enterprise applications

Zoho: A Tech Company like No Other

Core Values Strengthen A Solid Product Offering

Zoho is a software company that sees its technology as a key differentiator in a crowded field. However, while it does offer an impressive portfolio of technology-enabled enterprise applications, Mint Jutras would argue that what really sets it apart from its competitors are the core values upon which the company operates. Those core values include a pledge to stay private with a “never exit” strategy, and a commitment of continuous innovation to create differentiating technology that addresses real business issues. Zoho is also dedicated to preserving customer data privacy and promises never to monetize that data for marketing purposes. But perhaps most importantly, it is the belief that running a business should be about more than just profits that gives Zoho its mission and true purpose.

That said, technology and a strong portfolio of products are indeed the life blood of the company. Those products are the instrument by which it engages with prospects that become customers. And so, Zoho is never willing to sacrifice independence, control or performance and data privacy for the sake of expediency. And as a privately held, self-funded and profitable company, it truly controls its own destiny.

But, as with any living organism, it is the heart that keeps that lifeblood pumping vigorously. And it is this set of core values that gives the company its “heart,” as well as its mission and purpose. That purpose is to create opportunity for people that don’t (already) have it. Values and philosophy are often viewed as far removed from business. But by deeply rooting those values into the business, Zoho has found a way to actually address the social inequality that (still) plagues our world. Not only does it operate Zoho Schools for Learning, teaching relevant skills for real software careers (for free!), it also opens offices across the world in rural communities where opportunities are otherwise limited. Leadership views know-how, culture and capabilities as the true capital of the company. And it has been consistently building that capital for the past 25 years.

Unlike many other software as a service (SaaS) companies that seem content to report operating losses for years, Zoho is profitable and self-funding, plowing much of its profit back into the product. But Zoho measures its own success, not by financial valuation and sterile numbers, but by the impact it has. Here we explore some of this impact, not only on products and technology, but on employees, customers, community and the industry at large.

Why Philosophy and Philanthropy Matters

Zoho’s core values, along with its philosophy, define the company’s mission and give it purpose. That purpose is to create opportunity for those who do not have it. So, of course, this philosophy includes humanitarian efforts and philanthropy, which in of itself is not unique in the corporate world. However, Zoho’s approach is quite unique. Other companies talk about social equality, promote volunteerism and donate software. They might even make donations of essential products and cash to worthy causes. Zoho does some of this as well. When the recent global pandemic hit, Zoho made Remotely, a Remote Work Suite including chat, video conferencing, office apps and more, available to small businesses for free. It served over 10,000 meals made in its own kitchens (with produce from its own gardens) to neighboring communities. But this is just the tip of the iceberg. Zoho goes much further.

At a time when many companies around the world decry a shortage of skills, the Zoho leadership firmly believes there is no lack of raw talent, just lack of exposure. They recognize there is a tremendous amount of latent talent waiting for an opportunity, and much of this talent lives in small towns and rural villages across the globe. And so, instead of opening offices in the traditional technology meccas around the world, Zoho seeks these more rural locations. And Zoho not only provides jobs, but it also provides the education needed to qualify for those jobs. This focus on rural jobs is localism at its best.

To that end, it operates Zoho Schools of Learning for the express purpose of giving young people a chance at a higher level of education. Candidates for the schools are between the ages of 17 and 20 and have no schooling beyond a secondary education. In India that is described as those that “do not have any academic qualification higher than Class 12 or 10+3 diploma.”

Zoho Schools teaches hands-on software engineering, relevant English communication skills, and helpful mathematical concepts – skills relevant for real software careers. There is more of an emphasis on skillsets and abilities rather than paper credentials. Students are not charged any fees; in fact they are paid a stipend – starting at Rs 10,000  per month – throughout the course of study. After the successful completion of the course, students automatically become employees of Zoho. 

This approach is reminiscent of a quote from the 12th century philosopher, Maimonides: “Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.” While other companies might provide hand-outs, Zoho provides a hand up. In the words of Zoho CEO Sridhar Vembu, “We help them take the first step on the ladder. They figure it out from there. I wish we could do it all over the world.” Today Zoho runs two schools in India but accepts applications from all over the country. And no one who knows Zoho would be surprised to eventually see more in other locations around the world.

This is just one example of Zoho’s core values making an impact when put into practice. Another example, which speaks volumes, is its overall response to the COVID-19 crisis.

COVID-19 Response

While Zoho Schools has the biggest impact on employees, actions taken because of the global pandemic impact not only employees, but also customers and the community, including partners.

At the very beginning, even before the full impact of this devastating crisis was clearly understood, Zoho made a promise to its employees that there would be no layoffs as a result of the pandemic. The company pledged that should things worsen, executive and management level employees’ pay would be cut first, before touching salaries of the rank and file.

Also, in the interest of employee safety, it instituted a work from home policy a full month before any lockdowns were placed into effect. This was certainly facilitated by the fact that Zoho runs on Zoho, in the cloud, and had already been supporting work from remote locations. Each one of its apps is also a mobile app, and even as teams became remote, collaboration was enabled.

At the same time the company made Remotely, a Remote Work Suite including chat, video conferencing, office apps and more, available to small businesses for free.  It also made Zoho Classes available free to schools with less than 100 students. This app allows students to join classes, remotely. Through Zoho Classes, schools can host courses, send assignments, run live sessions, collect fees, and more. Zoho also powered COVID call centers in India with free software.

And for those small businesses whose operations were negatively impacted by the shutdown, Zoho waived subscription fees for six months. Yet, during that time, it continued to pay commissions to partners. And it has offered free product training for all products, in all regions. For those customers and partners that kept employees on while experiencing a slowdown in business, this created the perfect opportunity to take that time to learn.

Zoho was able to do all this because the company was in good shape and had built in reserves for emergencies such as this, although nobody could have predicted a crisis of this scale. However, Zoho has continued to grow, although at a somewhat reduced rate, throughout the pandemic. And this has allowed the company to continue to innovate, reinvesting income at almost the same (impressive) percentage as prior years.

And so, this brings us back to the technology and applications we alluded to earlier as the lifeblood of the company.

The “Full Stack” Approach to Technology

Zoho takes a “full stack” approach to developing its software in order to provide a seamless, superior customer experience. This means Zoho owns (and controls) all core aspects of the technology stack. That stack includes everything from the applications themselves, the services, and middleware software, to the hardware, infrastructure, network, and data centers. While (a very few) other enterprise application solution providers might claim to offer an equally broad portfolio, typically this is as a result of partnerships (think Amazon, Microsoft, Salesforce, etc.) and/or acquisitions. Zoho does not.

A year ago, Mint Jutras wrote about The Pros and Cons of the “Full Stack” Approach, asking the question: Are control, independence, data privacy (and more) worth the cost?

From that report a year ago:

 “This full stack approach comes at a time when most other native Software as a Service (SaaS) solution providers are choosing to leverage tools and technology from public cloud providers like Microsoft (Azure), Amazon (AWS) and Google, in order to focus their efforts on their core competency, which is the application itself. Some do create their own development platforms, while others turn to giants in the industry like Salesforce and its Force.com platform. They do organically develop new features, functions and new products. But they also plug gaps in functionality and expand into new markets through acquisition and partnerships. And in doing so, they also sacrifice a level of independence, control and sometimes performance and data privacy.

“Zoho is unwilling to sacrifice any of this, and is also committed to providing seamless integration and a single, unified data model. But that comes at a price. There are no shortcuts. Zoho must develop everything itself. While this might appear to be a serious constraint, its solution stretches well beyond the usual boundaries of enterprise applications to include productivity tools like Mail (think Outlook), Sheet (think Excel), Show (think PowerPoint), Writer (think Word), Meeting Bridge (think Microsoft Teams or Zoom), and much more, totalling 47 apps today and growing. Plus it continually innovates its products, embedding new technologies like natural language processing (NLP) and artificial intelligence (AI). And it somehow manages to deliver an average of five new products a year.”

