An Innovative Approach to Business, Coupled with Continual
Product Innovation
Acumatica, a prominent provider
of cloud Enterprise Resource Planning (ERP) software, has been calling itself “the
world’s fastest-growing cloud ERP company” for several years now. But growth can
be measured in many different ways – as an absolute or a percentage increase,
measured by revenue, number of customers and/or employees, just to name a few.
This opens the door to multiple competitors claiming that top spot of “fastest
growing.” But as Acumatica shared some statistics at its recent Acumatica
Summit 2020, it would appear that it is indeed moving away from the pack.
As a subsidiary of Swedish
investment firm EQT Partners, Acumatica does not disclose revenue, but does
share some numbers. License revenue from all deployment models grew 72% year
over year. Acumatica signed on 1,300 in 2019, bringing the total to over 6,500.
A year ago there were no user groups. Today there are nine. In 2019, 1,500 people
attended the annual conference. This
year, over 2,500 were in attendance at Acumatica Summit 2020, with thousands
more tuning into the live stream.
Given the growing
acceptance of cloud and Software as a Service (SaaS) in recent years, Mint
Jutras has been expecting (hoping) to see at least one of the native cloud
solution providers enter a period of explosive growth. Thus far we have been
disappointed, but now Acumatica appears to be doing just that. How has
Acumatica been able to achieve what others have strived but failed to do? We
see several factors combining synergistically to create a perfect storm to
drive growth. The common theme across all these contributing factors is
Acumatica’s ability to continually innovate, not just in terms of the product,
but in terms of its own business model.
Click
here to read the full report where we will look at how innovation fuels
growth from both of these perspectives, starting with how Acumatica does
business.
Deltek is unique within the world of enterprise applications. Focused squarely on meeting the needs of project-driven businesses, on the one hand, it is like hundreds of other solution providers offering some flavor of project management software. On the other hand, it is unique in offering an Enterprise Resource Planning (ERP) designed specicially for projects-based businesses. Yes, other ERP vendors target similar industries and also offer complementary project management solutions, but no other vendor combines these two software categories quite like Deltek. In the realm of (just) project management, Deltek must face the challenge of differentiating itself in a highly fragmented market. But in creating a software category where only a single vendor qualifies, a different kind of challenge looms. Competitors bring validation.
While Deltek is
laser-focused on project-based businesses, this “sector” also brings a
tremendous level of diversity. Government contractors are starkly different
than advertising, PR and marketing agencies. Architecture, engineering and
construction (AEC) differs from legal, healthcare or management and IT
consulting services. Energy, oil and gas is different than aerospace and
defense. Operating a for-profit business is different than running a nonprofit.
Some sectors are heavily regulated; others operate under few constraints. Some
manage projects that last days or weeks and others span multiple years. And yet
Deltek addresses the needs of all these different types of project-driven
businesses – and does it very well.
A general-purpose kind of
solution can’t do this effectively, and therefore over the years, through internal
development and acquisition, Deltek has collected quite an array of products, leaving it with the added challenge of
providing continued innovation across a broad portfolio. And yet it has proven
over time its ability to leverage this portfolio to go beyond the traditional
80/20 rule of ERP to deliver last-mile functionality.
And of course, Deltek is
confronted with some universal challenges all software companies face today. Technology
is rapidly changing the way we do business. At the same time, the workforce is
undergoing a generational shift and the access anytime, from anywhere,
collaborative promise of the cloud is becoming a “must have.”
Can Deltek’s plans to
leverage technology for “purposeful innovation” address these challenges and
also unlock the potential for more opportunity for both Deltek itself and its
customers? Let’s see.
The Challenge of Being “One of a Kind”
In today’s global, digital
economy, competition is fierce and every company strives to differentiate
itself. So at first glance, being the only software company competing for
market share in a particular software category may appear to be a good thing. Yet
while it does put that company in a position of strength, it never means
winning business is a slam dunk. Every company has competition, and Deltek is
no exception. On the plus side, Deltek recognizes this and never attempts to
beat its chest and portray itself as truly “one of a kind.” But, the type of
competition it faces will vary depending on what the prospect does and what it sets
out to buy.
If a Deltek prospect, say a
government contractor, is looking for ERP (think accounting, procurement,
inventory, manufacturing, etc.), Deltek will face certain qualified ERP
providers. The prospect may not even necessarily think, “I need to find an ERP
solution to support my project-based business.” Instead it thinks, “I
need a software solution to run my business.” And therefore, Deltek’s
differentiation as ERP for project-driven businesses doesn’t necessarily narrow
the field of competition at the outset. The door is open for any or all ERP
competitors. It then falls on the Deltek sales team to educate the prospect on the
differentiating features for a project-based government contractor. When that
effort is successful, then the tables are turned and that “one of a kind”
status will serve to eliminate the other contenders.
But if the prospect, say a
professional services organization, is simply looking for a better way to
schedule projects, Deltek has moved away from the “one of a kind” challenge.
Here it faces a whole different set of potential competitors in the category of
project scheduling software. And this field is
highly fragmented, with offerings that range from simple desktop
solutions to robust, multi-faceted solutions for budgeting, project accounting,
scheduling, risk management and analytics.
Here oftentimes the issue is
the age-old debate between a suite-based solution or a “Best of Breed,” and
this debate has been hotly contested for just as long. An integrated suite that provides a complete
end-to-end solution (including project management) on which to run your
business has been the holy grail of the ERP world for decades. For
project-based businesses, this is the premise behind Deltek’s ERP. But if the
prospect is just looking for something to help them manage the projects
themselves, putting a full ERP solution in front of them will appear as
overkill.
To better determine where we stand today in this debate, we
asked survey participants in our 2019 Mint Jutras Enterprise Solution Study to
choose between a “Suite in a Box” – a complete end-to-end solution that is
pre-integrated and ready right “out of the box,” or a more “Best of Breed”
approach with a strong core, coupled with the ability to purchase or develop
additional functionality and easily (we use the term loosely) connect it back to
the core. We recognize the choice is not always so cut and dried, and therefore
added some options that are more of a mix but leaning in one direction or the
other. Figure 1 paints an interesting picture, made even more interesting in
the context of project management.
Figure 1: Which approach is most appealing to you?
Source: Mint Jutras 2019 Enterprise
Solution Study
Over time the pendulum has swung back and forth between
preferences for the two choices, predicated primarily on two factors. When the
debate first emerged, the proponents of an integrated suite pointed to the ease
of integration. If you used the functionality built into your ERP, there was no
added cost or effort in integrating multiple applications. But the “Best of
Breed” camp reasoned against this approach, using the “depth or breadth”
argument. They implied integrated suites were a mile wide, but an inch deep,
pointing out that the functionality built in was lighter and less feature-rich
and definitely not “best of breed.” This is the exact assumption Deltek
disproves with its project-based ERP.
And yet, Figure 1 shows the Best of Breed approach is
favored over the full suite 2:1. There are actually some very good explanations
for this preference amongst project-driven businesses.
Take, for example, a small professional services firm with
10 to 20 consultants. This type of small business may think it is too small for
ERP. While Mint Jutras would disagree, we do recognize many might be adequately
served by solutions like QuickBooks or desktop or cloud-based simple accounting
systems. Yet projects are the lifeblood of their businesses and therefore they
need robust tools to schedule and manage those projects.
At the opposite end of the spectrum you might also have
large enterprises that have invested heavily in a corporate ERP system chosen
for its depth and breadth of administrative and financial capabilities. Many of
these corporate ERP solutions lack the operational capabilities required to
help the business function efficiently. And therefore, divisions or entire
corporations turn to Best of Breed solutions to better manage projects. Deltek not
only has that base covered, but also makes it easy to integrate back to any ERP.
Deltek’s
broad portfolio of products helps it turn the challenge of being “one of a
kind” into a strength. Rather than attempting to serve the varied needs of a
very diverse market with a single general purpose, horizontal solution, it
offers several different suites targeting the needs of different verticals, as
well as a more “best of breed” project and portfolio management solution. But
the breadth of its product portfolio comes with its own set of challenges.
The Challenge of Last Mile Functionality in
a Diverse Market
The ERP market has long been
dominated by the 80/20 rule. With few
exceptions, most early solution providers cast a wide net. Unwilling to turn
any potential business away without a try, they came to market with very broad
solutions. By trying to please everyone, they never had a complete solution for
anyone. The 80-20 rule prevailed. Nobody expected a solution to satisfy
all their needs (an 80% fit was often the goal), resulting in complexity, as
well as invasive (and sometimes expensive) customizations that built barriers
to further innovation.
