Meet SAP Leonardo

A Digital System of Innovation

The current version of SAP Leonardo made its debut at SapphireNow 2017. On the main stage, SAP CEO Bill McDermott called it a “digital system of innovation” – a catchy description which doesn’t really tell you what it is. In all fairness to Mr. McDermott, this is technically a relaunch, so perhaps he assumed a level of knowledge that proved not to be universal. Previously Leonardo was SAP’s brand for IoT, but the re-launch positions it much more broadly.

So what is SAP Leonardo? It is essentially a toolbox of digital technologies, including machine learning, block chain, big data, data intelligence, IoT, analytics, and more. SAP will not only market and sell these tools individually and collectively but it will also package them with design thinking and services to deliver innovation to solve specific business problems. Yes, it is a brand, but it is not a suite. A suite implies integrated components working towards a single (perhaps broad) purpose. Yes the different components can and do work together, but they also can stand alone. Even calling it a “system” is a bit misleading. Think of it more as a set or a collection.

Once you understand that these are digital tools that will essentially deliver innovation, referring to SAP Leonardo as a digital system of innovation actually makes a lot of sense.

Appropriately Named?

SAP Leonardo is apparently named after the Italian Renaissance man, Leonardo di ser Piero da Vinci, more commonly known as Leonardo da Vinci or simply Leonardo. Leonardo was an Italian polymath. A polymath (Greek: πολυμαθής, polymathēs, “having learned much”) is a person whose expertise spans a wide variety of different subject areas, enabling him or her to draw on complex bodies of knowledge to solve specific problems. According to art historian Helen Gardner, the scope and depth of Leonardo’s interests were without precedent in history, and “his mind and personality seem to us superhuman, while the man himself mysterious and remote.”[1]

The digital technologies included under the SAP Leonardo brand also span a wide range of subject areas, and can indeed solve specific problems. And when technologies such as machine learning and artificial intelligence are combined with data, big and small, the result could be viewed as remarkable – almost superhuman. To all but the true technologist, they do appear to be mysterious.

Our research shows these types of technologies are indeed not widely used or understood. In fact our 2017 Mint Jutras Enterprise Solution Study asked survey participants to rate their level of understanding of some of the technologies included/referenced in SAP Leonardo (Table 1).

Table 1: What level of familiarity do you have with these digital technologies?

Source: Mint Jutras 2017 Enterprise Solution Study

Predictive analytics, which is an important element, particularly when used in conjunction with these other technologies, is the most widely valued and used. Otherwise, fewer than 20% of our survey participants have deployed or are in the midst of deploying the remainder. While another 15% to 32% understand the technologies well and perceive value, this leaves more than half either lacking familiarity or feeling they have no applicability to their business. So SAP must help take some of the mystery out.

That’s what makes the services side of SAP Leonardo so important – this and the fact that digital transformation isn’t necessarily the goal, even though it is often presented as such. The goal is to enable growth, interoperability, communication and collaboration. The goal is to innovate. To this end, SAP intends to marry design thinking with these technologies. Design thinking is an iterative approach that identifies real issues and problems to solve. It avoids the trap of inventing and implementing elegant technology in search of a problem.

SAP Industry Accelerators

In addition, building on experience implementing solutions for other customers, SAP has packaged SAP Leonardo with “Industry Accelerators.” Industries might include retail, consumer goods, manufacturing, sports and entertainment, or any other industry that requires innovation services. These are fixed price bundles of expertise, data and software integrated to solve a specific and common business problem. Plus they include services to get started and deliver business value quickly, helping to jumpstart a digital transformation journey.

There is a design thinking component included, which is intended to validate that the package will address the customer’s business problem. They also include a fixed amount of services to implement a working prototype. SAP envisions the Industry Accelerators to be priced to be accessible to a wide range of companies, not just very large enterprises with large and highly skilled IT staffs.

These fixed price Industry Accelerators can be implemented with SAP technology, but SAP technology is not required. SAP Leonardo can ingest data from any source and combine it with data from applications like ERP, both SAP and non-SAP. So customers do not have to make a significant investment in new applications, database or other infrastructure in order to address a business challenge.

Of course, if a customer’s business challenge is unique or not a good fit for the Industry Accelerators then customers can leverage the components of SAP Leonardo for a custom implementation.

