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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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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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Unit4 Lines Up Vertically: Higher Education Setting An Example

Unit4’s specialty has long been people-centric organizations. In fact its tag line today is, “In business for people.” These people-centric organizations not only include service-oriented commercial businesses, but also non-profits, higher education, governments and other public services. While some might call this people centricity a “vertical” focus, in fact Unit4’s Enterprise Resource Planning (ERP) solution (although Unit4 prefers the term SRP for Services Resource Planning) has quite broad appeal. You might even call it more of a horizontal play across the services industries. But that is now changing.

In the past Unit4 built its strategy and its messaging around its VITA architecture’s ability to easily accommodate change. It was indeed a very broad (horizontal?) message targeting businesses living in change (BLINC). BLINC became Unit4’s mantra and in some ways, it is even more relevant today than when the acronym was first crafted. Every type of business and organization not only faces change today, but at an accelerating pace. And while change has always been hard to manage, today it can be dangerously so, especially when that change is disruptive.

After watching Uber disrupt the taxi industry, Netflix and iTunes disrupt entertainment and Airbnb disrupt hospitality, today we live in a world where nobody can predict which segment will be disrupted next. Our 2016 Mint Jutras Enterprise Solution Study asked participants to rate the risk of their industry being disrupted (Figure 1).

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

Unit4 fig 1Source: Mint Jutras 2016 Enterprise Solution Study

Few feel they are exempt from any risk. This disruption might come from new product introductions (26%), new ways of selling/pricing existing products (29%), entirely new business models (12%) or some combination of the above (33%).

But in spite of the continued relevance of managing change, there comes a time when old messaging has to make way for new. The next new message from Unit4 was its concept of “self-driving ERP”. Self-driving ERP is all about making ERP a productivity driver rather than a productivity killer. It’s about automating low value tasks, so that high value individuals can combine the right skills and knowledge with the right information to produce better outcomes.

This is a great goal and Unit4 is well on its way to delivering on its promises, particularly with its recently announced Digital Assistant and Business World On!. But self-driving ERP is still a rather broad, horizontal message that can be applied to a plethora of industries and circumstances. So in taking a more verticalized strategy, is Unit4 abandoning prior strategies around BLINC and self-driving ERP? Absolutely not. Think of it more as a refinement of strategy.

Service-oriented businesses and people-centric organizations have a lot in common, but there are also some very clear and distinct differences within this general category. As with any type of organization, each is a bit different, but some are more different than the rest. Over the years, in focusing attention on a service orientation (as opposed to product-centric businesses), Unit4 has been building on those similarities. Now it is time to accentuate the unique elements that distinguish higher education from non-profits, professional service organizations from public service providers (including governments), healthcare from real estate, just to name a few. Each of these people-centric organizations has its own unique requirements.

In combination with this, Unit4’s new tag line is “in business for people.” Given its focus on people-centric organizations, at first glance this doesn’t appear to be anything new. But Unit4 is adding a new dimension to the “people” part. Ordinarily ERP is for the people running the business or the organization. Take higher education as an example. Yes Unit4 is in education to help the people running the college or university (the administration). But it is also in education for the students. And it is in education for the alumni. And for the donors and benefactors. And the professors. And for all that, you need more than your typical ERP with a service orientation.

If you are in education for (all of the) people, you need a student management system. This is definitely not your typical core ERP module. It is an application that helps students enroll in the right courses for their degree programs. It’s an application that supports student recruitment and entrance applications. It helps manage tuition payments, student loans and more.

Then again, if you are in education for professors, you also need to help manage research efforts, from the feasibility study and due diligence to proposal development and financial planning to project planning, management and completion. Plus you need to manage assets and facilities on campus and probably the occasional special project. And of course you still need ERP for financials, procurement, HR and payroll.

Unit4 provides all of this, but not all in a single giant monolithic ERP solution. Let’s face it: Most other service-oriented organizations don’t need student management. You don’t want to overburden other types of customers with features and functions they will never use. So Unit4 packages up student management separately. Yes, it is integrated to ERP where appropriate. After all, tuition bills create accounts receivables and payments impact cash management, the income statement and balance sheet.

But Unit4’s student management application can also run stand-alone. This is actually more important than you might think. Providing a full verticalized solution for any industry today is a delicate balancing act for both solution providers and those consuming those solutions. Theoretically you would like a single integrated solution to meet all the needs of your organization. But the urgency of satisfying different needs varies across different functions within the organization, and so does the readiness of different departments. Maybe whatever you are using to manage your back office is “good enough”, at least for now. But you are in desperate need to better manage student services. You don’t want to have to wait until finance is ready before you provide online enrollment to courses.

This is exactly the type of requirement that has blazed the trail towards loosely coupled versus tightly integrated ERP solutions. A tightly integrated solution shares a common set of data, is developed under a common development environment and all moves forward in lock step. That is both good news and bad news for organizations. The good news is obvious: integration is inherent, no redundancy or duplication of data that needs to be synchronized, etc. But the fact that all the different parts of the organization must move forward together often slows the process and builds barriers to consuming new features.

Tightly integrated can be bad news for the solution provider as well. Development efforts across a a wide footprint needs to be tightly orchestrated and packaged together. A feature that is completed in March might not be delivered until December. And in order to satisfy a specific need (like student management), an entire integrated solution must be ripped out and replaced. When an organization is not quite ready for that, the vendor loses the deal either to no decision or because a competitor’s solution can stand alone.

The solution to this dilemma is loosely coupling the different functions so they might move forward separately, without losing the integration. By offering specialty functions like student management as (also) stand-alone solutions, the vendor is able to satisfy the urgent need without disrupting the entire organization. But the best of both worlds is to offer the add-on functionality that can stand alone, but also be fully integrated with a complete back-end ERP – now or later.

