respondents indicating they were very well-prepared or at least close. And manufacturers claimed to be even more well prepared (Figure 1).

Figure 1: How well prepared are you for the digital economy?

ifs-fig-1Source: Mint Jutras 2016 Enterprise Solution Study

Yet subsequent questions about digital systems of record, as well as how activities were monitored, managed and performed, proved otherwise. The vast majority were found to still rely, at least partially, on spreadsheets, paper and manual processes. This not only indicates that many, manufacturers in particular, overestimate their level of preparedness and underestimate the impact digital technologies can and should have on the enterprise applications that are used to run the business, as well as the business itself.

Those in asset intensive industries are perhaps even slower to respond. Because their businesses tend to be more capital-intensive, they can’t turn on a dime like those businesses that require less capital for growth and change, thereby making them lighter on their feet.

So what is IFS doing to make them lighter on their feet and more nimble?

Cloud Helps

First of all, we see IFS offering cloud options. Many of these businesses require capital to be invested in assets necessary to run their businesses. By running IFS enterprise resource planning (ERP), field service management (FSM) and enterprise asset management (EAM) solutions in the cloud, they lighten the load of capital required to manage back office and front office processes. Indeed IFS reports that 34% of new business closed is now cloud-based and running on the Microsoft Azure platform.

While preferences and perceptions vary quite significantly across the different regions in which IFS operates, at least within the United States Mint Jutras research finds software as a service (SaaS) is the most preferred option for new deployments. However, we expect the worldwide market will be in transition for the next ten years or more. This is partially because the United States tends to lead the world, and partially because there are simply so many on-premise deployments today. The inertia that keeps manufacturers from actively researching and investigating new technologies is the same inertia that keeps these solutions in place long after their glory years. IFS addresses this by providing multiple deployment options and also by adding other solutions that allow customers to make strides in digital transformation while leaving existing solutions in place.

Cloud-based IFS IoT Business Connector will play an important role, but perhaps equally important is IFS Enterprise Operational Intelligence (EOI), to which it is connected.

IFS IoT Business Connector

According to IFS, “IFS IoT Business Connector turns IoT insights into actions in IFS Applications” (including ERP, FSM and EOI). The goal is to observe the environment and turn perceived challenges into opportunities – a lofty goal. But what is it and how does it do that?

Before we answer that question, it is important to understand the different steps the IFS IoT Business Connector facilitates in order to transform challenges faced into opportunities for growth and improvement.

Data, Devices and Communication

The first step is in collecting the data itself. This might be done through sensors on assets or equipment on the plant floor or in products in the field. This is not especially new in the world of manufacturing and/or field service maintenance. Often data comes through:

  • supervisory control and data acquisition (SCADA) systems used for remote monitoring and control
  • programmable logic controllers (PLCs) for the control of manufacturing processes, or any activity that requires high reliability and process fault diagnosis
  • OLE (object linking and embedding) for Process Control (OPC), which is a series of standards and specifications for industrial communication of real-time plant data between control devices.

The connections might be made through local network protocols or Internet communication. It has never been hard to collect millions or even billions of sensor readings. The IFS IoT Business Connector isn’t about the data collection. It is more about connecting that data to make better use of it, in real-time where appropriate.

Discovery

In order to take full advantage of the data collected, it is necessary to go through a discovery phase. The IFS IoT Discovery Manager (a component of IFS IoT Business Connector) provides additional management and monitoring capabilities when using Microsoft Azure IoT Suite as the discovery platform.  It automates the creation and connection of all IoT Suite components (hubs, streams, buses etc.) in accordance with the IFS IoT Business Connector reference architecture.

However, it is important to note that Microsoft Azure IoT Suite is not a mandated requirement. A customer may use a different solution for discovery, in which case IFS provides an API (application programming interface) to receive observations to be used in subsequent steps of the process.

Operationalizing the Data

IFS IoT Discovery Manager can receive and store thousands, or even hundreds of thousands of “observations.” But how do you interpret what the data is telling you? In order to operationalize the data, you need to be able to take action.

You will want to analyze data streams in real time in order to mine the data to help you discover potential problems and/or opportunities. You will want to apply some sort of decision-making algorithms that work 24/7, even when humans are asleep, sick or busy with other value-add tasks. And finally you will want to visualize the data, presenting it in a way that highlights issues, both good and bad, quickly.

Often the action taken must be recorded or reflected in the enterprise software that is running your business. The IFS IoT Gateway (another component of IFS IoT Business Connector) enables communications between the cloud-based discovery and analytics of IoT data and the on-premise or cloud-based IFS applications.

The failure of a door to open on public transportation can trigger a service call. A pest trap that is full and requires emptying can alert a service engineer in a pest control company. Variations in vibration, temperature or voltage of a piece of equipment can send a warning signal that results in a call to a maintenance company during off hours, preventing a halt to production. These are just three examples of how early adopters of IFS IoT Business Connector are looking to operationalize the data collected, either with the help of human review and augmentation or through (prescriptive) automated actions, or both.

Business Optimization

But the real results will come only when you effectively use the data, discovery and operations to optimize your business. That means monetizing it to develop new sources of revenue. That may require a different way of thinking. Even companies that have exclusively made money from making and moving product in the past, will likely find new revenue streams through services and/or data. IFS likes to call it the “servitization” of business. Whether you replace or supplement your product sales, new revenue opportunities can come from maintenance or consulting services, software (as a service) or even outcomes like hours of successful operation or output.

IFS IoT Controller (the third component of IFS IoT Business Connector) helps you determine what actions to take based on the analysis of observations about your business. It helps you map your operational technology to your business applications like ERP.

Cascading Effect on Business Applications

However, the connection back to ERP (and perhaps other applications like Field Service) might not be so intuitive. New sources of revenue might require new methods of invoicing and revenue recognition. It is one thing to ship and invoice for a physical product, but quite another to create invoices (and recognize revenue) for services and/or subscriptions.

Guessing how new business models will impact invoicing, revenue and cash is just that – a guess. As the digital economy also becomes the subscription economy, companies today need to be able to handle new and different revenue streams, often in conjunction with more traditional ones. And with the upcoming changes to revenue recognition as a result of the merging of accounting standards (ASC and IFRS), this places new functional requirements on ERP.

Changes to existing accounting software are not insignificant. In fact, they can be quite extensive. IFS is still working on these changes, but with an eye towards the 2018 deadline for implementing new rules.

Apart from these (very specific) accounting requirements, the real key to business optimization lies just beyond the scope of the IFS IoT Business Connector. As we mentioned earlier, equally, if not more importantly, is enterprise operational intelligence. Notice the lack of capitalization. In this case we use the phrase as a goal. Hopefully we don’t confuse our audience in saying IFS Enterprise Operational Intelligence or EOI is the means to this end (goal). The level of importance of EOI is further amplified in that it is one of those solutions that helps customers take those transformative first steps without requiring the full-scale replacement of ERP.

IFS Enterprise Operational Intelligence (EOI)

IFS describes EOI as the the key that unlocks intelligent business operations for its customers, “integrating real-time analytics into business processes to empower organizations to make better, faster decisions based on [their] strategic objectives.” Of course analytics are becoming much more mainstream today, but there are two differentiators here – strategy and action.

The first is that last qualifier, linking analytics to strategy. This starts with the first of three core steps: Map, monitor and manage.

  • Map: capturing and visualizing the business model, which of course is subject to change much more frequently than in days gone by, due to the potentially disruptive nature of digital technologies.
  • Monitor: connecting and visualling performance. After mapping the business, you then connect various data sources, including IFS applications, the IoT, other databases and applications and even Excel spreadsheets. These are presented in “cockpits.” These are more than just pretty charts on a dashboard. IFS distinguishes these from your typical (passive) dashboard by allowing you to take action right from the cockpit.
  • Manage: analyzing and improving business operations. IFS has embraced continuous improvement methodologies including PDCA (plan–do–check–act or plan–do–check–adjust) and OODA (the decision cycle of observe-orient-decide-act).

Customers using EOI prefer embedding this type of solution into their IFS enterprise applications rather than purchasing separate business intelligence (BI) and/or business process management (BPM) solutions that either run stand-alone or must be custom-integrated into the solutions that run their businesses. But even more importantly, it allows them to take some incremental steps in digitally transforming their businesses, without the major disruption of a full-scale upgrade or replacement.