Indeed, this year there are more than 50 apps, even though we are still in the midst of a global pandemic. In answer to the question of whether it is worth it, we concluded:

While this would appear to be a high price to pay, Zoho is more than well-equipped to pay it. Zoho spends a very healthy percentage of its revenue on research and development. The result is an incredibly diverse range of applications, including both your traditional enterprise apps, and also a full complement of productivity apps, as well as a growing list of technical tools. Unlike some other cloud-native solution providers that still rely on capital investment even after many years, even decades, Zoho is profitable and self-funded.

Zoho is able to take this approach for two reasons. First of all, because it is privately held with no external investment (no venture capital, no private equity, no “Wall Street” stockholders), it is free to invest in what the company decides to invest in. Having no external shareholders demanding an immediate return allows Zoho to be patient, with more long-term vision. But it also forces the company to be prudent and not spend beyond its means. Which brings us to the second reason why it is able to be successful in this approach. Zoho has no debt. It has been profitable from day one. Cash is plowed back into the business and the products, to the benefit of customers, not external shareholders.

So how does Zoho decide what to invest in? First of all, the leadership is smart and not easily dazzled by glitz, glitter and elegant technology in search of a problem. But more importantly, it listens to its customers. Throughout the past year, even during a global pandemic, innovation continued as usual, with only a slight decline in the percentage of revenue reinvested. It redirected some of its marketing budget to maintain levels of R&D, but those humanitarian and philanthropic activities were not without cost. But because Zoho responds to real customer needs, where research and development directed its efforts was heavily influenced by the pandemic. Needs changed in 2020 and Zoho responded accordingly.

As a result, Zoho developed a new online event management application, Zoho Backstage. In the current climate where virtual events (still) predominantly replace in-person affairs, Backstage helps event organizers to plan and run conferences, meetups, and product launches efficiently. And Zoho further invested in its productivity and collaboration tools and released its new Collaboration Platform. Indeed there are a variety of apps that foster collaboration, products like Zoho Workplace and Zoho Connect.

Please refer back to last year’s report to learn more about what is included in this “full stack.”

De-Layering the “Full” Stack of Technology

Zoho’s Full Stack

In addition, you will now hear Zoho talking about “de-layering” its stack. When depicted in the figure shown, layers seem to make a lot of sense. But what Zoho really means by this is the complete vertical integration of all the different elements. For the business user, it will be hard to tell where one app ends and another begins. But that’s okay because everything simply just seems to work. Even though most of these different apps can be run stand-alone, they also can all work together as if they were a single app. If you need to call up a customer invoice, does that function reside in Zoho Books (finance and accounting) or in CRM (customer relationship management)? The real answer should be, “Who cares?”

Because the different apps all share a single data model, this has really always been the case. But now Zoho is blending productivity and collaboration tools right in the apps. The real advantage to the business user will be clear when they need to do something that would typically require them to exit the application and go into a separate productivity app. Let’s say an employee in accounts receivable calls up that customer invoice and has questions for the sales rep. He or she won’t have to exit to go into a separate email app or fire up a messaging app to chat. Those functions are embedded directly into the accounting apps.

The Full Stack’s Impact on Customers

If you recall, Zoho measures its own success, not only by financial metrics, but on its impact on employees, customers, community and industry. The actions taken in Zoho’s COVID-19 response (free software and subscription waivers) had a direct impact on customers. But this full stack approach is what gave many customers a leg up in facing very significant challenges as the world was plunged into a global crisis of epic proportions. These customers are not likely to describe Zoho’s full stack approach as the reason they survived and thrived. But they will point to the ability to address new requirements quickly and seamlessly, the ability to support processes that were never a part of their business before. They will point to the ability to customize, integrate and deploy new apps quickly and easily. These benefits are all a direct result of this full stack approach.

Take for example Purolite, a Zoho One customer. As a world leader in resin-based separation, purification and extraction technology used in many industries including public drinking water supplies, Purolite was deemed an “essential” business, and therefore has remained fully operational during the pandemic. While production staff continued to report to their facilities, sales and administrative employees transitioned to working from home.

While Zoho’s Software as a Service (SaaS) offering paved the way for remote workers, according to Amanda Dolan-Riddle, CRM Integration Manager for Purolite, “The most important thing in the transition to remote work was smoothing out any roadblocks in the software so employees could just focus on their work. This required automating and centralizing processes and making it as easy as possible for employees to stay connected and up to date.”

This actually meant introducing new systems that simply weren’t on Purolite’s radar prior to the pandemic. Suddenly though, issues like collecting employee information, expenses, and HR became much harder when administrators were also remote. Without the ability to simply walk down the hall and ask a friend (or IT or HR), any new software introduced had to be easy to learn and as automated as possible. Fortunately, as a result of this full stack approach, Zoho One also offers a variety of productivity tools not typically offered by a CRM or Human Resources (HR) software vendor. For example…

May and June are a busy time for Purolite’s HR department. Open enrollment for its healthcare benefits plans usually involve one-on-one meetings with employees and group sessions to help employees learn about the various plan options. This year the HR team is using Zoho Meeting for benefits webinars. HR has also started using Zoho Bookings to allow employees to sign-up for remote HR discussions using Zoho Meeting. This offers employees a way to communicate with HR in a private, secure setting remotely. And for those production workers on site, the company also set up two computer stations, monitored by Zoho Assist so that the HR team can offer live assistance to employees who are signing up for plans.

In light of new health and safety protocols, Purolite has also implemented new procedures to ensure a clean and safe work environment for its production staff. The need to purchase supplies related to personal protection (PPE) and disinfection for Covid-19 required that it add new categories to its accounting ledgers. Zoho Expense made it easy to add the new accounts and categories so that employees can be reimbursed for these important supplies.

In addition to providing PPE, and in order to keep track of employee health, Purolite had to start collecting employee temperatures. It is now using Zoho Forms as a way for employees to log their temperature each day when reporting to work. The form is easily deployed on mobile phones so that employees can record their temperature with no disruption.

Employees also needed new ways to stay connected to each other and to continue learning. To help employees stay in touch, Purolite’s marketing team has used Zoho Campaigns to distribute a daily newsletter called The Exchange. Each day they include a different topic, sometimes business related, or Covid-19 related as well as an employee spotlight segment. Purolite has also begun using Zoho Showtime to launch an educational series.

As a result of Zoho’s approach, all these productivity and collaboration tools were easily added to Purolite’s deployed stack of technology.

C.A.R.S. Protection Plus is another Zoho One customer that has transitioned quite easily to having employees work from home. Like Zoho itself, C.A.R.S. cares deeply about making sure employees’ needs are being met across the board—this includes access to the right data, information, technology, and even hardware to make sure their home environment is as conducive to productivity as their work environment. 

“One of the biggest pitfalls of remote work is that people tend to start feeling like they’re not on a team,” said Rick Tudor, Director of Operations. “The best way to combat that is to ramp up communication, even to the point where you may feel like you’re over-including folks.” Zoho Cliq, a team communication tool, has been essential for bringing everyone together. “Cliq allows us to stay in constant contact with our staff, and we generally touch base daily at a supervisor-to-employee level,” said Rick. “It allows remote workers to feel included, not on an island, and informed of what’s going on company-wide.” C.A.R.S. also conducts a stand-up call each morning via Zoho Meeting, which it has found to be critical for keeping everyone in the loop and reproducing some workplace normality.

While new “work from home” initiatives resulting from the global pandemic provide all sorts of proof that customers benefit from this full stack approach, Zoho has an even broader impact on customers. Agappe Diagnostics is the fastest growing company in the IVD (in-vitro diagnostic) industry in India with 30,000 customers across the country. Priding itself on providing customers with the best customer experience, Agappe’s mission is to provide their customers with up-to-date, innovative, and high-quality services backed by promptness. To do this, it needed an account management system that could support both sales and service functions seamlessly, for both domestic (India) and international processes that needed geo-specific support.