This is Unit4’s strategy. Higher Education is leading the way in execution, largely because of the acquisition a year ago of Three Rivers Systems and its Comprehensive Academic Management System (CAMS). Unit4’s current installed base of customers in higher education is a mix of those originally sold by Unit4 (prior to the acquisition) and those brought to the party by Three Rivers. In fact the latter represents the lion’s share of customers in this segment in North America. While all of the original Unit4 customers run its ERP and about 75% also run a version of student management authored by Unit4, all (100%) of the prior Three Rivers customers run student management, but run a mix of ERP solutions, including Unit4’s. In the future, the combined company will lead with student management in this segment, but expect to pull an ERP system along in about 50% of deals. In order for this to work, student management and ERP must be separate, but (optionally and seamlessly) integrated.

Looking to the future, I expect to see Unit4 replicating this strategy in other people-centric segments, starting with Professional Services organizations (watch for functionality to support contingent workforces), followed by not-for-profits (building on strengths in grants and research management) and then governments and public services. But I also see Unit4 diving deeper into what you might call sub or micro-verticals. Community colleges are a big market for Unit4 today, but the recruitment process for a private university like Harvard Law School (also a Unit4 customer) is just one aspect that is entirely different.

In order for Unit4 to successfully execute on this vertical strategy it will need to aggressively leverage all the work it has done previously. The same architectural principles that helped businesses living in change navigate through changing business conditions should help those same customers weather the potential storm of looming disruption. And if Unit4’s self-driving ERP can relieve them of some of the burden of the mundane, they stand a far better chance of deciding on the right (next) destination and how best to get there… either incrementally or all at once.

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Women in Manufacturing & Technology At PowerPlex 2016

I recently had the opportunity to participate in Plex Systems’ second annual Women in Manufacturing and Technology Forum. Held at PowerPlex 2016, Plex’s annual user conference, this year’s forum brought together over 85 women, providing an opportunity for networking and discussion. Plex also put together a moderated panel (on which I was honored to sit) to kick off the discussion. But in spite of the name of the forum, the topic of discussion wasn’t manufacturing or technology, but rather the challenges women face in working in what is still very much a man’s world.

So if the discussion didn’t touch on manufacturing or the Plex Manufacturing Cloud, or any kind of software for that matter, why did Plex do this? I believe it is ultimately because Plex cares deeply about its customers and their success. The depth of interest is evident in the level of customer engagement that strikes me as exceptional every time I meet Plex customers or attend one of its events. And while the software is the focal point of the engagement, customer success is always a combination of people, process and technology.

On the people side, amidst an overall skills shortage in manufacturing, women have so much to offer. Yet while our ranks are growing slowly, we remain a small minority. It is very challenging for a woman to get ahead and make it to the top and we need to support each other along the way. The best way to accelerate gender diversity in the worlds of manufacturing and technology is to create a supportive environment and highlight success. In the famous words of former U.S. Secretary of State Madeline Albright, “There should be a special place in hell for women that don’t help other women.”

Plex happens to have some great role models, with three women among its C-level executives: Heidi Melin, Chief Marketing Officer, Lilian Reaume, Chief Human Resource Officer and Elisa Lee, Chief Legal Counsel. These three women actively sponsored the forum. I applaud them for that. I would also like to share with everyone a couple of the main themes we discussed, as there are some good lessons both men and women can carry away from them.

Don’t Limit Yourself

While some women are indeed shattering the “glass ceiling” today, many (not all) of the limitations that hold others back are self-imposed. While no two women are exactly alike (just as no two men are), when asked to rate themselves on skills and accomplishments, women tend to under-estimate their own effectiveness, while men tend to over-estimate theirs. A woman will say she is good at A, okay at B and has never done C. A man with the same skill set will say he excels at A and B and could very easily learn C. It’s all about the presentation and the self-confidence with which it is presented. I am not advocating for shameless self-promotion, but whether this reticence stems from a lack of confidence or an overactive sense of modesty, it is equally detrimental in seeking advancement as it is in interviewing for a new job.

Believe in Yourself, But Don’t be Afraid to Ask for Help

If you are a woman and have trouble believing in yourself, you’re not alone. Many of the most successful women in the world today grew up believing they could do anything they set out to do. Very often they had the support of family or an early mentor who encouraged them to pursue their dreams.

I had the opportunity to hear Dr. Condoleeza Rice speak recently and walked away with a quote that I think is priceless. She was talking about growing up with the support of her parents. Dr. Rice and I are about the same age. But while I had the advantage in the 1950’s of growing up white in the northeast, she was a little black girl in Birmingham, Alabama where segregation was the norm. And yet she said, “Somehow my father believed that the little black girl that couldn’t order a hamburger at the lunch counter at Woolworth’s, could grow up to be the president of the United States.” That belief system carried Dr. Rice very far.

But just as many women (probably more) didn’t have that level of encouragement growing up and still don’t have it today. But it’s never too late. Seek out that encouragement. It doesn’t have to come from another woman, but it should be someone who is successful in his or her own right, either in business or just in life.

Be Yourself

One of the most common mistakes women make in entering a man’s world is trying to think, behave, act or communicate like a man. A piece of advice from someone who has worked in a man’s world for over 40 years … Don’t. Yes, develop your ability to think, analyze and be decisive. Yes, work on your communication skills, both listening and speaking. Yes, be conscious of how you come across (confidently or defensively). The list of skills you should develop will vary based on your role. Regardless of your role, trust me, it will be long. But as you work on that list, work just as hard to be yourself. Don’t try to be a man. It’s OK – even good – to be a woman in a man’s world as long as you remain you. If you haven’t figured out who that is yet, don’t worry, you will. I may not see it before I retire, but if we all do that, perhaps the man’s world will indeed give way to a world of diversity.

 

 

 

 

 

 

 

 

 

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Epicor Announces It Will Grow Business, Not Software

Epicor has a new tag line: “[We] grow business, not software.” The declaration is not quite as radical as it would first appear. In fact it appears to me to be much more evolutionary than revolutionary.

Epicor’s mantra for years was “Protect, Extend, Converge.” As in:

  • Protect its customers
  • Extend its solutions
  • Converge its product lines

However, in 2014 it appeared Epicor was diverging a bit from the convergence strategy, primarily as a result of the merger of (the original) Epicor and Activant. Both had grown through acquisition, but while Epicor’s ERP solutions were multi-purpose ERP (focused primarily on discrete manufacturing) and therefore ripe for rationalization, each of Activant’s products was purpose-built for distribution, and over time each had become even more focused and fine-tuned to specific segments of wholesale distribution. And then there was the SolarSoft acquisition (2012), which brought along an ERP which focused on more process-oriented industries, and also a “best of breed” manufacturing execution system (MES). And finally there was Epicor’s retail business, which was actually spun off last year.

