ERP

Exact’s New UX for Macola 10.5: More Than Just a Pretty Face

Adding Functionality and Value Too

At its annual user conference Macola Evolve 2017 in New Orleans (April 20, 2017), Exact unveiled Macola 10.5. Much of the new release of its enterprise resource planning (ERP) software is focused on enhancing the usability of the software with new tablet-led user interfaces, “aligning with how and where manufacturing and wholesale distribution customers use the software on a day-to-day basis.” While new user interfaces are often just about screen navigation and visual appeal, the new usability features of Macola 10.5 add more than just a pretty new face. They make existing functionality more visible and accessible, while also adding new functionality. Will Macola users fall into the typical trap of resisting change or will they welcome it with open arms? It’s all about perceived value.

Overcoming Resistance to Change

It is not uncommon today for ERP solution providers to be transforming the user experience. In fact, it is almost a necessity. After all, the millennial generation grew up with technology in the palms of their hands. The concept of a user manual is as foreign to them as vinyl records and turntables. But with the introduction of so many consumer applications on mobile devices, even Baby Boomers have succumbed to the siren call of mobile technology and have become much more demanding of user interfaces. It’s called “the consumerization of IT” and it is a very real phenomenon. We demand truly intuitive screens and touch technology.

But this isn’t the first time user interfaces have undergone a transformation. Those of us in the older generation remember the “green screens” of yesteryear. And we also remember how difficult it was to get the users to abandon those green screens in favor of a graphical user interface (GUI). When GUIs were first introduced in a major release, if you asked a typical user, “What was the hardest part of the upgrade to the new release?” the answer was almost universally, “The new user interface.” It was a real struggle to get the users to abandon the devil they knew. But if you asked the follow on question, “What was the best value delivered with the upgrade?” the answer was almost universally, “The new user interface.” Even though transitions were tough, they proved worth the effort.

So what have we learned from this prior transition? The key to overcoming resistance is to add value. Even if you hate the existing user interface, once you get used to it, it is indeed the devil you know. But if the new user interface is just different, adds nothing new, doesn’t solve a problem, then you can’t blame the user for resisting.

Personal experience at the Macola Evolve event provides us with an analogy. The event was held at the Sheraton Hotel on Canal Street in New Orleans, right on the border of the French Quarter. A popular location for events of this size, I had been to several located in this 41-story hotel, but they were all held 15+ years ago. Since then, the Sheraton had installed new “smart” elevators. These smart elevators had a new “user interface.” Instead of just pressing the up or down arrow, you entered the floor you wanted to go to as you were calling the elevator. This eliminated the need for any buttons inside the elevator itself. I loved them.

Interestingly one of the main stage presenters at the event, a Chief Information Officer (CIO) at a manufacturer of consumer products, bemoaned this new elevator user interface. He hated it. He wanted the old buttons back inside the car.

Why did this CIO resist them, while I embraced them? Well, for one thing, it provided him with a tongue-in-cheek example of how IT projects would go so much more smoothly if it weren’t for the users. Just kidding, but put something new in front of them, and they are likely to baulk. I would partially agree, but only if what you put in front of them doesn’t immediately solve a problem or add real value. I loved the new elevators because they solved a problem I had recently experienced.

The previous week I was at an event with sessions on three different floors of a hotel. Not only did the hotel not have enough elevators, they didn’t provide any access to stairs (so no work-around). This caused a severe bottleneck. But as one elevator was filled and more people wanted to get on, they couldn’t just press the up or down button because that would cause the doors of the filled car to reopen. They had to wait until it was away to call the next one. And there was no way to organize the group by destination so every elevator stopped at every floor.

With the smart elevator, each passenger could enter his or her destination in advance. This not only allowed the elevator(s) to optimize the routes, often making them express to a particular floor, but never recalled a full elevator car. And a new one was coming before the full one was away.

The CIO’s perception: they took away my buttons. My perception: they made the elevators smart and my ride faster. There are two lessons here. The first to the CIO: Never introduce a new upgrade without being able to convey the value. The second to the solution provider: It’s not enough to just put a pretty face on the software. Make it do more.

Is Macola 10.5 Adding Value?

Macola 10.5 does have a pretty new face. The look and feel is a radical departure from prior releases. The goals from a visual perspective were to strive for clarity, avoiding clutter. And yet users tend to want and need lots of data for insights and decision-making. Power users in particular are likely to ask for more and more data at their fingertips. But the more you add to the screen, the longer it takes a user to react and respond.

Exact has reconciled these two apparently contradictory needs with something called “progressive disclosure.” Simply put, make that added data available, but hide it until you press the little arrow that signals you want more. Progressive disclosure adds more functionality to any particular screen without necessarily adding clutter.

