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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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Enterprise Odd Couple: Plex Systems Partners with Workday

Pre-Packaging 2-Tier ERP for Manufacturers

Last week at its annual PowerPlex user conference, Plex Systems announced Plex Connect, along with several new partnerships and packaged connections. The goal of this new open integration framework is to “make it easier for manufacturers to connect people, things and applications to the Plex Manufacturing Cloud.” One of these partnerships stands out as being somewhat unique in that it is forged with another Enterprise Resource Planning (ERP) solution provider… Workday.

At first glance these two might seem like the proverbial odd couple. As another ERP vendor, Workday would appear to be a competitor. But it is not, because Workday is not a solution that is focused on the needs of manufacturers. And companies that “make things” are the only targets for Plex Systems. So if Workday isn’t for manufacturers, why would any Plex customer be interested in connecting to it? Because typically corporate headquarters doesn’t make anything, but might have sophisticated accounting requirements to support global operations. This partnership is all about delivering a pre-packaged 2-tier ERP.

Making the Case for 2-Tier ERP

Operating across a distributed environment has become a way of life for a large percentage of manufacturers today, even smaller ones. In fact 77% of all manufacturers that participated in the 2015 Mint Jutras Enterprise Solution Study had more than one operating location served by ERP (Figure 1). And 67% operate as a multi-national company. Even those with annual revenues under $25 million average just over 2 operating locations and that average grows steadily as revenues grow. This means very few companies today are able to conduct business as a single monolithic corporation.

Each operating division will have operational needs and must then feed to corporate financials for consolidation and reporting.

Figure 1: Environments Are More Distributed and Remote

Plex WDAY Fig 1Source: Mint Jutras 2015 Enterprise Solution Study

Note In Figure 1 company size is determined by annual revenue.

  • Small: annual revenues under $25 million
  • Lower-Mid: $25 million to $250 million
  • Upper-Mid: $250 million to $1 billion
  • Large: revenues over $1 billion

In years gone by all the different operating locations depicted in Figure 1 were likely to be left on their own to evaluate, select and implement a solution to run their operations. However, that scenario is quite rare today. The vast majority (90%) has established corporate standards for enterprise applications (Figure 2).

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

Plex WDAY Fig 2Source: Mint Jutras 2015 Enterprise Solution Study

But this doesn’t necessarily mean a single solution runs the whole enterprise. Very often the ERP solution installed at corporate was selected for its ability to report and consolidate across multiple divisions. Very often these corporate accounting solutions (like Workday) don’t have the necessary functionality to run the operations of its divisions, especially if those divisions are manufacturing sites. In these cases, the standard solution for these manufacturing operations is a different solution – one like the Plex Manufacturing Cloud. Hence…

The Emergence of 2-tier ERP

In fact this 2-tier standard has become quite commonplace. Of those that have established corporate standards, less than half (47%) uses a single standard where all units, including corporate headquarters, use the same solution (Figure 3). At the same time, 31% have established a 2-tier standard and another 22% have a multi-tier standard. This latter category is most typical in a diversified corporation where you might see different types of businesses at the divisional level – you might have distribution warehouses or sales and service locations in addition to manufacturing sites.

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

Plex WDAY Fig 3Source: Mint Jutras 2015 Enterprise Solution Study

It is this middle 31% that is targeted by the Plex Systems/Workday alliance, although it might work equally well in the multi-tier scenario. In fact if the non-manufacturing sites are sales and service operations, Workday itself might be the chosen standard for those divisions, eliminating the need for more than two different ERP solutions.

Plex Systems acknowledges that its solution is not the best for non-manufacturers. In fact Plex makes that point in its bold move to implement Workday for its own operations. The initial knee-jerk reaction might be, “What? They don’t sip their own champagne?” (An analogy I much prefer to eating one’s own dog food!) But while Plex knows and serves manufacturing very well, it isn’t a manufacturer. It makes software. While software companies that deliver on-premise solutions might burn CD’s, package them with documentation and ship a physical product to a customer, as a pure cloud provider, Plex sells software only as a service. The accounting for software, services and subscriptions is very different than accounting for shipping and delivering a physical product. But at the same time, this decision also underscores the fact that Plex is not afraid to make the right business decision in managing its own business.

