Software as a service

Oracle’s Cloud Journey… Accelerated

It is quite clear Oracle has set out to be the undisputed leader in cloud computing. Chairman and CTO Larry Ellison publicly stated his goal of Oracle becoming the first company to reach $10 billion in cloud revenue. The acquisition of NetSuite late last year certainly gave Oracle a big boost in meeting that goal.

In fact, in welcoming attendees to SuiteWorld 2017, CEO Mark Hurd declared Oracle to be in a class alone – the only IT company capable of co-existing on-premise or in the cloud. I have to admit this statement confused me a bit, since there are lots of software solution providers that have taken their on-premise solutions to the cloud, priding themselves in offering choice in deployment models. But I with other, more pressing questions to ask, I never got clarity on this statement while I was at SuiteWorld.

However, the week after SuiteWorld, I had the opportunity to visit Oracle’s Redwood City campus and attend an Oracle Media Day. The theme of the day was cloud and I think I “get” it now.

In the context of NetSuite and SuiteWorld, we’re talking about software as a service (SaaS), and more specifically, enterprise application software. That’s the world I live in and where my mind immediately goes when I think of cloud and “as a service.” I suspect I am not alone here. But that is obviously not all Oracle does. Oracle also provides infrastructure (database and middleware) and a development platform. And more recently it has ventured into the world of data as a service, recognizing data is an important key to unlocking better business outcomes.

Other vendors might offer one or two of these categories…

  • Many of its ERP competitors might offer enterprise applications on-premise or as SaaS solutions.
  • Salesforce offers enterprise applications, along with a development platform (PaaS). But Salesforce is exclusively SaaS and PaaS and doesn’t offer anything on-premise.
  • Amazon is focused exclusively on infrastructure (IaaS).

Oracle is the only company to offer all three (infrastructure, platform and enterprise application software) both on-premise and as a service.

Why is this significant? To quote Mr. Hurd, “We will lead a decade long transition to cloud. The hybrid world will last a long time.” I would agree that this hybrid world will last a long time. While preferences for software deployments have shifted dramatically, there is still a lot of software installed on premise today and my research indicates it will take longer than a decade to replace it. This shift of software to the cloud can’t happen without supporting infrastructure and platforms.

Preferences Have Shifted to SaaS

While years ago ERP could have been called the last bastion of resistance to SaaS, this resistance has been dissipating quite rapidly over the past several years. We have been asking the following question for years now: If you were to consider a new solution today, which deployment options would you consider? Participants are allowed to select as many as they wish. A summary of aggregated answers is shown in Figure 1. We start in 2011 and skip every other year just to fit it on the chart. SaaS is currently the option most likely to be considered and the willingness to consider traditional on-premise solutions dropped off dramatically between 2011 and 2013.

Figure 1: Deployment Options that would be Considered Today

Source: Mint Jutras Enterprise Solution Studies

*Option added in 2015

This year we added a follow-on question, displaying back the deployment models the participant selected and asking which was the first choice. Over half (51%) of all respondents selected SaaS. Furthermore, out of the 325 that would consider SaaS, 225 (~70%) selected it as their top choice.

But even with this level of interest, the actual shift to the cloud can’t happen overnight. We asked our 2017 Mint Jutras Enterprise Solution Study participants to estimate the percentage of all business application software they have running in the cloud today and we also asked them to project that into the future. Even 10 years out (and beyond) we still see over 30% of business software will not have transitioned to SaaS (Figure 2).

Figure 2: Percentage of Business Software Deployed as SaaS

Source: Mint Jutras 2017 Enterprise Solution Study

Yet with 40% of business software deployed as SaaS today, the shift has definitely begun. So this begs the question: How will they get there? What path will companies take? Our 2015 and 2016 studies asked this question (Figure 3). The results validate Mr. Hurd’s conclusion that the hybrid world will last a long time.

Figure 3: What Best Describes Your Cloud Strategy?

Source: Mint Jutras 2015 and 2016 Enterprise Solution Studies

No single strategy dominated, but less than one in four operate predominantly in the cloud today. Few (8% in 2015 and 11% in 2016) are taking specific action to move directly to the cloud, and many more prefer instead to supplement existing solutions with cloud applications and perhaps replace on-premise solutions over time.

We didn’t see all that much change in cloud strategies from 2015 to 2016, so we moved on to other questions in 2017. But we will likely revisit this question in 2018 or 2019. We anticipate that even those not anxious to make any move today might be influenced by the cloud momentum, as well as the growing number and variety of options available.

Oracle Building Cloud Momentum

In the meantime, Oracle is building its own cloud momentum. In its latest quarter, cloud bookings of annual recurring revenue (ARR) were up 73%. Current run rate of cloud revenue puts it at $5 billion (annualized), which means Mr. Ellison is at least halfway to his goal. This includes 1,125 new SaaS customers and 908 SaaS expansions. With the NetSuite acquisition, the number of SaaS customers grew from 13,103 to over 25,000.

Yet interestingly enough, while you might think the differentiation of Oracle as the only IT company capable of supporting on-premise and cloud throughout the full stack might be most appealing to its existing customers, Oracle says most cloud customers are net new. This bodes well for Oracle being able to grab more cloud market share. But it will be even more interesting to watch and see if this cloud momentum starts to permeate through its own installed base. This would serve to further accelerate cloud revenue growth.

And Oracle’s current capacity, with 21 data centers, supported by a flat, wide network with fast storage and huge bandwidth, seems like it should be quite appealing to its own customers, comparatively speaking. In fact Oracle presented one comparison between Oracle and Amazon Web Services (AWS) done by one of its customers, showing Oracle was three to seven times faster, at half the cost. And the workload portability to an Oracle data center should be simpler and easier because Oracle can offer a choice of deployment with the same software, the same APIs, and the same commercial terms.

Oracle has outlined six different “journeys” to the cloud, five of which start with existing (legacy) on-premise solutions. This might involve optimizing on-premise before shifting to either a public cloud or a cloud at the customer’s site. It might involve lifting and shifting workloads to a public cloud, creating a new solution with PaaS or modernizing functions by moving to a new SaaS solution. The final journey is one of a new company (or division or business unit), born in the cloud.

Trek Bicycles is an example of one customer that created a new cloud solution to address a specific pain point: processing claims (repairs). Service is a huge part of Trek’s business, and dealers were spending 6-7 minutes in submitting claims, and the average retailer submits about 2,000 claims per year. Retailers renting bikes in the mountains of Europe were rising early and getting in long before the shop opened simply to enter claims. They needed a better way. So Trek created a cloud-based mobile app. Now, whether partners are in their shops or at a trade show or event, they login to TREK claim entry, send a photo, registration of the bike, and easily enter a claim in under two minutes.

Trek is one example of this hybrid world. In the back office, it is running JD Edwards on premises.

One More Stop on the Cloud Journey: The Data Cloud

There is one more piece of the cloud puzzle, or rather one more step along the cloud journey. This one involves data – not the kind of data stored in and managed by Oracle enterprise applications, but the kind of data that lets you truly understand your industry and your customers. Oracle posed a good question during the Media Day: Would you rather spend money working on ERP or getting to know your customers better?

This is a no-brainer for most companies. They would much rather invest (time, effort and money) directly in growing the business, rather than in back-office solutions that offer more indirect benefits. By putting your ERP in the cloud you are relieved of much of the burden of managing the ERP installation. By tapping into the Oracle Data Cloud you take advantage of the investments Oracle has made, investments in companies like Moat, Blue Kai and Datalogix to make big data available to fuel marketing campaigns and strategic business decisions.

Summing Up

Oracle has made very significant progress in attacking its goal of cloud domination through both organic development and acquisitions. It is the only company on the planet today that can claim to have a “full stack” including IaaS, PaaS and SaaS, while also maintaining the same categories on-premise. And it adds DaaS as frosting on the cake.

However, in order to meet its goal of being the first to reach $10 billion in cloud revenue, it will have to continue its momentum of adding new customers, but will likely need a good portion of that revenue to come from transitioning its own on-premise installed base to the cloud. Before that happens, those customers will need to see the value of the move and be confident that Oracle is the best choice to get them there.

Many companies today, including many Oracle customers, have invested a lot of blood, sweat and tears (not to mention dollars) in their current on-premise implementations. They may be loath to make any changes, particularly if they are heavily customized.

Many still view enterprise applications, like ERP, as they would brain surgery: You don’t do it unless the patient is dying. Mint Jutras has long been trying to change that way of thinking, preferring to treat it more like joint replacement. When do you replace a knee or a hip? When it becomes too painful or when it prevents you from doing what you need (or want) to do. But joint replacement is still major surgery and there is some downtime and a recovery period involved. Nobody volunteers for it without the promise of significant improvements. Oracle’s challenge will be twofold. First it must convince customers that the journey is worth the effort. And secondly, it must prove that transitioning to the Oracle cloud is less invasive surgery, with a quicker recovery period. Of course if a company just wants to lift and shift its current implementation to the cloud, its current solution provider will be its first and best choice. But this is more akin to a hosted environment. While there will be some value in doing this, it will leave many of the benefits of a true SaaS solution on the table. Of course not all of Oracle’s ERP solutions are available as SaaS today and NetSuite is the only multi-tenant SaaS ERP solution in its portfolio. But the breadth and diversity of Oracle offerings provides many different paths that might be taken. The task at hand will be to pick the right path, the one that brings the most value to the customer.

If Oracle can accomplish this, it is certainly well positioned to accelerate its own cloud journey and be the first to reach its goal.

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ANAPLAN: The New Age of Connected Planning

A Connected, Living, Actionable Plan for Continuous Improvement

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

“Connected Planning”

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

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

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

What’s New in this New Age?