This is particularly important as users move from desktops and laptops to tablets and even smart phones. It’s called “responsive design.” Exact starts with a tablet-first design. A tablet is more constrained in size. Size and fonts, use of color and contrast become more important for visual clarity, along with the ability to collapse or expand sections to take better advantage of the real estate on the screen. A tablet has touch access, but no mouse. Think about how you often use a mouse today to hover over a field to get more information. No mouse, no hover. That hover is a sort of search and help mechanism.

Therefore the way you search needs to change. Think about texting or typing on your smart phone. Once you start typing the word, it gives you suggestions for finishing it. Do you ever miss that when you are typing a document or accessing ERP from your desktop or laptop? Of course you do. You will start to miss it even more when you get used to Macola 10.5 giving you similar suggestions. Start typing a customer name in order entry and Macola 10.5 will show you a list of who you might be looking for, just like your email does when you start typing an email address with which you have communicated previously.

Macola 10.5 is not only striving for clarity, but combining the best features of your different worlds – smart phone, tablet, laptop, email, ERP, etc. – whether you are at your desk or on the move. The goal is to preserve the power of the solution while reducing the complexity of how you interact with the solution and the data.

What Users Want

These added bits of functionality bring value just like the smart elevator brings speed and efficiency. But if usability is the ultimate goal, do these efforts align with what users want? The 2017 Mint Jutras Enterprise Solution Study asked survey participants to select the top three most important elements of ease of use (Figure 1).

Figure 1: Most Important Elements of Ease of Use (top 3 selected)

Source: Mint Jutras 2017 Enterprise Solution Study

We find speed and efficiency at the very top of the list. Macola 10.5’s progressive disclosure, device independence, type-ahead search that requires less data to be entered, infinite scrolling and sort-able table columns all speak to speed and efficiency.

Of course with intuitive navigation, second on the list, the proof is in putting your hands on it. If you are an Exact customer or prospect, ask for a demo. But don’t be content to watch one of the Macola experts demonstrate the new user interface. Of course it seems intuitive when you are watching someone who’s done it about a million times. You will only know if it is intuitive if you try to use it with little or no instruction. We think the software will speak for itself, but you need to be the judge.

Third on our list is “Easy access from anywhere, any time.” Loosely translated, this means cloud. Cloud brings tremendous value, but cloud-based software as a service (SaaS) brings more. What’s the difference?

  • Cloud refers to access to computing, software and storage of data over a network (generally the Internet.) You may have purchased a license for the software and installed it on your own computers or those owned and managed by another company, but your access is through the Internet and therefore through the “cloud,” whether private or public.
  • SaaS is exactly what is implied by the acronym. 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’s) computer. It is generally paid for on a subscription basis and does not reside on your computers at all.

All SaaS is cloud computing, but not all cloud computing is SaaS. Traditional on-premise or hosted solutions might (or might not) be accessed via the cloud, although this is more likely to be a private cloud.

We could write volumes on the benefits of cloud and/or SaaS. For many, cost savings are the prime advantage. Beyond cost considerations, the other types of possible benefits include:

  • More innovation through more frequent updates
  • Better support of distributed environments and remote workforces
  • Risk mitigation

Macola has been available to run in the cloud for a long time. Everything demonstrated at Macola Evolve 2017 was running in Microsoft Azure.

And finally, rounding out the top four most important elements of ease of use is “Does what I need it to do easily and naturally.” This was a primary goal of Macola 10.5. “In any given day, our customers may be on the shop or warehouse floor managing operations, out of the office visiting customers or suppliers, or sourcing new materials. The latest update to our ERP and business software is focused on empowering users to more efficiently and seamlessly access the information they need to do their jobs, wherever they are at the time,” said Derek Ochs, director of development, Exact, Macola division. “With Macola 10.5, we are matching our software to the way our customers do their jobs. In the end, if Macola is truly doing its own job, the user hardly knows the software is there.”

Beyond Macola 10.5

Of course Exact will continue to develop its road map for Macola. But in addition it is also experimenting with a new “hackathon” approach. Periodically it takes teams of developers across all divisions of Exact and allows them to work on any new idea they might come up with, encouraging them to be creative and courageous. This can result in some pretty cool stuff that may or may not ever get into the product.

One that we think is very likely to make it in is a new login screen that uses facial recognition. Think about collecting transactions on a shop floor. Seldom does every worker have his or her own device for data entry to collect hours worked and quantity completed. At the lunch break or the end of a shift, are they queued up to record a half or full day of work? If so, wouldn’t it be great if they could just walk up to a screen and the system would automatically recognized them, log them in and maybe even bring up the production order in process? How much time and aggravation would that save?