Deltek has been unique in never
succumbing to this 80/20 rule, choosing instead to acquire and develop
purpose-built solutions that address the needs of specific industries,
including what many view as the elusive “last mile functionality.” Its latest acquisition
of ComputerEase is
yet another example of this pursuit. ComputerEase is the recognized standard in
construction accounting, project management, and field management software for
contractors.
Earlier in the year, Deltek acquired
Avitru to bolster its Specification Solutions with a library of master
specifications (MasterSpec®), specification writing software and professional
and spec-writing services. These are just two examples of how Deltek
delivers true last mile functionality to the AEC industry.
While these requirements are
very unique to AEC, even functional areas that might seem quite generic to
other businesses have some unique characteristics across different
project-based businesses. Procurement for government contracts differs (a lot)
from procurement in residential or industrial AEC sectors, and these
differences carry over into accounts payable , otherwise typically a pretty
generic function.
But as different as these
businesses are from each other, they always share some common
requirements. General ledger is general
ledger, even though projects may carry into the chart of accounts. Cash
collection is cash collection. Currency conversion, tax rates and multi-company
consolidations are applied universally.
Both of the acquisitions above
are examples of how Deltek extends the functionality of its core solutions,
rather than embedding features through invasive code changes. Yet the types of
(potentially shared) services are typically built into the core solution,
rather than included as extensions.
Embedding core functionality is reflective of how ERP has
traditionally been built, and Deltek ERP solutions are no exception here. Early
ERP solutions were monolithic structures. They were likely comprised of modules
(e.g. general ledger, accounts payable, inventory management, purchasing, order
management, etc.) and certainly some were optional, but none of these could
stand alone. All modules shared a common database and all were developed using
the same tools and technology. The good news: they all moved forward in lock
step, data redundancy was eliminated along with any need for separate
integration efforts. But this approach makes it hard for different solutions to
share commonly required features and functions and means Deltek must develop
the same or similar functionality within several different software suites.
Disruption: A Contributing Factor
This wasn’t too much of problem when requirements for this
type of core functionality were quite stable. That is no longer the case. We
live in disruptive times. The pace of change and the pace of technology
innovation has accelerated beyond anyone’s expectations and it doesn’t show any
signs of slowing down.
We asked our 2018 Mint Jutras Enterprise Solution Study
participants to assess the level of risk their industries faced in terms of the
potential for disruption.
Figure 2: What risk do you face in your industry being
disrupted?
Source: 2018 Mint Jutras
Enterprise Solution Study
While all but 10% acknowledged some level of risk, the
majority (84%) feel the risk is low to medium rather than high or imminent. Yet
we feel compelled to ask the question: How do you think the taxi industry would
have answered this question on the eve of the launch of Uber? Nobody saw that
disruption coming and therefore few (if any) were adequately prepared.
This type of disruption is unlike the disruption of the past
that was largely due to new innovative products. Not only can it bring change
almost overnight, but it can fundamentally change the way we do business. That
kind of change has a cascading impact on the core requirements of ERP.
Technology Helps
Fortunately, today technology exists that can help companies
like Deltek to address new or changed common requirements once and apply that
solution across different solutions. This kind of technology is foundational.
While early ERP solutions were rigid, monolithic structures,
today’s modern solutions are more component-based, also referred to as
microservices architectures. Every technologist in our audience knows a microservice
architecture is defined as an architectural style that structures an
application as a collection of loosely coupled
services. For those nontechnical readers, think of it as constructing a
solution from a set of Lego building blocks. Purists hate this analogy, and
yes, it is an over-simplification. But it is an effective analogy that
resonates with most business users that don’t have the interest or inclination
to dive deep into technical jargon.
Think about how you build a structure
from Legos. Each Lego block is made of the same kind of material and is
attached (connected) to the other Lego blocks the same way. In many ways they
are interchangeable. But by choosing different colors and sizes, and connecting
them with a different design, you can make a structure that is very unique. And
once constructed, if you want to change it, decoupling some of the blocks and
replacing them doesn’t destroy the parts that are not affected. There is far
less disruption introduced than if you had constructed it with a hammer, timber
and nails.
With this type of architecture, enhancements, customizations
and extensions can be built and consumed much more quickly, and companies like
Deltek can develop functionality once and deploy it across multiple products. Not
all of Deltek’s solutions today are there yet, but that doesn’t mean they can’t
be refactored to take advantage of this kind of technology, and in fact its
Vantagepoint product already does.
This noninvasive approach was
instrumental in bringing a new, modern user interface, Deltek iAccess, to all
its applications. While each Deltek customer will likely be running only
one of Deltek’s ERP solutions, Deltek has been delivering more and more
functionality via cloud-based add-ons, including Deltek CRM, Deltek Resource
Planning 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. Mint Jutras expects that this kind of
approach will eventually be used to bring change and new innovation to the
different cores as well.
In the meantime, iAccess is also
a step in the right direction to address another challenge – that of the
generational shift in today’s workforce.
The Challenge of A Generational Shift
This generational shift is a given today. Baby Boomers are
retiring at an accelerating rate, passing the torch primarily (but not
exclusively) to Generation X. But it is not the Gen Xers as much as the
Millennials that are creating demand for access to data from anywhere, from any
device, with a new and improved user experience. This generation never knew a
world without the Internet, smart phones and on-demand access to technology.
They never used software that came with (or needed) a user manual. And they are
more transient. Employees don’t come to a company and stay forever or even for
a long time. As more Baby Boomers retire, the tribal knowledge they have
accumulated over decades goes out the door with them, contributing to a skills
shortage.
Many of the younger generation have developed a dependency
on technology. Without decades of experience, they have come to rely on it to
guide them through business processes. At the same time, we’re all asked to do
more, and we’d love to accomplish this without working longer hours and making
sacrifices. Never before has the home/work life balance been more top of mind.
New intuitive user interfaces, like iAccess, are certainly a
giant leap in the right direction. But this is just a start. Deltek is also
taking two other, equally important steps through adding automation and
intelligence.
Robotic Process Automation for the Mundane
Have you ever secretly wished for a personal assistant who
could relieve you of the burden of repetitive, mundane and time-consuming tasks
that really don’t require the kind of smarts or skills you hope you bring to
your job? If you are a Baby Boomer who launched your career in a business
setting back in the 1970’s, you probably had access to the services of a
secretary or an administrative assistant. After all, you couldn’t survive
without one to help navigate the administrative nightmare of a generation that
was completely dependent on paper and manual processes. Today technology has
made us far more self-sufficient, but we’re also expected to get more done – a
lot more. While nobody misses those golden olden days, everyone from every
generation sure could use some help today.
Often called “bots,” Robotic Process Automation (RPA) can in
fact relieve employees of repetitive, mundane and time-consuming tasks. RPA is
part user interface, making use of natural language processing (think Siri or
Alexa for the enterprise) and part artificial intelligence (AI) to help people
automate and complete repetitive tasks in a fraction of the time it has always
taken, without introducing the occasional (but inevitable) human error. Adding
bots to your workforce can boost productivity, thereby helping humans get more
of the “real” work done. It sure would be nice if Deltek customers could
say, “Hey Deltek! Help me out.”
And so…Deltek is partnering with Alirrium, an authorized
reseller of UiPath, a leading Robotic
Process Automation software provider, to offer Deltek customers RPA for
automating processes within and across Deltek solutions, as well as between
Deltek and third party applications.
In addition to natural language processing (NLP) for voice
communication, it will also use optical character recognition (OCR) and in the
future, combine it with machine learning (ML) in order to turn OCR into ICR or
intelligent character recognition. For example, if you take a picture of your
receipt, that added intelligence can distinguish a receipt for a meal from a
parking receipt. In many of the industries served by Deltek even time and
expense reporting is compliance driven. Deltek’s goal therefore is to make it
easy by combining mobile, OCR, machine learning and GEO location tracking to
not only improve efficiency and assure compliance, but also add a level of
intelligence.
Building the Company Brain
While automation is a necessary
step in making companies and people more efficient and productive today, it is
really just the first step in a longer journey. As noted above, Deltek’s
innovation strategy also includes adding intelligence to both processes and
decision-making. Deltek views this journey as an evolution of the company
brain.
Project-based companies today are awash with data from
operations, customers, projects, the workforce… The question is: What to do
with all this data. The possibilities are endless to augment human
decision-making, making it more predictive with AI and ML. Whether they realize
it or not, everyone makes decisions constantly that involve prediction:
What is the probably of winning a deal?
