Sage

The Sage Brand – Will it become a household name in NA?

Sage North America is taking its brand very seriously these days. In Europe, Sage is a household name, but when Pascal Houillon arrived in the United States from Paris, he found himself in a very different situation. Mr Houillon recently took over as President and CEO of Sage North America when Sue Swenson retired. Sage Software is a $2.24 billion global company. Sage North America boasted revenues in 2010 of $857.8 million, supporting more than 3.2 million customers in the U.S. and Canada with ERP and CRM and other business applications that support accounting, payment processing, human resources, and the specialized needs of the healthcare, nonprofit, manufacturing, and construction and real estate industries, among others.  Other numbers behind the scenes are equally impressive:

  • Revenues for the first half of 2011 were $1.18 billion globally and $430.7 million in North America
  • More than 40,000 customer calls are managed daily
  • More than 27,000 Value Added Reseller (VAR) business partners worldwide; 5,000 VARs in North America
  • 20,000 members of Sage Accountants’ Network in North America
  • 13,600 employees worldwide; 4,000 employees in North America
  • Over 4,000 attendees at its Sage Summit 2011 customer and partner conference (underway in Washington D.C.  as we speak)

In spite of this, and partly because many of these customers are very small businesses, Sage continues to fly under the radar of many. Based on the premise that a weak brand limits growth for both Sage North America and its partners, Mr Houillon and his management team are on a mission to change that.

In addition to serving a very small end of the market with products such as Simply Accounting and ACT! this lack of awareness  stems in part from Sage having grown largely through acquisition and having preserved many of the brands along the way: ACCPAC, MAS, Adonix and X3, SalesLogix, Simply Accounting, Peachtree, ACT!, ABAS, etc., etc.  Some of these have (and still do) have better name recognition than the Sage brand.  While keeping those brands alive was likely a smart decision at the time, now in order to strengthen the Sage name, the Sage management team has decided to eliminate them. Yes, all of them. While currently products are grouped and managed internally by software category (e.g. ERP and CRM), each with multiple brands and product lines, the thought moving forward is to simply group them by target of company size.

While nothing is yet cast in stone, there will likely be a Sage 50 targeting the very smallest companies, Sage 100 coming up market, Sage 200 even further up… You get the idea. Under Sage 50, there might be accounting solutions, as well as contact management and other categories of solutions. Similarly, there will be products in the Sage 100 line that will satisfy different market needs (ERP, CRM, Human Resources, etc.)  While the concept is simple enough, execution will be far from simple, since there are multiple products in the same category targeting similar size companies. Most specifically on the ERP side of the house, company size is not the only qualifier that determines which solution is offered.

For example, Sage Accpac targets 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. X3 is a better fit for the latter. Therefore, because the decision is not always based on company size, there will be some overlap and perhaps some hard decisions as to where to “put” some of the products or how many different Sage NNN product lines are created.

And once these product lines have been created, what will Sage call the different sets of code that fall under each umbrella product? Will they be products, options, flavors, categories? Or will another name (i.e. brand) creep back in? To some these might seem like small, inconsequential issues. But when branding is the goal, they are far from insignificant. For customers that bought Accpac or ACT! 15 years ago, it will be quite hard to get those customers to call those products anything but what they have always called them. One might ask if that really matters. After all, they already bought the product. But the answer is a resounding, “Yes!” Brand equity also translates to brand loyalty and brand awareness. And if the existing customers are loyal to the product, with no loyalty to the company that now owns it, the brand is diminished.

But the existing customers will make the transition if they perceive that they are actually getting something “different”, and “different” usually means “more.” So far there has been no talk from Sage North America that any of these products are going away, no talk of rationalization or consolidation. So if the products continue, just with a new name, Sage will need to find a different way of adding enough value to justify the shift in thinking to a new brand.