Wrap Up

It seems quite appropriate that IFS’s recent marketing efforts have led the company to sponsor a Formula One racing team. Earlier this year IFS announced it had become a Principal Partner of the Sauber F1 Team for the 2016 FIA Formula One Championship. Why is it appropriate? According to Mark Boulton, chief marketing officer of IFS, “This new partnership between IFS and the Sauber F1 Team is based on strong foundations, as both companies are commited to innovation, focused on design, and treasure the power of effective teamwork. It’s these qualities that … are lived by our employees and partners every day as we continue to empower our growing global customer base with IFS’s leading software and solutions.”

Mint Jutras agrees that IFS has built a strong foundation, but more importantly, one which helps customers face those upcoming curves in the road caused by the looming inevitability of digital disruption. Just as you don’t want to be changing the tires (or the engine) while you are speeding down the road, IFS customers won’t want or need to switch out the engine that powers their businesses, nor will they be blindly steering into those turns.

IFS Enterprise Operational Intelligence (EOI) can put them in the cockpit and IFS IoT Business Connector can keep them connected to the data they need to make the decisions required to accelerate out of the curve.

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SYSPRO Delivers on the Practical Side of Digital Technologies

Bringing Technology, People and Processes Together In a Winning Combination

Advanced technologies and automation have been transforming manufacturing and distribution for decades now. Through these advances we have streamlined production and eliminated waste and variability. We make products better and faster. But the digital technologies of today, those that serve to connect operations, people and processes through the power of the Internet, have the potential of fundamentally changing the way we do business. Eighty-two percent (82%) of manufacturers participating in the 2016 Mint Jutras Enterprise Solution Study agree and 86% understand that embracing digital technologies is necessary for survival.

And yet few manufacturers seem to fully grasp the potential digital technologies have to truly change the game. In some ways, this is perfectly understandable. While we are constantly bombarded with examples of how digital technologies can transform our world, most of the examples fall into the category of consumer technology (social, home, shopping, fitness…). The reference to this technology in the context of the enterprise is very often at a level of abstraction that leaves down-to-earth manufacturers either scratching their collective heads or thinking it is way beyond their reach. While we might buy the latest consumer gadget just because we can, manufacturers and distributors make investment decisions with their feet planted firmly on the ground.

This is why SYSPRO is announcing six new capabilities that help manufacturers and distributors take practical advantage of advanced digital technologies. If you are one of these pragmatic individuals, you might be so busy dealing with day-to-day challenges that you let inertia keep you mired in spreadsheets and paper. If so, you’re not alone. But don’t let that stop you. SYSPRO’s new advanced capabilities might be just what you need to justify that leap into digital transformation.

Do Manufacturers and Distributors Care?

As noted above, the majority of manufacturers and distributors today have an appreciation for the significance of digital technologies. In our 2016 Mint Jutras Enterprise Solution Study we asked survey participants how much they agreed with various statements about these new, advanced technologies (Table 1).

Table 1: How strongly do you agree or disagree with the following?

syspro-table-3Source: Mint Jutras 2016 Enterprise Solution Study

Only 3% to 6% disagreed at all with any of the statements above and a relatively small percentage was neutral. The majority of those in manufacturing and distribution companies today understand that digital technologies can not only facilitate the connection between companies, people and processes, but can also automate the connection between different enterprise systems. Whether this is a continuation of your current plans for information technology (IT) and/or automation, or a brand new direction, you need to implement them in order to forge that connection. While 86% agree these technologies are necessary for basic survival, we find evidence they have not been embraced with the level of priority and urgency that will give companies a competitive advantage.

Table 2: To what extent are these activities performed/managed digitally?

syspro-table-2Source: Mint Jutras 2016 Enterprise Solution Study

Table 2 is a sad reminder of the continued prevalence of spreadsheets and paper. Of course some use of spreadsheets is simply the result of familiarity and comfort level. But that doesn’t make it any less troublesome or the data any more real-time.

Come to find out, SYSPRO USA also gathered its own intelligence on this topic through one of its SNAP surveys, sent to its own customers. From this latest poll, SYSPRO concluded, “Companies are confused or have never heard about the newest, high-impact technologies.” This conclusion was based on the question: “Have you read or heard about [insert technology]?” The technologies included were predictive analytics, the Internet of Things (IoT) and bots. In each case, less than half (about 45%) said “Yes.” The remainder said, “No, I don’t know” or, in the case of bots, “Not sure.”

While this actually could help explain this lack of urgency, Mint Jutras interprets the answers a little differently. Individuals may be confused, but more likely these responses indicate they simply are not paying attention and therefore don’t make the connection between problems and challenges faced and digital technologies. For those that follow technology trends closely, the hype over digital technologies is impossible to miss. But your typical manufacturing or distribution professionals are far less likely to follow technology just for the sake of technology. They are far too busy fighting those pesky fires on a day to day basis.

Talking about predictive analytics won’t get their attention. Talking about ways to better forecast demand or predict revenue and profits might. Connecting the dots is not only practical, but also a winning combination.

Discussing the Internet of Things is an intellectual discussion. Suggesting ways to make better use of data captured today on the shop floor (i.e. through the IoT), whether it is for the purpose of increasing throughput or quality or customer service, is not only practical, but also a winning combination.

Bots in general still seem quite futuristic and “pie in the sky” to many, in spite of the fact that all kinds of production and material handling automation is already quite prevalent in many manufacturing and distribution companies. But investment in that kind of automation has traditionally been expressly for the purpose of making and/or moving more product, better and faster, not making the business itself, or the people that run it any more productive or efficient. But think about where supervisors and managers can be the most effective – not sitting at their desks, but out on the floor. The problem in the past arose from the fact that as soon as they leave the comfort of their offices and venture out on the floor, they have been instantly disconnected from enterprise data. Demonstrating how communicating with devices in a hands-free manner can facilitate control and decision-making is not only practical, but also a winning combination.

That’s really what SYSPRO’s new capabilities are all about: practical ways of bringing technology, people and processes together in a winning combination.

SYSPRO’s New Digital Capabilities

So what are these new capabilities? They combine the power of digital technologies with analytics, cloud deployment, big data and some other cool, high-impact technologies like that used for facial recognition. But think beyond faces; think about blemishes on raw ingredients, components or fabricated products. Here’s the rundown:

SYSPRO Azure Cloud Platform

SYSPRO has teamed up with Microsoft to deliver infrastructure as a service (IaaS) now and platform as a service (PaaS) in 2017. SYSPRO’s ERP will be delivered in the Azure cloud in 2016, but will also move beyond this to deliver the SYSPRO Azure Operation Center. This is more than just a data center. It will be staffed with SYSPRO employees that will provide managed services to assist companies looking to move from on-premise to cloud deployments. Early on SYSPRO customers may want to lift and shift from existing on-premise deployment and then move more fully into a SaaS environment in order to take full advantage of software as a service (SaaS). But these SYSPRO employees will also be available for new installations and will be armed with templates and tools for rapid deployment.

Additional services offered will include backups of course, but also system monitoring, incident management, disaster recovery and high availability (think automatic rollover and scaling).

Mint Jutras research finds SaaS deployment is the most preferred option for new deployments, but the market will be in transition for the next ten years or more because there are simply so many on-premise deployments today. The inertia that keeps manufacturers and distributors from actively researching and investigating new technologies is the same inertia that keeps these solutions in place long after their glory years. SYSPRO can help make that transition smoother and more appealing.

SYSPRO Harmony

SYSPRO describes this as a “cloud-based multi-user experience platform that unites social media capabilities, internal/external collaboration, machine learning, cognitive services and data analytics into a single offering for accomplishing targeted or highly complex tasks.” That’s a mouthful. What does it really mean?

To the manufacturing or distribution professional who might think “social” is something employees should do on their own free time, think of it more as an application that lets you keep your finger on the pulse of all the “stuff” going on concerning your production, orders, operations and finances.