Is this prospect a good fit?
What is the probability of project success?
What will be the schedule outcome?
Will a vendor deliver on time?
What makes an employee a “good employee”?
Who should we hire next?
How can we improve days sales outstanding (DSO)
and cashflow?
In order to make the best decisions, with the most
predictable outcome, we consciously or perhaps unconsciously look for patterns
in data to determine what makes projects, teams and resources successful. But the human brain is limited in how much it
can examine, absorb and analyze. AI and ML know no such limitations and can
operate at speeds that can only be described as super-human. This is power
Deltek is looking to leverage.
An early example of this is its
recently launched Acumen
Touchstone , the first product in the next generation of Deltek’s Project
and Portfolio Management (PPM) tools and a key step towards its Project
Intelligence Cloud (PIC). According to Deltek:
“The Project Intelligence Cloud is a technology refresh
designed to solidify Deltek as the industry leader in the PPM space. This web-based
technology will ultimately have many functions designed for project-based
business, including cost, schedule and risk management, analytics and workflow.”
The immediate benefit of Deltek
Acumen Touchstone is in its time-saving capabilities, automating the project
schedule process. Schedule submissions are analyzed using schedule diagnostic AI
for quality and deliverability. If it does not meet the required standard, the
submitter is automatically emailed a report showing the metric score and
deficiencies to be corrected.
This is the kind of purposeful
innovation that not only helps Deltek overcome its own challenges, but also
assists customers in seizing opportunity.
Wrap Up
In the world of project-driven business, Deltek is both
unique and one of many. As a pure play project management solution provider, it
must differentiate itself in a fragmented market. It does so through its depth
and breadth.
But if you are looking for an ERP solution provider that
focuses exclusively on project-based business, there is only one: Deltek. Yes,
other ERP vendors target similar industries and also offer complementary
project management solutions, but no other vendor combines these two software
categories quite like Deltek.
However, the market in which Deltek competes is far from uniform.
Government contracting, AEC, A&D, professional services, management
consulting, legal, healthcare, creative agencies, energy, oil and gas are all
very different from one another. A one size fits all solution simply doesn’t
work. Deltek’s broad portfolio of products helps
it turn this challenge into a strength. Rather than attempting to serve the
varied needs of a very diverse market with a single general purpose, horizontal
solution, it offers several different suites targeting the needs of different
verticals.
This
too presents its own set of challenges, but advanced technologies like
microservices architecture, cloud-based computing and all the various forms of
AI are the key to turning those challenges into real opportunity. But
leveraging technology for technology sake is not the answer. Purposeful
innovation that effectively leverages technology to produce real, tangible
value is Deltek’s answer. But this is a long and evolutionary process – one
that we will be watching closely, not necessarily from afar, but from the
outside. If you are a project-based business, you might want to consider
watching from inside the fold.
Available Stand-Alone or Fully Embedded within Plex ERP
Late last year (November 2019), Plex Systems announced its manufacturing operations capabilities were available as a best-of-breed, shop floor-specific offering called the Plex Manufacturing Execution Suite (Plex MES). This cloud-based suite is designed to satisfy a full spectrum of manufacturing needs from MES to manufacturing operations management (MOM). While MES capabilities are not new to the Plex solution, this is a departure from the past when those capabilities were always deeply embedded within its Enterprise Resource Planning (ERP) suite. Plex MES can now stand alone, alongside any ERP.
Since
2001, Plex Systems has been dedicated to serving the needs of manufacturers (originally
targeting small to mid-size companies and more recently serving larger
enterprise organizations), not only in the back offices, but also deep down
into the shop floor. Its solution reaches well beyond the typical features and
functions of ERP and includes strength in quality, inventory and production management.
In the past, some industry observers and competitors made the assumption that many
Plex customers simply used Plex as a point solution. That assumption was (and is)
just plain wrong.
A
good representative sample of Plex customers has been participating in my
annual Enterprise Solution Studies for many years. Over the years I have
collected data on completeness of solution and employee engagement. Year after
year, Plex customers tend to purchase and deploy a more complete solution than
the typical manufacturer, and the percentage of employees that use the Plex
Manufacturing Cloud (ERP) on a regular basis far exceeds the norm – the average
over the past five years was 77%.
That
begs the question: If Plex has been successful providing a complete suite, why
carve MES out now? Does this reflect a change in philosophy or purpose? I don’t
believe so. I think it is more reflective of the changing times and the needs
of today’s global, digital economy. For those prospects that fit the profile of
a current Plex customer, I don’t think a lot will change. They will continue to
reap the rewards of a complete solution. But it allows Plex to satisfy the
needs of more manufacturers now, not just when (and if) they ever get around to
replacing underperforming ERP solutions. And who knows… perhaps a little (or a
lot) of added value might just provide enough incentive to get rid of those old
solutions that might be holding them back.
Changing Times
What kinds of changes are we talking about? First, the
Internet has changed the world. It has leveled the playing field, bringing unprecedented
opportunity to all manufacturers, but it has also significantly increased the
risk of disruption and the need for speed. The accelerating pace of business
only serves to increase the need for visibility. And yet, even today, the shop
floor remains a black hole. While basic capabilities of ERP help with planning production
and procuring materials, once material is issued to the shop floor, visibility
is quite often lost.
Larger companies struggle with this when their corporate ERP
solutions, chosen for their financial capabilities (think multi-company
consolidation), can’t adequately support their (manufacturing) operations.
Small to mid-size manufacturers are often saddled with legacy solutions that
might have once been “state of the art,” but now simply don’t have the technology
needed to provide the connectivity and agility required. Can you significantly
improve all of the above, but especially this visibility, without a wholesale
replacement of ERP?
The answer is yes, and Plex MES is one way to do it. But is
the market ready? To answer this question, we need to re-examine a debate that
has been waged throughout the world of enterprise applications for decades: choosing
an integrated suite or “Best of Breed” approach. Many ERP vendors have been
preaching the benefits of a complete, end-to-end solution and arguing against
the proliferation of disparate applications for almost as many decades. This is
exactly what Plex has been delivering, but Plex is also changing with the
times.
To get a better sense of preferences today, we asked the
survey participants in our 2019 Enterprise Solution Study to denote their
preference for a “Suite in a Box” – a complete end-to-end solution that is
pre-integrated and ready right “out of the box,” or a more “Best of Breed”
approach with a strong core, coupled with the ability to purchase or develop
additional functionality and easily connect it back to the core. We recognize
the choice is not always so cut and dried, and therefore added some options
that are more of a mix but leaning in one direction or the other. Best of Breed
was preferred more than 2 to 1 over a Suite in a Box (Figure 1).
Figure 1: Which approach is most appealing to you?
Source: Mint Jutras 2019 Enterprise
Solution Study
We combined these results with follow up discussions with
many manufacturing companies. While most are interested in a fully integrated,
fully functional solution, they also want the freedom and flexibility to
implement incrementally, in their own determined sequence. They want the
ability to attack their most pressing needs, without creating a nightmare of
disparate and disconnected solutions. In other words, they want to have their
cake and eat it too.
We find many articulate their desire as a “Best of Breed”
approach because they equate the suite to a monolithic architecture and an “all
or nothing” kind of decision. In some ways that is true, but not entirely so.
Most any ERP solution is comprised of modules (e.g. general ledger, accounts
payable, inventory management, purchasing, order management, shop floor
control, etc.) and certainly some are optional. There is always a preferred
logical sequence to implementation because of dependencies in the data.
Foundational data like charts of accounts, customers and part or product
masters must be established early. But once the foundation is built each
company is free to decide what comes next and how far to go. This is certainly
the case with Plex ERP customers. Most go live when they have the basics
established, but then have further steps planned.
But with a monolithic architecture few, if any of the
modules are designed to stand alone. Sure, you can just implement general
ledger, or inventory management perhaps, but you can’t just implement the MES
that is built into ERP. Or the Quality Management System (QMS). Which is one of
the primary reasons why Plex Systems is actively engaged in decomposing its
monolithic solution and reconstructing it as loosely coupled components. This
represents the first fruit of that labor.
Development platforms and microservices architectures are
key to this decomposition. For the reader with a technical background, a
microservices architecture is defined as an architectural style that structures
an application as a collection of loosely coupled
services. This is the process of decomposition to which Plex refers in its
roadmap. For those nontechnical readers, think of it as constructing a solution
from a set of Lego building blocks. Purists hate this analogy, and yes, it is
an over-simplification. But it is an effective analogy that resonates with most
business users that don’t have the interest or inclination to dive deep in technical
jargon.