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

New Leadership, New Focus

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

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

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

New Context for “Connected”

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

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

More Data

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

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

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

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

 More Functions, More People, More Connections

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

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

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

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

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

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

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

Case in Point

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

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

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

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

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

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

Conclusion and Recommendations

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Figure 1: Approach to Consuming Innovation in a SaaS Model

Fig 1 SageSource: 2015 Mint Jutras Enterprise Solution Study

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

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

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

Conclusion

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

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

 

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What is Unit4’s “Self-Driving” ERP?

Empowering People in Service Organizations

Today we live in a world where automobiles can drive themselves across the United States. These same cars can parallel park far more skillfully than their human drivers. Airplanes spend most of their time in flight on autopilot. Small, self-directing vacuum cleaners systematically clean our floors while we are at work or play. Fitness devices tell us when it is time to move and warn us when we are over-exerting ourselves. Some of those fitness devices are smart phones equipped with apps – the same smart phones that keep us constantly connected. We get spoiled by all this automation in our personal lives and then we go to work and wonder why the software and technology that is used to run the business doesn’t empower our work lives like consumer technology empowers our personal lives.

Enterprise applications like Enterprise Resource Planning (ERP) are meant to capture transactional data and streamline and automate business processes. Yet while ERP was originally meant to make our business lives easier, many old ERP systems just can’t seem to get out of their own way. Unit4 is setting out to change that, at least for its customers. While it has always prided itself in its modern and flexible architecture and its solutions’ ability to accommodate change, it is now taking a page from consumer technology. A revitalized Unit4 is intent on delivering “self-driving” ERP, where user interaction is minimized and limited to activities where people make the difference.

People Are at the Core of all Unit4 Does

Unit4 has always targeted people-centric businesses, where services are the primary product delivered. These targets include professional service organizations, governments, higher education, not-for-profits and real estate. In each case, the key ingredients are people; processes are fluid and dynamic. By its very nature, outcomes are unpredictable. The last thing you want is your people doing manual tasks that add no value to the service delivered.

And yet that is exactly what happens when ERP can’t get out of its own way. What do we mean by that? Legacy ERP solutions that are rigid and cannot adapt as business changes, or that don’t allow business processes to evolve, or that force people to work in very unnatural or counter-intuitive ways, are more of a hindrance than a help to your business. They get in the way.

This has never been more true than it is today as we enter the digital age. Everywhere we look we see the pace of business accelerating and business models being disrupted. This is all fueled by digital communication. And yet many ERP solutions installed today lack the ability to participate in this revolution. They still force companies to transact business the way it has been transacted for the past 50 years. And they don’t contribute much insight in how to break that cycle, or insight into how to more profitably grow the business.

Unit4’s products have always been designed for change, but now they have a new goal: to help companies transform themselves in the digital age. This new goal is actually a natural progression, but is also fueled by the transformation of the company itself. Jose Duarte, Unit4’s current Chief Executive Officer (CEO) took the reins about two years ago. He made a clean sweep of his executive committee. A few very key players remain one level down from the top, which makes the transition smoother, but in the end, the Unit4 of today is very different than it was two years ago.

Today Unit4 is clearly energized, innovative, confident and aggressive. And it is on a mission: To empower people in service organizations.

The 6 Pillars of “Self-Driving” ERP

So what is this thing called “self-driving” ERP? Can software really make business decisions to drive the business? Of course not. Even an airplane on autopilot still needs a pilot. That car driving itself across the United States still has a driver. The homeowner has to decide which room to set up the little roaming vacuum cleaner in. Those fitness devices don’t do your workout for you. But all these technological wonders have a common theme: they make people more efficient and productive. People with these devices can do more, accomplish more. That’s what self-driving ERP is all about: better productivity, improved efficiency and better, more insightful decisions.

Unit4 likes to refer to the following as the six pillars of self-driving ERP:

  • Automation of manual tasks. Don’t make the human driving ERP do repeatable, repetitive tasks if they can be automated.
  • Drastically reduce the amount of input required; eliminate it entirely if possible. Ask for input only on an exception basis.
  • Use the moment of action to ask for the input. Ask a person when that exception actually occurs, not hours or days later.
  • Sense potential problems or bottlenecks.
  • Sense potential opportunities.
  • Make intelligent and sensible recommendations.

 How Does Unit4 Do This?

If you ask Unit4 how it will deliver on the promise of these pillars, Unit4 will talk about the four layers of its People Platform, announced back in April. After you hear the folks at Unit4 describe these layers, you may still not understand, particularly if you are a businessperson and not a technologist. Don’t feel bad. It’s not you. Some of these are tough concepts. But that’s okay. It is much more important to understand what it can do for you than to understand how it does it. You didn’t know how the transporter worked on Star Trek’s USS Enterprise. But you knew exactly what would happen when Captain Kirk said, “Beam me up Scottie.” If you understand the potential conceptually, a myriad of potential use cases might immediately spring to mind.

So here are the layers, as concisely as we can present them:

Personal Experience

The very top layer is the personal experience. This is all about a new, improved and modern user experience, which Unit4 has been working on for the past two years, improving existing functions; efforts will continue as new and different ways of engaging with ERP and new functions are introduced. This includes access through mobile devices of all sorts. But Mint Jutras believes the best user interface is often no user interface, and Unit4 is also heading down this path in automating those manual, repetitive tasks. But ultimately it is all about making software easy to use.

Of course ease of use means different things to different people.

Figure 1: “Top 3” Factors Influencing Ease of Use

Unit4 Fig 1Source: Mint Jutras 2015 Enterprise Solution Study

Note on defining generations:

  • Baby Boomers: born between 1943 and 1964
  • Generation Xers: 1965 to 1981
  • Millenial: born in 1982 or after

This is most apparent when we compare what is most important across different generations participating in our 2015 Enterprise Solution Study (Figure 1). While perceptions vary, minimizing time to complete tasks is right at the very top of the list across all generations. So Unit4 is right on track in automating manual tasks and reducing the amount of input required. In fact complete automation of many of these repetitive tasks is really the ultimate goal.

Business Capabilities

The second layer is business capabilities. Mint Jutras research confirms this as an appropriate focal point. Our latest study confirms that the most important selection criterion for choosing an ERP solution today is “fit and functionality,” followed closely by “the completeness of a solution.”

Expanding the footprint of its ERP remains a priority for Unit4, but it will pay particular attention to individual vertical markets. Some of these business capabilities will be developed by Unit4, some will be acquired, and some may in fact come from partners. The recent acquisition of Three Rivers Systems is a perfect example of how Unit4 can take some giant steps in business capabilities, in this case, significantly expanding Unit4’s solution for higher education.

Who is Three Rivers Systems and what does it do?

Three Rivers Systems’ solution is called CAMS Enterprise. CAMS is short for Comprehensive Academic Management System. As the name implies, it is a comprehensive higher education solution that automates the entire student lifecycle into a single system. It can be run on-premise or hosted in the cloud.

A few facts about Three Rivers:

  • Founded in 1985
  • 55 employees
  • Serving over 200 clients in North America, South Africa, Europe, Middle East, Asia
  • Serving all institution types from under 1000 students to over 40,000

 Smart Context

The third layer is called Smart Context. This is perhaps the toughest to explain and yet its name provides some clues. “Smart” implies intelligence. So the Smart Context layer adds some intelligence, but in the context of a specific task, question or problem. Think about the following:

  • You’re preparing your expense report. Smart Context can suggest the majority of the line items (mileage, airfare, meals, etc.) You simply confirm the amounts.
  • You leave your customer’s site where you have been working on a project. Smart Context asks you if you just spent three hours working on project XYZ. A simple click on yes or no completes your timesheet.
  • You are asked to deliver a detailed project plan (for resources and costing) before the close of day. You enter several characteristics and Smart Context reveals the closest fit to previous projects. You select one as a model and create the plan in a fraction of the time it would take if you built it from scratch. And you even have a complete workforce assignment.

Smart Context is all about removing the clutter, making complex things simpler, and requiring your input only for exceptions. By making suggestions where possible, enriching data with additional context, the information you do see is more relevant and complete. This is the real engine behind the concept of “self-driving” ERP.

Unit4 delivers this type of intelligence by bringing the latest technology together through a variety of components:

  • An alerts engine to keep you up to date with smart business feeds
  • A rules engine establishes and configures the rules to be invoked during data entry, allowing for dynamically altering the UI based on conditions, or proactively assisting the user in entering consistent data. Adding machine learning even makes it self-configuring.
  • Definition of communities (defining who cares about what) and the capture of conversations within the communities (no more lost threads after you hang up the phone). This creates a social context.
  • Mobile context, through technology that can detect location with a time stamp. This allows for location-based filtering and time tracking and can push information automatically (e.g. customer configurations pushed to a field service technician arriving on-site).
  • Predictive analytics, capable of pattern detection. This can involve complex analysis, bringing together technologies such as machine learning and event stream analysis for sensing problems, bottlenecks or opportunities. Or it can be as simple as pre-populating an expense report or suggesting a project plan.
  • Cloud and crowd context through capture of peer analysis and customer sentiment.
  • A workflow engine.

The net result is filtered, contextualized data that can be presented in a simple, relevant and complete experience.

Elastic Foundation

At the base, the fourth layer is the Elastic Foundation. The concept of elasticity is commonly associated with cloud and software as a service (SaaS). Unit4 does offer a variety of cloud options, including what it calls “cloud your way,” which lets the customer choose the deployment option without compromises. Used in this context, the elasticity comes from the ability to grow and consume resources as needed, without additional purchases of hardware, middleware and the associated maintenance.

But Unit4 takes elasticity one step further and uses it in the context of the application itself, which can easily be changed and/or extended without disrupting the installed solution.

The elastic foundation has evolved from the architecture on which Unit4 Business World (formerly Agresso) was built. This is where you define your organizational structure, information requirements, and the relationship between the two. Traditionally these types of structures, relationships and processes tended to be hard-coded in solutions or embedded in codes like the general ledger account, using a “once and done” approach that made future changes difficult and costly. But reality says they need to be fluid, and that is the elasticity that the People Platform delivers.