So while the “Protect” and “Extend” sentiments of the message are still very much alive, convergence gave way to a new message. Last year, Epicor’s (new) CEO, Joe Cowan declared the company would be “totally focused on the customer.” This year’s tag line seems to me to be a simple extension of that customer focus. Software is not the end goal. The goal is to help Epicor customers grow their businesses. It just so happens Epicor will develop software and provide services to make that happen. And a lot of the software will be delivered as a service, as evidenced by the appearance of a fluffy white cloud in the middle of the tag line.

Epicor tag line

Of course in having a tag line like this, Epicor needs to be careful not to make the message itself too fluffy. And in promising to help customers grow, Epicor will have to execute a delicate balancing act, balancing what the customers say they want and what Epicor knows they need. This is particularly true of those customers still running older legacy solutions. Epicor has promised not to sunset those products. And yet if you really understand the demands and opportunities of the new global, digital economy, you know you can’t be competitive without modern, advanced technologies.

Customers running legacy solutions won’t benefit as much from the latest and greatest development, but that’s not to say they won’t benefit at all. Epicor has been a bit quiet on the technology front for the past few years, but that is not the result of lack of attention. In fact it has been doing a lot, sometimes at the expense of new features and functions. Its advanced technology architecture (ICE), visionary at the time of its initial release circa 2009, has undergone a technology refresh of its own, and it also paves the way forward for both strategic products like Epicor 10, Prophet 21 and others, as well as legacy solutions like Vista and Vantage,  etc.

Now that that refresh is complete (for now… after all, technology continues to advance at an ever-accelerating pace), you’ll see more aggressive development of features and functions. Epicor is picking up the cadence of releases, shooting for twice a year (spring and fall) for its strategic products, which of course will garner more of its resources. But even legacy solutions will benefit from the development of external components, which can be used across different product lines. Prime examples include web portals, dashboards, self-service functions, mobile apps and other new features. And developing these components as web-based services (delivered through the cloud) will have the dual purpose of extending solutions and gently pushing those running primarily (or exclusively) on-premise towards the cloud.

I agree with Epicor’s new CTO, Himanshu Palsule, who called the transition to the cloud “inevitable.” But it won’t happen overnight (Figure 1). Part of the reason for this slower, yet steady growth is the fact that there are so many on-premise solutions in production today. And many remain reluctant to simply rip and replace solutions that are essentially getting the job done.

Figure 1: What percentage of your business software is deployed as SaaS?

Fig 1 EpicorSource: Mint Jutras 2016 Enterprise Solution Study

In his main stage keynote, Himanshu also (very astutely) observed that for a topic that is so widely discussed, “cloud” is still misunderstood and means different things to different people. My research supports his observation. While many use the terms cloud and SaaS interchangeably (I find myself guilty of this at times), they are not the same. While all SaaS is cloud, not all cloud is SaaS. While only a small percentage (12%) in 2015 didn’t know how they preferred cloud to be delivered, that percentage didn’t shrink in 2016 (Figure 2). There is still some education to be done. If you count yourself among those that “don’t know,” don’t be afraid to ask. You’re not alone.

Figure 2: How would you prefer cloud to be delivered?

Fig 2 EpicorSource: Mint Jutras 2016 Enterprise Solution Study

I’ve written extensively about the anticipated appeal of SaaS, along with the benefits actually realized. But I wouldn’t disagree with Himanshu’s conclusions about what cloud should stand for:

  • Choice
  • Convenience
  • Cost Control
  • Customization
  • Collaboration

However, I would qualify two of his bullet points. A few years back, my survey participants placed a high value on choice of deployment options. They seemed to like the idea of portability and the ability to move from on-premise to SaaS and from SaaS back to on-premise. Today many are looking for a path that helps them move from on-premise to SaaS, but once they move to SaaS, they almost never go back unless forced to (e.g. they get acquired by a company running a licensed, on-premise solution). So having multiple deployment options available is no longer such a high priority. Prospects simply pre-qualify those solution providers based on the deployment option they prefer.

I agree that choice is important. But it is more important to Epicor as the solution provider than to its customers and prospects. There are still some environments where a real multi-tenant SaaS solution might not be the best choice – at least not right now. These might be heavily regulated industries that require solutions to be certified, and re-certified when they change. Or a heavily customized solution may be required. And customization is the other bullet from Himanshu’s list that needs to be well-qualified.

Not all customizations are created equal. First of all, some simply aren’t needed. They might be left over from an implementation of a solution with far fewer capabilities than available today. Or they might have resulted from a “that’s the way we’ve always done it” mentality. If customization does not differentiate you in your market, I would seriously question whether it is justified.

Furthermore, customizations can be implemented in a variety of ways. Invasive code changes and SaaS don’t make for a good combination. But if customizations can be added as external components and linked back to ERP through Web APIs, or if they can be implemented through configuring the software without mucking around in the code, they may be perfectly compatible.

So Epicor’s announcement this week of its “cloud-first focus to support digital transformation of wholesale distributors is spot on”. The Mint Jutras 2016 Enterprise Solution Study found wholesale distributors lagging behind other industries in preference for and adoption of SaaS solutions. We also found 47% to 73% still relying heavily on paper for their operational and transactional system of record (customer and purchase orders, expense management, payments, etc.). They lag behind other industries in spite of the fact that ecommerce and their proximity to consumers puts them at a higher risk of disruption from the digital economy. Perhaps this “cloud-first” focus will be the gentle push wholesale distributors might need to start down the path of digital transformation.

Indeed, Epicor says it will be “…doubling-down on helping distributors adapt to these shifting dynamics of the marketplace—with an added focus to ushering customers’ journey to leverage the power of cloud-based solutions to drive increased productivity and achieve a differentiated customer experience to grow their business.”