Think about how you build a structure
from Legos. Each Lego block is made of the same kind of material and is
attached (connected) to the other Lego blocks the same way. In many ways they
are interchangeable. But by choosing different colors and sizes, and connecting
them with a different design, you can make a structure that is very unique. And
once constructed, if you want to change it, decoupling some of the blocks and
replacing them doesn’t destroy the parts that are not affected. There is far
less disruption introduced than if you had constructed it with a hammer, timber
and nails.
Plex is actively engaged in developing
this type of platform and has already successfully de-coupled MES, but with an
eye on integration capabilities. Importing of data and/or access to data from
external systems is designed into the architecture. Plus, it is delivering
value through other associated technologies, starting with the Industrial
Internet of Things (IIoT).
Plex’s customers aren’t asking Plex to “decompose” its full
suite, but enterprise customers that operate Plex in some of their divisions,
while also running other “corporate” solutions such as SAP and Workday, see the
benefit of being able to insert (Plex’s) MES in other divisions not currently
running Plex.
Other Plex prospects are also in the midst of a transition
to cloud solutions. This may mean a complete shift, starting with the migration
or replacement of an on-premise ERP solution. Or it may mean a more gradual
shift, often leaving in place on-premise ERP solutions and surrounding them
with cloud-based added apps. Offering MES as a stand-alone solution falls into
this latter category, allowing those running on legacy solutions to take an incremental
step into the cloud, perhaps leaving on-premise ERP in place (for now).
Summary and Conclusion
All this potential for change and disruption, shifting
priorities and technology innovation makes the foundational work Plex is doing
invaluable. And so are the new technologies it is introducing to its solution. If
you are a small to mid-size manufacturer today, or perhaps an operating
division of a large corporate enterprise and you don’t have the operational visibility
you want or need to compete effectively today, Plex MES may just be your ticket
to a whole new view. And it also may be a good first step in becoming a
connected and agile manufacturer.
Challenging the Status Quo, In Pursuit of the Extraordinary
IFS is in hot pursuit of the “challenger.” Being a challenger isn’t
about market position or size, but more of a mindset. It’s about challenging
the status quo, in pursuit of the extraordinary. Challengers have an appetite
for something new. They aim to stand out, to transform their businesses. And
while IFS is committed to empowering the world’s challengers in five select
industries, it is also intent on being a challenger itself in the world of
enterprise applications.
In the eighteen months since Darren Roos took the helm as Chief
Executive Officer (CEO), he has sharpened the focus and brought consistency,
collaboration and authenticity to its global operations, without damaging a
corporate culture built on trust. Already a strong solution provider, IFS has developed
products with deep industry functionality by listening to and working closely
with its customers. That depth is now complemented with embedded, enabling
technology that brings agility, usability, extensibility and more innovation. Under
Darren’s leadership IFS challenges the status quo by being a software solution
provider that prides itself on “Saying what we [will] do, and doing what we say.”
Here we take a look at what IFS has done to enable it to empower the
world’s challengers.
Sharp Industry and Solution Focus
IFS has always focused on asset-intensive and product-centric
businesses, but it has sharpened that focus to five industries:
Aerospace & Defense
Energy, Utilities & Resources
Engineering, Construction and Infrastructure
Manufacturing
Installation, Repair and Maintenance Service
While sometimes prospects might pull it into some related,
under-served markets that share some common characteristics (like mining and
oil & gas), these five are the segments it will use to provide direction to
its product roadmaps and its go-to-market strategy. Unlike some of its
competitors, interested only in grabbing market share, IFS is sticking to the
industries it knows best, and for which its solutions have been designed and
tuned. Rather than offering a general-purpose, one size fits all solution, it
develops one that is purpose-built.
And while some of those same competitors are also trying to
be one-stop shops for all enterprise applications, IFS focuses on three
specific solutions that are individually deployable, yet inherently integrated.
They are:
Enterprise Resource Planning (ERP)
Enterprise Asset Management (EAM)
Field Service Management (FSM)
However, when combined, these three cover a very broad
footprint. Indeed, many ERP solution providers today claim to provide a
complete “end-to-end” solution, to the extent that it is often hard to tell
where ERP ends and other applications begin. But is this really what companies
want today or is it just another land grab?
We asked our 2019 Enterprise Solution Study participants to
choose between a “Suite in a Box” – a complete end-to-end solution that is
pre-integrated and ready right “out of the box,” or a more “Best of Breed”
approach with a strong core, coupled with the ability to purchase or develop
additional functionality and easily connect it back to the core. We recognize
the choice is not always so cut and dried, and therefore added some options
that are more of a mix but leaning in one direction or the other. Where one
approach was clearly preferred (i.e. not a mix), we found the “Best of Breed”
approach preferred 2:1 over a “Suite in a Box” (Figure 1).
Figure 1: Which approach is most appealing to you?
Source: Mint Jutras 2019 Enterprise
Solution Study
This may seem like the integrated suite versus “Best of
Breed” arguments that have waged throughout the world of enterprise
applications for decades. That debate was always about the tradeoff between
sacrificing “best of breed’ functionality for ease of integration. But there
are some subtle and not so subtle differences. Nobody today is willing to
sacrifice features and functions. And everyone wants an integrated solution. But
they also want it “their way” and at their own pace. And they don’t necessarily
like to be locked in with a single solution or vendor.
ERP itself is an integrated suite. Mint Jutras defines ERP
as an integrated suite of modules that provides the operational and
transactional system of record of your business. As such, it is comprised of modules,
some of which are core to any business (e.g. general ledger, accounts payable, accounts
receivable, purchasing, order management, etc.) and some specific to a type of
business. Product-centric businesses, particularly manufacturers, also need
logistics and production capabilities. But ERP doesn’t necessarily address the
needs of sales, service or marketing. And seldom does it address all the
special needs for asset maintenance and management or field service.
For these asset-intensive industries, IFS has chosen to
address the special needs of field service (FSM) and enterprise asset
management (EAM), but don’t expect it to acquire or develop a CRM system any
time soon. It will leave sales and
marketing to the likes of Salesforce and Marketo, and payroll to the likes of
ADP, Paychx and CloudPay. And it is not afraid to use technology from partners
like Microsoft to address industry-specific needs like ITAR (International
Traffic in Arms Regulations) compliance in the United States.
Of course, a lot of development effort internally goes into
developing and innovating these solutions. But IFS has also invested in
acquisitions, including the acquisition
of Workwave in 2017, and the most recent
announcement of a definitive agreement to acquire Astea Technologies, a
well-recognized player in the FSM arena. According to the announcement, “The
combined company will have strengthened leadership position in Field Service
Management (FSM) by integrating two of the most established and well recognized
players in the market.”
It is clear, IFS will stick with what it knows best,
leveraging its deep domain expertise, but also provide strong integration
capabilities. This is not only possible today, but is also the key attraction
to the most popular option in Figure 1 – the ability to assemble exactly what
is needed, with the caveat that it must be easily connected back to the core…
which brings us to the product(s).
Delivering on its Promises
IFS prides itself on the philosophy of transparency: We say
what we do and do what we say. But the cadence and volume of innovation is also
important. IFS has a spring and fall release each year. But it is also
establishing an ‘evergreen’ approach, which gives customers the option to
always be on the latest version of their applications without the disruptions
that come with full-scale upgrades. The applications are continuously updated, and
new features are optional.
This re-imagined application life-cycle experience does not
require the customer to be running in the cloud. Unlike other vendors that seem
more intent on being the biggest (in the cloud) than on delivering what
customers really want, IFS offers the choice between cloud and on-premise, with
the same software available regardless of which deployment option is chosen.
While there are some obvious advantages to the cloud, including this
‘evergreen’ approach, IFS offers no incentives to move to the cloud, leaving
the choice entirely up to the customer.
Architecture is Key
The secret behind IFS’ ability to keep a steady cadence of
both features and technology improvements is the attention it has paid to
laying the proper foundation. Oftentimes today, in selecting a new ERP (or FSM
or EAM), there is a tradeoff between a solution that has matured over years or
even decades, and one that has been developed more recently, based on the
latest and greatest technology. IFS is one of the very few solution providers
today that has survived the evolution from mainframes to component-based, cloud
native architectures, without abandoning its original solutions or leaving them
behind to ride out their final years on old and outdated technology.
