Cloud ERP value extraction doesn't land in your lap at go-live. Acumatica's CEO on ensuring customer success, in the pandemic and beyond

Profile picture for user jreed By Jon Reed March 4, 2021 Audio version
Summary:
A year into the pandemic, how are Acumatica's customers faring? And why do enterprises leave cloud ERP value on the table? Those are perfect topics to take up with Acumatica CEO Jon Roskill, who also shared Acumatica's customer maturity model and bill of rights.

Acumatica CEO Jon Roskill
(Acumatica CEO Jon Roskill talking shop)

When the pandemic knocked business-as-usual into a coma last spring, most software vendors went into the bunker - at least when it came to public communications.

Not so with cloud ERP vendor Acumatica. Last April, they issued an inspired collection of impromptu Acumatica customer videos, sharing how companies were faring amidst the adversity.

CEO Jon Roskill also shot an informal clip - that video sparked a provocative discussion (Acumatica's CEO on customer change - is Coronavirus the death blow to on-premise software?). As usual, Roskill was good for pull quotes:

This is the death blow to on-prem - and it's never coming back. The market for non-cloud software has just gone overnight, boom, vaporized. And, you know, that's not a surprise. But I think some of our competitors are going to be impacted by this data.

Serving disrupted customers - "What's the right thing to do here?"

But the highlight of Roskill's piece was his stories of Acumatica customers responding to circumstance. Almost one year in, it's time for a video update. How does Roskill see things now? As he told me:

What a year it's been. We did our Acumatica Summit at the end of January. We had this amazing summit, and we all left and went home, excited about how 2020 was going to go.  We're in the Seattle area. The first case in the United States was about eight miles from where I live.  We didn't completely grok what it meant, but by mid-March, it was clear it was going to have a big impact.

That's the pandemic gut check - we all know it well. Now we find out what we're made of. Roskill adds:

We did take a very different route. We were consistent throughout the year saying, "Let's use this as the time to live up to this thing that we've we've published, which we call the Acumatica Customer Bill of Rights. Part of that is the company's commitment to customers."

We said, "What's the right thing to do here?" It wasn't always how you expected it. We saw some customers that were struggling, on the edge of going out of business. They called us, and over the year, we did something like 500, what we called COVID concessions. A lot of them were relatively small, you know, an extra thirty days to pay, or doing something that we could help them out with - another module that could help their business.

Digital commerce, on the other hand, was a high point:

The flip side was something we didn't initially anticipate, but it made a lot of sense. Internet shopping obviously exploded in 2020. Probably 60 percent of the Acumatica customer base is selling on the Internet. And so we had a lot of customers that accelerated their Acumatica business, and this put a different sort of a different sort of requirement on us.

Explosive growth amidst a pandemic is a good problem to have, but it brings a test of its own. Roskill:

We have a health and beauty company - they didn't grow 30 percent, they grew 3,000 percent - in thirty days. One of the videos you talked about, Palmer Foods, down in the Tennessee Valley, they were the sole grocery supplier to all of the families down there, and so our focus was on keeping them running. It became really important to us, and sort of a bigger mission at play there.

Humbling lessons all around:

I think we had a year of a lot of learning. Despite the fact that everybody in Acumatica was working from home, in a very distributed way, we still managed to put out three releases through the pandemic. At the core, we are a product company.

And then on the other hand, we've been working with customers, helping them get through this. In some of those videos our customers sent us, the consensus was how happy they were that they've decided to move to a cloud-based system. It allowed them to move to remote work overnight.

Though I don't completely agree with Roskill on the death-knell of on-premise software (I believe that depends on company size and industry), one thing is undeniable: the pandemic has accelerated cloud software trends - and validated those customers who pushed into cloud-based architecture more aggressively than their peers.

Cloud ERP benefits - why aren't enterprises pushing further?

No one can argue with how valuable it is to shift to remote work overnight with cloud ERP - or quickly activate an integrated e-commerce component. But those that emerge strongest from the pandemic will be the ones that grab this transformational moment. So many cloud ERP customers leave the biggest impact on the table. Why would they do that? As I wrote in Cloud ERP isn't a handshake deal - it's a value extraction challenge:

Despite the benefits of moving to modern ERP software, many cloud ERP gains don't seem to come until well after go-live. Even more concerning: some customers never get to what I would call an advanced stage of cloud ERP.

Extracting full value from cloud ERP is not about flipping the go-live switch. It requires organizational will - and a fierce collaboration with the vendor and/or consulting partner(s).