Many business leaders in manufacturing and distribution companies downplay the importance of “social” capabilities, equating them to social media. But when we break down the really useful capabilities, and don’t necessarily label them as “social” we get a very different response. Suddenly these concepts become useful or even “must have!”

Table 3: Would these capabilities be useful? Shhh… don’t call them “social”

syspro-table-1Source: Mint Jutras 2016 Enterprise Solution Study

If you aren’t already a fan of “social” the concept of “following” might not seem familiar to you. But chances are, you are already following someone or something either in your professional or personal life. Perhaps you follow the stock price of specific companies, or you watch a stock exchange like NASDAQ or the Nikkei. Or maybe you follow the stats of your favorite sports teams. Maybe you do that through newspapers, online or using an app on your mobile device. Perhaps newsfeeds are delivered to you through email. Regardless of the delivery method, the objective is to stay informed.

What if you could easily apply that same concept to your customers, orders or prospects? Perhaps you need to keep tabs on that big deal you hope to close by the end of the quarter. Wouldn’t it also be helpful to “follow” the trail of activity that has already occurred during the sales cycle? What if you could see the conversations or chatter between sales rep and manager? What documents have been delivered to the prospect? And what if this potential deal is with an existing customer? Wouldn’t you like to be able to scroll through the support activity over the past few months, including the calls, issues, resolutions? Has the customer experienced any quality or delivery issues? Have they been consistently paying their bills on time or is their outstanding balance over 90 days?

And what if all that activity was collected for you and presented in a single stream? The result of monitoring these types of activity streams is fewer surprises and more proactive versus reactive management. And to present this coherently you need a “consumer grade” user interface. This is what SYSPRO Harmony is all about.

SYSPRO Predictive Search

Enterprise search capabilities should be quite self-explanatory, but don’t mistake just any kind of current search capability for a true enterprise search. Of course you can look up a part by its description or a customer number by the customer’s name. ERP solutions have had this kind of search capability since the 1990’s. But can you search across your entire enterprise database for any reference to a particular customer, including contacts, conversations, sales orders, invoices, dunning notices, cash receipts? It’s not entirely clear when “Google” became a verb, but can you “Google” your customer and include the data in your ERP?

SYSPRO’s Predictive Search can be used to search like this within the confines of your ERP. It is predictive just like your consumer device or your productivity tools (think email and messaging) are predictive. You start typing and it anticipates what you are looking for. And best of all, it puts that search into a specific context of a customer or an order or any relevant business object.

SYSPRO BOTS

Sometimes you might think when you are looking for an answer to your question, “Wouldn’t it be nice if I could just ask for something in plain English?” Many smart phones today allow you to do just that, using voice activated commands. You say, “Hey Siri” and an automated bot responds. With SYSPRO Bots, you initiate a similar conversation with, “Hey chatbot.” And guess who and what is at your service? It is actually a self-service agent lurking in the background, one that never needs a coffe break or a day off.

SYSPRO Webviews (User Interface)

SYSPRO has completely rethought dashboards, making them configurable to the extent that a single individual can construct his or her own “single view” of the world. Tailorable by power users (without the assistance of a developer), the traditional “read only” view of the world becomes interactive. For example, an order can be released from a dashboard via a single click – no need to open it up, browse through and then take action.

The Age of Digital Disruption

Eighty-one percent (81%) of manufacturers and distributors agree that embracing digital technologies will give them a competitive advantage. And yet 77% to 91% still rely at least partially on spreadsheets or (even worse) manual efforts to plan and manage activities. This is a far cry from “embracing” digital. So what are they waiting for? What are you waiting for?

The Internet levels the playing field in our global economy, allowing companies of any size to establish a presence and compete on a global basis. That’s the good news. The bad news is that those same windows of opportunity you might encounter, are also open to your competitors. And those competitors come in many different shapes and sizes. So as you take your place on the world stage, be careful what you wish for. The enterprise applications that got you where you are today simply may not be able to take you where you need to go. In order to participate and become a real player, you need to embrace the cloud and take advantage of digital technologies in many different shapes and forms.

The age of digital disruption is upon us. As a result, you better be pretty flexible in terms of where you want – and need – to go. Giving examples like Uber, which disrupted the taxi industry, Airbnb, which disrupted hospitality and Netflix and iTunes, which disrupted entertainment, we asked our 2016 Mint Jutras Enterprise Solution Study participants, “How much risk do you face in your industry being disrupted?” Figure 1 shows the majority (79%) peg the risk as low to medium. But how do you think the taxi industry would have responded shortly before Uber came on the scene? These kinds of game-changing disruptions can occur right out of the blue. Are you ready? Would you survive?

Figure 1: How much risk do you face in your industry being disrupted?

syspro-fig-1Source: Mint Jutras 2016 Enterprise Solution Study

What will be the compelling events that drive this disruption? Will it come from the introduction of new products or from new ways of selling/pricing existing products, or entirely new business models? Or might it come from some combination of sources, making it even more unpredictable?

Are You Listening?

Manufacturers and distributors face difficult challenges, not only in the possibility of disruption, but just in dealing with the increasing complexities of an already complex world. You don’t have time to constantly surf the web and other information sources looking for that one new digital technology that just might change the game (and your life). So in keeping abreast of new, potentially high-impact technologies, select your source carefully. SYSPRO has the practical experience, the vision, the expertise and the platform to deliver. If you are looking to better embrace digital technologies for practical use, to connect enterprise systems directly to people and processes, to gain a competitive advantage… SYSPRO speaks your language.

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What Acumatica 6 Means to Digital Transformation

Productivity, Analytics, Technology

The Internet levels the playing field in our global economy, allowing companies of any size to establish a presence and compete on a global scale. But in order to fully participate in this global, digital economy, most companies must undergo a digital transformation. Digital technologies of today, those that serve to connect operations, people and processes through the power of the Internet, have the potential of fundamentally changing the way we do business. Eighty-four percent (84%) of companies participating in the 2016 Mint Jutras Enterprise Solution Study agree and 88% understand that embracing digital technologies is necessary for survival.

And yet we find evidence most have not embraced “digital” with the level of priority and urgency that will give them a competitive advantage. Almost half still rely on paper and/or manual processes for maintaining their operational and transactional systems of record. And 71% to 82% still rely at least partially on spreadsheets or manual processes to plan and manage key elements of their businesses. Why is that?

Oftentimes it is because the “digital” hype focuses either on consumer technology (social, home, shopping, fitness, etc.) or is discussed at such an advanced (and abstract) level that your typical business leader just can’t figure out how to get from here to there.

Acumatica is looking to change that and its latest release of its cloud ERP, Acumatica 6, provides us with some good examples of how it is going about it.acumatica6

Click here to read the full report.

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Plex Systems Hits the Acquisition Trail

Earlier this month Plex Systems announced its first (ever) acquisition. On August 9, 2016, Plex revealed it had acquired DemandCaster, essentially stretching the end points of its end-to-end cloud-based solution for manufacturers. Adding DemandCaster’s Supply Chain Planning (SCP) solutions to its enterprise resource planning (ERP) and manufacturing execution system (MES) means Plex now has the most complete suite of products of any independent cloud-native solution provider targeting manufacturing.

As I noted in a recent post, there are several reasons for one company to acquire another, one of which being to:

Fill a product gap: It can be far easier to acquire functionality than to develop it yourself. This can make the company more competitive, provide cross-sell and up-sell opportunity, or both. But don’t assume there is any M&A pixie dust that will magically integrate products overnight.

This is clearly Plex’s intent here, adding SCP to an already robust ERP and MES offering. But in this case, no M&A pixie dust is required. Plex and DemandCaster have been partnering together for about a year and already 10 out of DemandCaster’s 50 customers are also Plex customers. The integration is complete and bidirectional.

Partnering turned out to be a great way for the two companies to get to know each other and Plex was already positioning (and white labeling) DemandCaster as its answer to supply chain planning, sales and operation planning (S&OP), practical forecasting and demand planning, distribution requirements planning (DRP) and multi-site master production scheduling (MPS).

The solution, which is based on Microsoft technology, is highly graphical and was built from scratch as a multi-tenant SaaS solution. And the functionality is 100% complementary. The company is based in Chicago, but has a team of developers in Bulgaria, which could prove to be an additional plus in being a great entry point for Plex in attacking the eastern European market.

