Cloud ERP: Is Kenandy and Force.com a marriage made in heaven?

When Marc Benioff talked Sandy Kurtzig into coming out of retirement and founding Kenandy back in 2010, it was clearly seen as a business marriage of sorts. You can define marriage today any number of different ways, some of which are very controversial, some quite safe. Erring on the side of safe, I would define marriage as a “union of two things.” In this case the marriage is between an application development platform (Force.com) and an Enterprise Resource Planning (ERP) application. While the marriage between Kenandy Cloud ERP and Salesforce Force.com might not be made in heaven, the wedding at least was right up there in the cloud.

While I am not overly superstitious, when I got married I wanted to stack the deck in favor of marital bliss. I wore something old, something new, something borrowed, something blue. It must have worked because more than 37 years later, I am still happily married. So amidst all the seemingly obligatory predictions for the New Year (no I don’t publish mine), let’s apply the same old adage to Sandy’s new venture and see if we can predict its success. Can we find something old, something new, something borrowed, something blue in this union?

Something Old

When I look for something old, my thoughts first go to “old friends.” I joined Sandy’s first company (ASK) exactly 30 years ago today: January 2, 1984. While this is a new company for Sandy, there is a lot to be gained from the experience in building that first one. During her 20 years as founder, chairman and CEO of the ASK Group, she grew the company from a one-woman show to one of the ten largest software companies in the world.

Her first product, MANMAN, short for Manufacturing Management, was an enterprise application that helped manufacturing companies run their business. In fact it still is. Having survived several acquisitions, MANMAN is now owned by Infor and still has fans in manufacturers around the world. In spite of running on what is now old and outdated technology, for more than a few, you will have to pry MANMAN from their cold, dead hands. Their perception: It just works.

Her new product, Kenandy Cloud ERP, has similar aspirations. Like MANMAN, its target market is manufacturing. Those that “know” manufacturing intimately understand the complexities associated with this type of business. Those that don’t tend to over simplify the solution needed. Fans of Workday for example constantly laud the company for its simplicity. Workday has a great product, but of course it is simpler. First of all it is Human Capital Management (HCM) and financial management (accounting) software, but it isn’t full ERP. And second, it doesn’t even try to address the manufacturing market. It takes a lot of manufacturing experience to satisfy this market. Sandy “knows” manufacturing.  You might say she is an “old hand” at it.

Something New

But it is not MANMAN that Kenandy is selling. It is a completely new product. As I mentioned before, MANMAN is now based on old and outdated technology. While many are satisfied with what it can do, quite frankly, they shouldn’t be. Any company still running MANMAN, or any number of other older business applications, are at a very serious competitive disadvantage today.

I wrote a lot about “Next Generation ERP” in 2013. If you are running an older ERP solution, especially those implemented prior to the year 2000 (Y2K), you may not even be aware of what you can expect from a modern, technology-enabled, next generation ERP. A lot of the basics required by a manufacturer today are the same, but the basics aren’t enough any more. The footprint of ERP has grown steadily, to the point where it is sometimes hard to figure out where ERP ends and other applications begin. So you need a very broad footprint to compete.

But it isn’t the depth and breadth of functionality that qualifies an ERP solution as “next generation.” It is the underlying technology. And conversely, it is that new technology that enables ERP footprints to expand at an accelerated rate. This is what makes the marriage of Kenandy Cloud ERP with the Force.com platform so important. When Kenandy decided to enter the market, the company started by building a new product from scratch. In one way, this made it much easier. As you are developing a new product, you don’t have to worry about keeping any existing customers happy with product or implementation decisions they may have already made. You can start from a clean slate. It is sort of like building a new house. It is much easier to start with an empty lot and a design plan, than it is to remodel an existing structure.

And yet Kenandy set out to build a very big and complex structure. One of my all-time favorite quotes from Sandy Kurtzig dates back to that year I joined ASK. I don’t remember who we were talking to, but I remember what she said just as clearly as if she said it yesterday, not 30 years ago. We were talking about the software competitive landscape. ASK was a market leader at the time and Sandy was very confident in its ability to maintain that leadership role. She said, “To get into the software business and compete, you have to match me line for line of code. It’s like having a baby. You can’t put nine women on it and do it in a month.”

Yet when I first communicated with Sandy in the early days of Kenandy, what she emphasized most was the speed of development that was possible with the Force.com platform. I reminded her of that quote from 30 years ago and asked her if she was trying to put nine women on it and do it in a month. Sandy chuckled, but didn’t really answer. I think time has answered the question. It is now almost three years later and Kenandy has delivered the baby. In order for it to be a real “baby” it needed to live and breathe on its own. That means for any company running it, it must provide a complete operational and transactional system of record for a (potentially complex) manufacturing business. I can’t tell you exactly when the baby was first delivered so it is hard to say whether it took the traditional nine months or more like three. But it is living and breathing in a handful of companies.

And I would say it meets the qualifications I have been promoting as necessary to be classified as a next generation ERP. It must include new technology that enables:

  • new ways of engaging with ERP
  • custom configuration without programming
  • more innovation
  • better integration

Many of these capabilities are derived directly from the Force.com platform.