Zoho CRM was implemented as the first step in the plan and remains at the heart of the transformation. Zoho CRM became Agappe’s centralized application that would serve all their sales and service needs.  A custom module was designed to capture its sales process automation. This included customer and product information along with the lead-to-order process details. Zoho CRM also serves as the single point for running field operations, capturing orders and leads and converting those leads into potential business orders. Zoho Desk, the customer service software from Zoho, serves as the back-end and the Zoho Desk and Zoho CRM integration ensures that all service-related processes can be handled from within Zoho CRM. The automation also triggers an SMS on service ticket creation and completion from within the CRM system. This gives the team at Agappe a complete view of the customer with all relevant information,

Agappe also uses Zoho Survey to obtain customer feedback, Zoho Analytics to get complete reporting and analytics on sales and service processes and Zoho Expense to manage employee travel. Employee attendance data is managed using Zoho People and recruitment is handled with Zoho Recruit. Zoho Cliq is used to manage internal communication and notifications. All these different apps are fully integrated with Zoho CRM. But it is not just Zoho-product integrations in play; Agappe continues to use Microsoft Dynamics Navision as its ERP software to manage all its financial billings. Data flows from the ERP system to Zoho CRM provide a complete 360o view for sales and service.

These are just a few examples of how Zoho’s full stack approach impacts customers every day.

Summary and Key Takeways

Zoho’s core values include a pledge to stay private with a “never exit” strategy, and a commitment to continuous innovation to create differentiating technology that addresses real business issues. This allows the company to take a “full stack” approach to technology with an uncompromising attitude. Unwilling to sacrifice independence, control, performance or data privacy, Zoho is also committed to providing seamless integration and a single, unified data model.

While these core values are admirable, it is the belief that business should be about more than profits that truly sets it apart and gives it a mission and purpose. That purpose is to create opportunity for those who don’t have it. While other companies talk about social inequality, Zoho takes steps to eliminate it.

Over the course of the last 25 years, Zoho has been building capital. But it defines capital, not in financial valuation, but in a culture based on know-how, skills and the ability to work together for a common cause. This culture has developed a deep root system, based on values. What will the next 25 years bring? The only certainty is that it will be very different from the last 25 years. To make the best of the future, Zoho is committed to de-layering the technology stack, addressing the social inequality through localism and supporting a distributed environment with remote tools, and continuing to develop a strong shared culture. Zoho is rooted and connected.

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Introducing QAD Adaptive Applications

Adaptive ERP and More, all built on the QAD Enterprise Platform

QAD Adaptive Applications is a portfolio of flexible solutions for manufacturers, with QAD Adaptive ERP at its core. Founded in 1979 by Pamela Lopker, QAD has always set out to provide an integrated system, laser focused on manufacturing. That focus has never wavered, but over time the underlying technology and the functional footprint have evolved. Just as Material Requirements Planning (MRP) evolved into Enterprise Resource Planning (ERP) for manufacturing, QAD’s solutions have also grown and matured. Even as disruptive technology is killing off older companies, QAD is still growing strong. But the leadership is smart enough to recognize, “What got us to here won’t get us to where we are going.”

For years now the company has been committed to the Effective Enterprise, defined as “every business process running at peak efficiency and perfectly aligned to the company’s strategic goals.” QAD remains just as committed as ever to this goal, but now adds the ability to adapt. In the words of CEO Anton Chilton, “We need the Adaptive Enterprise to sense – plan – act. For this you need a different kind of technology.”

The journey that led to this different kind of technology began at a pivotal point in 2013 when QAD mapped out what it wanted to achieve:

  • full functionality operating in the cloud
  • easy extendability with no or low code
  • modular upgrades without redoing extensions
  • Internet of Things (IoT) support
  • real-time analytics
  • a powerful, web-based user experience

This realization led to the launch of a multi-phased internal project, called the Channel Islands Initiative. By 2018, what started out as a user experience initiative had been been transformed into an enterprise platform. The result: a re-architected underlying application infrastructure, a fresh set of RESTful application programming interfaces (APIs), and a new future-proofed user interface (UI), including the framework for connecting devices.

While features and functions are still important today – actually more important than ever – the secret to “adaptive” applications lies in the QAD Enterprise Platform.

Click here to read the full report.

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Aera Technology Turns Data Into Decisions and Actions

Aera Cognitive WorkBench: Your Next Breakthrough?

Technology is changing the world today. On a personal level it changes the way we live, work and play. On an enterprise level, it changes the way we communicate and transact business. The rapid pace of technology innovation and exponentially growing volumes of data can be both exhilarating and also a little frightening. Artificial intelligence (AI) is insinuating itself into our personal and professional lives in many ways. As consumers we are subjected to personalized targeted marketing. We frequently have conversations with our mobile devices (think Siri and Alexa). And self-driving vehicles, while not perfected (yet) are no longer the stuff of science fiction.

And yet, even as we are surrounded by all this technology, even as modern enterprise applications open new doors to us in terms of data accessibility and visibility, most important business decisions are still made in much the same way as they have been for decades. We spend hours pulling reports to gather data and review exceptions. Next we spend days analyzing it to determine what options are available. Then we spend weeks sending emails and making calls to gain a more complete understanding. We run through different scenarios, trying to play the “what if” game and figure out the best decision. Only then do we take action and by that time, guess what? The data and the conditions have already changed. Windows of opportunity may already have closed.

Aera Technology thinks there is a better way. Its data crawlers (patented real-time crawling technology) collect, index and harmonize billions of data points from complex enterprise systems and external data sources. Its processing engine analyzes data continuously (even while you sleep) to detect business risk and opportunities. After utilizing decision trees and algorithms to recommend the best course of action, its new Cognitive Workbench engages the relevant users to collaborate, evaluate and approve a suggested course of action. Based on your response, it learns what works and what doesn’t. And in the future, it will evolve to take action autonomously right in transactional systems like Enterprise Resource Planning (ERP).

Click here to read the full report.

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ANAPLAN: The New Age of Connected Planning

A Connected, Living, Actionable Plan for Continuous Improvement

In a recent report, Mint Jutras posed the question Is Planning & Performance Management A Marriage Made In Heaven? We concluded the key to marital bliss: more data, more tools, more often. Anaplan is one company that is committed to this approach. Back in December 2015 we applauded its solution as A Complete, Connected and Living Plan. But Anaplan hasn’t been resting on its laurels since then. The theme of its most recent customer event (Anaplan Hub 2017): A New Age of Connected Planning. Yes, Anaplanners are able to connect planning and performance management, but “the connected plan” means much more. Connected planning connects data, people and plans. And we’re not just talking about financial plans. We’re talking about being connected across the enterprise.

“Connected Planning”

Ideally, the enterprise should have a single, cohesive plan to maximize growth and profits. This should be both a financial plan and an operational plan. Of course there are different components of that plan, but you need all the different functions within an organization pulling in the same direction. This requires each function to narrow its focus and figure out exactly what it needs to do, without losing sight of the end goal. That is often easier said than done because traditionally this requires specialized tools and applications for each function, resulting in separate sales, finance, workforce and supply chain plans. How do you bring them altogether? Too often the answer is, you don’t.

After all, what software company provides financial planning, budgeting and forecasting, sales and operations planning (S&OP), workforce planning, supply chain planning (SCP) and inventory optimization (and possibly more) all in a single solution? While some of the giants in the industry can satisfy all these needs, they tend to do so with discrete applications. Very often those different solutions are the result of acquisition, which means they weren’t developed from a single platform and the integration is far from seamless, if it exists at all. Instead of a single, coordinated plan, you risk having disconnected or even competing plans pulling you in different directions, even though you work with a single vendor.

This is why Anaplan takes a completely different approach. Instead of the traditional point solution approach for each of these planning functions Anaplan offers a single planning platform that is cloud based. The team at Anaplan likes to say, “one platform, unlimited possibilities.” The goal is to connect the organization, end to end.