Indeed wholesale distributors aren’t the only Epicor customers that will benefit from this “doubling-down.” I heard similar plans from the Epicor 10 side of the house, including planned features and functionality, along with efforts to improve simplification and usability. Yes, it’s about the overall user experience, but those driving the products seem to understand it’s not just about the “pretty software” you hear so much about today. As business models change, as technology advances and as new innovative products come to market, Epicor’s product must be easy to use, easy to install, easy to manage, and easy to change when the need arises.

Epicor “gets” it. We’ll be watching to see if it delivers.

 

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Unit4’s Self-Driving ERP Gets a Digital Assistant

Don’t you envy those top-level executives with personal assistants who seem to sense and deliver on the bosses’ every demand, even before the bosses have figured out what they need? You see them on TV and in movies all the time. Unfortunately for the vast majority of us in the business world today, the trend is in the exact opposite direction. Even prior to the emergence of the digital economy, electronic communication changed everything. Back in the day, many of us (old enough to remember) first relied on secretaries and then administrative assistants, telephones and paper. Today we rely on emails, texts, instant messages, along with specialized apps for things like purchase requisitions, travel and expenses and personnel administration and management. This makes us administratively self-sufficient – all in the name of productivity and efficiency. Sure it’s faster. Sure, we’re better connected. But that doesn’t mean it’s easy. Or fun.

It also doesn’t necessarily relieve us of the burden of mundane tasks. Yes, we have elevated employees to become more “knowledge workers,” and we eliminated a lot of menial jobs, but we haven’t entirely eliminated all the grunt work. We’ve just distributed it more democratically across the organization. Wouldn’t it be nice if we could eliminate more of it?

That’s exactly what Unit4 has in mind in developing what it calls its “self-driving ERP.” I introduced the concept to my readers back in June 2015 with a blog post: What is Unit4’s “Self-Driving” ERP? Unit4’s latest announcements, coinciding with its customer conference in Amsterdam last week, showed the company is making headway in fulfilling its “promise of self-driving business solutions which free people from repetitive tasks and allow them to focus on high value activities.” In fact that is a direct quote from its press release on Unit4 Business World On! – the biggest release ever of its business suite for services industries.

Unit4 Business World On! is built on Unit4’s People Platform Premium Edition, which is the technology foundation for Unit4 applications, enabling self-driving capabilities based on predictive, event-centric and pattern recognition technologies. It is available as a true multi-tenant SaaS solution, but can also be delivered and deployed on-premise without sacrificing the mobile-access capabilities. Unit4 has put a lot of work into the user experience, but you need more than a visually appealing user interface to be “self-driving.” And I am a firm believer that the best user interface is often no user interface at all. (Refer back to my previous blog post to get a better handle of what makes it “self-driving.”)

But what really caught my eye this time around was the press release on its Digital Assistant. I was kind of hoping for someone (or even something) to shadow me (even if it is virtually), anticipating my every need. But if you look closely you see this is a “Digital Assistant for business software” not an assistant to industry analysts or presidents of small companies. Business software needs an assistant more than I do?!?

Actually yes. As I noted last June, enterprise applications like ERP are meant to capture transactional data (which happens to be the basis of a lot of our decision-making) and streamline and automate business processes. Yet while ERP was originally meant to make our business lives easier, it hasn’t always delivered on that promise. It’s gotten a lot better over time, but we still need to be expert navigators. We often have to fill some gaps. Sometimes we play the role of the (human) glue that holds everything together. If Unit4’s Digital Assistant can help the business software do all that for us, then sign me up!

The Digital Assistant is scheduled for general availability in 2017. In the meantime the glimpses I have had of Unit4’s “self-driving” capabilities are impressive.

Now, if only it could make a great cup of coffee!

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A Changing of the Guard at IQMS

A new president and CEO took the stage at IQMS Pinnacle this week as customers and long time employees bid a fond farewell to founders and leaders Randy and Nancy Flamm. IQMS has been one of the best kept secrets in the world of ERP for manufacturing, but new investors hope to break out of the stealth marketing mode of the past and really put the company on the path to increased market awareness and a new level of growth. New CEO Gary Nemmers, previously with HighJump, stepped into this new role about six months ago and has been assembling a team that will shift the strategic focus, but also leverage successes of the past.

Under Randy’s leadership the customer base has grown quite steadily to about 500 customers (not too shabby!) and those customers have been instrumental in developing manufacturing functionality that is both broad and deep. Indeed product development has been almost exclusively driven by Software Enhancement Requests (SERs) submitted by customers. While that approach was smart in the early stages of the company’s growth, building “real world” functionality that expressly meets the needs of its users, at some point it also has some drawbacks.

The breadth of functionality that IQMS can deliver is impressive, particularly for a relatively small ERP player. Scratch the surface of other solutions from vendors comparable in size and you get more surface. Scratch the surface of EnterpriseIQ (IQMS’ ERP) and you find remarkable depth. And you also have a very engaged user community. But having been driven by existing customers, the development process has not been entirely well organized. One customer noted, “It’s like a house that started out small and then additions were added on piecemeal. In the end you might have everything you need, but not necessarily where you need it. You might find the oven in the living room.”

Development of some of IQMS’ mobile apps provides us a good example. The development team has produced some pretty cool features like its Android Bulletin Board, described as “Twitter for your shop floor” or “Messenger-like instant communication to workers on the shop floor.” This includes the ability to attach the equivalent of sticky notes to business objects (e.g. orders, work centers, etc.). As the status of these business objects changes, an update is automatically sent. But while most of this development work is now transitioning to HTML5, making it compatible with a range of devices including Android, iOS and Windows devices, many of the existing apps run only on Android – not very useful if your company has standardized on iOS or Windows.

This example is symptomatic of a larger limitation inherent in being completely customer-driven. Customers will never push a vendor to do a major revamp of the underlying technology – particularly small to midsize manufacturers They already have too much to worry about without asking their software provider to fix something that isn’t broken. And yet today that underlying technology is critical in building and/or maintaining a competitive advantage in our digital economy.