With Unit4’s Elastic Foundation, no source code changes are required and even if it means changing the business rules, the data model and how the data is presented, this does not constitute multiple changes. You make a single change and it is permeated throughout all the necessary components of the solution. All are on the same page. No delays. Nothing can be out of sync.

Nothing Tells the Story Like an Example

While all this discussion may provide good background, nothing illustrates what Unit4 is doing better than an example. Let’s explore the project plan example mentioned earlier in a bit more depth.

Projects are common in many services organizations. For some, projects are simply internal. But in many companies, particularly in professional services organizations, these projects are core to their business. Unit4 has been listening to these types of customers as they expressed a desire for better ways of winning profitable business. When your business is project-based, that means coming up with more accurate estimates faster. This is one of the scenarios Unit4 has been working on that will showcase all the layers described above.

To better understand this endeavor, put yourself in the shoes of a project manager at a project-based business that has identified a new opportunity. You need to come up with an estimate of cost, resources and schedule in order to propose a price that is both competitive and profitable. And you need to do so quickly and efficiently or either your window of opportunity will close, or your current projects will suffer, or both. If you are smart you don’t start completely from scratch. Instead you find a similar project, hopefully one that was successful, and start from there, modifying it to reflect the current needs of your prospect.

Sounds simple, but in reality, how do you go about finding the right project to use as a starting point, especially if it was a project in which you had no personal involvement or experience? Unit4 is developing a scenario where you will be able to enter a few key characteristics of the project including the customer (if you have done business with the prospect before), type of project, time frame required, cost range, etc. Using these parameters, Unit4 will present you with potential reference projects, each assigned a rating of how closely they match your criteria. They do the legwork; you pick the closest, most profitable and start from there.

But have you ever managed a project that looked great on paper, but in reality it was the project from hell? You can’t tell everything from the numbers. So Unit4 uses sentiment analysis to assist. The solution will be able to look at conversations and pull up up the five most positive things and five most negative things said. What is the most common word used? Perhaps you find it to be “team.” It can look for certain words used in comments and conversations, including words like “complaints” or “excessive overtime.” Perhaps the team is complaining about too much overtime.

Projects under consideration may also not yet be completed; in which case, Unit4 will simulate a completion to predict schedule and cost accuracy, along with projected margins. While all of this might seem relatively simple, when done manually, there are numerous assumptions and opinions that get inadvertently filtered that can result in overlooking the best model, choosing the wrong project or making bad predictions.

By automating the process, Unit4 delivers on all of the pillars of a “self-driving” ERP, from automating manual tasks to reducing input and asking only for input at the moment of action. It can sense problems, as well as potential opportunities and give intelligent recommendations.

This is just one of many possible scenarios. Mint Jutras anticipates more and more of these types of scenarios will be identified through working with actual customers. Once some are delivered (later this year), this could have a snowball effect, with one idea generating many more. Then it will be up to Unit4 (and possibly some select partners or customers themselves) to deliver against the promise of “self-driving” ERP.

Summary and Key Take-aways

Unit4 has truly transformed itself into a new company, one that is energized, fresh, innovative, confident and aggressive. And yet it has done so by building on the strengths it has exhibited in the past. It has always targeted people-centric businesses, particularly those that are “living in change.” It has a strong, modern architecture and understands the trends rocking the world today. We are truly entering the digital age. Social, mobile, cloud and analytics all play a key role. Unit4 is leveraging all of these and delivering a solution with a simple goal: to empower people in service organizations.

But probably most importantly, Unit4 is now focused on execution. That focus is centered on:

  • Delivering vertical solutions for service industries
  • Building applications for people
  • Designing its underlying architecture for agility
  • Delivering cloud solutions “your way,” with no compromise

The recent acquisition of Three Rivers Systems is evidence it is indeed moving into major execution mode. Don’t be surprised to see others and expect some very significant partnerships to be announced soon as it aggressively builds its partner ecosystem.

During the past two years, as this transformation was underway, Unit4 was quite “quiet.” Expect the company to significantly turn up the volume, particularly in North America, where there is tremendous opportunity that has yet to be tapped.

Expect the pace of product innovation to accelerate as it starts to aggressively leverage its prior investment in architecture and technology.

If you are a services organization with an ERP solution that seems to just get in the way, Mint Jutras would agree with Unit4 when it says, “To adapt to the speed of change, ignore the old restrictions.” Perhaps you need to get into the driver’s seat of a new “self-driving” ERP.

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Acumatica and the Power of Three

Three must be Acumatica’s lucky number. In reviewing all that was covered in a recent (industry) Analyst day, I was struck by how often things came in 3’s:

  • 3 types of partners
  • 3 cloud models
  • A goal to eliminate 3 C’s: cost, complexity and customization
  • 3 veteran Acumatica execs presenting alongside 3 relative newcomers
  • Even the customer in attendance had the Acumatica partner demo 3 different systems side by side and then was up and running in 3 months
  • That partner… typically does 3 integrations per installation

In the competitive world of ERP, it is often quite difficult for solution providers to differentiate themselves. Basic functionality has become somewhat of a commodity, although the basics aren’t so basic any more. Most vendors are responding to the dominant trends impacting enterprise applications… cloud, mobile, social and analytics (aka big data). And yet, differentiation was indeed the theme of the day for Jon Roskill, CEO (and one of the 3 relative newcomers to Acumatica, along with VP Partner Strategy and Enablement, Richard Duffy and brand new CMO Kathy Visser-May).

3 Types of Partners

Apart from the lengthy list of 3’s, Acumatica can claim one easy point of differentiation. Unlike most ERP vendors and definitely unlike other SaaS vendors, it sells exclusively through an indirect channel. And in keeping with the power of 3, Acumatica has 3 different kinds of partners: Value Added Resellers (VARs), Independent Software Vendors (ISVs) and OEMs. How does it define the difference?

Think of a VAR as a typical reseller of the Acumatica software. The “value add” might simply be the implementation and consulting services provided along with the purchase of the software. Or it might include some customization, or add-on functionality developed by the VAR. In providing this value add, the VAR might also be providing specific knowledge or expertise of a certain software, industry or country requirements. The VAR in attendance at the Analyst day, BHE Consulting, is quite typical in that it resells Acumatica along with 2 other applications, both on-premise solutions. BHE’s customer, Menck Windows truly appreciated this diversity as it allowed the evaluation team to work with a single partner, but look at 3 different solutions, side by side.

VAR revenue for Acumatica grew 70% last year, making it one of the fastest growing ERP companies today from a percentage standpoint. While the growth percentages are impressive, they are tempered by the fact that Acumatica is still small compared to key rivals like NetSuite, SAP and Microsoft Dynamics. Yet the company did announce its 1000th customer at its partner event last August – quite a significant milestone.

The value added by an ISV is more specific. An ISV adds value through extensions to the product. Some ISVs you might have heard of include: Avalara (for sales and use tax management), Adaptive Planning (for financial planning, budgeting and forecasting), ADP for payroll and more recently Magento for eCommerce software and platform. Others might expand the addressable market for Acumatica beyond its standard financial, distribution, project accounting and CRM. For example, JAAS Systems adds advanced manufacturing features to Acumatica’s solution. ISVs (like JAAS) might also be VARs and other VARs may also resell solutions from ISVs. Indeed any partner that sells to manufacturers today must also partner with JAAS for a complete solution.

OEMs are a little different. These companies will use Acumatica technology to build their own solutions, sold under their own brands. So Acumatica will be “under the covers” so to speak. The two most notable of these relationships are Visma, a provider of business software solutions to SMBs in Northern Europe and MYOB, an Australia and New Zealand-based company that enjoys market shares as high as 70% to 80% within its operating markets. The deal with MYOB, announced in August 2013, enables MYOB to localize and distribute Acumatica’s ERP solution. Visma offers Visma.net, a complete business solution including a white-labeled version of Acumatica’s ERP as a key component.

3 Cloud Models

Acumatica was developed as a cloud-based solution. It was born in a browser and therefore has always had a zero footprint on the client, making it accessible any time, from anywhere. No legacy issues here. It is built from the ground up with cloud technologies and can be run on a variety of cloud platforms including Microsoft Azure, Amazon Web Services (AWS), IBM cloud and CenturyLink.

The downside of being “all in the cloud” ordinarily means less choice. Typically a cloud-based solution is only available as software as a service (SaaS). Not so with Acumatica. The solution is designed to be a multi-tenant cloud solution, but that doesn’t prevent Acumatica from offering it in a variety of different environments and Acumatica is quite unique in this regard.

Acumatica offers 3 different models through its partners:

  • A traditional multi-tenant option where a single instance of the application can be load balanced for scalability
  • A multi-tenant application, but each tenant can have their own separate database
  • Single tenant, where the customer has a dedicated application and database.

While SaaS purists might argue against this kind of choice, the 2015 Mint Jutras Enterprise Solution Study found when it comes to cloud, not everyone wants the same thing (Figure 1).

Figure 1: How do you prefer your cloud?

Acumatica Fig 1Source: Mint Jutras 2015 Enterprise Solution Study

What is most important to Acumatica is that all 3 options use a single code base, which allows the company to deliver on another promise of 3: it schedules releases every 3 months. The ability to deliver more innovation is one of the benefits of a SaaS solution that is often overlooked and under-valued by consumers of ERP accustomed to upgrades being time-consuming, costly and disruptive. Acumatica has customers like this, and therefore it offers two different “tracks” for updates – quarterly and annually. Which leads us to another of the 3’s.

Eliminating the 3 C’s: Cost, Complexity and Customization

Most everyone today (including our Enterprise Solution Study participants) recognize the potential for cost savings in deploying a SaaS solution. Each year we include a question in our study regarding what respondents find appealing about SaaS. Cost savings consistently rise to the top of the leader board, including reduced total cost of ownership, less cost (and effort) of upgrades, lower hardware, maintenance and startup costs and fewer IT staff required to simply keep the lights on.