While SAP Leonardo targets a wide range of companies, many smaller companies operate with minimal IT staffs. Any kind of separate price tag for a tool set may make these technologies remote (like Leonardo himself) – out of reach for small companies. So it would behoove SAP to look for ways to connect, or even embed these technologies in the enterprise solutions that target smaller companies. These include SAP Business ByDesign and SAP Business One (in addition to SAP S/4HANA) and some of the surrounding “line of business” applications that extend these solutions.

To this end, SAP has been working hard on refactoring the underlying code of its products to take better advantage of new digital tools and technologies. Mint Jutras recently outlined this platform approach in a report, SAP Business One: The Next 20 Years.

From Systems of Record to Systems of Intelligence

The ultimate goal is to transform all these systems of record into systems of intelligence. Whether addressing the needs of large enterprise, small companies, or anything in between, it has always been a lot easier to get data into a system of record than it is to get information and insights out. SAP Leonardo, the digital system of innovation, tackles this problem directly with the goal of transforming business transactions into intelligent insights, in a never-ending continuum, thus enabling digital transformation and innovation.

[1] Gardner, Helen (1970). Art through the Ages. pp. 450–456.

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Deltek iAccess: More Than Just a Pretty Face

Deltek’s Secret Sauce to Innovation

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

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

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

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

What is Deltek iAccess?

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

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

Three Workspaces Touch Much of the Organization

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

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

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

Consistent Look and Feel Across Extended Products

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

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

More Innovation, Easier to Consume

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

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

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

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

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

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

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

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

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

Handling Disruption

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

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

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

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

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

Wrap Up

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

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The Force was Strong at Autodesk University (#AU2015)

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

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

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

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

Companies like…

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

From Autodesk:

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

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

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

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

In conclusion, whether you are looking to

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

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









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Sage Says ERP is Dead. What (I think) They Really Mean Is….

At Sage Summit 2015 earlier this week, new CEO Steven Kelly announced the company would drop the moniker ERP from its product names. Sage NA CTO Himanshu Pasule followed up by announcing that ERP is dead. This announcement produced a mixed response. There was some applause (ding dong the wicked witch is dead!) There were some shrugs (I don’t really care what you call it.) In conversations with clients I got some eye rolls and one actually said, “This too will pass.” My reaction? Yes, we need new ways of designing, delivering, consuming and innovating ERP. But you don’t say the automobile is dead just because there are some old clunkers still on the road.

Of course proclaiming ERP to be dead is not new news. Headlines along these lines started appearing shortly after Y2K (which proved to be somewhat of a non-event.) They were attention grabbing for a while and then they began to fade away, only to reappear periodically. So… with this revival does Sage intend to stop selling products that have been labeled “ERP?” No. It just won’t call them that anymore, explaining that instead of standing for Enterprise Resource Planning, what ERP really means is “Expense, Regret, Pain.”

Thanks to Derek du Preez of Diginomica who actually captured Mr. Kelly’s quote: “We believe ERP is a 25 year old industry term, characterised by cost overrun, and in some cases even business ruin, that has been imposed on you for the benefit of others.

“To the finance directors of the world, ERP stands for Expense, Regret, Pain. Sadly our industry has a long history of invasive, disruptive initiatives that have been carried out at the expense of their customers.”

Hearing this or reading it, you somehow get the sense that all ERP implementations are failures. I would disagree and can share some very impressive results from those I have determined to be “World Class.”

You also might get the sense Mr. Kelly was implying this involved some malicious intent – certainly not by Sage, but by all those other ERP vendors. Personally I think a lot of ERP vendors did the best they could with the technology they had available at any given time. But that technology is nothing like what is available today, just as the Model T is nothing like the Masserati, or even the Ford Taurus today.

Old, monolithic ERP solutions have been notorious for being hard to implement, harder to use and sometimes impossible to change as business conditions and businesses themselves change. Over time they have grown more complex and more unwieldy. I agree we need to fix that. Today the industry must find new ways to design, develop, implement and run these systems if they are going to keep pace with the rapid evolution of both technology and business today.

We need solutions that are easier to consume, using new ways of engaging users, over a wide range of devices. We need software that can be easily extended and/or configured without invasive customization that builds barriers to innovation. And we need more innovation, but it must be easier to consume with less disruption to the business. And finally, we need better integration capabilities.