Some of Sage’s “Connected Services” may be just the ticket for this.   Connected Services are online, web- or mobile-based services, integrated with a Sage product and designed to solve specific business issues for Sage customers. In some instances, they are provided at no charge, in others, they can be purchased on a subscription basis or included with a Sage Business Care Plan. Sage groups these into various categories as follows:

  • Employer Services: learning management service, performance management service, recruiting service
  • Financial Services: payments service, credit checking service, billing service
  • Operations Services: payroll service, direct deposit service, tax service, compliance service
  • Sales and Marketing Services: E-marketing service, business information, business intelligence services
  • Vertical Services: Healthcare patient and physician services, construction project management services, fundraising and grant management services

There is a distinct advantage to offering these as separate services. By creating these as add-on, external components, Sage can develop them once and make them available to all product lines, rather than having to develop employer or financial (or other) services for each of its separate products. Combining the original product offering with a host of services such as these, Sage  may just be able to get its existing customers to make the paradigm shift from being Accpac, Adonix, ACT!, SalesLogix (etc., etc.) customers to being Sage customers.  And then they will be well on their way to being a real “name” in North America.

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Sage X3 Version 6.2 Ready for Growth

After a year of weathering the recession, hunkering down and listening to its customers, Sage Software is emerging from the downturn in the economy with growth on its mind. A key element of that growth plan includes the introduction of Sage X3 Version 6.2. With over 300 enhancements that broaden an already broad footprint, the new version adds multi-national support, extended accessibility, portable widgets for mobile and casual users  and visual process flows. Embedded Business Intelligence (BI) brings added visibility and new packaging options offer rapid implementation for smaller companies.While Sage is a household name in Europe, will this new release of a mid-market Enterprise Resource Planning (ERP) application help Sage to gain mind share and market share here in North America?

Quick Snapshot of Sage

In introducing itself, Sage cites sources that rank it number one in business software in the Small to Mid-size Business (SMB) market1. With over 6.3 million customers worldwide, $2.24 billion in annual revenues, headcount numbering 13,600 employees in 24 countries and 27,000 value-added resellers, Sage certainly takes an imposing lead in sheer numbers. However, many of its customers use Sage products which fall into a category that Sage itself calls “small business accounting.” This is separate and distinct from its ERP product lines, which is the category into which X3 falls. Even when combined with its other ERP product lines, given some of the very prominent competitors on the scene, Sage falls short of ERP market domination. But these statistics serve to identify Sage as a stable and financially secure vendor. Given the influence of the internal and external financial stakeholders in any business software decision, this can be a strong endorsement.

Sage X3 Version 6.2 Highlights

The underlying themes of Sage X3 Version 6.2 are threefold:

  • Focus on productivity, particularly in recognizing increasingly complex processes especially in mid-market companies, all the while responding to the pressure of time and cost constraints.
  • Visibility, flexibility and the need for collaboration. Market volatility requires agility in responding to fluctuating demand. Success is based on managing both the relationship with the customer, in addition to transactions. As customers become more demanding, the need to deliver more and better value increases, adding further complexity to the relationship.
  • Increasing need for global management. Global expansion is changing how and where products are made, bought and sold. Rising material and energy costs and emerging markets impact decisions on sourcing of materials and labor, adding increased complexity and new regulatory compliance requirements.

Here are some highlights of the release.

Bundled Functionality

All the functional components of Sage X3 are grouped into two bundles for distribution and manufacturing, with distribution being a subset of manufacturing. While it is possible to purchase distribution without manufacturing, it is not possible to purchase manufacturing without distribution. Both include core business functionality for finance, sales, purchasing and customer management. The CRM functionality does not include any of the CRM packages Sage offers as stand-alone solutions and is in fact lighter than these other solutions. However, in the future full integration to Sage Saleslogix will be offered as an out-of-the-box solution for those who require a more robust CRM.

However, while the bundled CRM functionality may be considered “light”, the manufacturing and distribution modules are quite comprehensive, including some more advanced options such as support for both discrete and process manufacturing, including both Bill of Material (BOM) and formula management. Warehouse management includes Radio Frequency (RF) data collection, acquisition price tracking, multi-level warehouse and location management and can handle outsourcing and subcontracting.