What’s New in this New Age?

Given the title of our December 2015 report, it is clear the concept of a connected plan is not entirely new at Anaplan. Yet not only has that connectivity evolved, it really is a new age at Anaplan.

New Leadership, New Focus

First of all, Anaplan has a new leader. New president and CEO Frank Calderoni came on board in January of this year. It was a tribute to the rest of the executive leadership that the company hadn’t really missed a beat since former CEO Fred Laluyaux had stepped down in April 2016.

But Mr. Calderoni came with some new ideas. He largely kept the same executive team that worked well without the guidance of a CEO, reflecting his trust in them. He also brought a three-pronged corporate strategy, focusing on:

  1. Customer first: Beyond the cliché, Mr. Calderoni hopes to bring this mantra into the very culture of Anaplan.
  2. More innovation: Expect the investment in improving the technology to grow, but Anaplan will carefully choose where to develop innovation and where to partner. For example, new workflow capabilities will be developed internally because they impact the customer interaction so directly. But Anaplan chose not to re-invent automation of data integration, choosing instead to partner with Informatica. And new visualization capabilities are courtesy of Tableau for advanced analytics.
  3. Focus on community: An engaged and connected community is important to any software company, but more so for Anaplan. It delivers “use cases” or “apps” on top of its planning platform. But as noted in a previous Mint Jutras report,these are not your traditional commercial apps. And Anaplan isn’t the only one creating them. Both partners and customers (i.e. the community) contribute to the growing pool of them.

New Context for “Connected”

Anaplan started out by offering a planning engine built on its patented HyperblockTM technology. This calculation engine supported (and still supports) a level of granular detail that lets you connect all the dots naturally. So back in December 2015, we used the term “connected” in the context of connecting the dots. By changing one (connected) dot, Anaplan automatically propagated that change to any other part of the plan connected to that data. And because visibility and transparency are built in, you can easily adjust the plan as you monitor performance, making it a living plan.

Anaplan is still able to connect all the dots, but today it connects much more.

More Data

First of all it connects to more data. As we noted in previous reports, a planning engine is useless without data and this data might come from any number of sources, including enterprise resource planning (ERP), customer relationship management (CRM), human capital management (HCM), additional financial applications or any other source of structured data. Back in 2015, most of the use cases for Anaplan centered on finance, workforce management and sales, relying primarily on internal data. Supply chain planning had only recently become a focus (late 2014).

In 2016, supply chain planning gained significant momentum for Anaplan. A year ago there were just 10 supply chain apps available. Today there are over 30. Supply chain planning can’t rely exclusively on internal data and communication. It wouldn’t be a supply “chain” if it didn’t involve other enterprises, including suppliers on the back end and customers on the front end. And a supply chain is only as strong as its weakest link, making connections a key criterion for success.

One customer, a manufacturer and distributor of high-end fashion accessories, credits Anaplan’s planning engine for its ability to significantly strengthen its forecast accuracy. Using the tool for demand driven planning has allowed the company to transition from pushing supply (with the hope of it being consumed) to pulling from an accurate forecast of demand. Given the volatility of fashion trends, nowhere in the organization is a living plan more important. And nowhere is it more important to connect directly to external forces driving the seasonality and downright fickleness of the world of high fashion. And nowhere is communication and collaboration beyond internal employees more important.

Prior to doing demand planning with Anaplan, the company had been overly dependent on the information management (IT) project management team to respond to needed changes in planning models. Not only was planning too slow and cumbersome, but the process itself was not flexible, and it took way too long to respond to change. But with Anaplan, the planning team became more self-sufficient and the planning process itself went from being performed monthly to weekly. The company currently plans a week of production and is heading toward daily planning. Given the volatility of high fashion, its products might only stay on the shelf for 3 months. It is critical to connect the plan to sales, social and economic drivers. With Anaplan, the frequency is higher and the data is fresh and planning is connected to reality.

 More Functions, More People, More Connections

While Anaplan’s planning engine is capable of connecting all the dots, oftentimes companies need to work hard to get all the different functions in the organization to play along. Yes, Anaplan is a platform for planning, but typically Anaplan’s customers don’t start out looking for a platform. They start out with one particular group looking to solve a particular problem. In solving that problem they may be collecting data from other parts of the organization and connecting those dots. But there are many more potential problems to solve and more connections to be made.

Anaplan customers tend to start with a single pressing problem, which is solved with a custom-tailored use case. On average, they then go on to solve at least two more, often related problems. Some wind up with 10 or even 30 use cases built on top of the platform. The more use cases, the more connected the enterprise and the more people are pulling together, all working from a cohesive plan.

So what holds customers back from taking full advantage of the platform in order to satisfy all their planning needs? Probably the most common obstacle is the custom nature of the solution. Remember, Anaplan started out as a planning and modeling engine, which makes it flexible and powerful. But if a department within the organization is looking for a quick fix, right out of the box, they might wind up looking elsewhere.

If you have a generic problem and are looking for a rigid, prescribed way of dealing with it, or perhaps you yourself really don’t know how to (theoretically) solve the problem, the solutions that work right out of the box are perhaps your best bet. But if you have a problem that is rather unique to your particular business or that calls for regular changes or course corrections, and you know how you would solve it if you just had the right tools, then a powerful platform that is easily tailored by the business user without a lot of assistance from IT might be the better solution. That’s Anaplan.

Back when Anaplan’s planning platform was first conceived you would have had to start solving the problem from scratch, perhaps with the assistance of a consultant. This is becoming less the case as more and more apps are added to the library of use casesAnaplan App Hub, increasing the likelihood that someone else has solved at least a similar problem previously. But even if they start with a pre-defined app, Anaplan customers will typically custom-tailor it to address their specific needs, either on their own or with the assistance of a growing number of partners.

You might fear that you don’t have the necessary technical skills to custom-tailor the solution. But don’t worry. If you can work a spreadsheet, you have most of the technical skills you need. You might need some assistance from the IT staff to setup the automated data integration from various sources of structured, and perhaps even unstructured data. But since you have freed them up from having to do the heavy lifting normally associated with a custom-tailored solution, they have much more time to work with you on the more strategic stuff.

Over time, most Anaplan customers see a clear path to moving on to solve the next problem and chances are the average number of use cases deployed will steadily rise.

Case in Point

Another Anaplan customer, achieved a 900% return on its investment (ROI) in two years.

A global leader in innovative comfort footwear for men, women and children is a vertically integrated enterprise with five factories around the world. The head of global supply turned to Anaplan to optimize supply planning.

Many of the offered products can be made in any of the factories, although some do some specialized production. Prior to deploying Anaplan, the company had to rely on a planner’s gut feel as to the best source of supply. But there was no financial consideration factored into these decisions even though the trade-offs between cost to make and cost to transport were significant. The head of global supply felt the decisions needed to be more fact based. She needed to be able to easily rebalance allocation. She needed to be able to easily and quickly consider various “what if” scenarios in order to not just make a sourcing decision, but to make the optimal sourcing decision.

It took one year to completely develop a customized use case for optimization. The team tested for six months and then ran in parallel with the old methods in order to prove the cost effectiveness.

They changed some products from being single sourced to dual sourced. They found that while the cost to make certain products in Europe was higher, the offsetting savings were huge. It was also a huge learning experience because some of what they discovered was counter-intuitive. But with the real facts in hand they were able to save about one million euros – a 900% ROI in two years. The long ramp-up was not so much dependent on the skills of the people doing the setup, but rather the nature and complexity of the problem, and the number data sources and volume of data required.

The next step is to move from detailed allocation to more strategic planning, a necessary step to convince the rest of the organization that this disruptive technology is not too good to be true.