“IFS has been evolving its
technology foundations over an intensive and sustained period of engineering
development.”
This statement was included in its recent announcement
of what it calls its “evolved industry-focused architecture.” Scheduled for
availability in 2020, this new architecture will lay the foundation for IFS’s
entire portfolio of products.
“In essence, this new approach
will allow customers to integrate enabling technologies such as internet of
things (IoT), augmented and mixed reality (AR/MR), artificial intelligence (AI)
and machine learning (ML) in pragmatic and focused ways so they can optimize,
automate, predict and interact better across their business.”
But IFS customers don’t have to wait until next year to reap
some benefits. The current underlying architecture is already component-based
and this is, in fact, how IFS has been successful in delivering last mile
functionality, not only to its declared focus industries, but also to
individual verticals within those segments. Process manufacturing industries,
like food and beverage, provide the perfect example. Keeping up with different
regulatory requirements across the globe has always been a challenge, but one
IFS has readily accepted. But it has not burdened other industries with the
specific requirements needed for compliance. Instead, it has developed a series
of components that can be assembled and integrated seamlessly into the core ERP
product.
How does this work and how does it set IFS apart from rivals
that have similar maturity of feature/function, but perhaps not the technology
enablement to meet rising expectations today?
In the past legacy solutions were developed as monolithic
structures. Adding very narrowly focused features and functions added to the
complexity of the solution and also made it rigid, hard to maintain and
innovate. IFS was among the early pioneers in moving away from this monolithic
approach. Its journey to a component-based architecture began in 1994 when it
introduced its Services Oriented Architecture (SOA). Today it is moving
steadily towards a microservices architecture, with specific mention of
container technology and Kubernetes,
but that is a more technical discussion than most business leaders care to dive
into.
Every technologist in our audience knows a microservices
architecture is defined as an architectural style that structures an
application as a collection of loosely coupled
services. For those nontechnical readers, think of it as constructing a
solution from a set of Lego building blocks. Purists hate this analogy, and
yes, it is an over-simplification. But it is an effective analogy that
resonates with most business users that don’t have the interest or inclination
to dive deep into technical jargon.
Think about how you build a structure
from Legos. Each Lego block is made of the same kind of material and is
attached (connected) to the other Lego blocks the same way. In many ways they
are interchangeable. But by choosing different colors and sizes, and connecting
them with a different design, you can make a structure that is very unique. And
once constructed, if you want to change it, decoupling some of the blocks and
replacing them doesn’t destroy the parts that are not affected. There is far
less disruption introduced than if you had constructed it with a hammer, timber
and nails.
IFS has already evolved from the era of the mainframe,
through the client/server era where the graphical user interface (GUI)
dominated, followed by web-enablement and the cloud era. IFS has declared the
next era to be the era of intelligent and autonomous enterprise solutions.
In a world where self-driving cars are a reality, why shouldn’t enterprise
applications be smart enough to automate processes and help you make
intelligent, data-driven decisions? So how is this transition coming along?
Tracking IFS Progress
When the latest IFS Applications 10 was announced last year
at its 2018 World Conference, it included new features and functions, but also
introduced some key areas that show IFS moving in this general direction. Let’s
take a look back on each and get an update.
A New User Experience (UX)
IFS Applications 10
introduced a brand new, intuitive user experience, called IFS Aurena. The new UX
was well received when initially launched. It has now been extended across all
IFS solutions (FSM, ERP, and EAM), and (impressively) it was delivered ahead of
schedule. Aurena provides customers with a truly responsive design. This means
it responds to the environment on which it is used, based on screen size,
platform and orientation. Whether you use it on iOS, Android or Windows, the
applications take advantage of the native capabilities of the device, giving
them a familiar look and feel, with support for offline scenarios and
device-specific capabilities such as GPS and camera. In addition, IFS
Aurena BOT is now generally available. This is essentially a virtual assistant
that allows the user to interact with the system via voice or text. It can
connect to any of the popular messenger apps (Skype, Skype for Business,
Facebook Messenger, etc.) and is making use of artificial intelligence (AI) to
make it an intelligent bot.
Application Programming Interfaces (APIs)
Last year IFS started adding APIs to open its applications
to new paths to extensibility and integration. Whether you prefer a Suite in a
Box or a Best of Breed approach, nobody runs a single application today. And no
application can afford to be an island. IFS has now developed over 15,000 APIs,
which means connecting, extending or integrating into the IFS core is quick and
easy. As
a new
member of the OpenAPI Initiative (OAI), IFS promotes open
applications in order to give customers and partners total freedom to develop
and connect data sources to drive value in a way that is meaningful to
them. IFS Aurena uses the same set of APIs which are now generally
available for every function in every IFS application.
Connecting Smart Devices
IFS is constantly
evaluating the potential new digital technologies have in providing real value
to its customers. Projects are led by a small development group called IFS
Labs. IFS Labs is focused on solving the problems of tomorrow – or perhaps the
problems and opportunities customers don’t (yet) realize they already have. With
this approach, IFS Labs hopes to provide guidance and inspiration to influence
customers to disrupt, rather than be disrupted.
But this is not
technology for technology sake. These endeavors are essentially “proof of
concept” projects, often conducted with real, live customers in order to solve
real problems. IFS Labs keeps the projects small because, with the requisite
license to fail, it must decide to pursue the concept and apply it universally
or fail fast in order to move on to the next potentially disruptive project.
Much of this
pioneering, experimental work is done quietly in the Lab and yet the results of
several of these projects were demonstrated at the most recent IFS World
Conference.
On stage and on the
Exhibition floor at the 2019 World Conference, attendees watched as Marvin, a
small, self-driving, robotic forklift delivered materials to the shop floor. Marvin
is very real and working at Cheer Pack, a US manufacturer of spouted pouches
used in the packaging of baby food, children’s snacks, yogurts, pet foods,
dressings, condiments and other food & non-food items… and an IFS customer.
While humans are still
loading and unloading the materials, CheerPack intends to connect it directly
to material handling equipment in the future to further automate the
process. In the meantime, no human is
involved in guiding the little robot to its pickup and drop off locations. ERP
drives what it carries and where it goes.
The audience also
watched as remote technicians guided the diagnosis and repair of Marvin. Think
of it as Facetime for the enterprise. An operator on stage was able to share a
live view of Marvin with a remote technician, who was able to guide her through
the diagnosis and resolution of the problem. Think of the possibilities this
might present to asset-intensive companies running a 24/7 operation, but with
technicians only on site one shift. Or those operating in remote parts of the
world where it makes no economic sense to have technicians remain on site
constantly when they are seldom needed.
Attendees of the
conference could also don a HoloLens and be guided through the replacement of
an integrated circuit board. While this type of augmented reality has been
available for a while, in the past it was hard to operate and required far too
much skill and use of the wearer’s hands, when in fact the biggest benefit
should be for hands-free operation. This
technology has now reached the level of maturity where a novice (like the
author) can pick up the device and use it with little or no instruction.
While some might call them “next gen” capabilities, these
are among those IFS has deemed to be “now gen,” ready for prime time. But these
efforts continue.
Look for the introduction of a new Machine Learning (ML)
Service coming in 2020. While asset-intensive industries are ripe with
possibilities for accelerating the use of Artificial Intelligence (AI) in
practical ways and connecting applications to devices and the Internet of
Things (IoT), there are also challenges. It is very difficult to prepare the
right data, often requiring a data scientist and competency in machine learning
technologies. There is always the risk of a communication breakdown between those
data scientists and technologists and business leaders with business goals.
The new ML Service
is being designed to be easy to use, enabling business users to solve specific
business problems with the automated selection of ML algorithms, based on their
own data. These new services will be “explainable.” In order to build trust in
the data and the algorithms, ML can’t be a black box. The user should be able
to understand why an algorithm is being used. IFS agrees.
Expanding and Strengthening the Ecosystem
In conjunction with
opening up its architecture with APISs and modern component architectures, IFS
is also investing in its partners. Its mission is to triple the resources, but
also create one IFS team, while providing its customers more choice. Many
customers prefer to work directly with a more local partner, but since IFS
requires all to be 100% certified on the applications, customers should see no
difference in quality in working with IFS or a partner.
While in the past
partners were very likely to build customizations for customers, we see a huge
potential for them to transition to building extensions. As IFS opens up its
platform to partners, this presents an opportunity for them to package up
potential modifications, providing themselves further revenue sources while
also extending the IFS applications deeper into the vertical and even micro-vertical
segments within the sectors in which IFS plays well. This removes barriers to
consuming IFS innovation that customizations create, while also creating
opportunity for IFS, its partners, and its customers.
