"Cloud ERP" is one of those trend-happy phrases that implies coolness and value - but what happens when you investigate?
At this year's Acumatica Partner Summit, I had the chance to dig into the relevance of cloud ERP with plenty of Acumatica partners and customers. Several of them were willing to take the video plunge with me, and have an informal chat about lessons learned.
It's always good to look across the videos to get a better grip on common themes. Not surprisingly, "cloud ERP" wasn't the phrase these customers or partners used for their results. Fine - so what are the factors that made a genuine difference?
Let's run through the videos, and then I'll draw some conclusions.
AME's selection criteria - flexible options and caliber of relationships
My first victim was Ehren Dimitry, President and CEO of AME Corporation. (now Panova). A contract manufacturer specializing in rubber and plastic components and sealing solutions, AME was an early Acumatica customer. As Dimitry tells me during the video, Acumatica marked a big change from the "legacy" systems of old:
Dimitry selected Acumatica based on flexible deployment, as well as changes in pricing and user license policies:
Acumatica was something that was fresh in the marketplace, that was different than its competitors. For example, having a choice of how to deploy it, that was a really big advantage for us coming off of a legacy system and having that data still available without paying ongoing subscription fees, and Acumatica would allow us to do that, to having unlimited users, and not feeling penalized for growing your business when you're slapped with another few thousand dollar bill for adding a user to the database.
Dimitry is also looking ahead to UI improvements and mobile enhancements coming in the 5.0 edition:
The continued improvements with the UI is great to see. My users, they're the ones using it day and day out. That's going to be a huge benefit to them. We're rolling out the CRM functionality right now. Bringing Acumatica access to the mobile front: I just came out of a breakout session listening to what they're doing. My mind is blown. The gears are turning thinking of all the different ways we can benefit from that technology.
But what struck me most about the video was Dimitry's emphasis on that old school stand-by: trust in the vendor relationship. Being an early customer, AME's implementation had its issues. It was the responsiveness to those problems that counted. As Dimitry put it, "Being able to build a relationship with Acumatica, unlike we were able to with any of the competitors, really meant a lot to the culture of (our) company."
Cherry Lake Tree Farm - Legacy software restrained growth
Next up was Timothee Sallin, President of Cherry Lake Tree Farm, a next-gen agribusiness that produces ornamental trees, palms and shrubs. Sallin overseas a workforce dispersed across multiple farm sites, and a sales force that extends to Europe.
With revenues of 72 million and ambitious growth plans tied to technology (including same day order fulfillment), Sallin's business requires a product that can evolve rapidly:
Sallin shared an all-too-common ERP story: Cherry Lake had over-customized their previous ERP system (Solomon) to the point where it was unwieldy and tough to upgrade. The choice came down to a new out-of-the-box instance of Solomon or a shift to Acumatica. Sallin explains that the Acumatica choice came down to features that no other vendor had. In Cherry Lake's case, the cloud-based delivery was a key:
Acumatica is truly built for the cloud and we felt that that technology is going to be very important to our business. We saw Acumatica as being ahead of the curve in terms of embracing [cloud], and we had a lot of trust in Acumatica that they would continue to improve the technology and to develop it along the lines of what we're going to need as our business grows.
Due to Cherry Lake's mobile workforce, Acumatica's growing mobile capabilities matter:
We see mobility as a big part of how we're going to use Acumatica... For us to keep everybody working to together and communicating, mobility is key. To be able to deploy tablets or ChromeBooks or devices into the field and have our people interact with the data directly in real-time is a game changer. It changes the way that we think about our processes.
I also did a video shoot with Acumatica partner JAMIS, a niche job costing player, that adds more context to these customer views. In JAMIS's case, building their product on the Acumatica platform has allowed them to be more competitive, thanks in part to a "dazzling" user experience that is uncommon in the job costing space. As Jeffery Noolis, President/CEO put it:
We're winning sales cycles against serious competition, and we've been able to go up market, raise our prices, and compete in areas we couldn't compete before. Even in the last 90 days we've won 3 out of 4 times head to head. That's crucial. It changes everything for us.
My take - cloud ERP as enabler, not buzzword
Cloud ERP might work as a software category, but it doesn't work as a description of value. Based on talks with Acumatica customers, the interest in cloud comes as more of an enabler than an end result. "Cloud" becomes a way to talk about how your business can transform, and how your relationship with software vendors can transform as well - from pricing to user experience.
Some cloud factors in these videos are more specific to Acumatica, and some are broader. Jumping out are:
- Cloud as an ideal platform for extending to mobile ERP (mobile was a very common agenda item)
- Cloud as an applications platform for partners and customers (thus addressing the on-premise over-customization problem)
- Cloud as a better way of delivering new functionality (and more confidence in cloud vendors than on-premise vendors to deliver that functionality in a timely and less intrusive way)
But not all of the appeal of next-gen ERP is cloud. Enhanced UX is another common refrain. In Acumatica's case, flexibility in deployment rather than a forced cloud march is effective. Flexible pricing options, such as unlimited users for the same base cost (consumption-based pricing) are not unique to Acumatica either, but most vendors - even of the cloud ERP variety - haven't gone there yet. They should - because that's where the implications of "rethinking for cloud" take us.
The trust SaaS vendors have earned delivering regular enhancements via the cloud has changed the software selection process. The emphasis on caliber of relationship cited by AME comes back to the fore - selection becomes less about completeness of functionality and more about the ability to enhance and build on the platform, perhaps with a trusted partner.
In Acumatica's case, the partner model is taken to an extreme with all go-to-market handled by partners. Building out apps on a cloud platform is yet another differentiator that some cloud ERP players have seized upon, while others have not. For the Acumatica customers I spoke with (including Cherry Lake Tree Farm), the platform aspects make a big difference, calming the fears of having to settle for "vanilla cloud." And: the confidence that new functions can be easily added over time. Functional completeness is a myth of a bygone time when business moved more slowly. Today's "complete" is tomorrow's "legacy."
If the concept of experience-over-functionality gives the edge to relationships, then upstart vendors like Acumatica that can focus on the partner/customer experience on a smaller scale have a advantage on the evaluation scorecard. What gets tougher is scaling that trust factor as the customer base grows. Acumatica has recruited many disillusioned partners from other vendor communities; it's not a given such trust can be maintained at scale.
And from what we're hearing from these stories, without that trust (and the ongoing collaboration it implies), then "cloud" returns to its hollow status as just another pretty slide in the slide deck.
Disclosure: Acumatica paid the bulk of my travel expenses to attend the Acumatica Partner Summit. I was also compensated for my appearance on an analyst panel during the show. Acumatica assisted in lining up the video guests I interviewed, but diginomica produced the videos at our own expenses (and had full editorial control of the final output). Special thanks to video partner in crime Den Howlett for editing the final versions.