But getting back to the 2-tier scenario, in the past we have seen solutions from SAP and Oracle dominate the corporate scene. Yet solutions like Workday, born in the cloud, are starting to chip away at the dominance of these two major players. And an alliance like this will only serve to accelerate this erosion. Very often a decision for SAP and Oracle might have been influenced by the efforts involved in integrating and rolling up financials from the distributed sites. While these have typically not been “out of the box” in the past, popular sentiment is that if you go with one of these “giants,” you will likely find systems integrators and other service partners who have done it before. That means they have a lot of experience with SAP and Oracle. You still pay for the connection, but you are at least dealing with a higher level of expertise.

With pre-packaged connectors, the need for this prior experience goes away and the expense of forging the connection drops dramatically.

Impact on Roadmap

So after hearing about this and other partnerships (with Salesforce and DemandCaster) the first question I posed to Plex was regarding the impact these might have on their own road maps. In terms of Workday, my specific concern was over enhancements planned to make its ERP more “global.”

Plex already has customers running the Plex Manufacturing Cloud from more than 20 countries, but it has let its customers essentially “pull” them into those countries and doesn’t necessarily support all the localizations and legislative regulations required in each… or all the complexities of growing multi-national companies. About a year ago Plex Enterprise Edition made its debut at PowerPlex 2014 along with an aggressive roadmap to support complex, global, multi-plant manufacturing organizations with multi-entity financial and supply chain management requirements.

In answer to my question, Plex has assured me none of these partnerships will result in taking planned innovation off the table. It will continue to invest in these globalization efforts. Similarly, other solutions such as DemandCaster will not prevent Plex from developing its own forecasting / demand and supply planning software. The alliance with Adaptive Insights will not prevent Plex from developing more robust financial planning and budgeting offerings. But I am thinking Plex doesn’t really need to compete against Salesforce for CRM.

 Conclusion

In the meantime and well into the future, Plex Connect should indeed make it easier for manufacturers to connect people, things and applications to the Plex Manufacturing Cloud. And in today’s connected, digital economy, isn’t that what it’s all about?

A Side Note: Is Workday ERP?

In the past I have posed the question about Workday: Is it ERP? Does it Matter? Many refer to Workday as ERP, but by my definition (an integrated suite of modules that provides the operational and transactional system of record of a business) an integrated finance and accounting solution that does not manage the “order” falls a bit short, But it does manage a contract, which for “talent intensive organizations” including software and Internet service companies like Plex) is equally, if not more important. Feel free to read my full analysis in the highlighted link above but for purposes of our discussion here in terms of 2-tier ERP, I am comfortable in referring to Workday as ERP.

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What is Unit4’s “Self-Driving” ERP?

Empowering People in Service Organizations

Today we live in a world where automobiles can drive themselves across the United States. These same cars can parallel park far more skillfully than their human drivers. Airplanes spend most of their time in flight on autopilot. Small, self-directing vacuum cleaners systematically clean our floors while we are at work or play. Fitness devices tell us when it is time to move and warn us when we are over-exerting ourselves. Some of those fitness devices are smart phones equipped with apps – the same smart phones that keep us constantly connected. We get spoiled by all this automation in our personal lives and then we go to work and wonder why the software and technology that is used to run the business doesn’t empower our work lives like consumer technology empowers our personal lives.

Enterprise applications like Enterprise Resource Planning (ERP) are meant to capture transactional data and streamline and automate business processes. Yet while ERP was originally meant to make our business lives easier, many old ERP systems just can’t seem to get out of their own way. Unit4 is setting out to change that, at least for its customers. While it has always prided itself in its modern and flexible architecture and its solutions’ ability to accommodate change, it is now taking a page from consumer technology. A revitalized Unit4 is intent on delivering “self-driving” ERP, where user interaction is minimized and limited to activities where people make the difference.

People Are at the Core of all Unit4 Does

Unit4 has always targeted people-centric businesses, where services are the primary product delivered. These targets include professional service organizations, governments, higher education, not-for-profits and real estate. In each case, the key ingredients are people; processes are fluid and dynamic. By its very nature, outcomes are unpredictable. The last thing you want is your people doing manual tasks that add no value to the service delivered.