Or how about a Macola Chat Bot (based on Microsoft’s bot engine) to do basic things in Macola just by chatting with it using Skype? Perhaps this might be an alternative user interface for occasional users so they don’t have to understand the system in order to get data and answers from it. Or how about a preferences engine that might suggest other items that are likely to be purchased as you add a line item in order entry?

These are just a few examples of sprint-like projects that are being conceived and developed through these hackathons. None of these are out of the realm of possibility with technology available today. Perhaps the biggest stumbling block to moving forward with these potential innovations is a lack of familiarity, and therefore appreciation for what technology can do today.

In our 2017 Mint Jutras Enterprise Solution Study we selected 14 different kinds of technology and asked respondents to assess their level of familiarity with each in terms of how they relate (or not) to their business. All respondents were asked about all 14, even though we realize some are more relevant to some industries than to others. Those shaded in the lighter green are primarily applicable to those making and/or moving a physical product, while those in the darker green are likely to be applied more universally (Table 1).

Table 1: How familiar are you with these technologies as they relate (or not) to your business?

Source: Mint Jutras 2017 Enterprise Solution Study

Adoption rates are still quite low and in many instances, those that have little or no familiarity outnumber those that understand it well. So in many cases Exact can’t rely on its customers to ask for these features. But even if customers aren’t pushing in this direction, perhaps Exact can pull them along, potentially transforming businesses as it does.

 Summary

Macola 10.5 brings some added new features and functions along with its pretty new face. These include:

  • A newly re-architected tablet-led user interface that uses size and fonts, color and contrast or added visual clarity, along with the ability to collapse or expand sections to take better advantage of the real estate on the screen
  • Progressive disclosure, keeping added detail (clutter) hidden until needed
  • Responsive design of software, which behaves differently depending on the device in use
  • Special search capabilities that ask the question as you type, “Did you mean…?”
  • Intuitive screens (but don’t take our word for it, see for yourself)
  • Available in the cloud

These are exciting times for the developers at Exact. If you are a customer, share in their excitement. If you are considering replacing your current ERP solution, Macola is definitely worth a look. Dive in to Macola 10.5 to see what you are missing.

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Are Digital Technologies for Everyone?

Understanding Just How Well They are Understood and Valued

Industry pundits have been hyping “digital transformation” and “digital technologies” for several years now. This hype tends to make ample reference to the consumer technologies that are indeed making an impact on our personal lives: connected homes, self-driving cars, wearable fitness devices and every kind of “app” you can think of on your smart phone or tablet. That’s easy. The hard part is connecting this transformation to the workplace and the enterprise in a way that seems to bring real value. The pundits make the assumption that these technologies are well-understood and perceived as valuable. But are they?

I don’t make any such assumptions and the results from questions on digital preparedness in my annual enterprise solution study last year confirmed many decision makers are fooling themselves with a false sense of security. While 88% agreed that embracing digital technologies was necessary for survival, the majority still rely at least in part on spreadsheets for something as common as the system of record of business transactions. That contradiction led me to investigate just how well understood various technologies are, and whether value is perceived as real.

How Well Do You Understand?

We are still actively collecting data from this year’s study, but at this point in time we’ve captured over 500 responses – enough to make some early observations. Participants represented a wide range of industries and companies of all sizes, from small to very large.

We selected 14 different kinds of technology and asked respondents to assess their level of familiarity with each in terms of how they relate (or not) to their business. All respondents were asked about all 14, even though we realize some are more relevant to some industries than to others. Those shaded in the lighter green are primarily applicable to those making and/or moving a physical product, while those in the darker green are likely to be applied more universally.

Table 1: How familiar are you with these technologies as they relate (or not) to your business?

Source: Mint Jutras 2017 Enterprise Solution Study

There is a lot of data and insight buried in this table and there are countless different ways we can cut it and present it. One way of analyzing the data is to divide participants into two groups: those that have no familiarity or are only somewhat familiar with a technology, and those that understand it well. We presume those that have deployed or are deploying it fall into the latter category. Figure 1 depicts this dichotomy graphically.

Figure 1: Either you “get it” or you don’t

Source: Mint Jutras 2017 Enterprise Solution Study

We seem to be all over the map here, with those that utilize increasingly large volumes of data to provide intelligence most well understood. And yet we don’t see a big uptake in terms of deployment (Figure 2). Only 10% to 20% have even begun deploying the technologies that are most well understood and many just don’t see the applicability to their business.

Figure 2: Deployment Lags Understanding

Source: Mint Jutras 2017 Enterprise Solution Study

Is this due to a lack of education or is it because they really don’t apply? I think it is a little of both. While I still want to do a deeper dive by industry, two preliminary data cuts told me a whole lot. First of all, those that fall into my category of “World Class” have a far greater knowledge and appreciation for these technologies. Just look at the difference in adoption rate (Figure 3) between World Class and All Others.

