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Acumatica Summit 2023 - Acumatica stakes its claim to modern ERP. Here's how it defines it

Jon Reed Profile picture for user jreed February 2, 2023
Summary:
Acumatica Summit 2023 raised a provocative question: what exactly is modern ERP, and does it deliver? Grab your beverage of choice and we'll dig in. I also have some newsy nuggets for you, including Acumatica leadership's clarifications on which verticals are in play, and which aren't.

Acumatica CEO John Case
(Acumatica CEO John Case)

Every vendor says its user events are "all about the customer." This year's Acumatica Summit went to an extreme.

Acumatica never worries about making noise with keynote marching bands or exotic acquisitions, but this year's day one keynote flipped the script. It was the first Summit keynote to feature new CEO John Case - and it was all about customer interviews (the product keynote was on day two).

As always, Acumatica's keynotes were concise, raising the perpetual question of why so many vendors struggle to wrap their keynotes, and give that invaluable on-the-ground time back to attendees.

Is there such a thing as truly modern ERP?

But there was a more compelling storyline in play - and it's a story that anyone with a connection to ERP should care about: is there such a thing as truly modern ERP? If so, shouldn't it help us serve our customers better? Has Acumatica achieved this? Oh, and while we're at it, can we get rid of some of the friction ERP customers still have with vendors - whether they are in the cloud or not? To sort this, Acumatica loaded me up with frank customer and exec sessions. I pulled out some under-the-radar newsy nuggets I'll share at the end of this post.

The biggest focus of the 2023 keynotes? New functionality - no, not next-gen futures like industrial drones or ChatGPT-meets-ERP, but functionality coming in Acumatica 2023 R1 in April. Much of this functionality was voted on by customers, or generated from Acumatica's customer advisory boards, which influence the lengthy feature list added to the Acumatica's industry editions with each release.

During his analyst chat, Acumatica CPO Ali Jani explained that kiboshing the Alexa-type demos was an intentional shift, sparked by customer feedback:

You didn't see all these drones and Apple watches. We purposely removed that from the Summit, because we heard from our customers: 'Tell us something we can use for ourselves.' These things are all great -  but that's not what our customers want; they want the technology to work behind the scenes. They want us to focus on what they're asking for, not what we think they should. So we really took a step back.

If it doesn't fit intuitively into product, it's not going on the keynote stage. Jani added:

It's happening behind the scenes - we haven't stopped. We have an entire AI group, and teams of people focusing on this stuff. But my mandate to them is: make it seamless; like they don't know it exists, but it's there.

Talk about a contrast: an analyst colleague tells me there's no nifty drones or notable news at the show. Meanwhile, Acumatica's customers vigorously applauded this exceedingly-practical approval reassignment demo:

Acumatica updates its Customer Bill of Rights

Backing up Acumatica's customer-first rhetoric is their customer bill of rights. An updated Acumatica customer bill of rights was announced to kick off the entire show:

A fellow analyst quipped (to me) that any vendor can put up aspirational slogans. True enough - but this was the first public customer bill of rights I know of in the ERP industry (at least one other vendor has followed suit). Yes, some of these "rights" have a self-serving dimension. For example: choosing your deployment option is on here, but I see pros and cons to this from a business model perspective. I wouldn't necessarily criticize vendors that don't offer this.

However, Acumatica is correct that training should be free; monetizing the training that's supposed to help your customers succeed is such a classic ERP industry fail. And yes, "Unlimited user access without having to purchase user licenses" is also self-serving, but shouldn't more ERP vendors offer consumption-based licensing models? Especially now that empowering the so-called "citizen developer" and engaging casual ERP users is so high on the to-do list?

As for "Transparent, fair pricing and agreements without long-term commitments," maybe version three can even specify the maximum page length of such contracts, given that teams of lawyers still miss fine print on mind-numbing ERP contracts from too many vendors.

Modern versus legacy ERP - Acumatica's CTO explains the difference

Let's follow this rabbit hole a little deeper, into the very definition of modern ERP.  During the day one keynote, Acumatica Founder and CTO Mikhail Chtchelkonogov, who knows a thing or two about the evolution of ERP, threw old school legacy ERP under the bus, in favor of modern ERP. According to Chtchelkonogov, what is modern ERP? My interpretation brings out this list: 

Superior UX for a broader user base - ERP used to be the domain of power users, accountants and departmental managers. Now, as Chtchelkonogov says, it must reach (almost) everyone - including some external stakeholders. "When we say everyone, it's not just the company employees; it is customers; it is vendors; it is auditors; it is pretty much everyone who is involved in the business process.