While acquisitions have a tendency to cause disruption, fear, uncertainty and doubt, if there ever was one immune to that disruption, this is the one. The entire staff of DemandCaster, including founder and CEO Ara Surenian, will come on board as Plex employees. Customers should only see a continuation (or perhaps strengthening) of their relationship. There is no sales staff to integrate. Previously DemandCaster was sold online with a “try before you buy” approach, with a little product evangelism thrown in. Plex intends to leave that channel open. Who knows, other (ERP and MES) sales efforts might even benefit.

Plex should also benefit from being able to natively satisfy the needs of larger, multi-national, multi-site manufacturing enterprises. The largest DemandCaster customer already handles over 300,000 individual SKUs. This could help Plex move up market and DemandCaster will also provide an additional entry point into Plex prospects.

Plex will also continue to make DemandCaster available as a “stand-alone” solution. We use the term loosely because DemandCaster alone is pretty useless unless it is tied back to an ERP. DemandCaster handles the integration by placing a very simple piece of software on the customer’s system. No APIs or web services required. Of the 40 nonPlex customers, DemandCaster already successfully interoperates with 18 different ERP solutions. So who knows, this might even be a “land and expand” opportunity for Plex to lead with SCP and eventually replace an incumbent ERP.

As acquisitions go, this one seems to be nice and neat and clean – adjectives rarely used in the same sentence as M&A. Kudos to Plex Systems for starting small but knocking one out of the park!

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Infor Partner Network Continues to Mature

In the End, It’s All About the Customer

Back in February 2015, Mint Jutras observed that The Infor Partner Network (IPN) was coming of age. After four years it had laid a solid foundation with fair contractual terms, rules of engagement and segmentation, marketing programs, training and certification. Entering its 5th year (2015), Infor continued to strengthen those areas, but shifted its focus to help its partners with cloud business enablement, micro-vertical specialization, value engineering and solution portfolio expansion. Those efforts are paying off, as evidenced by more (and larger) deals in the pipeline, more “declared” verticals and value-add extensions to Infor’s CloudSuites. And yes, accelerated movement to the cloud.

All of these efforts are continuing in 2016, but the IPN team is not sitting back and resting on its laurels. Instead it is charging ahead vigorously with new partner enablement programs aimed at attracting more customers through delivering more value. That includes “waking up” existing customers that may be suffering from inertia. And throughout we see increased sensitivity to helping customers and prospects evaluate, select and purchase/subscribe to solutions on their own terms.

Freeing Customers from the Bondage of Legacy Systems

Prior to 2011 (which is when the current management team took the reins) Infor had grown exclusively through acquisition. This resulted in a very broad portfolio of products that includes some very old, legacy solutions. Many of these solutions have retained some very loyal customers, in spite of turmoil and transition throughout the years.

MANMAN is a classic example, originally created and sold by ASK Computer Systems (there are two versions, one vintage 1974 and the other vintage 1984), which was later acquired by Computer Associates and subsequently divested to SSA Global, which was acquired by Infor in 2006. Written in FORTRAN for the HP 3000 and DEC VAX computers, believe it or not, there are still maintenance-paying customers running their businesses on the product. Throughout the years they remained loyal to the product, irrespective of which company owned it.

MANMAN of course is an extreme example, but Infor also owns many other products based on old technology that’s not going anywhere. Throughout these years of acquisition, Infor always promised never to “sunset” a product. Although Infor provides no real innovation to them, it does continue to support these legacy products. On the surface this might seem quite noble, or perhaps simply the right thing to do. But is it? Does Infor (and its predecessors) actually do a disservice to these customers by making it easy to simply stay where they are and continue to be severely limited by this old technology? We understand the fear of disruption of ripping out an existing solution and replacing it, but in reality this fear and these older solutions are holding these customers hostage.

The Software Equivalent of the Stockhom Syndrome?

So are the customers that are refusing to replace these old solutions simply not aware of the capabilities and potential benefits newer solutions can bring? Maybe they simply don’t know how far software has come over the last couple of decades. Or are they suffering from the software equivalent of the Stockholm syndrome? Mint Jutras suspects there is a little of both at play here. Either way, the Infor partner can play a very significant role… or not. The IPN team is trying very hard to make sure it’s the former, not the latter.

The Stockholm syndrome, also called “capture-bonding,” is a phenomenon where those held captive start to identify and sympathize with and defend their captors. Older solutions prevent their users from achieving the interoperability, collaboration, visibility and transparency needed to maintain a competitive edge today, not to mention the inefficiencies that result. Older solutions (and their customers) suffer from lack of features and functions and clumsy user interfaces that are anything but intuitive and “beautiful.” And yet the users of these solutions often complain about them on the one hand, demanding more features and functions, and vigorously defend them on the other.

This phenomenon is not confined exclusively to the Infor customer base. We find evidence of this in some of the questions we place in our Mint Jutras Enterprise Solution Studies. We capture satisfaction, levels of automation and digitization, buying intentions, as well as preferences and perceptions about Software as a Service (SaaS) and cloud. SaaS and cloud provide a perfect example of how older software can take you hostage.

For years now we have been asking a hypothetical question: If you were selecting a solution today, which deployment options would you consider?

We define the different deployment options as follows:

  • Software as a Service (SaaS): Software is delivered only as a service. It is not delivered on a CD or other media to be loaded on your own (or another party’s) computer.
  • Hosted and managed by your ERP vendor: Software is licensed by you but you pay your ERP vendor to manage and maintain (host) hardware and software.
  • Hosted by an independent 3rd party: Software is licensed by you but you pay another party to manage and maintain (host) hardware and software.
  • Traditional licensed on-premise: You license the software and are responsible for managing and maintaining it on your own premises.
  • Hybrid: Parts are licensed and maintained on premise and parts (e.g. add-on modules) are cloud (SaaS or hosted).

The most popular deployment option is now SaaS and less than 30% of participants will even consider a traditional on-premise solution (Figure 1).

Figure 1: Which deployment options would you consider today?

IPN Figure 1Source: Mint Jutras Enterprise Solution Studies

* This option was added in 2015

Given the preference here, you might expect cloud solutions to dominate over the next few years, right? Wrong.

We went on to capture the percentage of all business software (not just ERP) that is now or will be SaaS over the next 10 years and beyond (Figure 2). While that percentage increases steadily over that time period, there is no hockey stick growth here.

Figure 2: What percentage of all your business software is/will be SaaS?

IPN Figure 2Source: Mint Jutras 2016 Enterprise Solution Study

The reason? There are just so many solutions already installed on-premise. Yet while less than a third would even consider an on-premise solution today, we don’t find an overwhelming percentage with immediate plans to replace those that currently exist (Figure 3). Even though many are underperforming.

Figure 3: Do you intend to purchase a new solution within 2 years?

IPN Figure 3Source: Mint Jutras 2016 Enterprise Solution Study

We offer these general observations in an attempt to understand what is going on in the Infor installed base, where there is an unusually high number of legacy solutions still in place, even after all these years. If these customers are anything like the rest of the ERP population represented by our survey sample, they could use a little push. Here’s where the Infor partners come in.

By now, most customers running these older solutions “get” the fact that the stream of innovation has slowed or, in some cases, completely stopped. So they turn to partners for consulting and customization. Those partners that continue to only sell and provide services around these older products are contributing to the problem. Of course it is good they can continue to support these long-time customers, but they should be educating customers on the advantages and benefits of moving to a newer, technology-enabled next generation solution. With over 90,000 customers, Infor relies heavily on the partners for customer intimacy. And of course, Infor wants to stack the deck in favor of that next generation solution being one its industry-specific CloudSuites.

Before that can happen, the partners also need to be convinced this is the key to continued growth and success in their own businesses. Those that simply ride this customization and consulting business into retirement will not be influencers or participants in the Infor community (or the digital economy) for the long term.

Up until recently many partners chose to stay in their own comfort zones. But that is starting to change and even die-hard Visual, Adage, Baan, PRMS (and other) partners that were inherited from acquisition are starting to come around. Infor is encouraging these partners to take on new products and even “declare a major” around one of its vertical CloudSuites, perhaps with one or more micro-verticals.