Figure 3: World Class Deploy More

Source: Mint Jutras 2017 Enterprise Solution Study

Note that I define World Class (the top 15%) through the results achieved since implementing the software that runs the business and progress against company goals. This is not a “world class company” as much as world class use of technology, although better use of technology very often correlates with better company performance in terms of growth and profits. So we’re not surprised to see a higher level of understanding and more adoption in companies that have achieved World Class status.

However, we also recognize that while deployment is about the company, understanding and perception of value is more about the individual. And this is where the second data cut was quite revealing. I looked at levels of understanding based on the age of the survey participants, the vast majority of which fell into the categories of Baby Boomers (23%), Gen Xers (53%) and Millennials (23%).

Figure 4: Millennials Understand Better

Source: Mint Jutras 2017 Enterprise Solution Study

It is quite clear that the level of understanding of these technologies is inversely proportional to age. This doesn’t mean Millennials are smarter. They were simply born in an age where we rely on technology to make life easier, while Baby Boomers grew up doing things the hard way. In terms of seeing the value, Baby Boomers are definitely harder to convince.

As a Baby Boomer, I am skeptical of technology making us stupid and lazy. I see many examples of this in consumer technology. Smart refrigerators are the perfect example. A simple, online search came up with this:

The Samsung Family Hub fridge has a giant touchscreen built into one of its doors, complete with an app you can use to order groceries online. A line of cameras on the inside will send a picture to your phone when you’re out shopping. An app on the fridge for Samsung’s SmartThings smart home service will let you control your lights, your thermostat, and other connected products right from your refrigerator door.”

My reaction: Really? You need this to manage the inventory of your refrigerator? Are you constantly running out of milk? You can’t flip a light switch or remember to turn down the heat when you leave or go to bed? You want your refrigerator to do that? You really think you’ll save a measurable amount of energy by not having to open the door?

The reaction of my 28-year-old nephew? While he didn’t spring for the Samsung $5,000 model, he did buy a smart refrigerator.

The risk I face is overlooking something that will make a significant impact. The risk my nephew faces is spending too much for too little real value… while perhaps becoming stupid and lazy. But there is hope for both of us. I did invest in a video doorbell this past year, resulting in improved security. Not to mention the fact I actually know when someone is at the door even though my hearing isn’t what it used to be. And my nephew never runs out of milk now and still saved enough money to renovate his kitchen, increasing the resale value of his home.

The lesson for businesses to learn: educate yourself on the real value, but scrutinize the return on investment. Over the next few weeks and months, look for me to dive deeper into these different technologies for help in both areas.

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Deltek iAccess: More Than Just a Pretty Face

Deltek’s Secret Sauce to Innovation

Deltek is laser-focused on meeting the needs of project-driven businesses. Unlike a myriad of solution providers that simply provide software used to manage the projects themselves, Deltek takes a giant leap beyond, also providing software that runs the projects-based business. This type of software is typically referred to as enterprise resource planning (ERP). But in Deltek’s case we’re not only talking about ERP, but also a special kind of ERP.

Over the years, through organic development and acquisition, Deltek has collected a dizzying array of products: specialized enterprise solutions for government contractors and a wide range of professional services organizations including architecture and engineering (A&E) firms, management consultants, advertising, PR and marketing agencies and more. The one thing all these segments have in common is this: They are all people-centric, providing services, largely delivered through projects.

Beyond this point of commonality, they can be very different. They don’t go after the same type of business; their customers are worlds apart; some are heavily regulated; others operate under few constraints. Some are small; others are large. Some manage projects that last days or weeks and others span multiple years. A general-purpose kind of solution just doesn’t work well here.

This leaves Deltek with a rather difficult challenge of providing continued innovation across a broad portfolio of products, but a challenge the company has embraced with vigor. What is the secret sauce to keeping a potentially diverse set of customers able to keep up with the demanding requirements of our digital economy? Deltek iAccess.

What is Deltek iAccess?

Deltek describes iAccess as an “Easy to use front office solution.” But unless you count each and every employee in a project-driven firm as an occupant of the front office, you completely underestimate what iAccess can do. Mint Jutras would suggest you think of it instead as a front door, an entry point into some of the most critical functions performed in a project-based business.

As a front end to Deltek’s ERP solutions, iAccess provides a new way to navigate and therefore it does provide a new user interface, which will eventually work its way throughout the various applications. iAccess will supplant previous user interface efforts such as the Maconomy Portal and Vision Smart Client. But for the functions it serves today, it is more than just a user interface.