But in order to eliminate all 3 C’s (cost, complexity and customization) you need a solution that is broad and deep, yet flexible and agile. Building more and more specialized functionality into the core solution has the potential of turning it into a battleship – complex, unresponsive and hard to maneuver. Instead, Acumatica has made every effort to make its core solution generic but extensible.

By design, the core solution Acumatica itself delivers is a horizontal one, and therefore it will have functional gaps in certain vertical industries. Acumatica looks to OEMs and ISVs to fill the gaps, providing more opportunity for these partners and also shielding individual customers from having to deal with added complexity arising from specialty functionality that serves no purpose for them. Special platform technology helps Acumatica support this approach while making it easier for partners to extend the solution.

As with many modern solutions today, Acumatica has 3 layers: presentation, business logic and data access. Each can be modified through a “customization engine” that can extend the layer without touching original code or binaries. New functionality can be added through extension packages and multiple packages are supported on a single runtime version. The partners, or even the customers themselves, can create packages and they are “automagically” merged together. New data fields can be added and the entire database is split into base tables and extension tables. Even in a multi-tenant environment, different tenants have access to different extension packages and tables.

A good example of using ISVs to extend functionality is in the realm of eCommerce. Acumatica and Magento have partnered to help customers connect eCommerce to the back office functions supplied by Acumatica. This is a different approach than one of Acumatica’s key rivals, NetSuite, which has authored its own eCommerce suite. This is the classic example of weighing “best of breed” functionality versus ease of integration. While the NetSuite approach takes a tightly couple suite approach, Acumatica chose Magento as a market leading “best of breed” solution. That is not to say NetSuite’s SuiteCommerce solution will never match Magento in terms of functionality, but it still has a ways to go. And in the meantime Acumatica offers “out-of-the-box” integration and recognizes that some current Magento users will be reluctant to let go of that “best of breed” functionality and that specific solution.

Another example can be found in Acumatica’s approach to mobile applications. Acumatica has begun to deliver a small number (so far) of these specialized apps. One analyst at the recent event asked why not take a “mobile first” design approach, rather than creating add-on mobile apps? But for Acumatica, this is not an “either/or” approach, but rather “both.” The entire Acumatica ERP, being browser-based, is available from virtually any device with a Wifi connection. The additional mobile apps can be used in a disconnected mode, even when a Wifi connection is not available. Data is later synchronized automatically. So these mobile apps are in addition to (general access through a mobile device) and purpose-built for a particular function.

There is Power in Those 3’s

Being a relative newcomer to ERP, Acumatica has a ways to go before it becomes anything close to a household name. But then, for an industry as mature as ERP, there are indeed very few household names. If it were to rely on a direct sales force to grow its customer base one customer at a time, it might never reach the kind of penetration needed to be taken seriously. But with 327 VARs (200 in North America), OEMs like MYOB and Visma and ISVs like Avalara, Magento and Adaptive Planning, the company will definitely have a leg up.

With the cloud at its current tipping point (for new software acquisition at the very least), Acumatica is well positioned, offering choice, while also preserving the advantages of a cloud-based solution.

On the product side of the house, it has some stability with veterans like Mike Chtchelkonogov (founder and CTO), Ali Jani (VP Product Management and Services) and Gabriel Michaud (director of product management). While continuity is a key factor here, I expect the pace of innovation to accelerate, leveraging key partnerships and new technology.

And yet Acumatica has been smart to infuse some new blood into the organization with Jon Roskill (CEO) and Kathy Visser-May (CMO), both from Microsoft and Richard Duffy, recruited from SAP Business One. All 3 newcomers have pedigrees firmly rooted in the small to medium size business market, where Acumatica intends to stay. All are hungry – and well-equipped – to make a name for themselves and Acumatica in this rapidly changing, cloud-based world of ERP.

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NetSuite Announces the End of the Beginning: Cloud is Here

At SuiteWorld 2015 NetSuite CEO Zach Nelson announced The End of the Beginning. “The question of whether cloud was going to happen is answered. Cloud is here.” Mint Jutras agrees. Attitudes towards cloud and Software as a Service (SaaS) have changed dramatically over the past few years, particularly with respect to software that runs your business. As recently as five to ten years ago, Enterprise Resource Planning (ERP) could easily have been called the last bastion of resistance to SaaS. “Cloud” had yet to become part of the business vernacular and “SaaS” was still a relatively new and poorly understood concept. While other complementary solutions were headed in that direction, entrusting the transactional system of record of your business to the cloud requires a higher level of trust than required for other applications, including those which are often referred to as “systems of engagement.”

But now – how times have changed! According to the latest Mint Jutras 2015 Enterprise Solution Study, the majority of businesses have some sort of cloud strategy and the shift to the cloud has definitely begun.

What’s Your Cloud Strategy?

To get a clear picture of how cloud strategies have developed and evolved, we turn to some specific questions in our study.

Figure 1: What Best Describes Your Cloud Strategy?

NS Fig 1Source: Mint Jutras 2015 Enterprise Solution Study

The first of these questions specifically asked about cloud strategies. This is the first year we have asked this question and the results were a little surprising – but only a little. The first surprise was that the majority (84%) has a cloud strategy, even if that strategy is to not go there (8%). In a way this is not particularly surprising given all the hype over cloud these days. This leaves the remaining 16% with no cloud strategy. But notice how we phrased this option: “We don’t have a cloud strategy. Cloud is just one of many factors we consider.” So it doesn’t mean these participants will not consider cloud.

We phrased it that way because for years we have been capturing priorities for selection criteria for ERP. Over the years we have always included some sort of reference to deployment option and it has consistently been ranked close to the bottom of the list of criteria. Since deployment option was not the overriding factor in selecting these solutions, you might also conclude that cloud was not driving strategy. And yet only 16% don’t have a cloud strategy.

So, in a way, survey participants are sending us mixed signals. But at the same time, we saw the availability of “cloud options” rise significantly in importance this year. It moved up from the very bottom of the list of criteria to the middle of the pack.

But, based on the strategies shown in Figure 1, we might conclude that cloud deployments will not dominate immediately. We actually confirmed this conclusion by capturing the percentage of all business software that is currently deployed as SaaS, along with projections over the next two, five and ten years and beyond (Figure 2).

Figure 2: Percentage of Business Software Deployed as SaaS

NS Fig 2Source: Mint Jutras 2015 Enterprise Solution Study

This steady progression is to be expected largely because of the number of existing on-premise (non-cloud) solutions that are currently installed. These will not be ripped out and replaced overnight, particularly when it comes to ERP. Implementing a solution that runs your business is not a small undertaking and most will not abandon their current solutions without a very good reason and an expected return on investment. So in that respect, it is not surprising that the most likely strategy is to leave existing systems in place but surround them with cloud-based solutions. This option leads to a hybrid environment, which delivers some of the benefits of SaaS, but will lead companies down a more circuitous route in their cloud journeys. In these cases, hybrid solutions might simply be viewed as temporary options and not necessarily the desired final destination. It will be interesting to see if interest in these hybrid solutions continues to grow or decline over time. A lot will depend on whether the hybrid solutions deliver the desired (end) results or just whet the appetite for more SaaS.

However, one in five (20%) will seek to replace existing on-premise solutions with cloud-based alternatives and another 8% are taking specific action now to do just that. If we add these two percentages together we see those taking the plunge and replacing systems with complete cloud solutions (slightly) outnumbers those that prefer a more evolutionary, hybrid approach (28% versus 25%). These are the companies most likely to be evaluating NetSuite as a replacement solution, as well as companies just starting out on their ERP journeys.

Those with a defined strategy of moving to the cloud clearly see the potential benefits. These benefits may be cost savings, more innovation, better support of remote workforces and distributed environments, or simply enabling growth.

But Remember, Not All Cloud is SaaS

However, if you recall our previous definitions, while all SaaS is cloud, not all cloud is SaaS. So we asked specifically “Which is most important to you in terms of placing any solution in the cloud?” While 12% admit to not really understanding (Don’t Know), the preference is for SaaS (Figure 3).

Figure 3: Which is most important to you in terms of cloud?

NS Fig 3Source: Mint Jutras 2015 Enterprise Solution Study

SaaS is the top choice, but as long as the solution is web-enabled, even a hosted or on-premise solution might be able to be accessed anytime, from anywhere. However, Mint Jutras would contend that without a SaaS solution, you would leave some of the potential benefits on the table. And as you can see, there is still a significant percentage that prefers a private cloud. This might be because a private cloud is considered more secure (it may or may not be), or because of current or anticipated customization. If the overriding desire is to simply move to the cloud (only), it might be easier to lift and shift existing solutions to a private cloud. Yet in doing so, you relinquish the opportunity to re-implement and remove limitations that might have been imposed by older, less functional and less technology-enabled solutions. And with the current configurability of a good SaaS solution, you would likely be able to eliminate a lot of your invasive customizations and therefore simplify your IT life, particularly as business needs change over time.

As the World Turns

And what business today is not undergoing change? Only those that are stagnating and losing any competitive advantage they might have ever had. In fact today we are living in times of unprecedented change and growth opportunity. New consumer middle classes have sprung up in countries that were hardly industrialized a short decade ago, creating opportunity even for small to medium-sized enterprises (SMEs). Innovation, advanced technology and the Internet have combined to create new business models that were never even considered a decade ago.

Those companies providing these consumer goods and even those offering industrial products that support the manufacturing and distribution of these consumer products see the most opportunity, but are also most subject to new and ever evolving business models. This is a market that NetSuite is very well suited for given its strength in eCommerce and its support for digital transformation.

NetSuite was born in the cloud long before cloud and SaaS came into the limelight. While NetSuite could not have foreseen all the new opportunities and new business models that have been created over the past few years, it did have foresight enough to build a system that could accommodate change. As Zach Nelson likes to say, “We built change into the system. We can’t predict the next business model or where it might go, but we can make the solution adaptable, regardless of the direction.”