Questions inserted (new this year) in our 2016 Enterprise Solution Study lead me to believe many companies over-estimate their “digital preparedness.” A two thirds majority (67%) of manufacturers feel they are close to or very well prepared for the digital economy, yet Table 1 tells us a very different story.

Table 1: To what extent is your operational and transactional system of record digital?

IQMS Table 1Source: 2016 Mint Jutras Enterprise Solution Study

*B2C Commerce is Not Applicable to 18% of our respondents

Generally over half still rely heavily on paper for their transactional system of record – more proof no solution provider can rely on existing customers to push for a major technological shift (e.g. to full web-enablement, support of HTML5, social, mobile and cloud capabilities).

For this kind of progress, as well as growth and expansion into new markets, you need a strategic plan and a well-defined product road map. That is exactly what new VP of Product Management, Rob Wiersma, is setting out to do. This shift in overall product and corporate strategy will take some time to put in place, but this is not Rob’s first rodeo. He is only in his second month on the job, so right now customers and prospects will need to wait and watch for this. But I would expect to see some major progress within months, not years.

Another area that bears watching is IQMS’ cloud strategy. The catch phrase at IQMS Pinnacle was “Cloud is the new choice.” The choices from IQMS today include a traditional on-premise license, a hosted model or cloud managed services. Notice there was no mention of Software as a Service (SaaS). And just to be clear, we know that while all SaaS is cloud, not all cloud is SaaS.

While the two terms are often used interchangeably (I admit to falling into that trap as well), they are not the same thing. So let’s distinguish between the two:

  • 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.

Again – all SaaS is cloud, not all cloud is SaaS. While the IQMS customers I spoke with are not expressing a strong desire for SaaS (in fact some are still trying to understand the difference between client/server and SaaS and cloud), many are also faced with the challenge of aging servers that ultimately will need to be replaced… or not. Moving to a hosted model may eliminate the need for upgrading this hardware, but it also might not, depending on who and how it is hosted. Moving to SaaS eliminates this problem by eliminating the need to invest in hardware and its ongoing maintenance, among all the other potential benefits of SaaS. And I am now seeing a shift in preference away from hosting and to a real SaaS solution (Figure 1).

Figure 1: How do you prefer your “cloud”?

IQMS fig 1Source: 2016 Mint Jutras Enterprise Solution Study

So far IQMS “cloud” options provide reasonable choices to customers not demanding SaaS, but this could limit growth in the future. IQMS added about 100 new customers in 2015 and is expecting to increase that number to 140 in 2016. So it will be interesting to watch as IQMS continues to further define its overall strategy, including cloud and SaaS.

Mr. Nemmers has also made some other changes in his (so far) short tenure with the company. On the advice of his head of customer support (a 20 year veteran of IQMS) he deployed new call center software (Five9 Call Center), which went live about a month ago and is now operating 24X7 and providing faster response time and quicker resolution of customer issues. The software features skill-based browsing to connect the customer to the right support technician, and a nifty feature that facilitates an automatic call back (without losing your place in line) when high call volume precipitates a longer than usual wait time.

In order to emerge from its stealth marketing mode, IQMS also has a new CMO, Steve Biesczcat, on board now for almost a year. I think we will see some significant changes in the near future, since Mr. Nemmers has doubled the SEO and brand recognition budget from a year ago.

There have been some changes on the sales side as well with a new VP of Sales Operations (long time industry veteran Gary Gross) and the formation of a new Customer Success Team (think account management), leaded by Ken Kratz, providing a better front line link from the customer to IQMS. Also expect growth in EMEA (Europe, Middle East and Africa) through value added resellers (VARs) using the same model that has been successful in covering the Asia Pacific area.

In summary, I think 2016 will prove to be a year of transition for IQMS. I think fewer and fewer industry observers and potential prospects will be saying, “IQMS? Who’s that?” I look forward to seeing an aggressive and progressive road map and certainly more splash on the marketing side. I expect to see growth in North America and internationally. And through this transition I would expect customers to remain engaged and productive.

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The Force was Strong at Autodesk University (#AU2015)

Attending Autodesk University (AU2015) is a pleasant change for me. First of all, it diverges a bit from my usual focus on ERP. But as I have been saying for years now, the footprint of ERP has been expanding to the point where it is hard to tell where ERP ends and other software categories begin. Indeed, many ERP players have ventured into design software (largely PLM solutions), data management, and more recently the Internet of Things (IoT), all of which lie squarely in Autodesk’s wheelhouse. And of course, while I don’t limit my writing or research to a particular industry, manufacturing (a key industry for Autodesk) is “home” for me.

I came to “know” Autodesk better a couple of years ago when I worked on a project with them as they partnered with NetSuite, integrating ERP and PLM. That partnership is still strong today, expanding into the area of configure, price, quote (CPQ), as well as IoT. AU2015 is a good opportunity to refresh my knowledge of and my relationship with Autodesk itself.

But that’s not the only reason why AU2015 is a pleasant change for me. Even more appealing: Being surrounded by a vibrant crowd of innovators that see technology as a potential game changer. It seems I spend a lot of my time these days convincing business leaders of that potential. Even those who might be innovators in their own fields seem to undervalue and underappreciate what technology can do for them in terms of the (back office and front office) software that runs the business. Even as their current software might keep them locked out from this competitive advantage, because they spent a lot of blood, sweat and tears (not to mention money) getting it up and running, they are simply reluctant to rip it out and replace it, often convincing themselves “they can’t” or “it’s not worth it.” It’s my job to convince them otherwise, showing them the potential for game-changing results. Innovation can’t reside exclusively in a silo all by itself. It needs to connect back to the people and the software running the business.

Many in the Autodesk community have already made the connection between technology and innovation. So it is very refreshing to see and hear so many business leaders chomping at the bit to take advantage of these new technologies in order to accelerate innovation and really change their own game. Company after company came on stage during the Innovation Forum within AU2015 with bright new ideas and applications for technology.