But that piece is from 2018 - and it deserves an update. I laid out benefits firms can pursue, including ERP as a data platform, process automation and improved decision-making. The benefit stages aren't precise - customers can tackle them in a different order. But too often the advanced benefits don't happen. Is this how Roskill sees it?

Three years ago, we built an Acumatica customer maturity index. With that index, you can think about how customers are evolving in terms of their use of the product capabilities on one dimension. Then you can look at how are they evolving and maturing on their own business process intelligence on the other dimension.

Acumatica - customer maturity model
(via Acumatica - all rights reserved)

Roskill likes this juxtaposition, because maturity on one side doesn't mean maturity on the other.

You can have a company that's doing everything they can to consume technology, but they aren't being smart about how to line it up with the business process. So you can be really good in one dimension, but still not doing really well. Or you can be really good on thinking about your business process. But if you're not putting it into the right technology, you're going to struggle as well. So it's really important that those two things go together.

In my first cloud ERP benefits piece (2017), I spoke to the obvious-but-real benefits of a so-called single source of truth. Especially when that means, on the lower end of the cloud ERP market, moving out of spreadsheet chaos or the distinct pain of multiple versions of Quickbooks. Those cloud ERP benefits are real, but you can't stop there. For Acumatica, which you can see via the customer maturity graphic, there are two more aspects - expanding further into Acumatica, but also supporting a multi-cloud framework as customers move workloads into the cloud. Roskill added:

Twenty percent of our customers come off of QuickBooks; probably another 60 percent are coming from a legacy ERP. And while those are different places, I encourage people to start by looking internally at their employee base and saying, "Do you have the right people to help you bring this in, and be successful?"

So it starts with the people - and selecting the right external partner. But after go-live, the most successful customers press further. Financials should be more than cloud transactions. It's a shift from looking back to looking ahead:

It is going to evolve with stages... Typically, you start by you get the financials module up and going. And what's the benefit you get from that? Hopefully, you move from being kind of backward-looking to being forward-looking, and able to get dashboarding - like you talked about Jon - or able to get some level of analytics, what-if analysis that can help you run the business more efficiently.

After financials, customers branch out. But as they expand, it's the tie-ins back to financials the boost the overall cloud ERP value: 

Once you've got financials under your belt, now you can start to look at the other modules, inventory, field service, manufacturing, and start to get those components up and running. Then it becomes time to connect them, so connecting what's going on in your manufacturing with your inventory, because you've got raw materials going in. And obviously, you've got finished goods coming out of the manufacturing, and how all of those pieces are being managed from an order processing standpoint - that's super-critical to be thoughtful on.

Then there is the business workflow:

The last stage of maturity, is where you really start to get into this business process workflow stuff. We talked a little bit about that low code, no code, the ability to create triggers on things - automatic triggers that cause things to happen across the system.

My take - cloud ERP value extraction should start now, not when "normal" returns

Roskill acknowledged that a small-but-not-insignificant percentage of Acumatica customers that moved from legacy systems are basically running their business as they were before: "They haven't jumped in and said, 'How can we really use this to accelerate our business?'" He said Acumatica is looking to change that - and I'm glad to hear it. I don't hear cloud ERP vendors pushing their customers on this topic enough. I do believe it takes fierce resolve to push forward into advanced ERP benefits - with the services partner and vendor fully committed as well.

Acumatica was already doubling down on process automation before no code/low code became cool. Each release seems to bring more capabilities along those lines (Acumatica's next bi-annual release, 2021 R1, is due out mid-March). Obviously, automation is crucial during pandemic times, but it doesn't stop there. Workflow automation via no code/low code tools is an advanced ERP benefit I should have spent more time on in my original piece.

One unresolved aspect is how much ERP vendors should get involved with decision intelligence, and how much they should leave to their planning and analytics ISV partners. I see this as too important to leave entirely to partners, though Acumatica has some good ones in this space, most recently Planful for FP&A. Roskill sees a role for Acumatica in this area also, prompting customers with embedded industry benchmarks, to help them see how they stack up against "industry best practices."

These topics can't be covered off in one article, but it's time to rekindle this cloud ERP value debate. Managing your business remotely and beefing up digital commerce is all well and good, but I'm someone who doesn't believe that "normal" is right around the corner. I'd rather see companies pressing ahead on deeper transformations. That doesn't always include a modern ERP. But when it does, go-live is just the beginning - something my departed friend Michael Doane (RIP) taught me a long time ago - long before cloud ERP became a thing.