Disruption in an Omni-channel Environment

As a result, NetSuite views “disruption” as a good thing. In prospecting, it seeks out these disruptive business models and sees its support of “omni-channels” as a key factor in supporting growth and therefore featured it prominently in its SuiteWorld message..

Omni-channel, alternatively referred to as “multi-channel,” refers to the ability to use different channels simultaneously. Consumers might purchase online, but pick up, or return merchandise at a physical store. Retailers may use retail stores as distribution hubs. As consumers make online purchases, it may be advantageous to ship from a store location where the item may be overstocked, thereby drawing down surplus inventory. Or the choice of ship from location may be made to minimize cost and lead-time. This is definitely an issue for retailers today. But more and more manufacturers and distributors find themselves also selling direct now, so it is just a matter of time before they need to deal with omni-channel supply chain issues as well.

Combining all these options requires flexibility, a level of expertise and feature functionality not typically included in your traditional ERP software suite. NetSuite has differentiated itself by doing all of the above. But more importantly, this requires an unprecedented degree of flexibility and adaptability, well suited for the cloud.

Much of this adaptability comes simply from being a multi-tenant SaaS solution. On the one hand, solution providers that maintain a multi-tenant SaaS solution have a distinct advantage to those offering traditional on-premise or even single-tenant SaaS solutions. But while they must only maintain a single line of code, it must be more configurable and flexible than a traditional solution, or it winds up appealing only to a small sector of companies.

The NetSuite ERP provides many options for configuration without invasive code changes. But it also goes one step further, offering a software development platform that allows partners and customers to add in new features without impacting the single line of code that NetSuite manages for its subscribers. The code developed using this platform can and does survive updates that are made on a quarterly basis.

Shopping for a New Solution?

In order to take full advantage of next generation solutions, enabled by advanced technologies, you may choose to replace your current solutions. The question we have been asking for years now is this: “If you were to select a solution today, which deployment options would you consider?” In the early days of this question, those that would consider SaaS were definitely in the minority and almost everyone would, of course, consider on-premise solutions. That landscape has shifted dramatically. Figure 4 shows the most recent few years.

Figure 4: Deployment Options that would be Considered TodayNS Fig 4

Source: Mint Jutras Enterprise Solution Studies

* Option added in 2015

SaaS is currently the option most likely to be considered (participants are allowed to select as many options as they want). For the past few years “SaaS” and “hosted and managed by your solution vendor” have run neck and neck. In the past, one of the reasons has been because the difference between these two options was often blurry and survey respondents didn’t necessarily understand the difference. This was substantiated by observing that a significant percentage of participants that were running solutions that are SaaS-only (including NetSuite) chose this hosted option instead of, rather than in addition to SaaS.

But we’re now starting to see evidence of a better understanding of the difference between these options. Not only are more participants actually running SaaS solutions, but also the preference for SaaS is starting to pull away from hosted solutions.

Conclusion and Recommendations

Mint Jutras would agree with Zach Nelson. Data from our 2015 Enterprise Solution Study signals that the end of the beginning is indeed here. Early pioneers, and NetSuite in particular, have been providing cloud-based SaaS solutions for more than a decade. NetSuite customers, pioneers in their own right, have led the way and are living testimony to the benefits. The shift to the cloud has begun in earnest.

Most companies today have defined a cloud strategy. If you have not, either because of lack of understanding or lack of attention, take a step back and develop one. Educate yourself on cloud and SaaS, along with the potential benefits; satisfy any lingering concerns you might have and investigate your options.

Not everyone will take the same approach. If you are currently running your business on legacy solutions that limit your connectivity and interoperability, adding some peripheral and complementary cloud solutions might selectively help you connect to trading partners and customers, but ultimately you will need to replace that old software or run the risk of being at a significant competitive disadvantage. Replacing it with a cloud-based ERP, deployed in a secure SaaS model might just be the giant step you need to move into today’s digital world and accelerate your own competitive advantage. If you’re looking for a SaaS ERP solution with some longevity in the market, you would do well to add NetSuite to your short list of vendors.

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Infor: On a Mission to Go the Last Mile

Cloud-enabled Industry Functionality People Actually Want to Use

Infor is on a mission to “build beautiful business applications with last mile functionality and insights for select industries, delivered as a cloud service.” Supporting this mission are three strategy pillars:

  1. Specialized micro-vertical suites
  2. Powered by the architecture of the Internet
  3. That create experiences people love

In constructing these pillars, Infor hits on all cylinders of the go-to-market messaging surrounding the key technology trends today. But for Infor, this is much, much more than just marketing hype. Its portfolio of business applications is broad. Its executive team has a very deep understanding of the products, the underlying technology and the business itself, and has invested heavily in development. That investment includes a creative design team, which is large (about 100 people) and in-house. It’s all about bringing value to its current and future customers and growing its business.

Here we examine each of the three elements of its strategy in terms of the value it brings to Infor’s current and future customers.

Industry-Specific Features and Functions

Much of the functionality required in software that runs your business is quite generic. All companies must record basic transactions that create a system of record, and in some departments that are subject to regulatory requirements (e.g. operational accounting), creativity is frowned upon. This generic functionality has become a commodity today. Any good ERP solution today covers the basics, although the basics aren’t so basic any more.

However, no two businesses are identical and most growing companies actively seek competitive differentiation. Infor acknowledges these differences. In promoting its new CloudSuites, it likes to say, “No two clouds should be alike…because manufacturing tires is different than growing kiwis.”

And yet, one of Infor’s stated objectives is to eliminate customization. In order to do that, it needs to offer an unprecedented range of features and functions, some of which are very specific to certain industries. As a result, Infor is dropping down a level or two in its definition of industry. For example, some vendors refer to manufacturing in general as an industry. Others might concentrate on certain manufacturing sectors like automotive, aerospace and defense, high tech electronics, or food and beverage. But Infor thinks a bit more granular and will, for example, break out food and beverage into sub-verticals such as produce, dairy, beer, processed meats, etc., because each faces its own set of challenges. Dairies must worry about the variability of fat content, while breweries manage fermentation processes and measure alcohol content. Growers need traceability back to the field, or ideally, even a row picked on a certain date. Some food processors combine ingredients through formulas and recipes, while others have the equivalent of a reverse bill of material. How much bacon or pork loin you get will vary pig by pig.

These types of special requirements are often satisfied through customization, or not addressed at all by enterprise applications. Adding this type of specialized functionality to a single, general-purpose Enterprise Resource Planning (ERP) solution would certainly add an unwanted level of complexity. On the other hand, maintaining many different solutions that share some common requirements is a waste of development resources for the ERP vendor.

Through many years of acquisitions, Infor has actually accumulated quite a few different ERP and financial management solutions and has made a commitment to existing customers to never force them to rip and replace them. And so, Infor is faced with a delicate balancing act in prioritizing its investments.

Some of these solutions are quite mature and continue to be based on technology that has become outdated. Investment in these solutions is (and should be) minimal. Others are very modern and technology-enabled. Some were originally designed with a certain industry in mind, others were conceived as more general-purpose solutions. Decisions surrounding these solutions require careful thought. Some will be more strategic than others.

As Infor attacks sub-vertical markets, it is critical to start with the ERP solution best suited to each one. The specific industry functionality provided will be a better fit, and easier to deliver. In the case of food and beverage, for example, M3 is the selected ERP solution. Infor then builds out the requirements for dairy or beer or processed meats as optional add-on components. More on that in the next section where we talk about architecture.

Before we do that, let’s explore what this means for customers and prospects looking for a new solution. Mint Jutras has been collecting data on priorities in selecting software for years now. In days gone by, “fit and functionality” always topped the list. But over the past few years another selection criterion crept up in importance and appeared to be running neck and neck with “fit and functionality.” That criterion was “Ease of Use.”

In many ways, this makes sense. All the features and functions in the world won’t do you any good if you can’t figure out how to use them. But the ranking of “ease of use” and “fit and functionality” were so close, we started to wonder what the priority would be if users were forced to choose between them – hypothetically of course.

So in 2015 we changed the format of the question, again listing the different criteria, but this time forcing the participants to stack rank them from 1 (least important) to 10 (most important).

Table 1: Selection Criteria Priorities (ranked from 1 to 10)

Infor Table1Source: Mint Jutras 2015 Enterprise Solution Study

It is quite clear from Table 1 that “fit and functionality” is still king. The top three criteria are all related to features and functions, which would indicate Infor is on the right track in terms of providing solutions that “go the last mile.” User experience (a broader criterion than ease of use) is still in the top half, which indicates it is much more than an afterthought. But getting the right software to do the job – the whole job – trumps all other considerations.

Infor needs to make the best of two worlds. It needs to be able to develop some generic functionality once and reuse it across multiple applications. And it needs to easily tack on new components of functionality, preferably making them optional. Infor’s answer to this is ION.

ION is lightweight middleware, providing common reporting and analysis, workflow, and business monitoring in one, consistent event-driven architecture (EDA). ION also provides an environment that enables new functionality to be developed once and shared by multiple products in the Infor portfolio, which helps in that delicate balancing act.

All of Infor’s strategic product lines have been appropriately “ION-ized.” This means Infor can develop functionality that can and should be shared across many of its different products, including horizontal solutions such as customer relationship management (CRM), human capital management (HCM), supplier exchanges and more, as well as localizations that deal with local country requirements in transaction basic business. This results in more innovation and a broader footprint than could ever be delivered by a single developent team focused on a single purpose-built product.

But Infor also feels it needs to go a step further: providing the architecture of the Internet.

Architecture of the Internet

Nobody today would argue the value of the Internet, bringing us “access any time, from anywhere” connectivity. Of course, the Internet implies “cloud” and Infor is moving into the cloud in a big way. As Infor (and also other major enterprise software providers) vie for leadership in the cloud, most assume the cloud is both well understood and a desirable goal. Mint Jutras research confirms that the market has reached a tipping point where cloud-based solutions are preferred over traditional on-premise deployments.

