But if the news was a truckload, the debates were even more interesting.
I thought this comment on best-in-class becoming worst-in-class from Acumatica's customer of the year was compelling. That is surely the core of the "single source of truth" cloud ERP use case. #AcumaticaSummit https://t.co/W9sOVo2cfS
— Jon Reed (@jonerp) January 27, 2020
Funny thing about that quote: it clashes directly with one of my enterprise narratives, the revenge of the best-of-breed cloud (particularly in the midmarket).
Elledge and his team at Power Storage Solutions quickly went on to win Acumatica's customer of the year award. Thanks to the scheduling finesse of Acumatica's Kim Plank, I soon got the chance to talk to Elledge, and find out what his award-winning project was all about.
Cloud ERP go-live - in three months
This much I knew: Power Storage Solutions went live on Acumatica cloud ERP in three months. I'm a fan of fast ERP installs, but there's such a thing as flipping the go-live switch - and achieving almost no business value. Where did Elledge's team land?
Elledge, who is the VP of Operations, was modest about that question; the customer of the year award came as a surprise to him. But check out his pull quote from their Acumatica case study:
In 60 days, we went from nothing in Acumatica to launching a $24 million company with 20,000 parts, 5,000 customers and having sales orders, projects, inventory, payables, and receivables live. It's astronomical when you look at what we did and how Acumatica's cloud ERP system supports us.
They've already notched some ROI benefits, such as: reduced monthly close by 15 days, and "eliminated some $50,000 in waste from lost revenue, time and information." But how did they get there?
Succeeding in a fast-changing electricity market
Elledge's Acumatica story starts with some complicated corporate history, involving spinoffs and buyouts. The end result of the spinoff is Power Storage Solutions, which has been owned by Elledge and his two partners since 2018. So what is the Power Storage Solutions difference? As Elledge told me:
What has always separated us is that we are an engineering firm that has multiple ties with our vendors. And we have a plethora of different solutions, so we don't have to continually provide a single source solution like a lot of customers. We have the widest breadth of products available to us. We come in, and we design DC power solutions to fit the customer's needs using best in class solutions. And then, we continue to service those customers afterwards and make sure that those DC power systems are up and running.
The cloud hosting and hyperscale business might change, but here's what doesn't: Equipment needs juice. And that's where Power Storage Solutions comes in:
Once we get a customer base, we tend to grow that customer base exponentially until we basically have all of their business. We take on some of the hardest DC power challenges. Companies like CenturyLink will look to us; they carve out niches specifically for us because of the quality and the expertise of the work that we do.
The electricity market is in rapid change - Power Storage Solutions must change also. Elledge again:
Going forward, we're going to be expanding into some newer and emerging markets. We're getting into grid storage; we're getting into microgrids. We're going to be launching our own lithium battery solution into the new 5G networks. And then, we're working on a secondary source of taking used lithium, and repurposing it into green energy solutions. So this is going to be a whole new market growth on top of our organic market growth.
Even with the right industry niche, growth is complicated. For Power Storage Solutions, it's about rebounding after the spinoff:
We took a little bit step back when we moved over from Interstate PowerCare to Power Storage Solutions. It was planned for... There's some customers and contracts we didn't want that were not lucrative.
Saying no to business is tough - but it's essential.
You've got to make that call. Our third largest customer was a very large data center, but it was single-digit type margins. We cut that customer so we could expand into other areas. Last year, we grew 20 percent. We're projecting another 30 percent this year.
"We had six different operating systems"
When it comes to high-pressure cloud ERP deadlines, it's hard to top what Power Storage Solutions faced. When Interstate Batteries spun off Power Storage Solutions two years ago, Elledge and his two partners bid on the company, which was known as Interstate PowerCare. They lost the bid, but that deal fell through. Interstate came back to Elledge's team and said, "You won the bid - but we want to close it in thirty days."
Interstate was willing to help Elledge and team bridge the financing, but there was a catch: that purchase didn't come with any operating systems. Elledge's team was granted temporary six-month access to Interstate's systems. But after that, it was a hard stop. That's about a firm as a go-live deadline as you can get.
But for Elledge, moving quickly didn't mean moving blindly. Looking back at his time at Interstate PowerCare, he saw some fateful IT decisions that held the team back:
One of the big things that kept popping up is we had six different operating systems.