Three Workspaces Touch Much of the Organization

Deltek iAccess is more like an extension of your Deltek ERP. Today it provides three distinct workspaces that are specific to three different functions performed by employees and in doing so, covers much of what is accomplished in a project-based business:

  • Business Development Workspace provides a lot of the functionality typically associated with sales force automation, supporting those charged with developing business, including managing clients, contacts and opportunities
  • Project Management Workspace helps project managers monitor projects and identify problems before it’s too late
  • Employee Workspace makes it easier to keep timesheets and expense reports up to date from anywhere

While Deltek iAccess is browser-based, all three workspaces are available and integrated with both cloud-based software as a service (SaaS) and on-premise deployments of ERP. And it also provides a uniform look and feel across multiple products. Of course each Deltek customer will likely be running only one of Deltek’s ERP solutions, but all the features and functions required are not necessarily embedded within ERP. In fact Deltek has been smart in delivering extended functionality, particularly in light of its diverse portfolio of products.

Consistent Look and Feel Across Extended Products

Deltek has been delivering more and more functionality via cloud-based add-ons, including Deltek CRM, Deltek Resource Planning (RP) and Deltek Talent Management. With iAccess providing that front end across all products, users experience a consistent look and feel throughout, making the integration appear seamless while also fostering engagement at all levels of the organization.

In days gone by a select few ever put their hands directly on ERP. Today we find over 50% of employees typically have direct access. The access any time, from anywhere advantage of the cloud has contributed to this rise in engagement, but also ease of use and intuitive navigation. The prevalence of consumer technology has changed expectations and the user experience delivered through iAccess is meeting and exceeding those expectations.

More Innovation, Easier to Consume

This kind of approach is also smart. It leverages development efforts across a range of products and should ultimately allow Deltek to deliver more innovation across its entire portfolio. While the needs of project-based businesses vary across different industries, they do share some common requirements.

The fact that these new modules/components are cloud-based is also significant. All three of its major product lines (Costpoint, Vision and Maconomy) have all made the transition into the cloud and are offered as multi-tenant SaaS solutions. Note the applications are multi-tenant but each customer has its own instance of the data base, and Deltek does have an Enterprise Cloud offering for those customers that require a single instance type environment. Multi-tenant SaaS solutions have the most potential for delivering more innovation, faster.

The fact that these new modules are delivered as add-on components is equally important. It addresses two key issues. First, as noted earlier, it allows Deltek to leverage development efforts across a range of products and should ultimately allow Deltek to deliver more innovation across its entire portfolio. Secondly, it makes it much easier for its customers to consume innovation.

Adding new functionality to ERP in a way that makes it easy to consume has long been a challenge. The very definition of ERP (at least the definition according to Mint Jutras) contributes to this challenge. Mint Jutras defines ERP as an integrated suite of modules that forms the operational and transactional system of record of a business.

A core ERP solution has historically been a monolithic structure. Not only do all modules of an ERP solution share a common database, but also all are developed using the same tools and technology (platform) and traditionally they all move forward in lock step. This eliminates data redundancy and any need for separate integration efforts. And a common platform for development is beneficial to both the customer and the vendor.

When new features and functions are added to ERP, this tight integration implies that all modules, all functions, and therefore all departments within an organization must move forward together. This can slow down the upgrade cycle. But even more troublesome: It takes massive efforts of coordination for all departments within a customer’s organization to take those next steps all together. And all might not have the same level of motivation.

So what’s the alternative to this tight integration? The alternative is often referred to these days as “loosely coupled,” but that terminology frequently conjures the “best of breed” approach of yesterday, where you had independent point solutions that needed to be interfaced or integrated back into ERP. We’re not advocating taking a step backwards. Perhaps a better way of describing the newer alternative would be “component-based” or “service-based.” Deltek’s add-on solutions (CRM, RP, Talent Management) are good examples.

When it comes time to offer up new features and functions, instead of inserting lines of code directly into ERP, you might instead call upon a standard “service.” When it comes time to upgrade or add new functionality, simply swap out the old “service” for the new. You might also view these services as external components. While this is an oversimplification, it conceptually describes how next generation ERP can effectively deliver new, targeted innovation without forcing all departments served by ERP to march forward together.

Innovation has never been more important than it is today. We live in disruptive times.

Handling Disruption

We asked survey participants in our 2016 Mint Jutras Enterprise Solution Study to estimate the level of risk they face in their industry (and therefore their business) being disrupted (Figure 1). We found 88% of companies believe they face some level of risk in their businesses and/or industries being disrupted by new innovative products, new ways of selling or pricing existing products or services, entirely new business models, or some combination of all of the above.