A question we have been asking for years now is this: “If you were to select a solution to run your business today, which deployment options would you consider?” In the early days of this question, those that would consider SaaS were definitely in the minority and almost everyone would, of course, consider on-premise solutions. That landscape has shifted dramatically. Figure 1 shows the most recent few years.

Figure 1: Deployment Options that would be Considered Today

Infor Fig 1Source: Mint Jutras Enterprise Solution Studies

* Option added in 2015

Note: The time span between the 2011 and 2013 studies was about 18 months as Mint Jutras shifted the timing of the study during the calendar year.

And yet, even with all this interest, Mint Jutras is absolutely convinced that many still don’t understand the terminology that is so easily tossed around today. Many use the terms “cloud” and “SaaS” interchangeably, but there are some important differences. So let’s distinguish between the two:

  • Cloud refers to access to computing, software and storage of data over a network (generally the Internet.) You may have purchased a license for the software and installed it on your own computers or those owned and managed by another company, but your access is through the Internet and therefore through the “cloud,” whether private or public.
  • SaaS is exactly what is implied by the acronym. Software is delivered only as a service. It is not delivered on a CD or other media to be loaded on your own (or another’s) computer. It generally is paid for on a subscription basis and does not reside on your computers at all.

All SaaS is cloud computing, but not all cloud computing is SaaS. Traditional on-premise or hosted solutions might (or might not) be accessed via the cloud, although these are more likely to be delivered through a private cloud. Not all of our survey participants want the same thing in terms of the cloud (Figure 2). Yet despite this diversity in preferences, Mint Jutras believes it is important for any software that can be delivered through the cloud to be able to fully exploit the power and benefits of the Internet.

Figure 2: How do you prefer your cloud?

Infor Fig2Source: Mint Jutras 2015 Enterprise Solution Study

This is presumably the reason Infor has set out to take full advantage of the Internet, regardless of what cloud means to its various constituents. It has developed a very clear progression that it refers to as Cloud 1.0, Cloud 2.0 and Cloud 3.0. This journey continues today but Infor’s stated goal is “efficient, scalable, secure, highly available, cost effective applications running on world class infrastructure in the cloud.”

Infor’s requirements for “Cloud 2.0” include:

  • Multi-tenancy: This is the most efficient and cost effective way for solution providers to deliver a SaaS solution and aligns very well with Infor’s goal of “no customization.” Maintaining a single line of code precludes customizations that involve invasive code changes. Not all of Infor’s products offered as SaaS are multi-tenant today, but it is moving in this direction.
  • Scaleability and high availability: These should be prerequisites for any SaaS solution, but both require data centers that can easily grow as needed, with an adequate level of redundancy for backup, disaster recovery and business continuity. Rather than taking on this responsibility itself, Infor relies on the massive remote computing services offered through Amazon Web Services (AWS), leaving Infor to concentrate on developing business applications rather than building and supporting data centers.
  • Zero footprint and no local device dependency: By not requiring any software on the device used to access the software (desktop, laptop, tablet, smart phone, etc.), it delivers the access any time, anywhere promise of the cloud.
  • ION/web-based integrations: Features of Infor’s light-weight middleware, such as its event-driven architecture, message-based communications between applications and industry standard object models for data definition, provide alternatives to point to point integration involving a lot of programming and invasive source code changes. Individual ERP products making up its different suites will of course need to be able to take full advantage of this middleware. Solutions that are deemed “strategic” will take full advantage, while legacy solutions based on older technology can and do have limited capability and therefore might not be good candidates for movement to the cloud.
  • Successful security tests: Infor has three layers of security. Cloud-based products are required to follow acceptable protocols for software development and product release processes. It also has a team of ethical hackers, reporting to a chief security officer, that continually test and advise the development teams. And finally, it uses independent third parties for audits.
  • Health Check Monitors: These need to be built into the software for self-monitoring of performance (think scaleability and high availability).
  • No source code changes are allowed: But extensions, connected through ION, can be used to fill functional gaps.
  • Meets patching and upgrade requirements

Cloud 3.0 will likely produce more changes that are “under the covers,” including more use of open source technology, better support for single instance deployments (think private cloud) and minimizing the use of third party products that would require additional purchases from the customer.

Providing last-mile functionality across a broad set of micro-vertical industries, supported by the architecture of the Internet is a lofty and practical goal. But Infor faces a unique challenge in leveraging this strategies in growing its business. Like any other solution provider today, Infor must attract new business. But it also must work hard to satisfy and retain its existing customer base of over 73,000 companies.

Many of these customers are stuck on older products, built on outdated technology. While promising to never force them to move off these old products is laudable, in a way it does the customers a disservice. In staying put, they will remain at a competitive disadvantage. Infor needs instead to lure them into making a significant change. That is where the third strategy pillar comes in.

Creating Experiences People Love

All too often companies and the people responsible for choosing to replace or upgrade solutions (or not) become complacent. The solution in place might not have all the functionality they need; it might be hard to use; it might not have produced the results anticipated. But change is hard. Many fool themselves into thinking old solutions, based on outdated technology aren’t “that bad.” They lose sight of how much solutions have evolved, both from a technology standpoint, and also in terms of features and functions. They cling to old customizations, not realizing a newer solution could probably be configured and personalized to satisfy their needs without invasive customization.

Many Infor customers fall into this category. What they don’t realize is that they could trade in their old solutions without changing solution providers. If they choose to go to a cloud-based solution, they also benefit by relinquishing the care and feeding of that solution to Infor, allowing the existing information technology (IT) staff to play a more strategic role in the company, adding more value than just keeping the lights on. And those running old versions of the products that are “strategic” for Infor might not even have to switch solutions.

Infor’s UpgradeX program is designed to get these folks on the latest release of these strategic products and then move them into the cloud. If their current ERP is part of one of Infor’s CloudSuites, the biggest effort will be in upgrading. If not, that probably means it will never bring them the kind of competitive advantage a more modern solution can provide. So these customers will need to migrate to a different solution, which means a reimplementation. But that is not necessarily a bad thing. Reimplementation allows the customer to rethink decisions that may have been influenced by prior limitations of the technology or the application. It’s an opportunity, but to get them to move, the target solution better be something that truly beckons.

While Infor has been talking about building “beautiful software” for several years now, it is the concept of delivering an experience that people love that resonates and should have a bigger impact on that portion of its installed base that has been clinging to older software. After all, beauty is in the eye of the beholder and Mint Jutras research has confirmed in the past that efficiency far outweighs the visual appeal of the software. In fact our 2015 Enterprise Solution Study confirmed it once more.

We asked survey participants to select the top three most important factors in determining “ease of use.” As in the past, minimizing the time to complete tasks took first place and intuitive navigation was a close second (Figure 3). The two are closely related, more for knowledge workers than those doing heads-down data entry. A decision-maker in search of answers that must hunt and peck for the right inquiry or function is certainly not minimizing the time to complete a task.

Figure 3: “Top 3” Factors Influencing Ease of Use

Infor Fig 3Source: Mint Jutras 2015 Enterprise Solution Study

However, with all the talk of the impact of the millennial generation recently, we decided to look at this from a generational perspective this year (Figure 4).

Figure 4: “Top 3” Factors Influencing Ease of Use by Generation

Infor Fig4Source: Mint Jutras 2015 Enterprise Solution Study

This gave us a new perspective. While minimizing time to complete tasks still takes the lead for all three generations, it does so with a much smaller margin in the Millennial generation – actually by no margin at all. Beautiful software (a visually appealing user interface) was tied for first in the youngest of the three generations.

While it is more likely that a Baby Boomer or a Gen Xer will have final approval over the purchase of new software, Millennials will often be involved in the selection committee and will definitely be amongst the regular users of the system. So the perspectives of all three generations are critically important.

Yet for decades, user interfaces have been designed by software developers who have never walked a mile in the shoes of the customer, regardless of generation. Which is why Infor is providing more user experience options and is also now taking a radically different approach.

Several years ago Infor created Hook & Loop, its internal creative design agency. Typically software companies turn to creative designers for advertising and imaging, not for software design. But that is exactly what the Hook & Loop team does at Infor. The team has grown from six people to a staff of over 100. This team is not a team of software developers and as a result brings no preconceived notion of how software looks and feels. Instead it goes to those who do the work and asks questions like:

  • What is your role in your organization? What are the different “hats” (roles) you wear?
  • What is a typical day like?
  • How do you interact with your co-workers and share information?
  • What frustrations do you experience on a regular basis?
  • What workarounds have you come up with to make your life easier?
  • What are the (small) things that make you happy?

Remember this team isn’t developing the software. It is just designing what it will look like and how the users will interact with it. As a result, it is unfettered by all the distractions of the programming that very often leads developers down rat holes, creating added complexity and even scope creep.

Yet through its experiences to date, it has grown beyond designing each user experience from scratch, which is very important in terms of delivering innovation at an acceptable and accelerated pace. The team has developed a variety of page-level navigation methods for specific use cases, including approaches such as:

  • Drill down / drill up
  • Breadcrumbs
  • Sections: Tabs
  • Sections: Dropdown
  • Accordion (expand and contract information)
  • Wizards
  • Cardstack/List

If you talk to Infor you will hear them talk about the SoHo user interface, which is transitioning to SoHo Xi. Infor is quite fond of code names. What is more important to the users of the software is that it is designed to be efficient and visually appealing, both at the same time, whether the user is using a desktop, laptop, tablet, smart phone or any other type of device that may come on the scene.

Conclusion

The investment that Infor has been making over the past few years is now coming together and producing some pretty dramatic results. Its verticalized CloudSuites have been emerging on the scene. This of course is an on-going process, but expect more (functionality), and expect more vertical focus. New ways of engaging with ERP are being introduced. They are both efficient and visually appealing. These suites look nothing like the old software of yesterday. This is a new Infor.