Advanced Technology Underpinnings

The underlying architecture of X3 is web-native, built on Services Oriented Architecture (SOA) which is meta-data driven. This facilitates integration and inter-operability in multi-national, multi-location and heterogeneous environments. Seldom today does a mid-market enterprise exist with only a single enterprise application, even though ERP’s footprint has continued to broaden. Therefore the ability to integrate across a hybrid environment becomes more important.

The Sage Application Framework for the Enterprise (SAFE  X3) includes common tools which support all the functional aspects of X3 Version 6.2, along with a toolset for administrators and developers which provides a 4GL integrated development environment:

  • Workflow processing
  • Visual Process Flows
  • Portal and User Interface (Web/Windows)
  • BI Engine and Data Warehouse
  • Reporting tools
  • DB Requester (Oracle/MS SQL Server)
  • Multi-legislation support
  • Multi-company/site support (significantly improved in Vs. 6.2)
  • LDAP Authentication (added in Vs. 6.2)
  • Web Application Server & Web Services (added in Vs. 6.2)

Ease of Use

Sage X3 Version 6.2 includes visual process flows which provide an alternative to traditional hierarchical menu structures. Role-based flows are visualized to provide a complete view of a process. Picture it almost like a subway map, identifying all stops along a route, with branches and optional paths. Predefined processes identified by role are delivered with the solution, but companies can modify these or define their own. Valid paths are identified and then serve to enforce quality checks and procedures for the processes.

Extended Accessibility

Most executive decision-makers today are not tied to a desk for very long. With the introduction of a plethora of new devices, professionals are going mobile. Just as they are becoming more and more unwired, they are indeed becoming more and more tethered to the business. But top level executives have traditionally been hands off in terms of going to directly to the source for data. However, trends in mobility may be just the catalyst needed to prompt better engagement. With the advent of newer devices that are easy to carry, easy to use and allow for better visualization, executives are increasingly relying on these devices for more than email and phone.

Sage has introduced both a new method of interacting with Sage X3, as well as a mobility option through a partnership with Netvibes, allowing access to X3 through a Netvibes Dashboard. Sage is betting that this type of accessibility will draw in X3 users that today are not core users of ERP at all, expanding the audience and putting all on the same page with a unified view of data.

Who and What is NetVibes?

Netvibes Dashboard Intelligence is a universal platform that allows you to connect virtually any application, feed or system together on one real-time dashboard. Netvibes offers a large widget library, connecting enterprise feeds, CRM, ERP and analytics applications, and more through a customized dashboard.

Embedded Business Intelligence

One of the primary goals of ERP is to obtain added visibility to the business. Yet achievement of this goal has eluded most. Often the transactional nature of ERP makes it easier to collect data than to extract information and knowledge from the system of record it maintains. As a result, companies often turn to BI tools to extract this level of intelligence to fill the gap. But BI tools are just that – tools that need to be used to construct views and provide analysis.

Sage has embedded a BI engine (powered by SAP Business Objects) and data warehouse into X3 Version 6.2 and provided preconfigured data cubes for advanced business analysis through user-defined dashboards for real-time analytics. This removes the burden from its user’s IT department and in doing so further facilitates decision-making and removes the barriers from connecting decision-makers directly to the data.

New Configurations

In addition to functional and technical enhancements, Sage is also introducing some new packaging: Standard Edition and Premium Edition.

Sage is perhaps better known for its small business accounting applications (Sage Peachtree and Sage Simply Accounting) than it is for its ERP solutions. Now it is bringing its experience with these small companies to Sage X3. ERP is still quite intimidating for many small companies but globalization and new technologies are bringing a level of competition to running businesses that can’t be easily addressed without a full-fledged ERP solution.

In response, Sage has added Sage X3 Standard Edition, a preconfigured solution and implementation framework that is designed to maximize the efficiency of implementation and deployment for businesses with fewer than 50 users and standard industry processes. It provides the same core functionality as Sage X3 Premium Edition, with a full web client and role-based portals and the visual process flows, but without the Visual Process Editor.