Summary and Key Takeaways
IFS customers don’t necessarily hold the top spots in their
chosen fields. As a result, the old advertising slogan, “We’re number two. We
try harder” might very well apply.
To IFS “For the challengers” means:
Helping customers differentiate
Focusing on industries and solution sets
Providing agility and better time to value
Value and results for the customer
Choice – how licenses are consumed, and software
is deployed and who delivers (partners, IFS, both)
IFS clearly believes in the world’s challengers, encouraging
and enabling then to gain a competitive advantage and create value through
innovation. In support of these beliefs, it is focused on providing its
customers value by delivering on three key enablement points:
The software used to run the business in select
asset-intensive, product-centric industries, namely ERP, EAM and FSM
Enabling technology that helps its customers
keep pace with our rapidly changing world
Data needed to drive effective decision-making
And at the same time, IFS sees itself as one of those
challengers. It’s not the biggest enterprise solution provider, but still it
strives to disrupt, rather than be disrupted. In reaching for this objective,
it has sharpened its focus on five industries, with three solution categories.
With functionality that is broad, deep and industry-specific, it also continues
to take advantage of new and enabling technologies. It chooses to embed these
technologies rather than use them to milk the cash cow of their installed base.
Whether you are a challenger in one of IFS’ chosen
industries, or whether you aspire to be, you might want to take a closer look
at IFS.
Acumatica Summit 2020 will be at the Cosmopolitan in
Las Vegas, NV January 27 – 28, 2020. Those who are proud to be called “techies”
can come a day early for a Hackathon, and any and all can stay longer to attend
two more days of training. As an
industry analyst I have attended more conferences than I can count. Many are
over-hyped and just plain boring. But I have to admit, this is one I actually
look forward to each year. Here’s why.
Timing
First of all, the timing is right. Most of these events are
held in the spring or fall, which means I am (usually) on the road eight or
nine out of nine or ten weeks at a time, sometimes attending one or two events
a week – once in a while hitting three in a single week. No wonder most just
tend to blur together. And it’s not just me. Attendees are juggling their kids’
school and sports activities, and maybe even school vacations. But by the end
of January, I will have mostly been off the circuit for a couple of months. For
other attendees… while nobody is taking a long winter nap, schedules aren’t quite
so packed. And if you live up north, like I do, you might just be ready to go someplace
warm for a few days.
And… there’s no football to watch that weekend. The AFC and NFC
Championships will have played out and two lucky teams and their fans will be
preparing for the Super Bowl the following weekend.
Access to Acumatica Top Brass
For a company that sells exclusively through partners, the top-level
executives at Acumatica are amazingly accessible. That includes CEO Jon
Roskill, Founder and CTO Mike Chtchelkonogov (Mike C for short), and Chief
Product Officer Ali Jani. It is not uncommon for Mike C and Ali to visit
customers and they love to engage directly with users. They are very
approachable at the Summit.
Network with an Engaged Community
The Acumatica community is very engaged. That not only
includes the Acumatica staff and its partners, but the end users as well. So,
if you are looking to network, discuss ideas, offer constructive criticism or
praise, the Summit is the place to do it. There’s nothing like the kind of
personal interaction you get from meeting others with common interests and most
attendees are more than happy to share their experience.
Product Tips and News
Of course, if you just want to keep to yourself and attend
sessions, the Summit is a great place to learn more about the current product, the
latest innovation and plans for the future. Plus, you can get tips on
implementation and getting the most out of yours.
Cool Keynotes
In addition to hearing the latest from Acumatica execs, Acumatica
always has a very interesting guest speaker. Not the fluffy kind of celebrities
that pretend they know a lot about running a business, (most should stick to
show business) but presenters with some substance. This year you’ll hear Robert
Ballard, renowned ocean explorer, scientist, and discoverer of the Titanic.
Sessions for Everyone
All sorts of different people attend the Summit. There are
sessions for all attendees, including some that are geared towards
specific editions (manufacturing, construction, field service, eCommerce…). But
there are also sessions for the developers in the crowd, including Acumatica
xRP Framework Fundamentals and Web Services (and more). And there are sessions
dedicated to partners on topics ranging from pricing to sales strategies,
to best practices for co-selling with ISVs.
I’m Usually on a Panel
Typically, I am on a panel with other Industry Analysts
talking about trends in ERP. Sometimes we’re joined by customers. While I won’t
pretend this is the best reason for you to attend, I promise to make it
entertaining!
And so…
These are the reasons I am looking forward to Acumatica
Summit 2020. And if you are an Acumatica customer, or thinking about becoming
one, or if you are an Acumatica partner, you just might want to attend as well.
I’ll see you there!
Sage Intacct has been on
this journey towards an Intelligent General Ledger (GL) for several years. The
company’s goal has been to relieve
finance leaders of the burden of routine accounting tasks, while also bringing
them visibility to data, along with the necessary tools to provide actionable
insights that will lead to growth and profits. Many finance leaders today are
spending 80% of their time on accounting, leaving only 20% available to think
and act on a more strategic level. An “Intelligent GL” is really all about
flipping that ratio. Of course, no piece of software can magically turn a bean
counter into a strategist. But it can help you build trust in your data and
decisions, and provide you the time and the tools you need to dig deeper,
analyze, predict and prescribe a course of action.
And therefore, although an
Intelligent GL is a lofty goal, the real value will come from diffusing this
intelligence beyond the GL, beyond finance, leveraging it across all aspects of
the enterprise. But then, isn’t that what strategic thinking (and doing) is all
about? While Sage Intacct doesn’t profess (or pretend) to provide an end-to-end
solution, a strong, “best of breed” financial management solution can indeed
serve as a solid foundation on which to build a strategy that leads to
profitable growth.
Click
here for a closer look at Sage Intacct’s path to providing an Intelligent
GL and what it can mean to your business.
How do you achieve a 360o
view of your customer? While this has been a popular catch phrase for solution
providers offering Customer Relationship Management (CRM) systems for years
now, there have always been missing pieces to this panorama. A good CRM, as the
acronym implies, can indeed help you manage the relationship with your
customers, often starting at a point when the customer is still a prospect. CRM
solutions do a good job of managing a pipeline from initial contact to quote,
and perhaps even to the point where the quote is turned into an order. If this
is all it does, it might be more appropriately classified as Sales Force
Automation (SFA). But of course, some CRM solutions extend beyond this. But no
CRM, on its own, really manages an order, creates an invoice or manages
accounts receivable and collects cash – all necessary for that 360o
view. That is the domain of Enterprise Resource Planning (ERP).
Salesforce CRM is indeed
one of the most mature CRM solutions on the market today. While lighter
versions exist for even the tiniest companies, those that tap into its full and
extended functionality are able to effectively digitize marketing, manage
diverse channels, connect sales and service and derive business insights and
intelligence about all things customer-related. This may be sufficient for some
types of businesses, but manufacturers face some additional challenges. If
sales and operations are not properly aligned, if revenue forecasts can’t
accurately predict demand at a detailed product level, then manufacturing can’t
deliver completely and on time without inflating inventory. And even with
padding inventory, can it deliver the kind of customized or personalized
product many markets demand today?
In order to address these specific challenges of
manufacturing, Salesforce recently introduced its Salesforce Manufacturing
Cloud to “deliver transparency and predictability across your ecosystem… Align
sales and operations, unify account planning and forecasts, and deliver greater
transparency with a tailor-made CRM for manufacturers.” But in order to make
good on this promise, Salesforce itself must tap into its own ecosytem. Enter
Rootstock, providing Cloud ERP for Manufacturing, Distribution and Supply Chain
organizations. As such, Rootstock plays a key role in helping Salesforce
deliver on its declared value proposition of delivering the much sought after,
but often elusive, 360o view of the manufacturer’s customer.
Accelerating Out of the Curve of its Own Transformation
Over
the last few decades Enterprise Resource Planning (ERP) solutions for
manufacturing have evolved from their
roots in Material Requirements Planning (MRP), and have become quite mature. Throughout
that time we’ve seen solutions and solution providers proliferate and then consolidate,
leaving a select few that develop and support a
single ERP solution dedicated to filling the needs of manufacturers. Plex
Systems is one of those few, but even within this select group, Plex is unique.