Does any of this sound familiar? It should if you have been following me for the past couple of years. This just happens to be how I describe and define Next Generation ERP. Type that in the search box on my blog and you’ll get lots to choose from, starting with this first post. Could I have labeled it something other than ERP? Sure, I could have named it with the symbol . But if anyone referred to , they would always add, “used to be called ERP.” So I didn’t bother. Maybe we could start just calling it “the software previously known as ERP.” It seemed to work for Prince for a while, but ultimately he went back to being known as Prince.

Some are suggesting it be called Business Management Systems, although that too is far from new. Many have tried using this term in the past and it just hasn’t caught on, largely because those using the term tended not to have a complete ERP solution and were also targeting very small companies that typically lived in fear of ERP. So that sort of sets a precedent, and not one that is to Sage’s advantage.

And in an industry so enamored of acronyms, Business Management Systems would become BMS. So perhaps the reason it never caught on was in part based on the fear we would soon lose the “M” and we all know what BS stands for… again, not particularly advantageous.

In the end, ERP is simply a convenient label for software that runs your business, although I do use a more specific definition:

ERP is an integrated suite of modules that forms the operational and transactional system of record of the business.

This includes the customer order, which seems to be missing from Sage’s declared focus on the “Golden Triangle” of accounting, payroll and payment systems. Indeed it is typically the management of the customer order that sets a full ERP apart from a financial/accounting only solution. While some of Sage’s products are definitely accounting only, Sage assures me the intent was not to exclude the customer order and does include the full system of record in its Golden Triangle. So customers and prospects can feel safe in assuming at least some of the Sage products will continue to deliver on my definition of ERP.

Note also that my definition is intentionally quite broad. It needs to be, simply because the operational and transactional needs will vary quite significantly depending on the very nature of the business. You can’t run a service business like a manufacturing or distribution business. Retailers, government and non-profits all have their own unique requirements.

ERP evolved from MRP, which was originally short for material requirements planning, but later expanded to become manufacturing resource planning and then eventually grew beyond the realm of manufacturing to encompass the entire enterprise – any kind of enterprise, in any kind of industry. While some ERP vendors do have a very narrow vertical focus, others have taken a more horizontal approach. This has resulted in broader solutions designed to satisfy so many different needs that any one company winds up using only a small fraction of the full functionality. Not only are they encumbered by all that functionality they don’t use, but also there still might be gaps in meeting their specific requirements. So ERP winds up being too much and not enough, all at the same time.

This situation is also clearly exasperated by the fact that the footprint of ERP has grown to the point where it is getting more and more difficult to determine where ERP ends and other applications begin. Functions like performance management, talent and human capital management, etc, that used to sit squarely outside of ERP, today might sit either inside or outside that boundary. To be considered part of the ERP solution they must be seamlessly integrated. That used to mean tight integration that required the whole system to move forward in lock step, which made it rigid and very hard to upgrade. ERP users increasingly felt like they were steering a battleship, understandably so.

Expanding footprints, combined with a broader range of industries means complexity no longer grows linearly, but exponentially. Which I believe is the real problem Sage is attempting to solve. Changing the label won’t fix that. Taking full advantage of enabling technology and changing the way you design, develop, package and deliver it will.

I also believe Sage is making tremendous progress in making these changes, but that progress and the value actually being delivered to its customers is being overshadowed by the rhetoric around the death of ERP. Sage’s journey began several years ago under the guise of “hybrid cloud.” In a nutshell, this approach left on-premise ERP solutions in place and surrounded them with cloud-based connected services. The advantage was to allow customers to migrate pieces of their information systems to the cloud over time.

But there was yet another advantage to this approach, one that I wrote about most recently in describing Sage’s approach to Next Generation ERP. This component-based approach allows Sage to deliver more innovation by extending or complementing existing solutions rather than continually mucking around in the original code base. Today seamless integration can be delivered without old-style tight integration. A more component-based approach is typically referred to as “loosely coupled.” If you aren’t familiar with that term, you might want to read through my 4-part series on Next Generation ERP. For purposes here it is suffice to say that this approach allows you to consume more innovation, with less disruption.

Sage began to take a more component-based approach to development with its “hybrid cloud” strategy. Not only did this facilitate the addition of features and functions without invasive changes to the original code base(s), it also allowed Sage to develop new features and functions once and let different products and product lines take advantage of that effort. That means more innovation and easier integration.