Sage has determined that the average small company required 16 different roles and about 140 visual process flows. The implementation methodology and toolkit preconfigures these roles and processes and allows little deviation. Standard Edition customers are limited to three companies in a single instance of the software. French and English are supported, as is multi-currency. As a result, companies are ready to go right out of the gate and have experienced implementation and deployment in as little as 35 days.

As companies grow and require more flexibility, the transition to the Premium Edition is seamless. The Premium Edition utilizes the same underlying application but removes the limitations of number of companies and provides multi-company management, as well as the Visual Process Editor.

Key Takeaways and Recommendations

Upgrading to new releases is never a trivial process and a business case should always be created to justify the time and effort required. However, it is just as dangerous to let your ERP system become outdated. As new functional enhancements are introduced, new technology, accessibility and ease of use should be important considerations in making the business case. And don’t forget the cost avoidance and specific cost reductions that can be gained through added features and options. So existing Sage X3 customers are strongly encouraged to examine the potential benefits and build a solid business case for moving forward.

For Sage X3 prospects, look carefully at your functional needs and make sure they are met by any ERP options you are considering. But look beyond the features and functions and consider ease of use, accessibility and how ERP and its data blend with other sources of information. As decision-makers are indeed more tethered to the business than ever, it is important for today ‘s and tomorrow’s decision-making needs be met.

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Sage X3 Launches in Russia and Austria. Sage who?

Actually Sage X3 launched in these two markets back in November 2010, but recent wins and partnerships underscore the global nature of the offering. If you travel around the major cities in Europe you will find Sage to be quite well-known. Not so much in North America. At Sage’s recent North American Analyst Day, all of the top execs that were present lamented this anonymity, most specifically Pascal Houillon, CEO Designate selected to replace Sue Swenson, current President and CEO of Sage North America when she retires later this year. In moving from France to California, he has been constantly reminded of this challenge of awareness both personally and professionally. His goal – make sure those that see him in the grocery store know who and what Sage does.
The stats from the most recent launch of Sage ERP X3 v6 in January 2010 signal X3 is indeed gaining traction. In the last twelve months Sage reports:
  • 300 new customers have adopted Sage ERP X3
  • the total number of X3 customers worldwide numbers in excess of 3,000
  • Sage ERP X3 is now available in 53 countries
So why do so few people know who Sage (a $2.24 billion company) is? Why don’t they think of Sage when they think of the top ERP players? First of all, Sage is not just an ERP company. The company also sells accounting, CRM, Payment Solutions, Healthcare EHR and practice management and more. So that $2.24 billion is not all ERP sales. But it does have 3 different ERP solutions including MAS, X3 and Accpac with more than 165,000 users worldwide.
Part of this identity crisis results from Sage having grown largely through acquisition and having preserved many of the brands along the way. In fact, Sage ERP X3, until the last couple of years, was known as Adonix X3. Whenever I talk with a company that is acquiring another company, one of the first questions I ask is about preserving the brand. Changing names is hard, especially when there is a significant amount of brand equity in the name.
I went through those same decisions back in the mid-90’s when CA bought ASK. The CA management wanted to lose the MANMAN name. The problem was, everyone “knew” MANMAN even though hardly anyone “knew” ASK. So my advice to CA management was, you can change the name, but people will always call it MANMAN (today MANMAN is Infor ERP MANMAN). Sage had a similar situation with MAS and Accpac (acquired from CA, by the way) and therefore the prefixing of MAS and Accpac with Sage ERP is the logical solution to introduce the Sage brand while preserving the brand equity of these two solutions. But getting staff and customers to call them anything but Accpac and MAS is a constant struggle. Old habits die hard. But Sage had the opposite situation with X3. Adonix was more well-known than X3 and Sage allowed Adonix to operate as a subsidiary, preserving the Adonix name, for several years.
So I am afraid Mr. Houillon is going to have to continue to work very hard to get the same level of name recognition here in North America that he enjoyed in Europe. But in a market where name recognition is paramount to market awareness, it is certainly worth the effort.
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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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