And yet that is exactly what happens when ERP can’t get out of its own way. What do we mean by that? Legacy ERP solutions that are rigid and cannot adapt as business changes, or that don’t allow business processes to evolve, or that force people to work in very unnatural or counter-intuitive ways, are more of a hindrance than a help to your business. They get in the way.

This has never been more true than it is today as we enter the digital age. Everywhere we look we see the pace of business accelerating and business models being disrupted. This is all fueled by digital communication. And yet many ERP solutions installed today lack the ability to participate in this revolution. They still force companies to transact business the way it has been transacted for the past 50 years. And they don’t contribute much insight in how to break that cycle, or insight into how to more profitably grow the business.

Unit4’s products have always been designed for change, but now they have a new goal: to help companies transform themselves in the digital age. This new goal is actually a natural progression, but is also fueled by the transformation of the company itself. Jose Duarte, Unit4’s current Chief Executive Officer (CEO) took the reins about two years ago. He made a clean sweep of his executive committee. A few very key players remain one level down from the top, which makes the transition smoother, but in the end, the Unit4 of today is very different than it was two years ago.

Today Unit4 is clearly energized, innovative, confident and aggressive. And it is on a mission: To empower people in service organizations.

The 6 Pillars of “Self-Driving” ERP

So what is this thing called “self-driving” ERP? Can software really make business decisions to drive the business? Of course not. Even an airplane on autopilot still needs a pilot. That car driving itself across the United States still has a driver. The homeowner has to decide which room to set up the little roaming vacuum cleaner in. Those fitness devices don’t do your workout for you. But all these technological wonders have a common theme: they make people more efficient and productive. People with these devices can do more, accomplish more. That’s what self-driving ERP is all about: better productivity, improved efficiency and better, more insightful decisions.

Unit4 likes to refer to the following as the six pillars of self-driving ERP:

  • Automation of manual tasks. Don’t make the human driving ERP do repeatable, repetitive tasks if they can be automated.
  • Drastically reduce the amount of input required; eliminate it entirely if possible. Ask for input only on an exception basis.
  • Use the moment of action to ask for the input. Ask a person when that exception actually occurs, not hours or days later.
  • Sense potential problems or bottlenecks.
  • Sense potential opportunities.
  • Make intelligent and sensible recommendations.

 How Does Unit4 Do This?

If you ask Unit4 how it will deliver on the promise of these pillars, Unit4 will talk about the four layers of its People Platform, announced back in April. After you hear the folks at Unit4 describe these layers, you may still not understand, particularly if you are a businessperson and not a technologist. Don’t feel bad. It’s not you. Some of these are tough concepts. But that’s okay. It is much more important to understand what it can do for you than to understand how it does it. You didn’t know how the transporter worked on Star Trek’s USS Enterprise. But you knew exactly what would happen when Captain Kirk said, “Beam me up Scottie.” If you understand the potential conceptually, a myriad of potential use cases might immediately spring to mind.

So here are the layers, as concisely as we can present them:

Personal Experience

The very top layer is the personal experience. This is all about a new, improved and modern user experience, which Unit4 has been working on for the past two years, improving existing functions; efforts will continue as new and different ways of engaging with ERP and new functions are introduced. This includes access through mobile devices of all sorts. But Mint Jutras believes the best user interface is often no user interface, and Unit4 is also heading down this path in automating those manual, repetitive tasks. But ultimately it is all about making software easy to use.

Of course ease of use means different things to different people.

Figure 1: “Top 3” Factors Influencing Ease of Use

Unit4 Fig 1Source: Mint Jutras 2015 Enterprise Solution Study

Note on defining generations:

  • Baby Boomers: born between 1943 and 1964
  • Generation Xers: 1965 to 1981
  • Millenial: born in 1982 or after

This is most apparent when we compare what is most important across different generations participating in our 2015 Enterprise Solution Study (Figure 1). While perceptions vary, minimizing time to complete tasks is right at the very top of the list across all generations. So Unit4 is right on track in automating manual tasks and reducing the amount of input required. In fact complete automation of many of these repetitive tasks is really the ultimate goal.

Business Capabilities

The second layer is business capabilities. Mint Jutras research confirms this as an appropriate focal point. Our latest study confirms that the most important selection criterion for choosing an ERP solution today is “fit and functionality,” followed closely by “the completeness of a solution.”