The Kenandy baby didn’t necessarily need to walk or run when it was first delivered. But if it wants to compete against the big guys, those mature ERP solutions offered by big companies with deep pockets for continued development, it better help the baby grow up quickly. The more advanced features it can add easily through the Force.com platform, features like mobility and social collaboration, the faster the baby will grow and mature.

This will be particularly important to Kenandy because the target customer is also somewhat different from the old ASK customer. Yes, Kenandy is still squarely focused on manufacturing, but it is diverging from the MANMAN target, as well as the prime target for most other cloud companies. The sweet spot for MANMAN was in the lower end of the mid-market, often a division of a large company, but seldom a large enterprise. This has typically also been the target for emerging Software as a Service (SaaS) providers. Not so for Kenandy. It has its eye squarely on the large multi-national enterprise. While my data does confirm that the interest level in cloud ERP actually increases with the size of the company, I question the size of the target market. There are far more small companies in the world to sell to than large, and selling to the large enterprise is typically a replacement sale. So Kenandy not only has to sell into a large enterprise, they also have to oust the incumbent – certainly not an impossible task, but count on it being a long and involved sales cycle.

Something Borrowed

Quite frankly, no company could produce a product from scratch and make it competitive in three years without borrowing. Much of the technology that supports new and advanced features will come from the Force.com platform. So in a way, you could say it is borrowing those features. The best news about borrowing in this context: you never have to give it back. You gain the benefits for life.

But perhaps even more important is borrowing that knowledge of manufacturing from prior experience, and also the philosophy that made ASK a leader in its day.  Part of the evaluation process in selecting business software has always included checking references. As in any major purchase, before making a capital investment (or even taking on operating expense in a cloud environment) a prospect wants to talk to someone else that has walked in its shoes. Typically the software vendor provides one or more references.

But how much confidence does this really build in the prospect? By definition, any reference provided by the software vendor will be a good reference. Would it voluntarily provide a bad reference? Of course the prospect could instead get involved in user groups and/or do research on its own, but that is time consuming. And will the prospect even be able to get beyond the screening processes that occur naturally today? ASK used to handle references differently. When asked for a reference, the sales rep would hand over the entire customer list. As the customer list grew the “thud factor” alone was enough to win business. It will be awhile before Kenandy achieves that thud factor, but it fully intends to provide its entire customer list as references.

Something Blue

OK, so have we run out of our analogy with this final “something?” Hardly. Blue could represent any number of factors. Back in the ASK days, blue meant Big Blue, or IBM. In the early days when ASK was delivered on minicomputers, they were definitely not blue. The likes of BPCS (owned by SSA, now Infor) and PRMS (owned by Panasophic, then Computer Associates, then SSA, now Infor) ran on Big Blue. ASK ran on HP and DEC. But that all changed with UNIX and open architectures. Underlying hardware was no longer a point of differentiation. And with the entrance of SaaS and cloud, it is no longer even a consideration.

Blue could refer to blue sky. And blue sky could be exactly where the cloud resides, which is where the wedding took place: Kenandy Cloud wedded to ERP Force.com the cloud-based development platform.

But I prefer to consider blue sky in the context of: creative, knowing no limitations or boundaries. The sky’s the limit. After all, isn’t that the case if a marriage is made in heaven? As a woman and as an entrepreneur, perhaps I am a bit biased. While I will continue to watch and even be critical where appropriate, nothing would please me more than seeing this marriage achieve exactly what I was seeking in wearing something old, something new, something borrowed, something blue: marital bliss.

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4 Responses to Cloud ERP: Is Kenandy and Force.com a marriage made in heaven?

  1. What an interesting and well written article !!! 30 years ago you joined ASK! That is hard to believe??

    It is such a different world today technologically speaking. Certainly manufacturing companies still use some of the same processes to manufacture and assembly products as they did 30 years ago. But the software tools that we can development today that empower employees of these companies to be more agile, collaborative, competitive, mobile. are amazing. I did not return to the IT world to duplicate what the legacy vendors already have. That would not be a contribution. I returned because I saw that we could build a really empowering ERP platform that today that we could not even imagine 10 or 20 or 30 years ago. It is a whole new world and those manufacturing companies that enable their employees to make quick decisions by giving them cloud, mobile, collaborative products like Kenandy are definitely going to have competitive advantage.

    I loved your article… And it clearly took more than 9 months to have the Kenandy baby… But the baby is thriving very well and growing stronger and smarter everyday!!!!

    Thanks,
    Sandy Kurtzig, CEO Kenandy

    • mintjutras says:

      Thanks for the comment Sandy. I am on a mission to educate those stuck in the past! Amazing what you can do with new solutions today. Good luck!
      Cindy

  2. lauralou says:

    Brilliant article & as Sandra says it’s quite amazing how the technology for industries like manufacturing have come on over the years. It’s now so easy to keep track of everything because of Cloud Computing – it does make you wonder how businesses coped without it!

  3. Joseph Evans says:

    Great article. I’ve been in the ERP business for over 10 years as both part of an enduser support team and now with a reseller for Ross and Syspro ERP and Kenandy definitely has the right idea about the future of ERP systems. The same way Google, Facebook and Twitter made the internet “cool”, Kenandy and those who copy their model are going to make ERP systems cool. Who wants to figure out by drilling through a complex menu structure how to enter a purchase order or what were my sales to a certain customer last month, or what GL accounts were impacted by a certain transaction, when you can do this almost like a Google search?

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