This is also something Sage is getting better at in general. It began to implement rapid application development (RAD) methodologies about two years ago and is really starting to hit its stride. Its goal is to offer two upgrades each year. Of course, the real question will be whether its customers can and will pick up these new releases at an increased pace. According to the results of the 2015 Mint Jutras Enterprise Solution Study, 30% of respondents running on-premise or hosted solutions still skip releases and 11% would actually prefer to stay where they are forever.

This changes however as companies move to a SaaS deployment model (Figure 1). It is much easier to deliver more innovation, more frequently in a SaaS model. And there are fewer barriers to consumption because the SaaS provider does all the heavy lifting when it comes to upgrading the software.

Figure 1: Approach to Consuming Innovation in a SaaS Model

Fig 1 SageSource: 2015 Mint Jutras Enterprise Solution Study

After several years of promoting the concept of “hybrid cloud,” with an on-premise ERP at the core, Sage is moving more aggressively to SaaS, although it is still fully supportive on on-premise deployments. Sage X3 is a perfect example. As of its 7.0 release about a year ago, X3 became a true multi-tenant SaaS solution, although it does provide single tenancy at the data base level (which allows for portability between on-premise and cloud and supports extension of the data model). More recently it announced the official launch of Sage X3 Cloud on Amazon Web Services (AWS).

With this introduction, Sage will be competing more directly with SaaS only ERP providers. Those SaaS-only solution providers that offer multi-tenant solutions are able to deliver more innovation, with higher frequency, because they have the luxury of only having to maintain one line of code. Those that offer both cloud and on-premise versions must minimally support multiple releases (and often offer solutions on different databases and operating systems). Sage has indeed been gearing up for this and the proposed 6-month release cycle is evidence of very good progress.

Further evidence of Sage’s ability to innovate faster is the introduction of several new products including Sage Live, a brand new “real time accounting solution” built on the Salesforce1 platform and brought to market in months, not years. While existing customers don’t benefit directly from this product, they do benefit indirectly. Not only does this demonstrate Sage’s ability to apply RAD methodologies and new technologies (like those capabilities provided by the Salesforce1 development platform), but presumably other product like X3 will indirectly benefit from components developed for Sage Live that might easily be incorporated into the X3 landscape. As Himanshu described, “First the very high end, luxury cars introduce heated seats and pretty soon they become a standard feature.”


Let me repeat my initial reaction to Sage’s proclamation of the death of ERP: Yes, we need new ways of designing, delivering, consuming and innovating ERP. But you don’t say the automobile is dead just because there are some old clunkers still on the road. When it comes to solutions that help (or hinder us) in running our businesses, there are a lot of clunkers on the road today. Many were hard to implement, and are even harder to use and sometimes impossible to change as business conditions and businesses themselves change. Over time they have grown more complex and more unwieldy. I agree we need to fix that. Solution providers, including Sage, have made some great strides in doing that.

Those still driving those old clunkers should definitely think about trading them in. Those with some pretty good engines should look to turbo-charge them. ERP is a convenient label for the software that runs businesses across the globe today. Does it really need a new name? If so, I think we should call it Fred.


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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.


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 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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ERP, The Next Generation: The Final Frontier? Part 3

This is the third post of a series on Next Generation ERP. If you missed the first two in the series, take a moment and catch up with Part 1 and Part 2. You can find them on “Recent Posts” to the right.

As you recall from the previous posts, one of the hallmarks of “next generation” ERP is the ability to customize without customizations. Sound like a contradiction? Not really.

Customization versus Configuration and Tailoring

Different roles in the organization require different views. And different individuals may require unique views. And what organization today doesn’t think it isn’t unique in some way? With traditional ERP based on older technology this used to mean customization.

Customization also used to mean mucking around in source code, which builds barriers to moving forward with updates and upgrades. That was because in the past all the logic was “programmed” into that source code. This made business applications like ERP rigid and inflexible. Sure, there were always some configuration options, but those options were constrained by the logic embedded in the source code.

But next generation ERP is built in layers that are removed from the source code. First and foremost there will be a user interface layer. By removing this from the source code, you can easily tailor what the users see, and how they see it, without ever touching the underlying code. This is also how translations are much more easily delivered these days, allowing different users to interface with ERP in different languages.

This means tailoring the look and feel is easy. It also means that configuration (versus customization) does not require deep technical skills and is carried forward as the software is enhanced.

In addition, there might also be a set of business rules that are created and maintained. These rules might be used to determine behavior of a function or to configure next steps in a workflow. Business rules might define different thresholds for approval (e.g. all purchase orders require approval but those over a certain value require an extra step in the approval process).