Six? But that's not all. They were also navigating a complicated app landscape:
We had CRM with Salesforce, quoting managed through Salesforce CPQ, time managed through Workday, expenses managed through Concur, inventory and service management through Davisware, and it all sat on an Oracle E1 platform. We had six different operating systems we had to deal with at Interstate. Then we had to try to have them all communicate together.
The feeds directly into Elledge's "worst in class" quip:
It was ridiculous. Trying to get the systems to communicate, operating efficiencies decreased due to data not matching up between systems and inventory, along with time and expenses trailing in accounting. Management was constantly being surprised by something that came through in financials.
From six operating systems to Acumatica
But could they solve those vexing issues on one platform? Elledge was skeptical. Even before they closed their bid, Elledge began the search. He knew he wanted a SaaS-based ERP system:
We came to a pretty quick agreement when I started talking about the sales team's ability to access when they're on the road.
It quickly came down to Acumatica and NetSuite (Acumatica was recommended by Acumatica partner Clients First). When I asked Elledge for his top reason for choosing Acumatica, he said:
The number one issue why we chose Acumatica over NetSuite's is the unlimited licenses.
Elledge says they didn't even fully grasp the impact of that until after go-live.
After we got it, we go, "Oh, we have unlimited licenses. Hey, project managers, the technicians can be on there." Now everybody in our organization now touches Acumatica almost on a daily basis.
Long story short - with the help of Clients First, Elledge and team hit their go-live deadline of December 2018.
The wrap - where does that leave best-of-breed?
One year after go-live, Elledge is still looking into all he can do on the Acumatica platform. At the Acumatica Summit, Elledge told me he's realized he needs to give the mobile capabilities a closer look, based on what other customers were telling him. But, Power Storage is in growth mode again, and Acumatica is working out:
It still freaks us out. I mean about how much information and how much data is quickly available to so many people, and you can create actionable items for individuals.
Which brings us back to best-of-breed. After the interview, Elledge and I had a frank conversation on his views versus mine. He's been burned enough; he is understandably wary about assembling different parts from different vendors. I pointed out that some of the components he was trying to integrate with SaaS products at Interstate were on-premise systems. That's a nightmare.
As I see it, the only way a best-of-breed approach can possibly be worth the integration effort is if SaaS products with substantial APIs are selected. In an era where user adoption is everything, I believe there are use cases for going with a few SaaS products - especially if the vendors in question have committed to being compatible. You may also need a partner who can provide continual guidance on how to avoid upgrade and testing hassles with incompatible customizations.
The risk of saying "I'm only going with this vendor's products" is that no vendor is universally effective in their software. There is always a weak link, or an area not covered. And good luck getting users to adopt a substandard product just because you don't want to integrate. Watch them download their own "better software" on their phones instead, and have fun with that instead - data lost in business users' own phones might be the worst integration problem of them all.
There are no perfect answers here; SaaS APIs don't make integration chores magically go away. But I've heard from enough customers to convince me that with care and proper APIs, the integration chores can be reduced.
Every customer has their own IT philosophy/resource constraints, and build versus buy comes into play also. If I were a cloud ERP customer, I'd think about integration this way. If the functionality is sorely needed, and you've ruled out "build":
- Make sure the functionality isn't on the short term roadmap of the cloud ERP platform you've chosen. This often requires some type of "in" with the product team. But that's an "in" you're going to need anyhow.
- Consider certified ISV partners of that platform first. Talk to customers who have gone that route - don't go first.
- Outside of certified ISV partners, tread carefully. Prioritize those vendors that have committed to an integration together. If you're pioneering an integration between two SaaS vendors, make sure the concessions are acceptable, the need is urgent, and the relationships with partner/vendor are solid.
I personally like the model of choosing your go-to-platform first. Therefore, I agree with Elledge that just picking best-in-class products for every need is not the right kind of software shopping. Cloud platform-first, then careful choices. When we get into the large enterprise, this debate gets more complicated, with the potential of multiple platforms in play (and perhaps, more of an ongoing need for certain on-prem systems and data centers). But that's another story.
Elledge and I left that conversation open-ended, but he did tell me of a couple of Acumatica ISVs had caught his eye. I'll look forward to seeing if Elledge chooses to make that best-in-class move again - albeit with a much more cautious - and SaaSy - mentality.