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

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

While only 10% felt that risk was high and/or imminent, most do understand the risk is real. While about one in three (34%) feel the risk is low, we have to ask: How do you think the taxi industry might have answered this question on the eve of the launch of Uber? Do you think the hotel industry anticipated Airbnb? Did Block Buster foresee the devastating impact Netflix would have on its business?

And then of course there are still the more traditional disruptive factors like expansion and growth, organizational restructuring and regulatory changes, just to name a few. The Internet has leveled the playing field, allowing even small to midsize companies to establish a global presence and take advantage of unprecedented growth opportunities. But with these opportunities come change and the need for more (not less) innovation.

Wrap Up

Deltek iAccess is indeed more than just a pretty face. It is the face of innovation. It not only provides easier access and intuitive navigation, it adds functionality. When coupled with other cloud-based components, it will help Deltek handle universal needs while also delivering purpose-built functionality specific to different types of project-driven businesses. That is Deltek’s secret sauce.

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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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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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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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Top 10 Quotes from NetSuite’s SuiteWorld 2016

It has been an extraordinarily busy spring conference season. I personally attended 10 events over the past eight weeks and missed a few more because of scheduling conflicts. Of all those I attended, I think NetSuite’s gets the prize for the best sound bites produced in an event. Here are my top 10 favorite quotes from SuiteWorld 2016.

“I love the smell of GL systems in the morning.”

Not. Of course this was said tongue in cheek by Zach Nelson, CEO, and was actually a veiled reference to the context of the next quote. Zach (somewhat proudly) noted that Gartner’s ranking of NetSuite’s Financial Management System (FMS) had progressed from #8 in 2014 to #6 in 2015.

“We didn’t set out to build a Financial Management System (FMS). Our goal was to build a system to run the business.”

Actually NetSuite originally started with three goals: to build an end-to-end system, deliver it only over the cloud, and include ecommerce natively. Of course, in order to deliver an end-to-end solution, it needed a back office accounting solution, but that was just one piece of the puzzle, not the end game. Through the years they were tempted to put servers on premise, especially in the early days before Software as a Service (SaaS) had come into its own. But they resisted. And they made sure even the early solution had a web store.

“We spent $1 billion so you didn’t have to.”

Continuing on the theme of including eCommerce, Zach touted the speed of Suite Commerce, giving some statistics on how it outperforms other leading sites. In a follow-on to Zach’s opening keynote, CTO Evan Goldberg (also one of the original NetSuite founders) noted they had delivered a 33% faster sales order save and 40% faster Suitecommerce advanced page load time. Obviously there is a cost associated with delivering speed and performance, but not a cost that comes directly out of NetSuite customers’ pockets.

“Security bugs? We find ‘em; we fix ‘em. The next morning, all are running with the appropriate patches.”

The reference to security bugs was in the context of a security bug, purportedly reported to and fixed by rival SAP three years ago. Yet some customers had yet to apply the patch and were therefore still vulnerable. My tweet with this quote sparked a bit of a push back from someone coming to SAP’s defense:

This was an SAP API fix that broke ISV integrations if applied, hence SAP made optional. Cloud companies have similar probs

To which I responded: would venture to say in a #SaaS environment, problems don’t linger 3+ years

His response: API fix is a little different, SAP gave customers option because fix could break ISV integrations – it was a useful defect

“Useful defect?” Is there really such a thing? And have we really become so inured to fixes of any kind “breaking” integrations? I hope not.

But the real point here is the value of a multi-tenant SaaS environment. First of all, the customer is relieved of the burden of applying patches. The SaaS vendor pushes them out in (hopefully) a timely manner. And with only a single line of code to maintain, more innovation should come along faster.

The other implied benefit is the value of a platform that allows partners and customers to customize and extend the code without fear of it breaking when fixes and enhancements are delivered.

“Customization is not a dirty word at NetSuite.”

The caveat to this is obviously… as long as you can upgrade. NetSuite customers are all running the same code, yet all are a little different. One of the unique features of NetSuite’s platform (unique for a SaaS-only solution anyway) is the ability to make even complex changes to the data model with no negative impact. This feature is becoming more and more popular among NetSuite’s customers. Within the last year, the ability to add custom fields went from the 5th most used feature to number 1. This actually comes as no surprise to me. My 2016 Enterprise Solution Study asked survey participants what type of customization they required. Fifty-seven percent (57%) selected user-defined fields. Only custom and ad hoc reporting were more widely selected (63% and 62% respectively).

In fact much of the “customization” that is typically required by NetSuite customers does not require you to muck around in code at all. Much can be done through tailoring and configuring, or personalizing screens. But let’s say you want to develop a whole new function that is either very industry-specific or helps you differentiate your individual business. NetSuite does provide development tools for this, including SuiteScript. Per NetSuite: SuiteScript is a JavaScript-based scripting solution for sophisticated coding and debugging within NetSuite that enables developers to build new applications, processes and business rules.”