Conclusion and Recommendations

In today’s fast-paced world, you need to be working from a well-formulated plan, around which all parts of the enterprise can rally. You also need to marry that plan to performance and make it a living, breathing plan – one that is well grounded in real data and able to respond to the forces of change that impact businesses every day. And the plan needs to bring all the different functions in the organization together. Unfortunately today too many plans are built on solutions that are anything but happily married. Even the different departments live entirely separate lives, either consciously or unconsciously avoiding each other or, even worse, they are in contentious relationships.

When it comes to planning and performance management, Anaplan is not the only kid on the block. But no other company does it quite like this kid. Based on its own in-memory Hyperblock technology, Anaplan delivers a platform that is flexible enough to adapt to your specific needs and solve your specific problems. But it is easy enough for the nontechnical user to work with, especially with a growing number of pre-built use cases.

If your different financial and operational plans are not well coordinated across the enterprise, perhaps it is time to connect them. If your planning and performance management does not enjoy marital bliss, perhaps it is time to connect them. If your current plans are not based on real data, perhaps it is time to connect them. Anaplan’s connected planning is designed for all these connections, but perhaps most importantly, it may just be the path to connect you with reality and guide you into the future.

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Anaplan’s Smart Business Platform

A Different Kind of Platform for Planning

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

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

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

A Business Platform for Planning

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

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

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

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

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

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

Click here to download the full report.

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Anaplan: A Complete, Connected and Living Plan

A lot of planning can and should happen in any company. It all starts with a business plan, followed by financial planning, budgeting and workforce planning. Then you better have a sales plan, with territories, quotas and incentive compensation, which should tie in with a revenue plan. Of course this leads to demand planning and sales and operations planning. If you want to grow those sales, you better do some marketing and campaign planning. If you sell a consumer product, you might have a trade and promotion plan and you’ll definitely have to plan for inventory. Maybe you need to plan projects. And throughout, you need to watch your cash flow.

But how do you tie all these plans together? How do you stay vigilant, monitor performance and adjust the plan as you move forward? More often than not, you don’t. You rely heavily on spreadsheets and even if you have software tools to help you plan, each department works in its own silo, oftentimes using disparate solutions that essentially ignore each other. This can happen even when you buy these different solutions from a single vendor.

Anaplan has set out to solve this problem by creating an enterprise planning cloud designed to solve any planning challenge across all functions of your enterprise. Unlike most plans, developed at an aggregate summary level, Anaplan’s patented technology supports a level of granular detail that lets you connect all the dots naturally. And because visibility and transparency are built in, you can easily adjust the plan as you monitor performance. Instead of letting your plan lie dormant on the shelf, only to be dusted off periodically (if ever), it becomes a living plan.

The Anaplan Approach

Anaplan takes a platform approach to planning. At the core is its planning engine, built on 64-bit in-memory technology, which facilitates real-time modeling that can handle large volumes of data. As a result, planning can be done using very detailed data that might not be possible without in-memory computing power – think of forecasting for each customer down to the product level, rather than having to make a regional forecast in total or by product category. The planning engine uses Anaplan’s patented HyperblockTM calculation engine. It can perform modeling, including the ability to do simulations prior to making changes. But when changes are made, a full history is maintained.

While this planning engine is extremely powerful, it is useless without data and this data might come from any number of sources, including enterprise resource planning (ERP), customer relationship management (CRM), human capital management (HCM), additional financial applications or any other source of structured data. Therefore data integration is an important piece of the Anaplan Planning Platform. Anaplan has prebuilt many common connectors, but also provides application programming interfaces (APIs) to facilitate building out more custom connectors quite easily.

While the planning engine sits on top of the data, the user interface sits on top of the planning engine. Here is where individual Anaplan customers develop the model map (typically by dragging and dropping elements) and tweak the settings. This is also where the reporting, the analytics and the actual planning gets set up. If you are savvy enough to use Excel, you are savvy enough to set up planning and analysis in Anaplan. In fact the user interface looks and feels a lot like Excel (by design). However, Excel has two dimensions whereas Anaplan let’s you look at your data in any and all of the ways that make sense to your business.

Planning and performance management are business exercises, but all too often it is the Information Technology (IT) department that is required to do the heavy lifting. Plans and actuals often reside in different systems and can only be compared once a data warehouse is built, populated and periodically refreshed. This type of scenario leads to a very common concern among business leaders: over-reliance on IT.

The 2015 Mint Jutras Enterprise Solution Study asked leaders to check off all causes for concern over solutions used to actually run their businesses. Forty-one percent (41%) expressed concern over integrity of data, and an equal number (also 41%) were concerned over difficulty in reconciling different sub ledgers and different systems. This situation is only exacerbated during the planning and performance management process. The last thing you need is to make a plan based on faulty assumptions that come from bad data.

Relying too heavily on IT also means waiting for models to be built, and what happens when the model itself needs to change? Are you able to tweak it mid-cycle? Are you able to perform a “what if” analysis?

Over-reliance on IT also means the results aren’t available in real time and are only as good as the last request for analysis.

Not only does Anaplan provide real-time access to the real data (not one or more copies that must be periodically refreshed), but also it removes IT from the middle of the planning process, except of course in IT planning.

Additionally, you have applications built with the platform. Anaplan (and its partners) provide some pre-built apps, but these are all developed with the app designer, so they can easily be modified and managed. Or you can build your own using model templates, pre-built algorithms and business rules.

A Complete And Connected Plan

Planning means very different things to different leaders throughout your organization. If you are in Finance you think of budgeting, cost and profitability analysis and cash flows. But you also forecast revenue. You probably think first of applications for financial planning, budgeting and forecasting.

If you are in manufacturing operations you think of material requirements and manufacturing resource planning (MRP and RRP), long and short term capacity planning (CRP). You worry about the demand plan and how that impacts your supply chain. You try to optimize your inventory. You have a sales and operations plan (S&OP), which by necessity includes a workforce plan. You might try to accomplish all this in your ERP solution, perhaps extended with some specialty applications.

In Sales? You think of account segmentation and scoring, territory coverage and quota assignments, as well as incentive compensation planning. Your primary “go to” application might be sales force automation (SFA) and/or customer relationship management (CRM). But does it really support these planning functions or is all the information sitting in spreadsheets?

Meanwhile your human resources (HR) department is building out a workforce plan. Is that tied in with your sales plan and your manufacturing operations plan? If you start running significantly ahead of your sales plan, how does this potentially impact demand, inventory and other operational costs? What if you are falling short? Does that mean you start to cut jobs? What impact will this have on your ability to respond to a rebound in sales? Are you closing the door to recovery? How does all this impact margins, cash flow, debt, credit?

Anaplan makes these connections based on the different data elements that make up the plan. If inventory (at a warehouse, regional or corporate level) is part of the operational plan and also part of the sales plan, these plans are intrinsically and inherently tied together. Actual sales ties the sales forecast to the revenue plan to accounts receivable to cash flow and profitability goals.

The Right Level of Detail

The key to tying this all together is developing the plan at the right level of detail. If forced to plan at too high a level, you may not be able to connect the dots or even spot problems. You may appear to be right on track, hiding the fact that one region is totally over-performing while others are struggling. Will you have enough people and product in place to service that regional demand or will you be facing chronic shortages in that region while you sit on excess capacity elsewhere? Left unchecked, overall performance could take a nosedive. On the other hand, you may be falling short of your goals because of a serious failure limited to just one area. Over-reacting to an overall shortfall can result in blanket cost cutting measures that could make matters worse.

Anaplan lets you plan and manage performance at the lowest level of granularity required, pinpointing failure or success, and taking appropriate action. Anaplan has already built apps to use as a start (or end) point for functions within finance, sales, marketing, human resources, supply chain and operations. No need to start from scratch. Give yourself a jumpstart in launching what can and should be an iterative process, including the analysis of simulated results.

With the Convenience of the Cloud

And oh, by the way, Anaplan does all this in the cloud. According to Mint Jutras research, few companies today are looking to build out on-premise deployments. When it comes to applications, like ERP, that are used to run the business, companies are almost twice as likely to consider a Software as a Service (SaaS) deployment as a traditional on-premise implementation. We ask the question each year, “If you were to consider a solution today, which deployment options would you consider?” Participants are allowed to check any or all options (Figure 1).