Encouragement is backed up with serious investment in helping these partners make the transition. As more partners take advantage of Infor’s investment, this is good news for their customers. It means they are committing to stay in for the long haul, and can provide continuity even as the customers modernize. And perhaps they can provide that added “push” to do so.

Infor CloudSuite Academy

Infor’s CloudSuite Academy is one such investment. It is a series of practical training courses designed to help alliance and channel partners jump-start their Infor CloudSuite businesses. The first session a partner attends concentrates on product. All of Infor’s CloudSuites are (as the name implies) suites of individual products. There is quite a variety of different industry-specific CloudSuites, as well as several “horizontal” CloudSuites that might be sold stand-alone or in conjunction with one of the industry CloudSuites.

At the core of each of the industry-specific CloudSuites is an ERP solution. Yet while there are 15 different industry CloudSuites, they are not powered by 15 different ERP solutions. For example, both CloudSuite Fashion and CloudSuite Food & Beverage are powered by M3. CloudSuite Industrial and CloudSuite Business are powered by Syteline. Lawson S3 powers CloudSuite Financial, CloudSuite Healthcare, CloudSuite Hospitality and CloudSuite Public Sector.

It’s actually a challenge to keep them all sorted out. The good news: Customers don’t have to keep them all straight. Customers just care about their industry and what is included as part of the Suite and perhaps the (optional) add-ons. In some industrial sectors for example, Enterprise Asset Management (EAM) would be part of the suite, while it would be an optional add-on for others.

This may get a little trickier for the partners, particularly those selling into more than one vertical. But in fact each partner is most likely to concentrate on a particular ERP solution and then move out from the product to perhaps include a multiple of the CloudSuites powered by that ERP. From a market perspective it really doesn’t matter what is under the covers, but it certainly does from a support and service perspective. Partners need to know their stuff in terms of both industry, as well as software solution. So the CloudSuite Academy product training extends beyond the core ERP to the other complementary solutions included in the suite.

Other CloudSuite Academy sessions follow with a comprehensive agenda for partner business owners, management and practice managers. They include sessions on the process of marketing, selling, supporting and renewing cloud business, as well as value engineering (benchmarking results). And the most recent sessions have also featured other partners sharing tips for a successful transition to the cloud.

While all the CloudSuites are available as multi-tenant SaaS solutions, they can also be purchased and deployed either as single-tenant SaaS or on-premise, allowing customers to choose their own path on their individual journeys to modernization. The end goal is to better enable the Infor partner to become an effective and knowledgeable guide in that journey.

The Prospect’s Journey

In order for an Infor partner to have a thriving business, it is not enough to just service existing customers. Partners must also be in search of new customers – new to the partner and new to Infor. That means they must also provide the same level of consultative service to prospects. Today this assistance is required even before a prospect becomes a prospect.

Percentages vary depending on the source of the data, but industry observers today agree that most prospects conduct between 60% and 70% of their evaluations before ever reaching out to a potential solution provider. This includes researching aspects of their goals and aspirations, as well as different technologies. And it all starts online. These researchers are first looking to educate themselves. Only after that education is well underway are they open to discovering a potential solution and solution provider. Marketing materials that are thinly disguised sales pitches provide little value in this research.

Which is why Infor is investing so heavily in providing educational materials authored not only by Infor employees (subject matter experts), but also by industry thought leaders. Topics include digital transformation, the factory of the future (think Internet of Things) and omni-channel, as well as more traditional topics such as improving profitability and productivity. Infor is investing in research and reporting on these topics so that you, the prospective or current customer, doesn’t have to.

The benefit to the customers is direct, providing impartial and objective materials for their research. The benefit to the partner is a bit subtler, but equally clear. A well-educated prospect is a better-qualified lead. The partner’s role will be in helping the prospect to understand how Infor solutions can help address those needs. This is where “value engineering” skills are paramount.

Infor is also providing tools and training to assist partners in this phase as well, by helping partners to help customers engineer more value from their solutions. This training introduces a methodology that supports a more strategic way of doing discovery – discovery of the potential for improvement in alignment with the goals of the customer. It includes “discovery templates” for 16 solutions and industries, which assist in benchmarking current performance and quantifying opportunities for improvement.

It also helps the customer when the partner truly understands its business. While it is quite common for solution providers (and their partners) to specialize in a general category like manufacturing or distribution, Infor, with its CloudSuites, goes a step further into industries like food & beverage, aerospace and defense, automotive, industrial machinery, etc.

But Infor then encourages partners to go even a step further. Instead of “just” specializing in an industry like food & beverage, Infor is looking for partners to specialize in micro-verticals like dairy, bakery, grains and cereals or prepared foods. It is through this more focused specialization that partners can showcase unique strengths and capabilities and Infor customers can better achieve the “last mile” of features and functions that so often eludes customers and forces them down a path of customization.

Summary and Key Take-aways

Infor’s Partner Network continues to mature. While it has already come a very long way, we don’t see the IPN team slowing down any time soon. With the strength of Infor’s portfolio of technology and applications, and the support of a dedicated IPN team, partners still have a long runway ahead of them to continue to build speed and momentum.

Yet too many Infor customers have built their own roadblocks along that runway, allowing themselves to be held hostage by their own aging solutions. It now falls to the partners to help those customers overcome the software equivalent of the Stockholm Syndrome. Even while they continue to support those customers running legacy solutions, partners must now make them understand they are indeed bound by these limitations. They must educate them on the potential benefits of newer, more modern and technology-enabled solutions and then lead them out of bondage.

Education and thought leadership is a key part of the process for not only these legacy customers, but also new prospective customers. Recognizing that the way enterprise software is bought and sold has dramatically changed over the past decade, Infor has brought resources to bear to help partners transition to this new world, giving them the skills to bring both customers and prospects alike along on that journey. Will you come along?

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The New Sage: Who and What Is It? Where Is It Going?

Early in his opening keynote for Sage Summit 2016, CEO Stephen Kelly announced, “Our real purpose is to champion the ambitions of entrepreneurs.” This sentiment goes well beyond the development and delivery of software products. Mr. Kelly himself is a business ambassador to the Prime Minister of the United Kingdom, representing the interests of small and midsize businesses to governments, in global markets, at colleges and universities, and on the political front as well. He has pledged to bring Sage’s products to the cloud and more innovation to the products. And he has declared that Sage is “The only company providing your digital heartbeat from Start-up to Scale-up to Enterprise.” [These are the new monikers for the markets in which Sage plays, replacing references such as “small” and “mid-size.”]

But, having grown through acquisition, Sage faces some challenges, not the least of which is the sheer number of products it owns, many of which are based on older technology and run exclusively on premise. I’ve never done a specific count, but based on a quote from Mr. Kelly presented in a Diginomica article by Stuart Lauchlan back in May after a mid-year earnings call,

“Our historic, federated and fragmented and de-centralized business model meant that we couldn’t fully leverage the scale and the global reach for the benefit of our customers or ourselves. In fact, it was actually hindering our ability to grow.

Our acquisition-led growth strategy compounded the internal fragmentation and complexity. And this fragmentation I’ve shared with some of you before in terms of 270 different products, 73 different code bases, over 150 different sales compensation plans, 139 sites, 105 databases from management accounting, 21 different CRM systems. I could go on and on.”

Wow! That’s a heck of a lot to consider. But Mr. Kelly seems up to the challenge. Make no mistake: This is a new Sage. Over the past year there has been a changing of the guard, with many departures, and many more new faces. But more to the point, Sage has re-architected its positioning. This started a year ago when Mr. Kelly declared Sage would no longer sell ERP, noting the acronym should really stand for expense, regret and pain. This year that sentiment persisted.

Throughout the keynotes, we heard reference to “accounting, payroll and payments,” but never “ERP.” Couple this with the heavy dose of “entrepreneurship” and you walk away thinking Sage is the place to be for small businesses in need of an accounting solution. With enormous installed bases from acquired products like Peachtree, AccPac and Simply Accounting, you might say, of course they are.

