Apttus spans the quote-to-cash gap from CRM to revenue

Between the classic CRM activity of sales prospecting and the venerable transaction recording of ERP stands a hinterland of business-to-business interactions that are now also yielding to automation. Known generically as quote-to-cash, these processes fill in all the gaps needed to turn a buyer's interest into realized revenue.

If automated at all, these activities have traditionally been performed in separate applications: configure-price-quote (CPQ), which speeds the selection and pricing of features, components and add-ons that go into a proposal to the buyer; various aspects of contract management throughout the lifetime of the deal; and order management, billing and other revenue management applications.

But now, as in many other pockets of enterprise automation, a new generation of cloud-based vendors is emerging that consolidates all these operations. One of the largest of these newcomers is Apttus, whose software is built on the Salesforce platform, and therefore integrates natively with the CRM leader. Recently boosted by a $108 million funding round and now with more than a thousand employees, Apttus is prospering by offering a portfolio of seventeen separate applications that automate what CMO Kamal Ahluwalia recently described to me as "the new front office."

Customers are realizing that they need more speed and they are creating this new front office. They are starting to pull out custom solutions that were largely backoffice and moving them out into the cloud so that all customer facing interactions are faster paced, with a modern UI, giving them a great interface into their interactions.

Around four-fifths of the vendor's customers integrate to an SAP or Oracle back-end system, often replacing ageing on-premise applications with Apttus. As CEO Kirk Krappe told me earlier this year, these are often third-party applications to the core ERP, which are easier to replace with a cloud alternative than upgrade when the core system migrates to a new version. Ahluwalia said the vendor also sees a growing number of customers using NetSuite for back-end financials.

Common front-end

Customers often have more than one ERP or financials system, for example where there are separate instances in different regions or operating divisions. Apttus has the ability to act as a common front-end to multiple back-end instances, said Ahluwalia.

One of the things we've developed over the last couple of years, every line item can be sent to a different fulfilment system. That enables them to present a common front end to the customer and mask all the backend complexity.

The front-end capabilities now include e-commerce functionality that can be used both direct and in a partner channel. For many users, though, the interface is often a Word or Excel document, which connects into the underlying application using Apttus' X-Author technology.

X-Author allows people to continue using Word and Excel. Most people fight Excel, we're probably the only people saying, 'Great, keep it.'

All these features, of course, only create value if they are in use. Apttus takes care to monitor uptake because it, too, has a vested interest in spurring rapid user adoption of its application, as Ahluwalia told me:

Once your revenue's flowing through us it's a very sticky application.

Therefore the Apttus sales team has learned to postpone celebrations on signing a new customer until that adoption can be proven.

We no longer celebrate when we win a new customer or a project goes live. The celebration is kept at bay until we know the customer has reached 75-80 percent adoption.

An adoption team works with customers looking at various aspects, such as how intuitive the implementation is, whether popular actions and use cases are easy to complete, and the overall design of the application. Apttus also monitors ongoing usage, said Ahluwalia.

We have built an early warning system so that we can track the usage of the application. If that starts to decline, that tells us something is wrong.

Customers range from small, fast-growing businesses through midsized manufacturers and large global enterprises. Apttus often works with systems integrators including Deloitte, PwC Bluewolf and Cloud Sherpas (now part of Accenture).

With Salesforce putting more emphasis on industry cloud solutions, Apttus has been building up its expertise in industries including manufacturing, telecoms, media and technology, healthcare and life sciences, and financial services. Often its distinctive selling point is the ability to operate across the corporate firewall to go to market through partners, Ahluwalia told me.

Most customers need a strategy to sell across multiple channels. We are now the only solution on Salesforce that allows them to do that.

Any application or process that involves a customer or partner, we can be a part of that.

My take

Apttus is one of the largest Salesforce-native ISVs, occupying a functional footprint that's traditionally been difficult to automate. One of the reasons is the need for processes to span documents such as proposals and contracts as well as transactional records such as orders and invoices, where its X-Author technology plays well.

A typical customer is global supply chain logistics operator DSV, which has turned to Apttus to provide faster quotations to its customers, integrating with four separate ERP systems. Speaking to me last year, its chief commercial officer Rene Falch Olesen summed up the pressures it faces:

If one of my customers is asking for a price for a service, are they willing to sit and wait for me to pull my finger out and come back to them in two days’ time? I don’t think so.

This is the kind of challenge that is spurring enterprise adoption of more agile cloud solutions.

Disclosure: NetSuite, Oracle, Salesforce and SAP are diginomica premier partners.

Image credit: Graphic courtesy of Apttus.