Open ERP, APIs are expected - Serving these diverse constituents requires what Chtchelkonogov calls "open ERP." This means APIs, easy product extensions, and - bottom line - an ERP product "designed to connect all these people to operate together." But, Chtchelkonogov warns, that means the ERP vendor must maintain these API integrations. If they break, well, that's not too modern.

Automated ERP -  "Users expect the system to be automated and do the job for them, so they can focus on their work, not unlocking the information in the system."

Industry focus - I believe the future of cloud ERP is vertical. Chtchelkonogov seems to agree, but emphasizes Acumatica will stay focused on the verticals they've built out: manufacturing, construction, distribution, and retail commerce (more on the future of Acumatica retail-commerce at the end of this piece).

Free your partners to build functionality - you can't build everything customers need yourself. "Empower" partners (and customers) to build their own functionality - and apps.

Users should be able to customize their own environment - yes, we could slap the trendy "low-code" phrase on this. But I'm glad not to over-flog low-code; Acumatica was rolling these things out before low-code became the low-hanging PR fruit that bogs down my inbox. As Chtchelkonogov told attendees:

We call it a non-programming customization framework. This is the tool that gives you the ability to configure the dashboard, modify your reporting, modify your workflow, set up automated notifications, and many other things.

This is a worthy list - one that all vendors should aspire to. Add in the customer bill of rights - then the customer's scope for evaluating a cloud ERP vendor goes beyond software, into the entire experience of dealing with that ERP vendor.

What would post-modern ERP look like? On dashboards, user automony, and forgiveness

I'm sure Acumatica would put community on this list. I would add that modern ERP should be collaborative as well. I don't think Jani would disagree - Acumatica's Microsoft Teams integration will soon be expanding across the entire product.

I'm surprised, however, that Acumatica doesn't always emphasize its particular strengths (more on that shortly). Most cloud ERP vendors claim they can deliver those things - who doesn't claim to have a good UX or low-code these days? Whether vendors can deliver is another matter. But something Jani said to analysts jolted me: are we nearing the point where modern ERP is table stakes? Perhaps, to steal a clunky phrase from academia, we should now be aspiring to post-modern ERP? As Jani put it:

You saw the quote from [Key Code Media]. They said, 'We make every employee a power user. That's our goal.'... Our users love these tools you saw Mike show, where they can personalize and remove and optimize for their workflow. It started with a world of dashboards, right? People loved dashboards, because it was personalized. And you got the KPIs you needed and so on.

But we can't stop there:

Now the world's gone beyond dashboards. They've got to have screens that are friendly; they've got to have side panels that have the right information at the right time; they've got to have these intelligent advisors that are prompting them; they've got to have the tooltips that guide them through when they have trouble. [Author's note: Acumatica's customers are fond of the customizable "side panels" that appear on their screens].

Then, Jani dropped one of the standout quotes from the show: "Why aren't ERP systems more forgiving?"

We use the word forgiving; the system's got to be more forgiving. ERP is horrible at being forgiving. If you make a mistake, 'Oops - I'm done.' We need an undo button, and ERP systems don't have an undo button. That's empowering users to change the game. That's what we're focused on.

Revealing Acumatica stats and news morsels

Major breaking news? Perhaps not. But the Summit surfaced some items of note:

No more new verticals - don't expect Acumatica to go into any new verticals. Though Acumatica is doubling down on its vertical ERP editions, they believe the focus is important. Jani said they will turn down ISVs who want to go into new verticals, to avoid customer exposure if that ISV changes plans later. Both Case and Jani re-iterated their focus on distribution, manufacturing, construction, and retail-commerce. Yes, they might consider small acquisitions that help them to flesh out other aspects of those verticals (or micro-verticals).

Maybe one less vertical? Jani says retail-commerce may potentially end up integrated into the other three verticals, because, basically, "everyone is a retailer now."

AP automation is hot, but plenty of room to grow - As per Acumatica partner Somerset, about 200 out of 10,000+ Acumatica customers are using AP recognition. (Those using it are definitely enthusiastic, so I would expect that number to surge this year).

Velixo is hot, too - former Acumatica CEO Jon Roskill dropped by to fill me in on Velixo's success (he has been advising them) - more than 1,000 Acumatica customers are already running Velixo (it's no wonder Velixo is heating up, given ex-Acumatica's Gabriel Michaud is founder and CEO). He had the connections, knowledge of pain points, and vision for how Velixo could become an intuitive bridge between Excel and Acumatica. This all ties in with the push for better reporting (Acumatica is working on a new reporting engine also; more on reporting in a sec).