Infor will not force its customers or its prospects to move to the cloud, but if they so choose, Infor will be ready and fully Cloud 3.0 enabled. Even if customers choose to stay on premise, they will still be able to benefit from the architecture of the Internet. But of course those stuck on older technology will have to take some action.

Mint Jutras has observed that some Infor customers seem to want to die with their cold, dead hands on old software. While that may be a tribute to the software, if you want your business to grow and thrive, we recommend getting on board with the Infor program. Of course you will have to get used to a new user experience, but we think it will be a welcome change. You could even fall in love with your ERP all over again.

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The Three Dimensions of SAP Business ByDesign Set The Stage for Growth Part 3

This is the 3rd and final post of a 3-Part series on how SAP sets out to enable growth with its cloud ERP solution, SAP Business ByDesign. In Part 1 we talked about SAP Business ByDesign’s architecture and in Part 2 we discussed the user experience and configuration of the solution. If you missed either you can catch up with Part 1 and/or Part 2 or, if you prefer to skip the suspense you can read the full report now.

Organization Structure

SAP Business ByDesign allows growing companies to maintain a single organization structure that defines relationships between all legal entities both from a financial consolidation standpoint as well as an organizational (reporting) point of view. As enterprises mature and grow both of these tend to shift and change.

Legacy solutions often require these different structures to be maintained separately by business unit, embedding the enterprise structure within the general ledger account, making maintenance clumsy and any type of change difficult. Once established, changing the structure of the chart of accounts is next to impossible. In legacy systems personnel reporting structures were likely to be defined in a completely separate solution, if they were recorded at all. These two are often not aligned identically and this causes problems in managing performance while maintaining governance and control.

Take your sales organization for example. Sales is often managed as a global organization, yet salaries are paid and revenue is accrued by country and different countries mean separate legal entities. Sales representatives are part of both a legal entity and a global sales organization that spans multiple entities. Pipeline and quotas may be determined in an entirely different way, by internal, external or global sales and/or perhaps by product lines. Where can you get a full picture of performance from any or all perspectives?

SAP Business ByDesign provides the flexibility to structure all of this once, in a way that makes most sense, not in the way dictated by your ERP.

Embedded Analytics

Often companies look to reporting capabilities within their ERP solutions for managing operational performance. Yet in managing growth, you need to look beyond current operations and analyze the potential of growth opportunities. For this you need analytics. Most ERP implementations today don’t adequately deliver either because ERP has long had the reputation for being easier to get data into than decisions out of.

Standard reporting is never exactly what decision makers want and need and they often tire of waiting for the IT staff to make modifications or deliver new reports. And when making more strategic decisions about growth, they need to ask a lot of questions and the process is very iterative. Yet it is very hard to know where to start and what questions to ask.

Companies are sitting on a mountain of data, making it difficult to process through it very quickly in order to discern which key performance indicators (KPIs) will be most indicative of future performance. After all, they can’t look at every detail. So decision makers settle for aggregate summary data instead of the real detail they need. And they put the request for analytics on the back burner while they fight the operational fires. This is particularly true of mid-size companies struggling with the same kind of decisions as large enterprises, but without the deep pockets and large staffs to address them specifically.

This is why SAP Business ByDesign embeds analytics directly into the business scenarios. The analytics are browser-based and available on mobile devices, complete with alerts that can be sent in real time. SAP makes extensive use of dashboards, which business users can create or personalize for themselves. But SAP didn’t turn its back on business users’ almost universal love for spreadsheets. Offline analysis using Microsoft Excel is still possible.

Good Growth is Profitable Growth

Throughout, whether looking at subsidiaries or the corporate whole, you will need to manage cash and liquidity, payroll services, quality assurance and the financial close. For this you need visibility, delivered by SAP Business ByDesign’s embedded analytics. And you will need a consolidated view across these potentially different businesses within the business. You can’t run a sales and marketing team like a service and repair facility. And you can’t run a field service operation identically to a manufacturing operation. Yet all these have a common thread of master data (customer, products, parts, employees) and need to be consolidated at HQ.

Of course you want to satisfy the individual needs of the different types of businesses within a business, but you also don’t want to be trying to cobble together a unified view from disparate systems. This is the advantage of SAP Business ByDesign’s approach of a single, multi-purpose solution – providing it really can meet the individual needs of the different functions. During your evaluation process, look carefully at those business scenarios delivered with the standard solution. These will provide the base of operation of each facet of your business and those operations may vary and change with growth.

Summary and Key Take-aways

Cloud ERP is indeed a great enabler of growth for mid-size companies, particularly those looking to take bold steps in a rapidly changing business climate. It is clear that SAP has taken the needs of these mid-size companies seriously, particularly those that are fast growing. Keeping in line with its current mantra of “Run Simple,” SAP Business ByDesign can indeed help simplify the growth process through its three-dimensional design philosophy incorporating simplicity, flexibility and extensibility.

For mid-size companies looking to take full advantage of unprecedented growth opportunities, any old ERP is not enough. If you are in search of a cloud-based ERP solution that can help you grow and grow quickly, SAP Business ByDesign definitely deserves consideration.

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UNIT4: In Business for People: Introducing The People Platform

When Unit4 talks about people it does so in a variety of different ways. First of all, its products are designed specifically for people-centric businesses. These include those in sectors like professional services, education, government and public services, not for profits, and real estate. This industry focus however has also led the company to put people first in the design and development of the software. Unlike some other enterprise applications that require people to adapt and conform to the way the software works, Unit4 strives very hard to allow users to personalize the software to the business and the way they work – naturally. And because we live in a world where change is the only constant, the ways businesses run and the ways people work also constantly change.

Supporting businesses living in change has been a consistent mantra for its Agresso Enterprise Resource Planning (ERP) product for years, but Unit4 is now bringing the platform that facilitates change to other Unit4 products, in order to deliver agility and flexibility, along with an improved user experience. And so… along with the launch of its new People Platform, Unit4 recently announced new releases of two of its flagship products, while also re-branding and renaming them:

  • Unit4 Business World Milestone 5 (formerly known as Agresso)
  • Unit4 Financials, Version 13 (previously known as Coda)

The People Platform

The term “platform” can mean different things to different people, or even different things to the same person when used in different contexts. In this case, it might best be described as a technology stack, or perhaps middleware that does a lot of the heavy lifting in delivering more business capabilities, and an improved, personalized user experience. Unit4 also likes to say it delivers “smart context.” All of this is built on Unit4’s Elastic Foundation.

Elastic Foundation

The Elastic Foundation has evolved from the architecture on which Unit4 Business World (formerly Agresso) was built. So for this product, and for any new products that will be built on it in the future, it really does provide a true “foundation.” It includes the information/data model that feeds all the reporting and analytics. But it also defines and drives much more. The Elastic Foundation is where you define your organizational structure, information requirements, and the relationship between the two.

Traditionally these types of structures, relationships and processes tended to be hard-coded in solutions or embedded in codes like the general ledger account, using a “once and done” approach that made future changes difficult and costly. But reality says they need to be fluid, and that is the elasticity that the People Platform delivers. With Unit4’s Elastic Foundation, no source code changes are required and even if it means changing the business rules, the data model and how the data is presented, this does not constitute three (or more) changes. You make a single change and it is permeated throughout all the necessary components of the solution. All are on the same page. No delays. Nothing can be out of sync.

Today Unit4 Business World, built natively on the People Platform, takes full advantage of the Elastic Foundation. For Unit4 Financials, it will be more of an evolution.It will immediately be able to take advantage of the user interface framework that will open doors for mobile and social capabilities capabilities. It also immediately leverages some elements of the Elastic Foundation including one key component: “Flexifields.”

Think of Flexifields as user-defined fields on steroids. Let’s say you want to track your primary competitors. Most modern systems today will allow you to add user-defined fields, although often you are restricted to a certain number of them. But where do you add this competitor field? Do you put it in the product master file? What if you compete across many products? Perhaps you want to attach it to a region. If you add it to both in traditional, rigid systems, the solution won’t “connect” the two; there is no real relationship implied.

With Unit4 Flexifields, you can associated it with products, regions, customer types, etc. It’s possible to not only create this new data field, but also the relationships. It is even possible to create an entire master file around this competitor field, with data such as:

  • Any known contact data
  • key verticals or regions they operate in
  • their unique selling points
  • key sources of information about them
  • a table with their products

Without this foundation upon which to build, adding something like this would have traditionally required programming and invasive source code changes to existing programs. With the Elastic Foundation, a tech-savvy business user, that fully understands the relationships between competitors, products, regions and/or customers, would be able to add this as a new attribute and start using it immediately. And even better, change it as the competitive landscape evolves.

It is clear that the Elastic Foundation has the potential of delivering a lot of value to Unit4 customers. However, is it what people want? All indications point to this, but few business users will ever look under the covers of their solutions. How will the value manifest itself in such a way that the people using the software can immediately see this value? We can tell a lot about what people expect by the priorities they assign in selecting solutions to run their businesses.

What do People Want? Selecting a Solution

Mint Jutras has been collecting data on these priorities for years now. In days gone by, “fit and functionality” always topped the list. But over the past few years another selection criterion crept up in importance and appeared to be running neck and neck with “fit and functionality.” That criterion was “Ease of Use.”

Given the pervasiveness of consumer technology today, this comes as no surprise. And in many ways, it makes sense. All the features and functions in the world won’t do you any good if you can’t figure out how to use them. But the ranking of “ease of use” and “fit and functionality” were so close, we started to wonder what the priority would be if users were forced choose between them – hypothetically of course.

So in 2015 we changed the format of the question, again listing the different criteria, but this time forcing the participants to stack rank them from 1 (least important) to 10 (most important).