Figure 1: Deployment Options that would be Considered Today

Anaplan fig 1Source: Mint Jutras Enterprise Solution Studies
* Option added in 2015
Note: The time span between the 2011 and 2013 studies was about 18 months as Mint Jutras shifted the timing of the study during the calendar year.

This does not mean SaaS will dominate overnight, simply because there are so many of these solution on premise today, and many are reluctant to simply rip them out and replace them. In fact, with the availability of complementary solutions such as Anaplan, companies have the option of leaving solutions in place while they extend functionality and venture into the cloud.

There are many different reasons for this preference for cloud, not the least of which are cost, ease of upgrade and support of increasingly distributed environments. But perhaps most important to the planning functions, the cloud facilitates collaboration. A plan that is made collaboratively is much more easily accepted and embraced. With fewer constituents fighting the plan and more working together, the higher the likelihood of achieving your goals.

Make it a Living Plan

All too often the planning process is time-consuming and painful. The sooner it’s done, the sooner you can get back to your business. But if that’s the way you feel – and react – you aren’t getting the most value out of the process or the plan. And yet most enterprises today separate the processes of planning and performance management. They quickly lose whatever confidence (if any) they had in that plan.

And then of course, there’s change. Business conditions change. The economy changes. Competition changes. New products and new business models enter the market. On the one hand, you need to keep a snapshot of your original plan (and Anaplan does that). After all, you need to see how close you came to predicting outcomes, in order to continue to get better at it. But continuing to operate against a plan that you know is not achievable is like continuing to behave the same way while expecting different results. That is the very definition of insanity. Or, on a more positive note, continuing to blow out sales quotas with the same inventory plan is a sure way to put the brakes on exceeding quotas.

Anaplan takes a different approach. It fuses the two processes together. You essentially manage performance from the plan. All the reporting and analysis ties back to the plan, which remains front and center of reporting and analysis. You don’t put the plan on the shelf and forget about it until you remember your bonus might be affected or the board of directors starts asking the tough questions. You want to make it a living, breathing plan. That’s the Anaplan approach.

Summary

In today’s fast-paced world, it’s good to have a plan. But it’s not enough just to have a strategic business plan. Finance, Sales, Marketing, HR and Operations can no longer afford to work in their own silos of data, applications and reporting. They all need plans that pull together in order to achieve the overall company goals. The plan needs to be developed collaboratively; it needs to be complete and connected. But in order to take full advantage of opportunity today, it needs to be a living plan. As many of us are closing the year and looking forward to growth in the coming calendar year, now is the perfect time to scrutinize your plan… and perhaps scrutinize the tools used to develop it, manage it … and get ready to exceed your goals for 2016.

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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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Plex Systems Takes a Page From Manufacturer’s Play Book

CONTINUOUS INNOVATION DRIVES ERP DEEP ON SHOP FLOOR

Continuous improvement has long been the mantra for many manufacturers. Kaizen and other formal programs like Lean, Six Sigma, and Total Quality Management (TQM) have dominated the manufacturing scene for years. But what about the world of enterprise software for manufacturing? Not so much. Many of the solution providers that serve the manufacturing sector understand the concepts, but don’t apply them to software development. Sure, these software vendors innovate, but not in a continuum, especially when it comes to broad applications like Enterprise Resource Planning (ERP). Except for one: Plex Systems. Believe it or not, Plex can and often does deliver enhancements to its Plex Manufacturing Cloud on a daily basis. Too much, you think? Not at all; its customers love it!

Why Do Consumers of ERP Expect Less?

Many consumers of ERP are conflicted over innovation and upgrades. On the one hand, when functional gaps or missing features or cumbersome processes are detected, customers demand enhancements. On the other hand, we find manufacturers unwilling and unable to actually go through the upgrade process. So the whole process becomes a Catch 22.

If these enhancements are delivered through the normal upgrade cycle, customers can find themselves waiting a long time. Major upgrades to ERP are typically delivered once every 12 to 18 months, or sometimes over a longer cycle, partly by customer request. They simply can’t accept and consume upgrades any faster. But that doesn’t mean the typical ERP client waits “just” 12 to 18 months for a requested enhancement. If your enhancement request just misses the planning phase of the cycle, you might have to wait for another cycle before it is even considered, which means you might wait two to three years for it to be delivered. And even then, it might not make the cut.

But let’s say it does and your enhancement is delivered with a major upgrade within a year (or maybe two or three). Do you jump right on the release? If you are like most of the manufacturers participating in our annual Mint Jutras Enterprise Solution Study, the answer is, “probably not.” Only 14% of manufacturers tend to be early adopters of releases (Figure 1). About a third (34%) upgrade on a regular basis but not as early adopters. This means they will likely wait for those early adopters to shake out all the bugs and for the solution provider to smooth out all the rough edges. This might take three months? Six months? Another year?

Or you might be like the 31% that are likely to skip releases. You might not get too far behind, but if you skip a release, and upgrades happen every 12 to 18 months, you won’t experience any real innovation for at least two to three years.

Figure 1: Approach to Upgrades

Fig 1Source: Mint Jutras 2015 Enterprise Solution Study

Why? Largely because upgrades can be disruptive and costly. We asked our survey respondents to stack rank five individual factors in terms of the likelihood each will keep them from upgrading when a new release is available. We used a scale of 1 (least likely) to 5 (most likely). The results are shown in Table 1. As you can see, potential disruption to the business is at the top of the list, but the rankings are very close. Your typical manufacturer understands the cost and effort of a traditional upgrade and will be reluctant to spend the time and money without expecting a significant payback.

Table 1: Ranking of factors preventing upgrades

Table 1Source: Mint Jutras 2015 Enterprise Solution Study

 As a result, although software development is typically a continuous process, the results are not delivered continuously. Most solution providers create enhancements, bundle them up, test them out and issue major upgrades periodically, hence the traditional 12 to 18 month cycle, with just some bug fixes and/or minor releases in the interim.

Plex Customers Have Come to Expect More

While this type of upgrade cycle has been generally accepted and expected by those running traditional, on-premise solutions, Plex customers have come to expect more. Perhaps they were frustrated by delays, got impatient and dissatisfied and were seeking more from their software vendor. Or perhaps they chose Plex for other reasons. Either way, they soon became spoiled by the “Plex way” of innovating.

Of course any solution provider that offers its software exclusively as a multi-tenant SaaS solution has a distinct advantage of only having to maintain a single line of code. Solution providers that deliver on-premise solutions are forced to maintain multiple versions of the software. Very often the software is offered on a choice of platforms and databases, and the vendor must support multiple release levels determined by their customers’ ability to keep pace with upgrades. For every person-day they spend on innovation, they spend another multiple of that day making sure it works across various environments. The more choice they offer, the more permutations and the higher that multiple.

More and more we find vendors riding the cloud wave. They are taking on-premise solutions and moving them to the cloud and offering alternatives for deployment. Some of these moving to the cloud will be multi-tenant; others are single-tenant, delivering more of a hosting option. But even those that offer multi-tenancy will still be forced to maintain multiple versions and will be limited by their on-premise customers’ ability to keep pace with innovation. Only those that offer a multi-tenant SaaS solution exclusively can devote their entire development budget to innovation. That’s the real beauty of having (and maintaining) a single instance of the software, and nobody takes better advantage of that than Plex Systems.

The Plex Manufacturing Cloud is not the only ERP solution that is offered exclusively as multi-tenant SaaS, but it is one of a very few designed exclusively for manufacturers. And of these SaaS-only manufacturing ERP solutions, Plex’s is (by far) the most mature. But not all SaaS vendors take full advantage of the opportunity for continuous innovation. Some do offer more frequent updates and all relieve the customer of much of the burden of the upgrade process. But nobody else (that I know of) does it like Plex.