These business rules might also be used to trigger alerts, notifying managers when events occur (e.g. a big order comes in) or when they fail to occur (a scheduled delivery date is missed).

To better distinguish between configuration and customization, Mint Jutras posed the question to ERP survey participants, “What level of customization do you believe you need?” Respondents were allowed to select any or all of the options presented. Their responses are shown in Figure 2.

Figure 2: What level of customization do you believe you need?

Figure 3Source: Mint Jutras 2013 ERP Solution Study

With a next generation ERP, it is highly unlikely that any of these requirements, with the possible exception of “custom logic is required” would require customization rather than configuration. And if an external rules engine is available, custom logic might also be “configured” as well.

 Integration and Innovation

We include integration capabilities and new ways of delivering innovation as a single topic here because the technology used to deliver both are likely to be similar, if not identical. In this context, you will hear two terms bandied about: services and objects, both of which can be shared. We should also throw a third term in there: components.

Before getting into how next generation ERP delivers integration and innovation, let’s first recap how traditional ERP originally worked. Mint Jutras defines ERP as an integrated suite of modules that forms the transactional system of record of a business. This is a rudimentary definition because today ERP is likely to do much more than this, but it will serve us well in drawing a contrast between traditional and next generation ERP.

Traditional ERP was developed as a tightly integrated set of modules, with only one of everything, including master files and maintenance functions. Even though the order management and the accounts receivable modules both needed a customer master, there was only one and it was shared by both. Purchasing and accounts payable shared a supplier master file. Purchasing, shop floor control, engineering and inventory management all shared a common part master file.

Not only do all modules of an ERP solution share a common database, but all are developed using the same tools and technology and they all move forward in lock step. This eliminates data redundancy and any need for separate integration efforts. But it also means purchasing can’t move forward until order management, shop floor control and inventory management modules are ready to move. It takes massive efforts of coordination by the vendor to make sure all the pieces of the puzzle more forward together. And it takes similarly massive efforts of coordination for all departments within their customers’ organizations to take those next steps altogether.

But what if a supplier (or, even worse, a customer) demands that your enterprise change the way you conduct business with them? What if your current solution can’t support that new way of doing business? Maybe you need to upgrade, enhance or even swap out the purchasing (or order management) module for a new solution that does. If purchasing (or order management) was a separate application you could, although that would most likely require additional effort (and cost) to integrate that separate application with ERP. And when you make a change, the integration would likely require change as well.

What if, instead, you could take that tightly integrated purchasing module of ERP and loosely couple it? That way, if you wanted to replace it you would just have to uncouple it and swap in a new one – sort of like uncoupling one of the cars on a train? It just takes a standard coupling, right? Of course it is a little more complicated than that, but that’s the general idea.

Instead of referencing supplier and item master files directly, a next generation ERP will access a standard model of a supplier or an item (a business “object”). It might have its own standard or it might use an industry standard (like OAGIS). Of course a different supplier record (being swapped in) might not be identical to the master but think of the object as sort of a Rosetta stone for supplier information. If you can map to all the elements of the object, you can map to what ERP needs. This provides a leg up when it comes to integration with other internal applications as well as interoperating with those of customers and suppliers. Point to point integration methods are replaced with a hub and spoke approach. By connecting to the hub, you can “speak” with all the different spokes.

And instead of inserting lines of code directly into the purchasing module of its ERP to maintain the supplier master file, next generation ERP might call upon a standard “service” for file maintenance or for adding a new purchase order or any number of different functions. Need to upgrade or add new functionality, simply swap out the old “service” for the new. You might also view these services as external components. Again, this is an oversimplification, but conceptually describes how next generation ERP can effectively deliver new, targeted innovation without forcing all departments served by ERP to march forward together.

It is also how acquisitive ERP vendors can deliver more innovation to broader installed customer bases. The ERP market has been steadily consolidating for the past two decades. Many ERP vendors have grown through acquisition using one of two approaches, or combining the two:

  • Some have acquired market share by buying other ERP vendors resulting in larger development staffs, but also requiring them to support (and develop?) multiple product lines.
  • Others have expanded the breadth of their offering by acquiring complementary solutions. While this approach allows them to potentially grab more share of their customers’ wallet, the acquired products may or may not be fully and seamlessly integrated with their ERP offering(s).