Companies like…

LMN Architects that actually took it upon itself to develop software to use in validating designs. Turning to its in-house LMN Tech Studio for its Cleveland Civic Center project, it developed a 3D digital model of the façade, using parametric modeling techniques to help them convert a hand sketch of the window pattern into a set of fabrication-ready glass and precast-concrete panels. The team used a 3D printer to print out the basic panel form, then used this as the basis for a plaster mold to generate its own complete scale model. Tech Studio set a new standard for team wide collaboration and completely redefined the role of technology in design. As a result, they were able to complete the Cleveland Civic Center project in just 3.5 months (a typical project is 13 months).

JE Dunn Construction also developed a tool in house (called LENS), not for design, but for estimating. LENS allows you to develop a full estimate based on a simple sketch.

GE FirstBuild (yes even old dogs can develop new tricks!) is a partnership between GE and Local Motors formed to “create a new model for the appliance industry, engaging a community of industrial designers, scientists, engineers, makers and early adopters to address some of the toughest engineering challenges and innovations. FirstBuild will then manufacture those designs in its Microfactory for rapid product introduction and iteration.” Its first ever Appliance Hackathon developed 5 new prototype appliances. And as GE’s product evangelist Taylor Dawson (@J_TaylorDawson) said on stage, “A prototype is worth a thousand meetings.” Amen!

These are just a small sampling of companies, ranging from very small, early stage startups to large enterprises taking an innovative approach to using the software, services and platforms Autodesk provides. And it’s not just companies that are innovating. Matt Flail and Tim Ganter, industrial design students at Philadelphia University’s masters program came on stage to describe how they are taking a giant step beyond custom orthotics (the kind that fit inside shoes.) Instead they are making the whole shoe, using 3D scanning and 3D printing to create completely customized footwear that is made to conform exactly to the wearer’s needs. Their thesis project is called FOOTPRINT: 3D Printed Custom Algorithmic Footwear and their goal is to produce cutting edge shoes by incorporating 3D scanning, algorithmic model development, rapid manufacturing, and advanced textile technologies.

And Autodesk itself is no slouch when it comes to fostering innovation. There were several themes interwoven throughout the event to prove that. The overriding theme was “the future of making things.” To this end, Autodesk is on a mission to fuse three components that have previously been treated separately: Design, Make and Use. There are a lot of technical components here. We heard about generative design, and building intelligence and machine learning into smarter products. We heard about 3D printing, not just for printing trinkets, but some really valuable industrial and medical uses, from body parts to tooling. Attendees even assembled 3D printed hands with e-NABLE, a non-profit that provides customized 3D printed prosthetics for children.

So what is this fusion of design-make-use really all about? I think a quote from the stage really sums it up: “Stop trying to make people want what you make. Instead make what people want.” And recognize that people sometimes don’t know exactly what they want from a product until they use it. Therefore what people want continues to evolve as products are used. A smart product, connected through the cloud, can indeed continue to evolve even as it is being used.Storm-CHRON

This philosophy fit nicely into a fun kind of theme at Autodesk University – Star Wars. Complete with Storm Troopers!

Always drawn to fun analogies, I’ve picked up on the anticipated Star Wars craze in some of my recent writing (contact Lisa Lincoln at lisa@mintjutras.com if you are interested in learning more). A couple years ago I had fun with a Star Trek theme as I wrote about “Next Generation ERP” moving into the final frontier. But that concept of next generation software can be applied to a lot of different software categories.

Star Trek was all about sleek and futuristic technology, including starships that could travel at warp speed, transporter beams, (wireless) communication devices, weapons that could be placed on “stun,” and other electronic gadgetry that might not seem so futuristic today. But all these pieces of technology had something in common. They weren’t just cool to have; they served a real need -solved the right problem, perhaps?

The Star Wars franchise was (is?) better known for “the Force.” The Force was an energy that could be harnessed to perform supernatural feats and to amplify other common physical traits of speed and reflexes. Of course the original movie relied on some futuristic technology at the time, particularly in the use of robotic droids and space travel, but it was more about enhancing human performance. While we haven’t yet achieved the same level of progress in space travel, robotics don’t seem so futuristic today and in fact we saw them featured prominently on the AU2015 show floor. More importantly, the Force at AU2015 was really about enhancing the performance of people, products and organizations.

This supports a concept Autodesk CEO Carl Bass (@carlbass) emphasizes – one of “reframing.” He encouraged his audience to ask themselves: Are you solving the right problem? The example he used: Did you know there is a higher energy impact in making a car than driving it over its lifespan? So is reducing fuel consumption really the right problem to solve? I guess it is for the consumer paying at the pump, but maybe not so when you consider the greater good. But just asking the question is a giant step in the right direction.

But solving the right problems is going to be a group effort, which is why Autodesk is relentlessly building out the ecosystem, with more than just software and design tools.

 

Its cloud-based Forge ILogo_Colornitiative, announced during the event, is a three-pronged effort to transform how products are designed, made and used. The three major components include a platform-as-a-service (PaaS) offering, a robust developer program, and a $100 million investment fund. The components:

  • Platform-as-a-Service – The Forge Platform is a set of cloud services that span early stage design, engineering, visualization, collaboration, production and operations. Open application programming interfaces (APIs) and software development kits (SDKs) enable small and large software developers alike to build intuitive solutions to real problems.
  • Developer Program – The Forge Developer Program will provide ongoing training, resources and support to the developer community. Autodesk will host an inaugural Forge Developer Conference next June.
  • Investment Fund – The Forge Fund will provide up to $100 million in funding, as well as business and technical support to start-ups that are working to deliver innovative solutions and services on or connected to the Forge Platform. This investment will be made over the next several years.

But of course for the Force to be strong, there must be at least the implication of some magic – remember those seemingly supernatural powers? For a company like Autodesk, I think the keys to unleashing this “magic” lies in harnessing data from the Internet of Things (IoT). As Mr. Bass points out, we are rapidly approaching a time when everything will have an IP address and everything is addressable. This opens the doors to a whole new level of understanding of how products perform and how they are used.

IoT is not a foreign concept to manufacturing. Manufacturers have been collecting enormous volumes of data from sensors on the shop floor for many years now. But much of that data has lain dormant because these manufacturers didn’t have the tools and technology to really harness it. Of course the most intuitive use cases for harnessing that data has been in maintenance. Don’t schedule downtime for unnecessary preventive maintenance. Don’t wait for products to fail. Predict failure and perform maintenance optimally based on data collected by the product itself.