Expanding the footprint of its ERP remains a priority for Unit4, but it will pay particular attention to individual vertical markets. Some of these business capabilities will be developed by Unit4, some will be acquired, and some may in fact come from partners. The recent acquisition of Three Rivers Systems is a perfect example of how Unit4 can take some giant steps in business capabilities, in this case, significantly expanding Unit4’s solution for higher education.

Who is Three Rivers Systems and what does it do?

Three Rivers Systems’ solution is called CAMS Enterprise. CAMS is short for Comprehensive Academic Management System. As the name implies, it is a comprehensive higher education solution that automates the entire student lifecycle into a single system. It can be run on-premise or hosted in the cloud.

A few facts about Three Rivers:

  • Founded in 1985
  • 55 employees
  • Serving over 200 clients in North America, South Africa, Europe, Middle East, Asia
  • Serving all institution types from under 1000 students to over 40,000

 Smart Context

The third layer is called Smart Context. This is perhaps the toughest to explain and yet its name provides some clues. “Smart” implies intelligence. So the Smart Context layer adds some intelligence, but in the context of a specific task, question or problem. Think about the following:

  • You’re preparing your expense report. Smart Context can suggest the majority of the line items (mileage, airfare, meals, etc.) You simply confirm the amounts.
  • You leave your customer’s site where you have been working on a project. Smart Context asks you if you just spent three hours working on project XYZ. A simple click on yes or no completes your timesheet.
  • You are asked to deliver a detailed project plan (for resources and costing) before the close of day. You enter several characteristics and Smart Context reveals the closest fit to previous projects. You select one as a model and create the plan in a fraction of the time it would take if you built it from scratch. And you even have a complete workforce assignment.

Smart Context is all about removing the clutter, making complex things simpler, and requiring your input only for exceptions. By making suggestions where possible, enriching data with additional context, the information you do see is more relevant and complete. This is the real engine behind the concept of “self-driving” ERP.

Unit4 delivers this type of intelligence by bringing the latest technology together through a variety of components:

  • An alerts engine to keep you up to date with smart business feeds
  • A rules engine establishes and configures the rules to be invoked during data entry, allowing for dynamically altering the UI based on conditions, or proactively assisting the user in entering consistent data. Adding machine learning even makes it self-configuring.
  • Definition of communities (defining who cares about what) and the capture of conversations within the communities (no more lost threads after you hang up the phone). This creates a social context.
  • Mobile context, through technology that can detect location with a time stamp. This allows for location-based filtering and time tracking and can push information automatically (e.g. customer configurations pushed to a field service technician arriving on-site).
  • Predictive analytics, capable of pattern detection. This can involve complex analysis, bringing together technologies such as machine learning and event stream analysis for sensing problems, bottlenecks or opportunities. Or it can be as simple as pre-populating an expense report or suggesting a project plan.
  • Cloud and crowd context through capture of peer analysis and customer sentiment.
  • A workflow engine.

The net result is filtered, contextualized data that can be presented in a simple, relevant and complete experience.

Elastic Foundation

At the base, the fourth layer is the Elastic Foundation. The concept of elasticity is commonly associated with cloud and software as a service (SaaS). Unit4 does offer a variety of cloud options, including what it calls “cloud your way,” which lets the customer choose the deployment option without compromises. Used in this context, the elasticity comes from the ability to grow and consume resources as needed, without additional purchases of hardware, middleware and the associated maintenance.

But Unit4 takes elasticity one step further and uses it in the context of the application itself, which can easily be changed and/or extended without disrupting the installed solution.

The elastic foundation has evolved from the architecture on which Unit4 Business World (formerly Agresso) was built. This is where you define your organizational structure, information requirements, and the relationship between the two. Traditionally these types of structures, relationships and processes tended to be hard-coded in solutions or embedded in codes like the general ledger account, using a “once and done” approach that made future changes difficult and costly. But reality says they need to be fluid, and that is the elasticity that the People Platform delivers.

With Unit4’s Elastic Foundation, no source code changes are required and even if it means changing the business rules, the data model and how the data is presented, this does not constitute multiple changes. You make a single change and it is permeated throughout all the necessary components of the solution. All are on the same page. No delays. Nothing can be out of sync.