 Daily Updates – Responsibly

Plex can and often does update the solution every day. You heard (or read) that correctly: every day.

Of course Plex doesn’t pull the rug out from under its customers every day. The development team adds all new features in such a way that a customer must “opt in” to use them. Many of its customers evaluate these innovations on a periodic basis, much like a release cycle. But they are never faced with the “all or nothing” kind of scenario so common in upgrading on-premise software. If they know a valuable new feature is coming, they might jump right on it and not wait for that periodic review.

User Interface Refresh

Plex’s new, redesigned user interface (UI) is the perfect example of this. Plex is methodically updating every screen used by its users, including the navigation screens used to perform back office functions, as well as the control panels used on the shop floor. As each of these are completed, they are introduced into the live product, but the old screens and the old navigation methods are still there.

Of course Plex is only converting those functions its customers are actually using. Over time, newer and better features and functions may have replaced some of the screens, inquiries and transactions. Eventually people stop using the old functions and Plex can then get rid of them. In an on-premise environment, solution vendors have no visibility into what is actually being used and what is not used. So, once code is delivered, it tends to live on forever.

But because all customers are using a single instance of the software running in the Plex Manufacturing Cloud, Plex has full visibility into not only what is being used, but also how often it is used. While this might seem to be a bit big brother-ish to some, customers don’t seem to mind. And it puts Plex in the unique position of being able to eliminate code. In fact the development team recently deleted 30% of its existing source code. And as Jim Shepherd, Plex’s Vice President of Corporate Strategy noted, “If we couldn’t get rid of code, ours would get as big and unwieldy and ugly as everyone else’s.”

You know how good it feels when you finally clean off your desk at work, or clean out your closets at home. Think how good the software developers felt when they could clean out 30% of the code, making that much more room (figuratively) for all the new features, functions and innovation they continue to work on. And indeed the development team has been busy. Combine that with the fact that Plex perfected rapid application development processes more than a decade ago and you get a regular cadence of new features and new offerings.

Here’s an example of some of the areas they have been working on:

Investment in process manufacturing

In order to address the market sitting right outside its doors in nearby Detroit, Michigan, Plex got very good at addressing traceability. The strength of the traceability functions built for automotive discrete manufacturers have led Plex into a fair number of food and beverage and similar process-related industries. Further investment in lot management, lot attributes, lot tracing and unit of measure management will be made in 2015. That investment will also continue into the future with even more sophisticated unit of measure management, costing, yield management, recipes and pricing/promotion management, as well as further work on compliance and FDA validation.

Finite Scheduling

Plex has already released its Advanced Production (Finite) Scheduling modules, but work continues to bring attribute-based grouping (e.g. watch out for allergens!) and sequencing and sequence-dependent changeover time determination (better go from light to dark when applying coatings), and labor-driven capacity determination (knowing how many machines is not enough).

Plex Enterprise Edition

Plex Enterprise Edition is a suite of applications built to support complex, global, multi-plant manufacturing organizations with multi-entity financial and supply chain management requirements. It was first introduced at PowerPlex 2014, with finance and accounting capabilities (accounts receivable, accounts payable, general ledger and cash management). But work continues throughout 2015 on centralized sales and purchasing functionality, along with inventory work in progress. The team will then move on to enterprise manufacturing (engineering, scheduling, production) and enterprise asset management (fixed assets, treasury management and human resources).

Tech Gadgets and Automation

These are just a few examples of the types of feature/function development that has been underway at Plex. In addition, the team has also been busy experimenting with new technology. This team is led by the ultimate “gadget guys.” But this is not frivolous work. The team also “knows” manufacturing and is always in search of new ways to make manufacturers more efficient and productive. This means new ways of capturing data, automating processes and engaging with ERP both in the back office and on the shop floor. The shop floor was the prime focus of a very interesting demo the Plex team put together about a year ago, but has recently updated.

The demo a year ago was an interactive demonstration of a manufacturing process that took you from the receipt of material through to shipping of a finished product. It was, and still is, a good example of new and different ways of engaging with ERP. You see, we didn’t use a keyboard. But we did use scanners and sensors, a light curtain and yes, there was even a blue button that you might call the “easy button” that signaled an operation was complete. Never once did we go through a traditional menu structure. Each work center looked and felt a little different, and even the devices used for data capture varied, because the work being completed was different. This was a far cry from early days of ERP and confirmed my belief that the best user interface (UI) is really no UI at all.

And this year there were some new “wearables” on the (simulated) shoGoogle glassp floor, some of which were just being prototyped. Plex is participating in the new Google Glass @Work program including Google Glasses built into safety goggles. It is experimenting with smart watch and blue tooth technology and beacons that recognize when someone wearing these devices comes within range of a work center. The goal is to make smart watchdata capture as easy, automated and hands-free as possible.

Manufacturers are widely known for their pragmatism. Unlike some consumers today, they will not go out and buy the latest new gadgets just to look cool or simply because they can. These devices need to add real value Beaconand that is exactly what the Plex team is searching for in this experimental phase.

Not Slowing Down Anytime Soon

With a history that spans almost 20 years, and a product that has matured significantly, you might think innovation might be slowing down at Plex. Quite the contrary. The Plex development team has nearly doubled over the past couple of years. Even though it is already a complete manufacturing ERP solution, with particular depth in functionality in manufacturing execution (MES), there is still lots to do. Along with the wearable technology and the refreshed user experience, it is also working on a universal search capability, master production scheduling, advanced manufacturing intelligence, along with the additional process manufacturing, finite scheduling and multi-national, multi-location capabilities mentioned earlier. And much more.

As an industry analyst, it is my job to stay objective. But every once in awhile a company comes along that does something very unique. Plex’s combination of rapid application development, cloud delivery and commitment to customer satisfaction is the prefect trifecta for this uniqueness. And on top of that, Plex does it very well. Kudos to the Plex team for taking a page from the manufacturers they serve so well and delivering continuous innovation.

 

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The Three Dimensions of SAP Business ByDesign Set The Stage for Growth Part 1

Simplicity, Flexibility, Extensibility in the Cloud

In Cloud ERP: The Great Enabler of Growth, Mint Jutras examined how Enterprise Resource Planning (ERP) solutions delivered as software as a service (SaaS) help companies fuel and simplify growth by addressing people challenges and mitigating risk, while maintaining governance and control. Cloud solutions enable you to fail (or succeed) faster, allowing you to focus on the next and best opportunity for growth. While some of the factors that enable growth are inherent in any SaaS solution, not all cloud ERP solutions are created equal. Targeting mid-size and fast growing companies, SAP claims its SAP Business ByDesign is designed specifically to help these companies grow and maximize profits. In this 3-part series of posts I’ll investigate the merit of those claims.

This is Part 1 of that 3-Part series. If you prefer to skip the suspense you can read the full report now.

SAP Business ByDesign was born in the cloud in 2007, long before “Run Simple” became the mantra of SAP. Yet the initial objective was to simplify, delivering a 100% cloud-based solution for the small to mid-size enterprise (SME), while also fully leveraging SAP’s experience and infrastructure. Instead of reworking an existing product, SAP took a “start over” approach, and over the past seven years has developed and refined a three dimensional design philosophy. Those three dimensions: simplicity, flexibility and extensibility. This philosophy is a perfect prescription for a growing company that needs to get out of the gate fast, but has not yet reached, or perhaps even determined its final destination.

In order to enable growth a solution must be broad (in terms of functionality), flexible and extensible. SAP attacks these requirements with a modern and modular architecture that was born in the cloud. It delivers a next generation user experience that continues to evolve and a business configurator that has become the gold standard within SAP, helping organizations adapt as they grow and change. And finally, it embeds reporting and analytics right in the application itself so that continual oversight and analysis does not become an afterthought.