Not only does its Plex Manufacturing Cloud (PMC) satisfy the back-office needs
of manufacturers, it also dives deep into the shop floor, with strength in
quality management and manufacturing execution. Born in the cloud, Plex’s ERP
has been offered exclusively as Software as a Service (SaaS) since 2001, making
the company a true cloud pioneer.
For years following 2001 Plex
Systems was in the high-speed lane on the straight-away, rapidly expanding its
depth and breadth of functionality. PMC became the performance engine driving growth
and profits for a steadily growing customer base. But just as manufacturers today must undergo a transformation
in order to compete effectively in the global, digital economy, so must Plex.
And in the course of that transformation it must navigate some curves. It must evolve
its platform and architecture, embrace new digital technologies, support
disruptive business models and adapt to changing expectations of today’s
workforce.
Whether
driving a muscle car or a business, you know you need to ease up a bit on the
accelerator as you enter a curve in the road. But if you have a performance
engine under the hood, there is nothing more exhilerating than accelerating out
of that curve. Where is Plex Systems today? Is it about to explode out of the
final turn?
The Straight-Away: A Bit of History
In its early years Plex offered the only ERP for
manufacturing that was available exclusively as Software as a Service (SaaS).
In order to fully appreciate why Plex was indeed in the fast lane, on
the straight-away, you have to understand why Plex became a “SaaS only” company
in 2001. It wasn’t because SaaS and cloud were the hottest topics back then. Back
in 2001 “SaaS” and “cloud” were not even part of the vocabulary of the typical
manufacturer. It wasn’t because the company wanted to be on the bleeding edge
of new deployment options. Most manufacturers weren’t even knowingly and
willingly considering SaaS.
The real reason was because the founders had developed
technology and processes to rapidly develop applications and SaaS was the only
way they could deliver software as fast as they could develop it. They wanted
to share new functionality and new technology as it was developed, not 12 to 18
months later, when the next release was scheduled. As a result, early on,
customers didn’t buy the Plex Manufacturing Cloud because it was SaaS. They bought it because of the broad and deep
functionality and the company’s willingness and ability to respond to their
needs… in spite of the fact that it
was deployed and delivered through the cloud.
And yet back in the early 2000’s Plex was not only a
fledgling company, but also a self-funded SaaS solution provider. Of course,
back in 2001, ERP systems in general, especially those offered by small start-ups
like Plex, were not as full-featured as today and this naturally led to gaps. However,
when you have a development team excited about new rapid application
development tools and anxious to please customers, those gaps get filled
quickly. During this “straight-away” phase, Mint Jutras once observed that in
the time it took a traditional development organization to tell its customers/business
users why something couldn’t be done, the Plex development team would have had
a proto-type of the solution up and running.
Unlike most providers of multi-tenant SaaS solutions, Plex
willingly “customized” the software. But the enhanced software wasn’t custom
for long (if at all). Plex always incorporated these enhancements into the
product. As a multi-tenant SaaS solution, every single customer runs the exact
same software. It just might not look or behave identically from customer to
customer because most of these enhancements could be selectively turned on… or
not.
Throughout this time, the lion’s share of innovation came
from customer-driven enhancements. In the early days, customer-driven also meant
customer funded. So, a customer would pay Plex Systems to enhance the product
and other customers would benefit. In other user communities this does not
happen, at least not consistently. The typical way of thinking is, “I paid for
it and it’s mine and only mine.” In the land of Plex, customers simply viewed
this as making a contribution to the community. And they expected others to do
the same. Each gave a little, and everyone got a lot. When everyone is running
the same software, literally, not figuratively, it creates a unique sense of
community, one of being “all in” together.
The Turning Point
This strategy worked brilliantly for years, but then Plex
reached a point in its own maturing process where it no longer made as much
sense. The gaps in functionality had been filled and Plex needed to formulate
its own strategy for growth, rather than let itself be led entirely by its
customers. Adding functionality that was not mainstream, or features that
perhaps led down a path Plex deemed not to be strategic, would only add
unwanted complexity to the solution. So, several years ago Plex took charge of
the roadmap and began to phase out customer-funded development and increased
its R&D investment.
But there were other factors at play here as well. This
decision came at a time when disruption had become the norm. We live in
disruptive times. Last year, the 2018 Mint Jutras Enterprise Solution Study
found 89% 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. 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.
All this disruption can have a cascading impact on business
application requirements, making agility – the ability to easily innovate,
evolve and change – even more important than current functionality. Software
delivered as a service is only one of the ways innovation is delivered and
consumed faster and more easily. This speed is largely dependent on the way
your ERP solution is constructed and the platform on which it sits. This caused
Plex to focus some attention on the underlying architecture and what Mint
Jutras calls “foundational” technologies.
Table 1 shows how our survey participants perceive the value
of foundational technologies that are embedded in enterprise applications.
Table 1: Perceived Value of Embedded (or Foundational)
Technologies
Source: Mint Jutras 2019 Enterprise
Solution Study
While a growing percentage of manufacturers perceive these
technologies as providing strong value, on average almost one in three (32%)
are unsure of the value. Essentially, they are saying, “Show me.” And another
9% (the average across all) simply don’t know. And yet investment in these
kinds of technologies is essential to the continued health and well-being of
any solution used to run a business today. As Plex turned its attention to
these underlying technologies, it very likely appeared as if innovation was
slowing down. In fact, investment increased; Plex was (and is) just navigating
a curve. To understand what Plex is doing, and why, we need to step back and
look at what is going on in the world around us all in terms of how solutions
today are built and delivered.
“Suite in a Box” or Best of Breed? Yes
First, we need to re-examine a debate that has been waged
throughout the world of enterprise applications for decades: choosing an
integrated suite or “Best of Breed” approach. Many ERP vendors have been
preaching the benefits of a complete, end-to-end solution and arguing against
the proliferation of disparate applications for almost as many decades.
This is exactly what Plex has been delivering and it would
certainly appear to be what Plex customers want. Plex customers have
participated actively in Mint Jutras surveys for many years now. They tend to
have more complete solutions than manufacturers running other solutions, and
strongly favor a single vendor, single solution.
We asked the survey participants in our 2019 Enterprise
Solution Study to choose between a “Suite in a Box” – a complete end-to-end
solution that is pre-integrated and ready right “out of the box,” or a more
“Best of Breed” approach with a strong core, coupled with the ability to
purchase or develop additional functionality and easily (we use the term
loosely) connect it back to the core. We recognize the choice is not always so
cut and dried, and therefore added some options that are more of a mix but
leaning in one direction or the other. The results (Figure 1) surprised us a
little. We expected a higher percentage would prefer the Suite in a Box
approach.
Figure 1: Which approach is most appealing to you?
Source: Mint Jutras 2019 Enterprise
Solution Study
Since collecting this data, Mint Jutras actively sought out
discussions with companies, posing the same question, and got very similar
results. But then we asked, “Why?” The short answer: most are interested in a
fully integrated, fully functional solution, but they want the freedom and
flexibility to implement incrementally, in their own determined sequence. In
other words, they want both.
Many are also in the midst of a transition to cloud
solutions. This may mean a complete shift, starting with the migration or
replacement of an on-premise ERP solution. Or it may mean a more gradual shift,
often leaving in place on-premise ERP solutions and surrounding them with
cloud-based added apps.
The core points of any debate between suite and Best of
Breed center around the trade-offs between ease of integration and depth and
breadth of solution. With a suite approach, all modules share a common database
and are developed using the same tools and technology. This eliminates data
redundancy and any need for separate integration efforts.
In the past specialty functionality built into ERP was
lighter and less feature-rich and definitely not “best of breed.” While that
may have been the case early on, over the years, ERP solution providers added
more robust features and functions through a combination of their own
development efforts and sometimes through acquisition. Today they are often
(not always) able to compete head to head against stand-alone “best of breed”
applications.
With the exception of two acquisitions (DemandCaster
for supply chain planning and DATTUS
for Industrial Internet of Things connectivity) Plex’s functionality has been
internally developed and therefore intrinsically built into the suite. This
includes rich functionality connecting the shop floor to the top floor. The
Plex Manufacturing Cloud can certainly hold its own against so-called best of
breed applications in several categories, including quality management (QMS) and
manufacturing execution (MES).
So, if companies can get best of breed functionality in a
suite, without the need to manage separate integrations, what drives the desire
for the “Best of Breed” approach as we articulated it in our question?
We find many articulate their desire as a “Best of Breed”
approach because they equate the suite to a monolithic architecture and an “all
or nothing” kind of decision. In some ways that is true, but not entirely so.