In addition, a beta version of SuiteCloud Development Framework has recently been released after a multi-year effort. This framework includes all the tools for coding that you know and love, now with team development collaboration, richer code completion, version control, change and dependence management (i.e. discover what code might break if you make this change).

“SuiteScript allows you to do anything your wife wants you to do.”

This quote came from Evan Goldberg, one of the original NetSuite founders. When not performing his duties as NetSuite’s chief technologist, his alter-ego manages his wife’s ecommerce site, which she happens to run on NetSuite SuiteCommerce. The new release of the NetSuite Development Tools has had a profound impact on all developers, including Evan and his alter-ego as both took the stage. While it was quite hard to decipher everything going on (the font was way too small for my eyes, and I haven’t written code in almost 4 decades), it was clear the new code created for Mrs. Goldberg’s web storefront was a lot shorter and faster..

“Our goal is to stay out of your way [to innovate] in your business.”

While first spoken by Evan, this phrase proved to be thematic, popping up in other keynotes and sessions as well. Revamped developer tools were just the beginning. What the NetSuite development team has accomplished with the tools is equally important, if not more so. Among the new features and enhancements were many in the finance area, a new SuiteBilling module, complete with support for new revenue recognition rules for ACS 606 and IFRS 15, and “intelligent” order management. NetSuite places the dual goals of streamlining the development process and customers’ business processes on equal footing.

Disruption caused by today’s digital economy makes digital transformation compelling and the need for agility crucial. Traditionally ERP solutions were more likely to hold you back than to enable transformation. Can NetSuite be an enabler? They can certainly try. And trying is even more important than ever as business complexity increases.

“In the cloud economy everything gets more complex.”

Actually I would say it is the digital economy that makes things more complex. Perhaps in this quote, “the cloud economy” was meant to be synonymous with “the digital economy.” Indeed, it is hard to have a digital economy without the cloud. But I think there is a subtle difference. Cloud is an enabler in helping us participate in the digital economy, both as consumers as well as enterprises. On the one hand, the cloud has made our personal lives simpler. We can order dinner, entertainment, or a taxi ride online. We can shop online and have goods delivered right to our doors. But we can also still shop in a store. Or we can order online and pick up the goods in a store. This is the very definition of “omnichannel.” As we simplify our personal consumer experience, we complicate matters for the enterprise.

“Hybrid business models are the new black.”

Can one system handle all these different ways of conducting business? Certainly traditional ERP solutions made this difficult. They either catered to a retail/cash sale environment or an order-to-pay environment. But today blended environments are becoming more and more common. Many try to accomplish this with different systems. But when these systems don’t talk to each other the customer experience suffers.

But this isn’t the only example of a hybrid business model. We are rapidly entering a subscription-based economy. The software industry led the charge here. Enterprises and consumers alike used to license software and bring it on premise. While this didn’t really mean they “owned” it, as they might own a pair of shoes, in some ways they did own a copy of it. Today, these same software companies are much more likely to sell a subscription to the software.

Now even companies that sell and ship physical products are likely to sell a subscription either along with the product, or instead of it. Consider the water filter company that ships you a device that filters your water for free and then invoices you monthly based on how much water you filter. After a certain period of time, the filter needs to be changed and they charge you when they ship you a new one. Chances are you don’t own the DVR in your home. Your cable provider does. You simply pay for the cable service as a subscription.

More and more companies must invoice based a hybrid business model, invoicing for some combination of product, services or “as a service.”

“If you can sell it, we can bill it (and recognize it.)”

NetSuite’s SuiteBilling module not only supports all these different invoicing methods, but it can also combine them all on a single invoice. While this sounds simple, trust me, there are many solutions out there today that will struggle with supporting all these different billing methods at all, even without trying to combine them on a single order and then a single invoice. I applaud NetSuite for rejecting the option of trying to optimize for the intersection. Instead NetSuite chose to but have to optimize for each and make it easy to combine them.

And because many of these new ways of billing have a signed or at least implied contract, there won’t be too many companies that are not going to be impacted by the convergence of ACS 606 and IFRS 15 (Accounting Standards Update (ASU) 2014-9, Revenue from Contracts with Customers (Topic 606 and the International Accounting Standards Board (IASB) International Financial Reporting Standards (IFRS) 15, Revenue from Contracts with Customers.)

These converged standards for revenue recognition go into effect the beginning of 2018 for public entities, and in 2019 for privately held organizations, bringing very significant changes to financial statements and reporting for any company doing business under customer contracts. While revenue recognition, including expense and revenue amortization and allocation, has never been simple, with these changes, it is about to get harder – at least for a while.