Some vendors will have combined both approaches for growth. Using next generation “services” and “object orientation” provides more seamless integration and also allows them to develop code once and deliver across different ERP product lines.

Even if the vendor in question has not grown by acquisition, this approach also allows delivery of more innovation with less disruption to the customer. The connection will be the strongest when ERP and these components share a common platform of technology.

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Infor’s Innovation Team Helps the Company Go Faster

After a 4-year hiatus, Inforum2012 made a big splash in Denver this week. I attended the last live Inforum back in 2008. There was also a “virtual event” in 2009. But, in my opinion, a virtual event just doesn’t have nearly the same impact as a live one. The Lawson customers in attendance haven’t had to wait so long. The last Lawson CUE was held just about a year ago in Boston. But this week, with no less than 21 different press releases talking about everything from the reinvention of the company under its new leadership to numerous technology and product announcements, Infor did a lot of catching up.

So given all these different announcements, what was the most important message I heard? I think it all boils down to the theme of the conference – Go Faster. And at the center of that theme is a fairly new group within Infor, the innovation team led by James Willey. What is this team all about? I think one of James’ team members summed it up pretty well.  “We have cool ideas and we’re going to build cool stuff. Then we throw it out to the different teams for them to pick it up.”

The reference to “different teams” has resulted from a long history of growth by acquisition. So there are different product teams, but with a renewed industry focus last year, it also means different industry teams. And there is not a simple one-to-one relationship between the two. It’s more like many-to-many relationships. A single industry is likely to be broken down into micro-verticals. The example Charles Phillips used on stage was in food and beverage. Dairies, meat processors, brewers and bakers (all target markets for Infor) share the common category of food and beverage, but are also each unique. On the other side of the equation, Infor has at least a couple of products that target food and beverage, including both Lawson M3 and Adage. So mapping solutions and teams is a bit more complicated than it appears on the surface.

This “cool stuff” includes

  • Intelligent Open Network (ION): lightweight middleware, providing common reporting and analysis, workflow, and business monitoring in one, consistent event-driven architecture (EDA)
  • Infor10 ION Workspace: a “consumer grade” user interface
  • Infor10 Motion: both mobile apps as well as a platform to develop them on
  • (newly announced): a platform to deliver localized statutory reporting, accounting and tax content by country in a loosely coupled architecture

Through this “cool stuff” the innovation team powers a lot of the possible innovation in the industry-specific suites introduced with Infor10 about mid-year 2011.  And ION is at the core of a lot of the innovation. ION is based on much the same premise as Infor’s prior Open SOA (Service Oriented Architecture) was in the 2006 to 2009 timeframe in that it is meant to provide an environment that enables new functionality to be developed once and shared by multiple products in the Infor portfolio. However, unlike Infor’s Open SOA, which became very heavy and took years to develop, the new team has kept it lightweight and simple. It comes on 3 CD’s and can install in less than ten minutes.

But in keeping it lightweight, this forces some of the work back on the individual application development teams. And because Infor is in the applications business, not the middleware business, this means James’ innovation team doesn’t necessarily bring the innovation to directly to the market. The innovation team makes it available to the product and industry teams, who take it the final mile.

In order to take advantage of all that ION has to offer, the application has be what Infor calls ION enabled. I prefer to think of it as being IONized.

The individual application needs to provide a translation, sort of a mapping, to the Business Vault. Think of the Business Vault in ION as sort of a Rosetta Stone for applications. Infor still uses OAGIS (Open Application Group’s Integration Specification) as the standard template, along with its definitions of Business Object Documents (BODs). These BODs are really a combination of standard business objects (sales orders, purchase order, invoices, etc.) and processes (acknowledge a sales order, receive a purchase order, pay an invoice, etc.)

Infor’s strategic, go-forward products, which of course are based on newer technology, were the first to be IONized. But there are also a lot of customers on older legacy products. So the innovation team also built tools in ION to help IONize the older apps (e.g. MANMAN, older versions of BAAN, etc.). These tools essentially pre-process these business objects and then import them to ION, much the same way objects from non-Infor (3rd party) applications would be handled.

So there is work that must be done in order to take advantage of the innovation team’s efforts, but once that is done, the application teams get a lot of stuff for free. And that’s the real beauty of it – once the data in the application is exposed to ION, there’s lots that can be done with it, including complex event processing (CEP), making even older solutions exception driven. As data moves across, you can apply rules to it. If the cost changes by more than x%, notify certain roles or individuals. If the price change is too high, put an order on hold until it is approved. If the master data changes 5 times, you have 5 XML documents recording the changes and this can be tracked and reported.