Most any ERP solution is comprised of modules (e.g. general ledger, accounts
payable, inventory management, purchasing, order management, shop floor
control, etc.) and certainly some are optional. There is always a preferred
logical sequence to implementation because of dependencies in the data.
Foundational data like charts of accounts, customers and part or product
masters must be established early. But once the foundation is built each
company is free to decide what comes next and how far to go. This is certainly
the case with Plex customers. Most go live when they have the basics
established, but then have further steps planned.
But with a monolithic architecture few, if any of the
modules are designed to stand alone. Sure, you can just implement general
ledger, or inventory management perhaps, but you can’t just implement the
manufacturing execution system (MES) that is built into ERP. Or the Quality
Management System (QMS). Which is one of the primary reasons why Plex Systems
is actively engaged in decomposing its monolithic solution and reconstructing
it as loosely coupled components. This is at least one of the curves Plex is
navigating.
What, if any, significance does this have on existing Plex
customers and prospects? For those customers looking for a complete end-to-end
solution, it allows Plex to once again speed the delivery of added features and
aids them in providing last mile functionality without adding complexity. Instead
of building customer-driven enhancements into the base, it can assemble a
unique set of components to deliver industry-specific functionality for each of
the segments of manufacturing on which Plex focuses.
For prospects looking to start their own cloud journey or
digital transformation, it provides an option to start small, perhaps with MES
instead of a full ERP solution. And of course, that provides Plex with added
growth opportunity.
But “decomposing the solution” is not the only way Plex is
navigating this curve and transforming the company and its solution. It is
actually hitting on all of the different aspects listed back in table one. The
most obvious is the transition to cloud and SaaS. While not exactly a
“technology,” it is the only entry in the table that is even close to
mainstream. But this requires no transition for Plex. PMC was born in the cloud
and has always been offered as a multi-tenant SaaS solution. Enough said.
However, let’s hit on a few of the others listed.
Platforms and Architecture
Development platforms and microservices architectures are
key to this decomposition. For the reader with a technical background, a
microservices architecture is defined as an architectural style that structures
an application as a collection of loosely coupled
services. This is the process of decomposition to which Plex refers in its
roadmap. For those nontechnical readers, think of it as constructing a solution
from a set of Lego building blocks. Purists hate this analogy, and yes, it is
an over-simplification. But it is an effective analogy that resonates with most
business users that don’t have the interest or inclination to dive deep in technical
jargon.
Think about how you build a structure
from Legos. Each Lego block is made of the same kind of material and is
attached (connected) to the other Lego blocks the same way. In many ways they
are interchangeable. But by choosing different colors and sizes, and connecting
them with a different design, you can make a structure that is very unique. And
once constructed, if you want to change it, decoupling some of the blocks and
replacing them doesn’t destroy the parts that are not affected. There is far
less disruption introduced than if you had constructed it with a hammer, timber
and nails.
Plex is actively engaged in developing
this type of platform and is probably about a year away from completion. But in
the meantime, it is delivering value through other associated technologies,
starting with the Industrial Internet of Things (IIoT).
Industrial Internet of Things (IoT)
While sensors, machines and
equipment on the shop floor have been collecting vast volumes of operational
data for decades now, that data has not always been “connected” or accessible
for decision making. Indeed the very fact that this data collection has been
happening for decades contributes to the problem. Many of the machines and
software put in place decades ago pre-date the Internet and therefore have no
ability to connect to a network. Retrofitting equipment, or replacing it, is
expensive and most of these machines were designed to last a lifetime.
Expensive custom integration projects are beyond the expertise and budgets of
all but the largest manufacturers. So what’s the alternative?
This is where Plex’s
acquisition of DATTUS comes in. Providing an alternative is what DATTUS is all
about. Think of it as the bridge between you and your machines. The platform is
a hardware/software combination, which collects data from PLCs, VFDs,
industry protocols like MTConnect,
and popular enterprise applications including Salesforce, SAP and (of course)
Plex. The goal: making this data available for analysis and
decision-making.
The majority of the original
DATTUS customers are not sophisticated and therefore beyond the physical
connection Plex is concentrating on developing applications to be used right
out of the box, rather than just providing a tool set and leaving it up to
customers to connect manufacturing equipment and sensors to the cloud and to
PMC. DATTUS is now Plex Industrial IoT and the first applications are
centered around visualization of the sensor data, combining it with data from
PMC, adding thresholds for alerting production supervisors when a process is
about to go out of spec. But the team is already working on connecting data to
MES and QMS to complete the genealogy and traceability and for anomaly
detection to prevent machine failure. But this anomaly detection will require some
artificial intelligence.
Artificial Intelligence
Technologies like machine learning, natural language
processing and other forms of artificial intelligence have become quite
prevalent in consumer technology (think Siri and Alexa, or GPS that learns your
favorite route). Now is the time to bring them into the enterprise, much like
they were insinuated into our personal lives – by adding value and embedding
them.
The concept of machine learning in an industrial setting
employs computer algorithms that learn and improve over time with use, often
drawing on data, not only from enterprise applications, but also from equipment
on the shop floor or even from smart products in the field. Between the data
already being collected in PMC and the data that can be potentially collected
through Plex IIoT, Plex is sitting on a potential gold mine of data to use in machine
learning. The team is laying the ground work for future initiatives.
In the meantime, the development team is already
experimenting within PMC by analyzing settings to discover combinations that
produce great (implementation) results and those that can spell disaster, in
order to guide new customers and even warn them of pending disaster. Delivering
this kind of artificial intelligence provides value, not only to those looking
to connect to the IIoT, but to all Plex customers. And therefore, Plex is
following the same path Apple took in delivering a voice-activated virtual
assistant (Siri). Nobody asked Apple to deliver this and Apple didn’t make it a
separate option (with a separate price tag). Once customers started using it,
they saw the value and it became a prerequisite for any smart phone. Will Plex
set the standard in terms of performance evaluation of a SaaS solution for
manufacturing?
Accelerating Out of the Curve
Like any good business competing effectively in the today’s
global, digital economy, Plex Systems has been undergoing a transformation.
Unlike other SaaS-only solution providers that operate in the red, Plex is cash
flow positive and spending more in R&D than ever before in order to fund
and fuel this transformation.
For more than a decade and a half, the development team
worked swiftly to build out robust functionality that connected the shop floor
to the top floor, through practical (often customer-funded) innovation. But today
we live in a different world. Both the pace of business and the pace of change
are accelerating. The road to success is not necessarily a straight path.
Disruption throws us some curves.
And therefore, Plex must find new ways of listening and new
ways of solving problems – problems its customers might not even know they
have. Apple (think Siri) and Steve Jobs provides some inspiration.
“Get closer than ever to
your customers. So close, in fact, that you tell them what they need well
before they realize it themselves.” Steve Jobs
Plex’s customers aren’t asking Plex to “decompose” its full
suite, but customers like Accuride that
operates Plex in some of its divisions, while also running SAP and Workday, see
the benefit of being able to insert (Plex’s) MES in other divisions currently
running SAP.
Customers transitioning from legacy, on-premise solutions
face new challenges and have all sorts of different priorities. The shortest
path to their goals may not be the traditional road, but rather a road less
travelled. Customers (and prospects) that think artificial intelligence is
still the stuff of science fiction aren’t asking Plex to predict machine
failures on the shop floor, but they will most definitely benefit.
All this potential for change and disruption, shifting
priorities and technology innovation makes the foundational work Plex is doing
invaluable. And so are the new technologies it is introducing to its solution.
There is nothing more exhilarating than accelerating out of a curve. If you are
a Plex customer or prospect, buckle up… it’s about to get very exciting!
In its quest to enable the Self-Driving
Enterprise, last fall Aera Technology
introduced its Cognitive Workbench. Using billions of data points collected with
its patented data crawlers (real-time crawling technology), Aera’s 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 Cognitive Workbench presents personalized,
time-sensitive, and prescriptive recommendations to drive capital efficiency,
productivity, growth and customer satisfaction.
Now, Aera further augments and digitizes decision making, tracking decisions made by all your team members, including those made autonomously by your newest virtual team member: its new Cognitive Decision Board. Working interactively through the Decision Board you gain better visibility into your decision making process, and understand the impact of each decision. By tracing steps taken and the reasons why they were taken, you are able to get quick insights about those decisions. Did you accept Aera’s recommendations and if not, why not? Through this monitoring, measuring and feedback, Aera continues to learn and therefore can make better recommendations and your entire team can make better decisions.
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.
Follow
twitter
linkedin
rss