Acumatica customers moving to the current release - Jani acknowledged that only about 50% of Acumatica customers are running the latest release, but Jani says that's about to change, to the tune of 70-80% this year, and close to 100% next year. Why? Jani says that "The ISVs were holding customers back," due to testing issues. The types of changes ISVs need to make require automated testing; many had their own test solutions. That's sorted now. Jani: "Now our ISVs are ready before the GA; they have to be ready. Otherwise they're not in the program; we kick them out."

Side panels will be shareable - customers want side panels to be shareable. Jani says this is in the cards, perhaps later this year. It's tied in with the rollout of a new Acumatica "trusted developer" credential. Once you have a trusted developer credential, Jani says Acumatica will consider making side panels - and other customer development offerings - shareable on the Acumatica Marketplace.

My take - how is cloud ERP serving customers better?

I mentioned that sometimes Acumatica doesn't play to its own strengths. Many of the so-called characteristics of modern ERP that Acumatica referred to are part of its competitors' talking points too. That doesn't mean Acumatica isn't exceptional in some of these areas (their mobile UI is much better than most, for example), but when all vendors talk up the same points, they lose impact. However, Acumatica also has unique aspects it can (and should) play up: robust all-free training is one, but the consumption pricing/licensing different is right near the top.

At a time when companies are both cost-conscious and eager to seize growth opportunities, licensing that scales has a major edge; Acumatica has that. Both were big factors in the Key Code Media case study I wrote prior to the Summit. Acumatica showed off crowd-pleasing UI changes users can make, but Acumatica also has a workflow engine that is getting more and more accessible with each release (during our briefing, VP of Product Management Doug Johnson told us that the three year old workflow engine is now accessible enough for power users to work with, the equivalent of a so-called low-code "citizen developer.")

Johnson thinks they can get the workflow engine to the point that any business user can apply it. That means more users will be able to automate their own workflows - surely that is a core characteristic of post-modern ERP (along with the needed governance that comes with tool democratization). At any rate, customers are already applying it; few ERP vendors can say that. Acumatica can make more noise here.

Acumatica also plays up community, but of course, all vendors claim they have awesome communities. What most ERP vendors don't have is a hackathon prior to their user event. This year's hackathon finalists included two ChatGPT-related projects. Yes, Acumatica is resistant to going overboard with next-gen tech, but why not have a couple hackathon finalists demo what they quickly built on the platform the day before? Doesn't that send a strong message? Mixing developers and business users is an ERP win; we don't see it enough.

Informal talks with Acumatica customers gave us a well-rounded view (I also conducted 1:1s; use case coverage will come out over time). What a show of strength it is to put a whole slew of customers in front of analysts, and open the questions up  - without any controlling moderation. The biggest pain point out of these discussions? Reporting. At the same time, Acumatica has a range of reporting and planning options, including a diverse set of third party providers like Velixo. So how do we reconcile that?

This ties directly into the 'What is modern ERP?' discussion. One of the biggest shifts of modern ERP? Moving from ERP as a transactional platform to ERP as a data platform. Customers want to derive more value from all the hard work moving from legacy systems. Better analytics, planning, and, ultimately, decision making is fundamental to this. All ERP vendors are trying to address it, one way or the other. I taped a podcast with Joni Girardi of DataSelf, an Acumatica partner who shared a sharp view on how to achieve value from BI, and where the pitfalls lie. That should be out this weekend.

Whether we call it modern ERP, post-modern ERP, or something else entirely, it all comes back to this: "Is ERP helping to serve your customers better?" If not, then why did you bother upgrading to a new system? That may sound harsh, but I believe that's the bar now. ERP must be judged by its external impact. Operational efficiency is, at, best, table stakes.

When you shift to ERP as a data platform, we can add another edgy question: "Are you making better decisions? If so, how? Are your teams doing the same? Are they acting on data sooner, and having tangible business impact?" But those are questions for another time. Echoing Jani's point, dashboards can be effective, but we'll need more than dashboards here.

Of course, "customers" in this context could also mean suppliers, partners, auditors, your supervisory board, and even employees - especially when it comes to attracting and retaining talent. I asked that question of every Acumatica customer I spoke with - and they all had good, specific examples of how Acumatica is helping serve their own customers better. That's not too shabby. I'll get into more of that another time. For now, I think we all need a beverage refill.

Note: for more on Acumatica's direction, check diginomica contributor Brian Sommer's Acumatica Summit 2023 recap.

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