Why? First of all, while you can prepare for the change, you can’t jump the gun. You can’t recognize revenue based on the new rules until those new rules go into effect in 2018. At that point public entities must report under the new guidance and private companies can, but they have an additional year before they are required to do so. So any public entity better be ready to flip the switch, so to speak. But flipping the switch doesn’t only mean recognizing revenue in a new way. For any contract with outstanding, unfulfilled obligations, you also have to go back and restate the revenue for prior periods under the new rules. And for some period of time, you will need to do dual reporting: old and new. In addition, when contracts change, this can potentially have an impact on revenue previously recognized, including reallocation and amortization of revenue and expenses.

NetSuite has been working on this for quite awhile, starting with the support for multiple sets of books, which is how it will accommodate the dual reporting. It is not too early to be planning for this change and using multiple sets of books, you can be looking at how the revenue will be recognized in the future. I have seen some of these before and after revenue reports and the changes are not particularly intuitive. Best to understand what is coming or your revenue predictions for 2018 are going to way out of whack.

Bonus Quotes

While those were my top 10 favorites coming out of SuiteWorld 2016, there were a couple more that you might find interesting:

“Luck should not be a business strategy”

No further explanation required. Real “luck” is a combination of careful planning and hard work.

“The Cloud is the last computing architecture, the last business architecture.”

Sorry Zach, I just can’t agree with this one. I am sure some will immediately think of the famous quote: “Everything that can be invented has been invented.” While some give credit to Charles H. Duell, the Commissioner of US patent office in 1899, others point to a more contemporary source, a book published in 1981 titled “The Book of Facts and Fallacies” by Chris Morgan and David Langford. Either way, whoever said it, was wrong. Maybe Zach is right, but personally whatever the last computing or business architecture will be, I’m pretty sure nobody has even thought of it yet.

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QAD Channel Islands: Multiple Stops on the Journey to the Effective Enterprise

QAD defines the Effective Enterprise as one “where business processes are operating at peak efficiency and perfectly aligned with strategic goals.” Yet given the ever-accelerating pace of change in our world today, QAD also recognizes that the Effective Enterprise is more of a journey than a destination. The journey is one of continuous improvement and carefully balanced objectives.

The same could be said for the software that runs the business. Which is why its “Channel Islands” initiative is divided into milestones that have QAD (figuratively) hopping from one island to the next. A year ago it released Anacapa and this year Santa Cruz is ready for early adopters. Next year, it will navigate to Santa Rosa and in 2018, San Miguel. With two releases a year planned, chances are San Miguel will simply be another stop along the never-ending journey, but by then QAD will likely be on to other additional adventures suitable to whatever the future might bring.

Channel Islands: An Appropriate Metaphor

In the meantime, QAD appears to have chosen the name of its latest initiative well. QAD’s Channel Islands initiative has a dual purpose. The metaphor is perfect because the first goal of the initiative is to re-invent the entire user experience of QAD ERP, making it more natural (intuitive), visually appealing and easy to use. The Channel Islands of California are a chain of eight islands located in the Pacific Ocean off the coast of southern California along the Santa Barbara Channel near QAD headquarters. The main attraction of the real Channel Islands is their natural beauty, providing relief from the cluttered, hard-to-navigate urban setting.

But the second goal of the initiative makes it even more appropriate. The islands are divided into two groups—the Northern Channel Islands and the Southern Channel Islands. The four Northern Islands used to be a single landmass, but as water levels rose (thousands of years ago), Anacapa, Santa Cruz, Santa Rosa and San Miguel emerged and evolved as separate islands. While QAD ERP was originally developed as a single, tightly integrated solution that needed to move forward in lock step, the goal now is to support more modular upgrades, allowing different modules and disciplines (think finance versus purchasing or production) to move forward independently at their own pace. Mint Jutras often refers to this approach as “loosely coupled” versus tightly integrated, but it should not be confused with a collection of point solutions with arm’s length interfaces. Just like the Northern Islands, under the surface all these different functional areas are still connected.

In fact that was why QAD named the first phase Anacapa. Of the four Northern Channel Islands, Anacapa appears to be the smallest, but in fact has an enormous land mass hidden under the surface of the water. This is representative of the work done to re-architect the underlying infrastructure, reworking the application programming interface (API) structure and protocols, and future proofing the user interface (UI), including the framework for connecting devices. This supports the theory that sometimes the best UI is no UI at all and paves the way for succeeding phases (Islands).

To better understand how QAD is delivering on this modular upgrade approach as well as a new and improved user experience, read the full report (no registration required):

QAD Channel Islands: Multiple Stops on the Journey to the Effective Enterprise

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