If you recall, earlier I referred to the team as “fairly new.” In fact James (with his team) has been around and doing his “innovation” thing for a few years, ever since the decision was made to abandon the heavyweight Open SOA approach and stick to the Infor knitting, which was and is enterprise applications. But when Charles Phillips arrived at Infor James had a team of 8. Today it numbers around 110, a recognition of the power of a rapid application development mentality, coupled with a “develop once, re-use multiple times” approach and a willingness to invest in it.

The innovation team has a finger in all the hot topics today: cloud, mobility, social, the consumerization of IT, big data and embedded analytics. I say kudos to James and his team and encourage all the product and industry teams to bring the innovation that last mile, so Infor customers can finally keep pace with the fast-moving world of technology enablement.

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Sage launches new version of Sage ERP Accpac

I’ve recently spent some time getting reacquainted with Sage ERP solutions. I spent yesterday in Boston at the Sage North American Analyst day and earlier today watched the virtual launch of Sage Accpac V6.0, which was officially released last week. I have to admit that I was pleasantly surprised to find how far Accpac had come since my CA days (1994-2002) when the product was owned by CA.
During the latter part of my stint at CA, I was VP of Product Strategy for interBiz, which was the independent business unit that was the home of all CA’s business applications. Correction…  all but one. Accpac was not part of interBiz. There were commercial reasons for this. Accpac operated as a subsidiary which later went on the block to be sold. But interestingly enough it was interBiz that was divested first, sold to SSA Global in 2002. It wasn’t until 2004 when Sage bought Accpac.
But beyond the commercial aspects, interBiz was the home of all the ERP solutions CA owned and back then I wouldn’t have called Accpac an ERP solution. I would have simply called it an accounting package for smaller businesses. Had that continued to be the case, Accpac today would belong with Sage’s other “accounting” solutions… Sage Peachtree and Sage Simply Accounting.
I define ERP as an integrated suite of modules that forms the operational system of record of the transactions that run a business. In this context Sage Accpac qualifies as an ERP solution targeting small to lower midmarket multinational businesses in several specific but quite diverse verticals: Finance, Service, Mining and Hospitality. Without the underlying base of MRP it is not really a fit for manufacturers, but Sage has other products that target manufacturing (Sage X3 and Sage MAS). Sage also distinguishes between “global” and “multi-national”. While Sage Accpac can deal with multi-currency and multi-language environments, it is assumed each legal entity in each country will run its own instance of the software, rather than running a global centralized, single instance.
The latest version has made some strides in terms of the underlying technology platform. While the product has been available via the web for the past 10 years, until the latest version it was based on ActiveX controls. Scott Zandbergen, VP of product management for the Sage Accpac line, refers to the technology improvements as “next generation” and “real web-based delivery.”  This is most evident in its new portal. The new Sage ERP Accpac 6.0 web Portal is built on the Google Web Toolkit platform, providing the first step towards releasing a full Web based Sage ERP Accpac solution as well as mobile access from iPhone, iPad and Android™ devices.
Sage Accpac’s strength still lies in the accounting functions, and therefore some of the new features are for the accountants. Like the new fiscal period management (which Sage says was a top requested feature by its users) allowing the locking of fiscal periods by module. But beyond accounting, the new release also includes embedded Business Intelligence (BI) functionality and built-in CRM.
Embedded BI functionality includes Sage ERP Accpac Snapshots that allow easy access to operational metrics in a graphical presentation with drilldown capabilities to underlying financial reports. User-configurable snapshots include balance sheet, income statement, and aged receivables. Sage ERP Accpac Inquiry allows users to easily and intuitively create personalized query lists on the fly, without the knowledge of databases or programming.
SageCRM is included as part of the Sage ERP Accpac solution at no additional charge. Over the past several years, as ERP footprints have expanded,  it has become harder and harder to tell where ERP ends and other applications begin. This is actually good news for the corporate practitioner. Connecting the front office (CRM) and the back office (typically ERP) is a logical place to blur these lines and in doing so, add value for the users of both. A good example of how this can be useful: sales reps can add a sales order without ever leaving  SageCRM, but they are actually using a function in Sage Accpac.
More on some of the general plans across the entire line of Sage ERP products, including Sage Advisor Technology, SData and more in posts to come.
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