In the future of making things, we need to apply this same concept to any kind of consumer, medical or industrial product, move it beyond maintenance and harvest that data to help us improve the products themselves, along with efficiencies that measure human performance. That means we need tools to make it easy to connect all these addressable sources of data. I think this must have been at least part of the consideration in Autodesk’s acquisition of SeeControl last summer, which resulted in the announcement of Autodesk SeeControl at AU2015.

From Autodesk:

The Internet of Things refers to the growing ecosystem of physical things embedded with electronics, software, and sensors that are connected to the Internet and to each other. When these things are products sold to end customers, manufacturers can gather and stream data about how they are being used to offer valuable insights, allowing them to respond to the needs of their markets and individual customers. Connected products also create new insights for the people who design and make them, helping companies better understand their use and improve them over time.

Autodesk SeeControl allows manufacturers to monitor how their product performs in the real world and use live data to optimize future versions. They can keep products running at peak levels, identify potential for failure before it happens and schedule maintenance downtime when it is least disruptive. Ultimately, manufacturers can bring their customers a level of enhanced services based on information about real world product performance and consumption.

Autodesk SeeControl is absolutely native to cloud and device agnostic. Most any protocol you encounter has been accommodated, but if you find a new one, Autodesk can add it generally within a couple of days. But even better, it requires no specific technical or programming skills to connect new devices. Most any business analyst or product manager can get in and do something meaningful with hardly any keying. Just point and click.

The connected product journey has begun – the journey to customer discovery, better next design, advanced services and product as a service.

In conclusion, whether you are looking to

  • Re-imagine the future of making things
  • Fuse the design – make – use processes with connected products
  • Solve the right problems or
  • Simply bring innovation to your business and your customers

…Know that the Force is strong at Autodesk. May the Force be with you.

 

 

 

 

 

 

 

 

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SAP Central Finance: a non-disruptive step towards system consolidation

Operating across a distributed environment has become a way of life for a large percentage of businesses today, even smaller ones. In fact 80% of all survey participants in the 2015 Mint Jutras Enterprise Solution Study had more than one operating location served by ERP (Figure 1). Even small companies (those with annual revenues lower than $25 million) average 2.87 operating locations, and that number grows steadily as revenues grow.

Figure 1: Environments Are More Distributed and Remote

Fig 1 SAPSource: Mint Jutras 2015 Enterprise Solution Study

This proliferation of operating locations often results in a proliferation of enterprise applications in general and ERP solutions in particular. In days gone by, these different operating sites were often left on their own to select the enterprise applications that would help them run their individual businesses. Yes there was a corporate accounting system, and financials needed to be rolled up. But those corporate financials were overkill at the divisional level, and often didn’t have all the functionality needed to manage operations, particularly in manufacturing sites.

As long as these different operating sites operated quite independently, this proliferation wasn’t too much of a problem. But today the likelihood of divisions operating completely autonomously has dramatically shrunk. Whether you are a services organization working on projects that span the globe or a manufacturer striving to manufacture closer to your customer, leaving each operating location to do their own thing just doesn’t cut it anymore. Standardized processes and corporate standards for the enterprise applications that support those processes have become the norm.

The majority (87%) of multi-location companies today have created standards that govern which enterprise applications are used across the enterprise (Figure 2). However, a fair number (14%) are still in the process of migrating to these standards, which means they are faced with the challenge of rationalizing existing solutions that are functioning today. Typically this means a long process of ripping and replacing solutions and many years before they see the benefits.

Figure 2: Have you established corporate standards for enterprise applications?

Fig 2 SAPSource: Mint Jutras 2015 Enterprise Solution Study

For SAP customers, SAP Central Finance might just be a shortcut to some of those benefits. It provides more than just the typical kind of consolidated reporting that is done at the aggregate level. Central Finance taps into the power of SAP HANA and replicates all journal entries in a Universal Ledger, while preserving the source of those entries, whether the source is an SAP ERP solution or not. Of course it takes a bit more effort to map the data from nonSAP solutions, but SAP has tools to help and it is quite do-able.

What this accomplishes immediately: Centralized reporting across the organization, beyond the typical financial reporting, and also the potential for more informed centralized strategic decision-making.

  • Reporting based on harmonized master data
  • Central journal for balance sheet and P&L reports
  • Central profitability analysis
  • Overarching views on customer and vendor accounts
  • Liquidity forecasts based on payables and receivables
  • Central overhead analysis
  • Reports for selected cost object categories

… All this without ripping or replacing anything. Of course, some might stop here, centralizing finance and leaving disparate ERP solutions in place, while others might move on to rationalize solutions. … or some combination of the two. Mint Jutras finds there are several different flavors of corporate standards (Figure 3).

Figure 3: Is this a single or multi-tier standard?

Fig 3 SAPSource: Mint Jutras 2015 Enterprise Solution Study

Although those all running a single ERP solution won’t need to rationalize solutions, they are still likely to need to consolidate financials, especially those that are multi-national. Central Finance could also be used to absorb a new acquisition, incorporating the new entity into corporate financials. Today Central Finance can be used for corporate reporting and planning, but as SAP continues executing on its planned roadmap, in the future, customers will be able to use it for central operational processing

To sum up both approaches….

Central Finance as a corporate reporting and planning platform:

  • Establishes central financial system as a single source of truth
  • Across entities and units
  • With harmonized master data
  • Using the flexible data model of Simple Finance (now called SAP S/4HANA Finance), with the possibility of adding new dimensions for reporting that might not even be available in source systems
  • With new reporting tools
  • And the speed of HAHA
  • Cross-entity insight with limitless detail. You can even click on a document ID in Central Finance to navigate back to the source system (think traceability). This is done automatically when the source system is an SAP product. Doing the same for nonSAP systems requires additional effort.

Central Finance for operational processing

  • Simplify and standardize processes
  • By centralizing financial processes
  • By standardizing, harmonizing processes across units
  • Move processes to central execution models while streamlining processes based on harmonized data
  • Possibly simplify work in shared service centers
  • Simplify your IT landscape

Whether you need to consolidate financials only, or entire ERP systems, if you are an SAP customer, you owe it to yourself to investigate how Central Finance could make your life easier.