Nothing Tells the Story Like an Example

While all this discussion may provide good background, nothing illustrates what Unit4 is doing better than an example. Let’s explore the project plan example mentioned earlier in a bit more depth.

Projects are common in many services organizations. For some, projects are simply internal. But in many companies, particularly in professional services organizations, these projects are core to their business. Unit4 has been listening to these types of customers as they expressed a desire for better ways of winning profitable business. When your business is project-based, that means coming up with more accurate estimates faster. This is one of the scenarios Unit4 has been working on that will showcase all the layers described above.

To better understand this endeavor, put yourself in the shoes of a project manager at a project-based business that has identified a new opportunity. You need to come up with an estimate of cost, resources and schedule in order to propose a price that is both competitive and profitable. And you need to do so quickly and efficiently or either your window of opportunity will close, or your current projects will suffer, or both. If you are smart you don’t start completely from scratch. Instead you find a similar project, hopefully one that was successful, and start from there, modifying it to reflect the current needs of your prospect.

Sounds simple, but in reality, how do you go about finding the right project to use as a starting point, especially if it was a project in which you had no personal involvement or experience? Unit4 is developing a scenario where you will be able to enter a few key characteristics of the project including the customer (if you have done business with the prospect before), type of project, time frame required, cost range, etc. Using these parameters, Unit4 will present you with potential reference projects, each assigned a rating of how closely they match your criteria. They do the legwork; you pick the closest, most profitable and start from there.

But have you ever managed a project that looked great on paper, but in reality it was the project from hell? You can’t tell everything from the numbers. So Unit4 uses sentiment analysis to assist. The solution will be able to look at conversations and pull up up the five most positive things and five most negative things said. What is the most common word used? Perhaps you find it to be “team.” It can look for certain words used in comments and conversations, including words like “complaints” or “excessive overtime.” Perhaps the team is complaining about too much overtime.

Projects under consideration may also not yet be completed; in which case, Unit4 will simulate a completion to predict schedule and cost accuracy, along with projected margins. While all of this might seem relatively simple, when done manually, there are numerous assumptions and opinions that get inadvertently filtered that can result in overlooking the best model, choosing the wrong project or making bad predictions.

By automating the process, Unit4 delivers on all of the pillars of a “self-driving” ERP, from automating manual tasks to reducing input and asking only for input at the moment of action. It can sense problems, as well as potential opportunities and give intelligent recommendations.

This is just one of many possible scenarios. Mint Jutras anticipates more and more of these types of scenarios will be identified through working with actual customers. Once some are delivered (later this year), this could have a snowball effect, with one idea generating many more. Then it will be up to Unit4 (and possibly some select partners or customers themselves) to deliver against the promise of “self-driving” ERP.

Summary and Key Take-aways

Unit4 has truly transformed itself into a new company, one that is energized, fresh, innovative, confident and aggressive. And yet it has done so by building on the strengths it has exhibited in the past. It has always targeted people-centric businesses, particularly those that are “living in change.” It has a strong, modern architecture and understands the trends rocking the world today. We are truly entering the digital age. Social, mobile, cloud and analytics all play a key role. Unit4 is leveraging all of these and delivering a solution with a simple goal: to empower people in service organizations.

But probably most importantly, Unit4 is now focused on execution. That focus is centered on:

  • Delivering vertical solutions for service industries
  • Building applications for people
  • Designing its underlying architecture for agility
  • Delivering cloud solutions “your way,” with no compromise

The recent acquisition of Three Rivers Systems is evidence it is indeed moving into major execution mode. Don’t be surprised to see others and expect some very significant partnerships to be announced soon as it aggressively builds its partner ecosystem.

During the past two years, as this transformation was underway, Unit4 was quite “quiet.” Expect the company to significantly turn up the volume, particularly in North America, where there is tremendous opportunity that has yet to be tapped.

Expect the pace of product innovation to accelerate as it starts to aggressively leverage its prior investment in architecture and technology.

If you are a services organization with an ERP solution that seems to just get in the way, Mint Jutras would agree with Unit4 when it says, “To adapt to the speed of change, ignore the old restrictions.” Perhaps you need to get into the driver’s seat of a new “self-driving” ERP.

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