But what about all those “enterprise” customers running Sage 100, Sage 300 and Sage X3 where the founder of the business has long since exited? I found myself wanting to be their champion amidst all the accolades for the entrepreneurs in the audience. These enterprises need more than accounting, payroll and payments. They need to manage the complete system of record of the business, including orders and/or contracts. Fortunately the Sage products formerly known as ERP do just that.

And I felt for the partners who sell these products into the ERP market. When a new prospect wants to buy a new ERP solution, with this new positioning and the declaration that ERP is dead, will they even give Sage a look? Precise percentages might vary, but experts today estimate 60% to 70% of the evaluation process happens before a single vendor is ever contacted. Will those in the market for a new ERP system ever find Sage? The answer is maybe – but not necessarily because of Sage’s efforts, but rather because others still hang on to that label.

As I wrote last year, I have never been a big fan of the “ERP is dead” mentality. To my way of thinking, although the acronym itself has lost a lot of its meaning over the years, ERP is a convenient label. While early ERP solutions were fraught with problems, and indeed some of those problems persist today, calling it something else doesn’t fix it.

Based on my conversation this year with Mr. Kelly I understand his intent. This statement was his way of sparking some controversy, something Sage had previously been unwilling to do. However, based on how vigorously some of his Sage colleagues have defended this stance, I worry a little that the spark has become a flame that continues to burn at Sage. This is not only troublesome for existing ERP customers and partners, but also for those start-ups that will eventually scale up and become full-fledged enterprises. If Sage wants to continue to provide the “digital heartbeat” for these growing companies, it needs to provide a logical path forward that doesn’t require any steps back.

Sage provides different products for different stages of company growth. Early on, startups might run Sage One or the newer Sage Live (built on the Salesforce platform, which allows it to take advantage of many of the cloud, mobile and social capabilities inherent in the platform). But as the company starts to scale, perhaps it makes a move to Sage 50c, the Sage product most recently enhanced with integration to Microsoft Office 365. Or it might go to Sage 100, Sage 300 or skip right on up to Sage X3.

But Sage itself admits that it needs to catch up in terms of new features and technology. To its credit, Sage is not satisfied with just catching up, but wants to leapfrog its competition. But will all products along the path have some of the nifty new features inherited from the Salesforce platform or added to Sage Live? An example of this leapfrog effect was seen in a demonstration that linked Sage Live to TomTom WebFleet to record mileage as an expense in Sage Live without any human intervention whatsoever. In the future it will be possible to record billable hours this way using a Siri-like conversation to “start the clock.”

Another leapfrog moment on stage was the introduction of Pegg, an accounting chatbot that can take input from Slack and Facebook Messenger (for now, others to come) to report expenses using natural language English. Pegg combines a natural language interface with machine learning and intelligence to potentially do much more. Sage even describes it as a “personal trainer” for your business, but I suspect it needs to mature a lot before that really happens.

But what happens to this innovation when the customer outgrows Sage Live? Does it too get carried forward? Does the integration to Office 365 carry forward? Can you bring Pegg along or your TomTom? When you look at all the different paths forward, you start to realize the devil is indeed in the details. And all the permutations can be daunting.

This potential complexity is the reason why I think the most important Sage Summit announcement of all was the Sage Integration Cloud. During the keynote, we watched Nick Goode, EVP of Product Management integrate Sage One with Expensify in just a few minutes and a few clicks. As Nick said on stage, “No code, no fuss, no maintenance, no techy skills required.”

It was so incredibly simple, you knew there had to be something more to it than met the eye. And there is. This is built on Cloud Elements, an API Integration Platform for application providers. And the author of the “add-on” product (in this case Expensify) has to do some work in order to allow customers to connect it this easily. The level of preparatory effort will depend a lot on the technology and architecture of the solution(s). But Cloud Elements has created a Sage Hub, which means in connecting it to one Sage product, it connects to all (relevant) Sage products.

This is incredibly important for those on older Sage products, particularly as Mr. Kelly reinforced a commitment he made to customers at last year’s Sage Summit:

  • No forced migration.
  • No end of life for any Sage products.
  • If you love your current Sage solution, whether it is desktop or cloud, Sage will support your continued use of it.
  • When you are ready to move to cloud, full mobility and real-time accounting, then Sage is ready to take you there.

Sage is essentially promising never to “sunset” a product. Sage is not the only company making this promise. Infor, which also grew through acquisition and faces similar challenges, makes a similar promise, although Infor is also clear on saying it provides no real innovation to these non-strategic products. That’s the difference. I sense that Sage is (or should be) going down this “no innovation beyond compliance” path, but has not been as forthcoming with that statement. But both Infor and Sage continue to support a very broad and diverse portfolio.

On the surface this might seem quite noble of both Sage and Infor, or perhaps simply the right thing to do. But is it? Do they actually do a disservice to these customers by making it too easy to simply stay where they are and continue to be severely limited by this old technology? We understand the fear of disruption of ripping out an existing solution and replacing it, but in reality this fear and these older solutions are holding these customers hostage.

In order to make it less easy to stay put, Sage will most definitely use the carrot and not the stick. And the Sage Integration Cloud could be a very appetizing carrot. By offering some add-on components that might help these customers emerge out of the dark ages, Sage could “show them the light” (so to speak) and get them hooked on the opportunities newer technology provides. But in order for these customers to make a giant leap to a newer cloud product, with mobile and social capabilities built in, they will need to drag these new components along with them. That is the role the Sage Integration Cloud can play.

And it will also serve to make the Sage solution much more than “accounting, payroll and payments.” Sounds a lot more like ERP (and more) to me. This whole positioning exercise sort of reminds me of when Prince changed his name to a symbol. Everyone simply started calling him “the artist formerly known as Prince.” Ultimately (and fortunately) Prince went back to just being Prince, only better than ever. I am still hoping Sage might come full circle too.

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Host Analytics: Where Planning and Performance Management Meet

Today we live in a new world where the Internet levels the playing field for small, mid-size and large enterprises, breaking down barriers to entering new emerging markets. And yet we also face new challenges with rapidly changing commodity prices, fluctuating exchange and interest rates and an accelerating pace of business across a global economy. Whether you are looking to grow and expand or just accelerate profits, you need a plan.

A recent Mint Jutras report posed the question: Is Planning & Performance Management a Marriage Made In Heaven? We concluded that having a comprehensive plan is the first step towards achieving any specific outcome. But to optimize growth and profits, that plan needs to be a living plan, capable of evolving as goals and business conditions change. The key to breathing life into your plan is to actively link it to enterprise performance management. While that might seem intuitively obvious, too often the plan simply goes on the shelf as you go about business as usual. To monitor, manage and predict performance against the plan, you need to marry the right solutions with the right data.

The tools available to help you succeed range from spreadsheets to suites of applications that also might range from simple, basic tools to comprehensive solutions built on modern, enabling technology. Host Analytics provides a comprehensive Enterprise Performance Management (EPM) platform that is simple and affordable enough for the small to mid-size enterprise, but comprehensive and robust enough to support a growing mid-size company as it transforms itself into a large enterprise. Delivering its solution exclusively as Software as a Service (SaaS), Host prides itself in offering an EPM solution you can’t outgrow.

The Right Mix

In our report, Is Planning & Performance Management a Marriage Made In Heaven? we found companies with World Class implementations use a more extensive set of tools to plan, monitor and manage performance (Figure 1). The tools shown in the figure below fall into four general categories: specific applications, reporting, analytics, and, of course, the ubiquitous spreadsheet. Host Analytics provides the first three as part of a comprehensive suite and also helps you control the inevitable use of spreadsheets.

Figure 1: Tools To Monitor, Plan and Predict Corporate Performance

Host Figure 1Source: Mint Jutras 2016 Enterprise Solution Study

Note that Mint defines “World Class” in terms of the performance of the implementation of enterprise software that runs the business. Survey responses are used to measure cost savings and other improvements since implementation, progress made in achieving goals and selected current performance metrics that can apply universally to any business. The top 15% in performance is categorized as “World Class” and the remaining 85% are referred to as “All Others.”