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What does fishing have to do with Salesforce? #DF15

A Quick Take on News from Dreamforce 2015

Last week I set aside some time to watch some of the big keynotes from Dreamforce, Salesforce’s annual extravaganza. Like Dennis Howlett, reporting for Diginomica, I watched from what Den calls “the cheap seats.” While thousands of attendees swarmed San Francisco, I was part of the virtual audience watching the live stream. As a result I was thankful to be insulated from the chaos and gridlock of a city pushed to its limits, but also missed what appeared to be a truly electric and energizing atmosphere.

There was no shortage of announcements surrounding products and partnerships, and I am certain I missed a lot. For more thorough coverage I might recommend Diginomica’s site. They not only had Den watching from the cheap seats, but a whole team covering it onsite. But from my vantage point, what struck me were the two very different faces of Salesforce – the application side and the platform side. Anyone who follows me knows that I research and write for business leaders about enterprise applications. So you would think I would primarily be interested in the applications, right? Not this time.

The category of applications Salesforce delivers is on the periphery of what I cover. As an analyst I describe my coverage area as “enterprise applications with ERP at the core.” Here is not the time or place to debate what ERP is, or is not. Suffice to say it is a convenient label for the applications that run the business, creating a fiscal and operational system of record. While Salesforce’s (or anyone else’s) CRM solution doesn’t fit that definition, it is still important for me to watch because the footprints of ERP solutions have expanded and oftentimes include CRM. Even if they don’t (e.g. the customer uses Salesforce), the intersection of ERP and CRM is important because it is often where the back office meets the front office where competitive advantage can be gained.

So watching from the sidelines has always seemed appropriate. Lately, however, I seem to be getting dragged from the sidelines to more center stage – but not because of its CRM solution. Instead it is its Platform as a Service that is calling me.

Platform as a Service (PaaS) is a category of cloud computing services that provides developers with a platform to create software without the complexity of building and maintaining the infrastructure typically associated with developing an enterprise application. Clearly developers benefit from using the services delivered with a platform, speeding the development process. Since I don’t write for developers, but for the businessperson, how does this translate to benefits to the business? The obvious answer is in delivering more features, functions and innovation in ways that help companies keep up with the accelerating pace of change.

And that is exactly what a growing number of Salesforce partners find appealing, including ERP and accounting solution providers who fall squarely in my line of sight. It has been those partners that have lured me from the periphery to better understand how Salesforce, as a platform company, can help them deliver more value. I also think that it will be the platform, not the applications, that has the highest likelihood to propel Salesforce on the growth trajectory on which Marc Benioff has his sights.

It’s sort of like the old proverb that goes something like this – give a man a fish and he eats for a day; teach him how to fish and he eats for a lifetime. Well, maybe not exactly like that. The platform itself might be appealing to large enterprises with teams of developers on staff looking to modify or even develop their own applications (i.e. learn to fish). But for every large enterprise there are dozens, maybe even hundreds or thousands of small to midsize businesses that are just looking for a fish. Of course, they don’t buy one fish and walk away – they sign up for the “fish a day” program (a subscription). So, sure Salesforce can sell a lot of fish, but that won’t get it to the $10 billion mark – not even close.

But the platform is a “Force” multiplier (pun intended). There are also those partner solution providers who are looking to not only fish, but fish with the latest and greatest fishing tackle and equipment on the market. Using Salesforce’s platform they have proven they can not only fill their nets, but also get to the dock and the fish markets that much faster. Or maybe they don’t go after fish at all because Salesforce CRM satisfies that nutritional requirement. They might be working on the meat and potatoes, the vegetables or the dessert. Together they will have all the other dishes that go with fish in order to make a whole meal and satisfy anyone’s appetite.

The better the development platform, the more likely it will attract more developers. The more developers attracted to the platform, the more applications get developed, which ultimately can be shared. Features, functions and extensions have the potential to start to grow, if not exponentially, at least much faster than the typical linear sequence of development. This is sort of a Catch-22, but in reverse. The strong keep getting stronger, while the weak (those that attract only a few developers) will struggle to compete.

In fact today the Salesforce AppExchange is the largest online marketplace of its kind, offering products built on the platform – all 220,000 of them. All products offered on the AppExchange are 100% native to the platform and share an integrated, secure data and identity management model. All go through a rigorous security review and all are equally easy to customize using developer tools available from Salesforce.

Several vendors I follow closely have based their offerings on the Salesforce Platform.

  • Kenandy used it to develop a modern, new ERP for manufacturing from scratch in a fraction of the time it would have taken with traditional development tools. Sandy Kurtzig, Chairman of Kenandy and also the founder of ASK Computer Systems, is an inspiring entrepreneur. My favorite Sandy quote from back in the ASK days (circa 1984): when asked if she was worried about competitors springing up, she said, “No. We’re in the software business. They have to match me line for line in code. Writing software is like having a baby. You can’t put nine women on it and do it in a month.” Yet that is exactly what Sandy set out to do when she started up Kenandy and saw the Salesforce platform as the means by which she could do it.
  • Rootstock, also ERP for manufacturing, switched from NetSuite’s platform to Salesforce.
  • FinancialForce, owned jointly by Unit4 and Salesforce natively developed its accounting solution on the platform and is now expanding more into the realm of ERP.
  • Conversely, Sage has recently abandoned the ERP moniker (but supposedly not its ERP customers) and simultaneously developedSage Live,a brand new “real time accounting solution” built on the Salesforce platform and brought to market in months, not years.

The new “Thunder and Lightning” hyped on stage at Dreamforce will only serve to make the platform more appealing to developers of all shapes and sizes. But just as in real life, while thunder and lightening add dramatic effects to a storm, it is the rain that makes the garden grow. It will be up to the software developers to capitalize on the drama from Dreamforce and make the rain (software) that makes our businesses grow.

Something tells me next year I might just have to brave the crowds at Dreamforce in San Francisco. My days of watching from the cheap seats may be numbered.

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