Architecture

SAP Business ByDesign is modular by design. This should not be confused with simply being comprised of a set of modules. By definition, any ERP solution is an integrated suite of modules. It is how modules are coupled together, or in the case of SAP Business ByDesign, how they are decoupled, that makes a solution flexible or rigid. Most mid-size to large enterprises today no longer grow to be large, monolithic enterprises. They grow modularly, spawning new divisions or subsidiaries to expand to address new products, product lines or territories. But these different business units must interoperate smoothly and seamlessly, making obsolete those legacy ERP solutions that were similarly designed as rigid and monolithic.

One of the guiding principles of the design of SAP Business ByDesign is decoupling. This decoupling is delivered in a variety of ways. Business logic is decoupled from the user interface, allowing for ease of translation and also the reuse of logic and services across any number of different types of interfaces. The same transactions can be triggered whether you are using the product through a browser on a desktop, a mobile application or no user interface at all. Through process automation, sometimes the best user interface is no interface.

In addition, the software modules themselves are essentially decoupled. Instead of hard-coded logic, communication between different modules is message-based. This makes it far easier to add or swap modules and business scenarios as needed or even to consume innovation. With a rigid monolithic solution, the entire enterprise needs to march forward together, oftentimes making some departments wait for much needed enhancements because other parts of the business aren’t ready for change.

While there is a lot of value to be gained from this type of decoupling, there is one area where embedding functionality adds more than it detracts in value. If reporting and analytics are completely separate, they often become an after thought, something the implementation team never quite gets around to delivering. And even if they do, if delivered as an entirely separate function, they are often out of sight and out of mind.

Separating reporting and analytics is often required in order to preserve or improve performance, hence the emergence of solutions for online analytical processing (OLAP) separate from online transaction processing (OLTP). However, from the beginning, SAP Business ByDesign was built using an in-memory database that removes those performance issues and allowed SAP to embed analytical capabilities within the solution. In addition to bringing this analysis front and center, it also provides real time access from a wide variety of data sources, including data from sister companies or headquarters, eliminating delays and speeding decisions. The speed and capacity of in-memory also removes the need to limit the amount or granularity of data needed to help determine where and how to invest next. Instead of using aggregated summary data that might be misleading, SAP Business ByDesign users can dive into a level of detail that would be unmanageable and unimaginable using legacy architectures.

Up Next…

In the next post (Part 2), we’ll take a look at what SAP has done with the user experience and configuration of SAP Business ByDesign.

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“Ease of Use” of Your Enterprise Software: More than Just a Pretty Face

Or is it? It All Depends on Who You Ask.

For several years now I have been listening to enterprise application software vendors touting “beautiful software.” Yes, the whole customer experience and ease of use of software have become increasingly important, influenced in part by the consumerization of IT. However, I am of the firm belief that beauty is in the eye of the beholder and efficiency is far more important than “beauty.”

This belief has been backed up by data. For the last few years I have asked survey participants in my annual enterprise solution study to select their top three highest priorities for ease of use. The options I provide to them are shown in the chart below (Figure 1). A “visually appealing user interface” is my interpretation of “beautiful software” and has consistently ranked close to the bottom while indicators of efficiency (including time to complete tasks and intuitive navigation) were right up at the top. This year we saw beauty ranking a little higher, but it still comes out towards the bottom

Figure 1: Defining “Ease of Use” by Selecting “Top 3”Figure 1 Blog

Source: Mint Jutras 2014 and 2015 Enterprise Solution Studies

However, with all the talk about the influence of the Millenials in the workforce we decided it was time to get a better picture of this influence. So we captured participants’ age and grouped them accordingly as Baby Boomers (born between 1943 and 1964), Generation Xers (1965 to 1981) and Millenials (since 1982). All three categories had adequate representation for us to make some comparisons, with 61 Millenials, 162 Gen Xers and 108 Baby Boomers. And we found that these priorities depend a lot on who you ask (Figure 2).

Figure 2: Defining “Ease of Use” by Selecting “Top 3”

Figure 2 BlogSource: Mint Jutras 2015 Enterprise Solution Study

While minimizing time to complete tasks still takes the lead for all three generations, it does so with a much wider margin in the Baby Boomer generation. Two out three Baby Boomers selected this, compared to only one out of two Millennials. And look what came in second. A very close second for Baby Boomers was intuitive navigation, while beautiful software (a visually appealing user interface) was virtually tied for first in the youngest of the three generations. Yet only one in five Baby Boomers (and one in four Gen Xers) selected beautiful software as a ”top 3.”

Indeed, if you are an enterprise solution provider targeting Millenials, the visual appeal of the user interface is far more important than if your buyer is a Baby Boomer. The truth of the matter is that all groups are important, particularly in selecting software that essentially runs your business. While it is most likely that a Baby Boomer or a Gen Xer is signing off on the final decision, it is equally certain that Millenials will be part of the evaluation and selection process. And once selected and installed, representatives from all generations are certain to be using the software.

So what happens when software is hard to use? We asked survey participants this exact question, asking them to select one of four possible responses (Figure 3). While many associate the demand for a better user experience with the consumerization of IT and therefore attribute it to the younger generation, we actually find the Baby Boomer generation the least tolerant of software that is hard to use. And this from a generation accustomed to “hard.”

Figure 3: What best describes your response when software is hard to use?

Figure 3 BlogSource: Mint Jutras 2015 Enterprise Solution Study

Let’s face it. Early enterprise solutions, including ERP, were anything but user-friendly. They were hard to learn and hard to use. Because early ERP systems didn’t work exactly the way people worked, workers first had to learn how to do their jobs, and then separately had to learn how to enter data into ERP, and/or how to extract it. Depending on how closely (or not) these two were aligned, the same ERP that was supposed to make life easier, sometimes made it harder. While Baby Boomers might not claim to have walked five miles to school in two feet of snow (uphill both ways?), they were accustomed to “hard.” They didn’t revolt. They adapted, but often that meant working around the system instead of with it. And as you can see, they are still more than twice as likely as younger workers to do just that. Why? Because they can. They’ve been around long enough to know the business inside and out. They don’t need a software package to tell them what to do or guide them in how to do it.

On the other hand, the younger generation is much more dependent on technology and much more easily influenced by “beautiful software.” And they have the Baby Boomer generation to thank… or blame for that.

While Baby Boomers might have simply kept quiet and worked around these early systems, on a personal level they also wanted “better” and “easier” for the next generation. And they delivered that, providing all the “modern conveniences” to their children and grandchildren. And of course the electronics of today were a natural progression for these next generations. They took to Xbox and computer games like fish to water. And games led to computers and cell phones and then smart phones, and then tablets. Computers led them to the Internet. Smart phones and tablets led them to “apps.”

When the generation that grew up with consumer technology entered the “real world” and got jobs, they couldn’t understand why the “apps” they used at work weren’t as easy to use as the ones they were using on their smart phones and tablets. Unlike the older generation that knew the business and the business processes inside and out, and therefore knew how to operate outside of the system, the younger generation had become dependent upon technology.

While years ago only a select few employees within a company ever put their hands directly on solutions that run the business, those days are long gone. Today almost half of employees have some access to solutions like finance and accounting or ERP, beyond those self-service functions like benefits administration, paid time off and purchase requisitioning. And this percentage is growing. How easy the software is to use correlates strongly with how well it is used and the benefits derived. It behooves any company to make sure users can and do make the most and best use of the software. The onus is on the solution providers to make sure the applications are not only robust in terms of features, functions and technology, but also easy to use, including all the different aspects. And it’s a lot easier to like a pretty face.

We are continuing to collect more responses to the Mint Jutras 2015 Enterprise Solution Study so the survey is still open. If you are consumer of enterprise software and are interested in receiving a summary of all our results, please participate by taking the survey. Click here to take the survey. We will need your email address to send you a link to results, but rest assured we never share any contact info and responses are analyzed only in the aggregate.

If you an enterprise solution provider and are either interested in surveying your customers and/or getting more insights into the data we collect and our analysis, please contact Lisa Lincoln at lisa@mintjutras.com.

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