Table 1: Selection Criteria Priorities (ranked from 1 to 10)

Table 1 Unit4Source: Mint Jutras 2015 Enterprise Solution Study

It is quite clear from Table 1 that “fit and functionality” is still king. The top three criteria are all related to features and functions. User experience (a broader criterion than ease of use) is still in the top half and the importance of reporting and analytics rose significantly from prior years. While ERP and financial solutions have long been famous (or perhaps infamous?) for being easier to get data into than to get information and answers out of, people today obviously want more. They want information and answers. Solutions need to be smarter.

The additional three layers of Unit4’s People Platform align quite nicely with what people seem to want most:

  • Personal experience
  • Business capabilities
  • Smart Context

While Unit4 separates these layers, it is the convergence of all three wherein lies the real value.

Personal Experience

While the overall user experience was trumped by fit and function, that doesn’t mean it is not important. Of course “ease of use” means different things to different people. And with all the talk of the impact of the millennial generation recently, Mint Jutras suspected this had become somewhat of a generational issue. Figure 1 proves that to be the case.

Figure 1: “Top 3” Factors Influencing Ease of Use

Fig 1 Unit4Source: Mint Jutras 2015 Enterprise Solution Study

When asked to select the top three factors in defining “ease of use” we found responses quite different in different age categories. While minimizing time to complete tasks still takes the lead for all three generations, it does so with a much wider margin in the Baby Boomer generation. Two out of three Baby Boomers selected this, compared to only one out of two Millennials. “A visually appealing user interface” was virtually tied for first in the youngest of the three generations but far down the list for Gen Xers and Baby Boomers.

The easiest way to satisfy different people, across different generations, is to deliver a user experience that is personalized to the individual’s preferences. A Millennial will seek and immediately adapt to screens that look very much like, and deliver the same kind of “social” experience as they are accustomed to. They will want to dive in and make tweaks on their own. While Baby Boomers might feel more comfortable with a more traditionally organized dashboard set up for them by a super user or the Information Technology (IT) staff.

The UX (UX is short for user experience) framework of the People Platform can satisfy both ends of the spectrum and do so on any kind of device. But perhaps even more important than the look and feel iare some of the more advanced features that can be derived from the organizational structure that was established through the Elastic Foundation. The Personal Experience layer is not only intuitive and easily navigable, it also draws from other layers in the People Platform to make it “smart.” Data, which is always up to date, is pre-populated and context is provided. By making the user interface smarter, Unit4 directly addresses the top concern for ease of use: minimizing time to complete tasks.

Business Capabilities

The same capabilities that facilitate change can be used to speed the development of new features and functions in both Unit4 Business World and Unit4 Financials. Unit4 Business World is already a step ahead in this since it was natively built on the platform, but more and more of these capabilities will be available to Unit4 Financial over time, particularly as Unit4 plans to deliver an SDK (software development kit) that will be available to both customers and partners.

However, the types of new business capabilities being delivered in Unit4 Business World Milestone 5 are representative of what can be delivered (Figure 2). Note the inclusion of “smarter collaboration.” Collaboration is an important flavor of social capabilities.

Figure 2: Unit4 Business World Milestone 5 (formerly Agresso)

Fig 2 Unit4Source: Unit4

While “social capabilities” were dead last in terms of selection criteria priorities, Mint Jutras believes this is because of a lack of appreciation for what these capabilities can bring. We also believe “social” to be a misleading label for some very important capabilities. For the traditional businessperson accustomed to traditional means of communication, “social” has an unfortunate connotation. Traditionalists distinguish between a business event and a social event, between a business conversation and a social chat, between a business colleague and a friend or social acquaintance. Which is why the “social” tag is unfortunate, even though it is really just shorthand for new and improved means of getting and staying informed. “Social” is also about engagement, collaboration and connectivity. The ability to “follow” and “converse” online brings a whole new dimension to “real-time.”

Table 2: Would these capabilities be useful?

table 2 Unit4Source: Mint Jutras 2015 Enterprise Solution Study

If you ignore the term “social” and look at the value delivered, a good businessperson can’t help but be interested. This is quite evident in Table 2, which shows survey participants more than twice as likely to categorize these social capabilities as “must have!” or “Useful” than “Nice to Have.” And 10% or less wouldn’t use them if they were available.

The combination of the Elastic Framework and the UX Framework of the People Platform will be key in allowing Unit4 to deliver more of these types of features and functions. And the introduction of an SDK will only accelerate the delivery.

Smart Context

While a personalized user experience and more business capabilities are both intuitively seen as valuable, the concept of “smart context” might require further explanation. To get a handle on this, recognize that smart is often a synonym for intelligent. Can the Unit4 People Platform deliver, not only reporting and information, but real intelligence? To do that, you need to put data into context and provide a tool for analysis. These requirements are clearly desired by more and more people, as evidenced by “quality of built-in reporting and analytics” making the “top 3” selection criteria.

So what’s the difference between reporting and analytics, and what makes it “smart?” Reporting is quite straightforward. It presents you with data to answer your questions about your business. In order to be truly effective, it has to be flexible and agile, because over time your questions change. And it needs to be able to handle a growing volume of data.

But reporting is only part of the solution. Reports are useful in answering questions you already have. Analytics can help you go one step further in helping you ask the right questions. Analytics implies analysis and any real analysis of data is iterative. You need to start poking at data, changing your view, looking at it in different ways, in order to recognize patterns and causal relationships. You need to transition from reporting of data to real analysis and intelligence.

Unit4 delivers this type of intelligence by blending social, mobile and visualization tools with in-memory analytics that add rapid data analysis and predictive capabilities. The components of the “smart context” layer of the People Platform are:

  • An alerts engine to provide smart business feeds
  • A rules engine establishes and configures the rules to be invoked during data entry, allowing for dynamically altering the UI based on conditions, or proactively assisting the user in entering consistent data
  • Definition of communities (defining who cares about what) and the capture of conversations within the communities (no more lost threads after you hang up the phone). This creates a social context
  • Mobile context, through devices that can detect location with a time stamp. This allows for location-based filtering and time tracking.
  • Predictive analytics, capable of pattern detection. This can be as simple as pre-populating an expense report, suggesting a project plan or for much more complex analysis.
  • Cloud and crowd context through capture of peer analysis and customer sentiment
  • A workflow engine

The net result is filtered, contextualized data that can be presented in a simple, relevant and complete experience.

Conclusion

Unit4 has been developing software that can easily, quickly and cost-effectively respond to changing business conditions for years now, not only at the applicvation level (feature/function) but also in the underlying architecture. It is now leveraging that investment, combining it with more innovations and releasing what is truly an innovative platform. Much of that innovation is under the covers, but never does the company lose sight of who it is developing software for.

Unit4 develops software for people in people-centric organizations. By focusing on the people that use the software instead of the software itself, Unit4 can avoid the all-too-common trap of technology in search of a problem to solve. There are plenty of business problems out there to solve and Unit4 seems willing, able and anxious to solve them.

For the customers running Unit4 Business World (formerly Agresso), this will feel much like any other release, adding new functionality and enriching the technology. Yet packaging this as a platform and broadening its use to the Unit4 Financials is smart in leveraging its strengths across a broader portfolio of products, which can only serve to present new challenges and more innovation.

Those customers running Unit4 Financials will see more fundamental change (in addition to the new features provided in version 13), but given the added flexibility, automation and agilty that this advanced technology brings, these should be welcome changes.

The launch of the People Platform is a big step for both Unit4 and its customers, but its not setting a new course. It is simply accelerating the journey down the current path to the next generation of Unit4. One would expect no less from Unit4. Afterall it is in the business of people.

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The Three Dimensions of SAP Business ByDesign Set The Stage for Growth Part 2

This is Part 2 of a 3-Part series on how SAP sets out to enable growth with its cloud ERP solution, SAP Business ByDesign. In Part 1 we talked about SAP Business ByDesign’s architecture. If you missed it you can back up and read it here or, if you prefer to skip the suspense you can read the full report now.

New Generation User Experience

In Cloud ERP: The Great Enabler of Growth we talked about the people challenges associated with growth. New generations of ERP, delivered through the cloud can help alleviate some of these challenges. But Mint Jutras research finds that “ease of use” means more than just a pretty face. Ease of use is first and foremost about efficiency, which not only requires a user interface that is intuitive, but also processes that align with the way business really works – business scenarios that maximize efficiency and minimize time to complete tasks.

Of course the real proof that SAP Business ByDesign delivers on these promises comes with a demonstration, but SAP’s design methodology is conducive to supporting both. When designing a business scenario, SAP designers go on site, observing the way people work and interact. Their designs are based on these observations and then validated, typically in multiple countries (China, India, Germany and the United States) before being incorporated into the product.

The result of this methodology has been an emphasis on the human engineering of the process. Each individual works from a personalized home page, which combines functions from within SAP Business ByDesign with other functions (e.g. email, calendars, maps, etc.) and a powerful enterprise search capability (think of it as a Google-like search throughout your enterprise data). Business processes are made more efficient as tasks are pushed to users. Throughout, there is a theme of simplicity and personalization.

Business Configuration

Personalization within SAP Business ByDesign is achieved through a “Business Configurator” that takes advantage of the pre-defined business scenarios discussed earlier and a rules-based catalog. Together these allow each customer to tailor the solution to specific needs by interacting in business language, not code and without invasive customization. These business scenarios map the workflow of a business process through the various functions of the solution. Selecting a pre-defined scenario automatically selects all the functions necessary during initial implementation. Customers can then selectively fine-tune the settings immediately or as business conditions change.

This type of configuration tool is particularly important as companies expand into new locations, either through organic growth or acquisition.

The combination of the SAP Business ByDesign business configurator, pre-defined business scenarios and a library of business rules enable this type of standardization. Customers need only to supply company-specific data, including assignments of tasks, to support a “push approach” within an organizational structure. By pushing tasks to an individual, processes continue uninterrupted, making the most efficient use of that person’s time. Nothing falls through the cracks.

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