While its solution is quite comprehensive today, being a cloud-only solution allows Host Analytics to offer frequent enhancements and improvements through monthly maintenance releases and quarterly feature releases. Over the past year Host Analytics has delivered about 185 enhancements and announced some very strategic partnerships. Key investment areas include:

  • User Experience
  • Performance
  • Consolidation
  • Data integration
  • Planning
  • Modeling
  • Productivity
  • Analytics
  • Security

“We Speak Finance, not Klingon”

According to Dave Kellogg, Host Analytics’ CEO, “Our first language is finance.” Hence the applications delivered serve the office of finance. He goes on to clarify with, “We speak finance, not Klingon.” That tongue in cheek reference to the language of the alien culture encountered in the journey of the USS Enterprise (of Star Trek fame) is a subtle reference to competitors who speak only in the language of information technology (IT), which will mean little to the finance department.

As an interesting side note, the Klingons appeared in the original Star Trek series as enemies of the Starfleet Federation, but became allies in later generations of the entertainment franchise. We can only assume Mr. Kellogg is referring to Klingon in those later series because Host Analytics is actually quite IT-friendly, building on a modern technology foundation. Certainly IT is not viewed as the enemy, even if the staff does speak a different language.

However, Mr. Kellogg goes on to point out that while those in the office of finance might speak finance, they don’t care exclusively about finance. They care about the performance of all departments and disciplines across the enterprise. This is an important factor, and one covered in depth in our prior report. You need more than a financial plan. You also need an operational plan. This could potentially present a problem to a solution provider focused exclusively on the office of finance, which is why it weighs heavily in determining Host Analytics’ strategic approach to its product portfolio.

Focus, Partner and Unite

Mr. Kellogg described the company’s strategic approach at the recent Host Analytics World 2016. “We have three options to choose from. As a solution provider we could ignore the problem. But that would most likely mean the plan would be retired to a drawer and used only for executive compensation purposes. We could go a mile wide and an inch deep, attempting to build functional performance management applications for all functions. Or we could focus, partner and unite.”

Host Analytics chooses the third option, focusing on building financial apps and partnering with other companies that speak the languages of supply chain, manufacturing, services, marketing, sales, etc. Key to that decision: Host allows partners to build these apps within its Modeling Cloud. When they do, Host can bring the financial plan together with the full operational plan in a single cloud model. In doing so, Host is hoping to eliminate the need for “shadow finance” organizations that tend to spring up across the enterprise when departmental and functional needs aren’t met by a financial (only) plan.

Planning modules within the suite allow you to plan, budget, forecast and report all from one application. Modeling helps you create operational plans that align with financial plans. Multidimensional modeling helps you anticipate outcomes using financial and non-financial drivers. New dimensions can be added for granular “what if?” scenarios.

Analytics Tie It All Together: Think Quick and Qlik

Analytics are important tools in bringing the financial and operational plan together. In our prior report we noted that World Class implementations were 43% to 180% more likely to use various types of analytics.

Host Analytics has had a long-standing relationship with Qlik, who is also its customer. That relationship has now been strengthened and Qlik is embedded within the Host Analytics suite. No more exports from Host to Qlik required. Access and data is available in real time right from Host.

This partnership and integration brings data discovery and visualization tools to the Host Analytics suite. Pre-built dashboards can be easily tailored and configured by business users, adding a level of self-service and independence for the business user without over-reliance on IT. Presentation quality story boards can be created and integrated with Host’s Financial Package Publisher. The (combined) solution becomes browser agnostic (Windows and Mac), and fully supports mobile devices.

Direct integration with Host financial data comes right out of the box, but customers and partners will also be able to integrate other models and third party applications in order to mash up data from a variety of sources. Host has also expanded in-memory support and implemented incremental updates of data cubes and dashboards. Early results have yielded 50% to 90% improvements in performance across various planning and reporting scenarios.

Expanding the Circle: Workforce Planning & Analytics

While Host Analytics’ primary focus is on financials, it is not drawing a circle too tightly around finance. In fact it is expanding its boundaries to include an element of workforce management, including the delivery of workforce planning and analytics. Workforce planning is a logical extension of the financial plan since headcount determination and resulting costs are often included as part of the financial plan. The new analytics will provide improved visibility to headcount, compensation, benefits, open requisitions and other employee detail. But for more specific planning activities, such as incentive compensation planning, Host has chosen a partner that speaks that language. A partnership and integration with Xactly was also announced at Host Analytics World 2016.

How Does Host Analytics Stack Up?

We concluded our prior report with a checklist of sorts to be used in looking for a solution that effectively manages planning and performance management. So how does Host Analytics stack up?

  • Look for planning and performance management tools that complement each other. While Host positions itself as an EPM player, its planning and modeling capabilities are a good fit for many companies, particularly in the small to mid-size range. While the volumes very large enterprises must deal with might have over-taxed its solution in the past, the new in-memory capabilities might just address that.
  • Make sure you can connect your overall financial plan to your operational plan. Host Analytics focuses on the financial plan, but has recently expanded to include workforce planning. Partners are required for other operational plans, but the partnership and integration with Qlik should help bring it all together in the end, provided the necessary operational plans are available. Expect some setup work to be required if bringing together data from applications in third party applications, but those offered by certified Host partners should slide in more easily.
  • Select tools that encourage rather than prohibit collaboration. Host Analytics has embedded social collaboration with in-context discussion threads and activity streams and the ability to annotate a plan. Host has partnered with SocialCast, but also supports integration with other collaboration tools such as Slack and Yammer. In addition, new “reporting” capabilities also support export to Google Sheets and Google Drive and Host will continue to build out this integration for bi-directional updates.
  • Consider a cloud approach. Host Analytics’ solution is delivered entirely and exclusively as Software as a Service (SaaS).
  • Evaluate not only the traditional desktop/laptop user interface but also the overall user experience, including the ability to support the mobile executive, on the device(s) of choice. Ask for a demo to evaluate the overall User Experience. Host is browser agnostic and adapts well to various devices.
  • Look for solutions that play well with others. Host has designed its solution with this in mind. But don’t be afraid to ask for specifics on your own configuration of solutions.
  • Work with your information technology (IT) staff, but seek a level of independence in the planning and performance management process itself. Think of your most complex test case for planning/modeling. For example, do you need driver-based planning? Host Analytics supports it. But does Host support all the methods and/or algorithms you might need? Make sure you ask. With the embedding of Qlik, data discovery and visualization took a giant leap forward, but always ask for a test drive. It’s one thing to watch an expert make the software sing and dance. How does it look and feel and how flexible is it when you are in the driver’s seat?
  • Understand clearly what kind of reporting and analytics are available right out of the box. Same as above: look at the demo but the proof of tailor-ability is in doing. Again, ask for a test drive.
  • How much data can the solutions handle? How fast can they process it? Host now supports SQL Server 14, which provides new in-memory capabilities. In addition, Qlik dashboards preload all data needed into memory. This combined with the ability to incrementally update reporting cubes and dashboards provides good support for high speed, real-time access to data.

Conclusion

Host Analytics’ claim to be a leader in cloud-based enterprise performance management (EPM) is valid. Its platform of financial applications for modeling, planning, consolidation, reporting and analytics effectively marry the planning and performance management activities in companies from small to large. While Host “speaks finance” it has also created a platform on which partners that speak other functional languages (supply chain, sales, marketing, etc.) can add their own value. Together with those partners, along with its special partnership with Qlik, the happy couple expands to become a true blended family.

If your current financial plan sits in a drawer for the majority of the year…

If you can’t align your financial plans with your operational plans…

If you are struggling to make sense out of a collection of spreadsheets…

If you find yourself in fear of mistakes buried in those spreadsheets leading to bad decisions…

You owe it to yourself to look for a new solution that can help you plan, monitor and manage your performance. But of course, only if you want to maximize your opportunity to optimize growth and profits.

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Oracle and NetSuite: Separate Fact from Speculation

Since last week when Oracle announced it had entered into a definitive agreement to acquire NetSuite, I have been amazed at the volume of incorrect information and speculation and opinions thrown around as fact. Just this morning I read an article referencing the projected $9.3 billion transaction as the largest acquisition by Oracle since the Peoplesoft acquisition for $10.4 billion in 2014. Well… the author was only off by about a decade. Oracle announced the proposed merger in 2004 but the deal was not consummated until 2005. The article also stated that Oracle would run NetSuite as an independent company. That too is inaccurate. What Mark Hurd was quoted in the press release as saying was, “Oracle and NetSuite cloud applications are complementary, and will coexist in the marketplace forever. We intend to invest heavily in both products—engineering and distribution.” That is a far cry from saying the company would stay independent.

These are just a couple of examples. Many others are disclosing “the real reasons” for the acquisition as fact, when in fact these are just opinions and personal conclusions. I stayed silent because I never simply regurgitate a press release, and beyond the price of the offer and a few quotes by Oracle co-CEOs, NetSuite founder, CTO and chairman, Evan Goldberg and NetSuite CEO Zach Nelson, everything else is just speculation. NetSuite can’t talk about it and Oracle won’t. But with all the commentary, I feel compelled to remind my readers not to misinterpret opinions as fact.

I consider myself somewhat of a reluctant expert in M&A. During my 40+ year career I have survived 15 of them, sometimes as the acquirer, sometimes as the one acquired. Sometimes I was intimately involved in the details; other times I simply observed from the sidelines. Acquisitions often generate excitement, but also fear, uncertainty and doubt. Sometimes they go smoothly, but more often they are disruptive – to the companies involved, the individuals (employees) and even sometimes the market. In the end, they can be very unpredictable.

There are a few very common motivations for one company acquiring another:

  • Grab market share: Some companies would prefer to acquire new customers in blocks of hundreds or thousands, rather than closing them one by one. This can apply to grabbing more share of your existing market or entering a new one.
  • Fill a product and/or talent gap: It can be far easier to acquire functionality than to develop it yourself. This can make the company more competitive, provide cross-sell and up-sell opportunity, or both. But don’t assume there is any M&A pixie dust that will magically integrate products overnight.
  • Upgrade technology: Similar to filling a product gap, but at the foundational level. It is much easier to build a new product from scratch with newer technology (or acquire one) than to retrofit new technology into old products.
  • Eliminate a competitive threat: If you can’t beat ‘em, buy ‘em.

So… what do I think is the motivation behind this acquisition? I think it is mostly about cloud market share. Of course, this is my opinion, but Larry Ellison’s stated goal of being the first company to reach $10 billion in cloud revenue is a pretty good hint. A secondary factor may very well be the cloud DNA, so to speak, that would come with a company and solution born in the cloud.

And there is no doubt in my mind that is the direction most prospective buyers are pointed in as well. I have been asking the same hypothetical question in my enterprise solution studies for the past 10 years: If you were to select a solution today, which deployment options would you consider? While back in the 2006-2007 time period less than 10% would even consider SaaS ERP (back then I called ERP the last bastion of resistance to SaaS), those preferences have slowly shifted. Between 2011 and 2013 the percentage that would even consider a traditional on-premise deployment dropped off a cliff and today SaaS is the most widely preferred option (Figure 1). And while Oracle was late getting out of the SaaS gate, NetSuite was a pioneer.

Figure 1: Deployment Options That Would be Considered for ERP

SaaS Fig 1Source: Mint Jutras Enterprise Solution Studies

But I also believe the other 3 reasons contribute to the attractiveness of NetSuite to Oracle.

Oracle probably already has all the different pieces that NetSuite brings to the table (and more), but NetSuite brings them all together in a seamlessly integrated, end-to-end solution. When I ask my survey respondents to stack rank 10 different selection criteria for ERP, fit and functionality still takes the top spot, but is followed closely by completeness of solution. This is particularly important for small to midsize businesses that don’t have deep pockets or the IT staff to roll their own solution or even integrate different parts. While Oracle does play in the SMB space, NetSuite plays better, as evidenced by some competitive wins against Oracle (usually in the upper midmarket). And it is built on a solid architecture of advanced technology.

So there is a lot on the plus side of the equation for Oracle. What’s in it for NetSuite? If you can believe Zach Nelson’s enthusiasm (his quote: “NetSuite will benefit from Oracle’s global scale and reach to accelerate the availability of our cloud solutions in more industries and more countries. We are excited to join Oracle and accelerate our pace of innovation.”), NetSuite will be able to expand its solution footprint and its global reach faster. Only time will tell on both aspects and a lot depends on how and how well the acquisition is executed and the companies are integrated.

While it is true that NetSuite never achieved a GAAP profit, that was heavily influenced by stock-based compensation and it did not really suffer from cash flow problems. As a result, it also didn’t suffer from a lack of innovation. And there is more overlap between products than some enthusiasts would lead you to believe.

And what about global scale? NetSuite could benefit from Oracle’s global reach. But integrating sales efforts might prove tricky. So the jury is still out on that front as well.

And then there is customer sentiment. Anecdotally, you can find NetSuite customers that made a conscious decision to avoid doing business with Oracle. When the acquisition actually happens, will that cause NetSuite customers to jump ship rather than become Oracle customers? My guess is no. ERP is just too big an investment (of time and money) to make such an emotional decision. Will there be some attrition over time? Probably. But again, a lot depends on how the acquisition is managed and the net impact on support, prices and contracts. NetSuite has never been the cheapest date, so there is not likely to be any immediate sticker shock.

All told, I think there are a lot more questions than answers right now. In the meantime keep your ear to the ground, but be wary of those who think they already have all the answers.

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Anaplan’s Smart Business Platform

A Different Kind of Platform for Planning

Call something a “platform” today and most people intuitively think of a technology platform – a development tool. In the hands of a skilled information technology (IT) professional, it can do anything and everything. That’s the good news. The bad news is, business leaders must rely on limited IT staff to deliver all the functionality required to do their jobs. As a result, business leaders typically prefer pre-built business applications.

Now, the good news about these business applications is they are purpose-built to perform the functions needed right out of the box. The bad news: Those pre-built applications might not operate exactly as needed. So either the business leaders make some compromises or they get back in line and wait for the IT staff to work their magic.

What if you could have the best of both worlds – a platform that is flexible enough to adapt to your specific needs, but easy enough for a nontechnical business user to design, set up and configure? What if it was available with some “use cases” pre-built to use as a starting point in building your own? That’s exactly what Anaplan set out to deliver with its cloud planning platform. The team at Anaplan calls it “The Smart Business Platform™” and it can be used for any combination of financial and operational planning to create an integrated plan for your business.

A Business Platform for Planning

Anaplan focuses exclusively on planning. But in order to make the Anaplan plan a living plan – one that lives and breathes as business conditions and real-life plans change – it fuses planning with performance management.

The pre-built application approach tends to work quite well in supporting business transactions. After all, how many different ways can you move inventory, pay suppliers, invoice customers and collect cash? But when it comes to planning, you enter a whole new world… or rather a whole new set of different worlds.

Not only does each type of business have its own nuances when it comes to planning, all the different functions in the organization approach it completely differently. The finance department needs financial planning and budgeting. Sales operations need sales forecasting. Supply chain planners need sales and operation planning (S&OP) and demand planning. Manufacturing needs inventory planning and optimization and resource planning. Corporate strategists need some combination of revenue, workforce and facility planning. The CFO needs to predict cash flow. The CEO needs visibility across the board. The list goes on.

If you take a purely business application approach to address all of these disciplines, you run the risk of creating a solution that’s a mile wide and an inch deep. So a platform approach to planning makes sense in that it helps you perform all these different kinds of planning in whatever flexible way needed.

But how do you take a platform approach and not become over-reliant on IT? You do what Anaplan has done and turn it into a business platform. What’s the difference? A technology platform is a set of tools for the technologist, while a business platform is a set of tools for the business leader. That’s the first step, but Anaplan didn’t stop there. Anaplan made it The Smart Business Platform™.

It’s smart because it naturally integrates all of the different plans, making it a complete and connected plan, across (potentially) every functional area of the business. It’s smart because it fuses planning and performance management together. You essentially manage performance from the plan. All the reporting and analyses tie back to the plan, which makes it a living, breathing plan. It’s smart because the planning engine uses Anaplan’s patented HyperblockTM calculation engine to perform modeling, including the ability to do simulations prior to making changes. And it’s smart because its in-memory technology gives you the speed needed plan at the right level of granularity, with all the detail you need for accuracy without sacrificing productivity.

Click here to download the full report.

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