Epicor maps a customer-centric path to the cloud - interview with Lisa Pope, President

With a 50-year history, Epicor is currently shepherding its customers through a transition that's all too familiar to observers of the enterprise applications industry. Harnessing digital technology and mapping a path to the cloud has become a priority, growing in urgency after the additional disruption of the past two years. To find out more about how the company is navigating this journey, I recently caught up with Lisa Pope, who after five years at the company was promoted to the role of President earlier this year.

I last spoke to Pope seven years ago, when she led sales of the flagship CloudSuite portfolio at Infor. That was useful experience to bring to Epicor, which a year ago launched Kinetic, the Azure-hosted, cloud-native version of its manufacturing ERP platform. It means she understands how the transition to a Software-as-a-Service (SaaS) model changes a vendor's relationship with its customers. She comments:

It's very easy to put Software-as-a-Service on your price list. It's another thing to get the DNA of the company around really becoming a service-based company, and putting your customers in the middle of that.

As President — and, by the way, the first woman to hold that role in a leading ERP company — she is responsible for the company's entire go-to-market operation, from branding and demand creation through to sales and account management. She believes this gives her the ability to speak up for customers:

I spend most days with clients, I'm really a field general. And I bring that voice of the customer back into our executive team and our boardroom ...

What I see as a big differentiation for Epicor is continuing to expand that customer relationship over time, and that long-term approach — differentiating ourselves from selling software, to really becoming a service provider, and changing the DNA of the company to really understand what that means.

Make, move and sell

The company focuses on the three adjacent industries of manufacturing, distribution, and retail — companies who make, move and sell, as Epicor's tag line puts it. Manufacturing in particular has been a laggard in moving to the cloud, and the launch of Kinetic has come relatively late compared to the cloud offerings of some competitors. But Pope argues that's been a good thing for Epicor. She explains:

We were able to evolve our cloud strategy, really make sure all of the company, all functional areas, were really ready for this movement to SaaS ... It did give us a great opportunity to do this right, and evolve and have our customers not just in the cloud, but happy in the cloud.

Over half the customer base have now taken the decision to move to the cloud, she says, and SaaS bookings have been growing "in the high 80s" in percentage terms. As a whole, the company has reached the key milestone of a $1 billion annual run rate. That's likely to please its private equity owners, New York-based Clayton, Dubilier & Rice LLC, who took over the company at a $4.7 billion valuation last September from previous owners KKR.

Industry focus

At the same time, the company is not so big that it can't tailor its offering to the specific needs of customers as their operations become more digitally connected. Pope observes:

In the verticals that we serve ... we really retain our focus on the makers, the movers and the sellers — manufacturing, distributors, and those essential retail companies. So we focus on that narrow supply chain, and provide that deeper industry expertise and tailored systems, less customizations, and a lot of reasons why they would look at us, compared to a broader solution provider.

I think digital transformation has kind of become the buzzword, like business process reengineering was back in the 1990s. Everybody wants to do it. Everybody talks about it. And really each customer journey is unique. It's literally looking at, what are they trying to accomplish? What's important for their growth? What do their customers want?

Therefore, Epicor's customer success proposition is largely focused on establishing what customers aim to achieve and then checking back each year to see if it's happened for them and what else they can do to make the most of the software. She elaborates:

[We're] really trying to understand the outcomes they want from the software. Not so focused on feature/function, but, 'We're trying to get this level of customer experience,' or, 'We need to be able to expand globally to hit these markets.' Then when we come back to those customer value workshops a year later, really looking to see, have they met those outcomes? And how can we help them get there. I think that idea of that relationship as a circle is key ...

Since we're now selling a service, the truth is, customers get to vote every year, because you have a retention rate. They either decide to stay with your service, or they decide to leave it.

Move to the cloud

In addition to retaining existing customers, this approach may also help Epicor win over new customers who are considering their option as they move to the cloud. She observes:

Especially now with many manufacturers deciding to go into the cloud, they're not all going to go to the cloud with the vendor they're with. So that's a big realization that we have — both at our own base, so we're very aggressively making sure that we're providing really easy tools and easy ways for our customers to migrate to the cloud — but also recognizing it's a great opportunity for us to go to customers that are not happy with some competitors, and really convince them that we're the right partner for them for the future.

The first step into the cloud for many Epicor customers has been through adding point solutions around the core ERP, such as business intelligence, analytics, e-commerce, configure-price-quote, and so on. Last month at its annual conference, Epicor launched a cloud-hosted, low-code integration platform powered by workflow automation specialist Workato, with packaged integrations for core Epicor applications. Just this week, it announced the acquisition of Data Interchange, a UK-based provider of Electronic Data Interchange (EDI) cloud technologies and managed services.

The experience of the pandemic, and more recent disruptions to supply chains, have both accelerated the journey to the cloud for many customers. For some, it's a matter of easing integrations, making it simpler for workers to access the software, and achieving more robust security and compliance. In other cases, acquiring key elements of their supply chain have become a driver, since integrating new sites or business units is easier via the cloud. She sums up:

[There's] definitely a focus on owning or controlling more of your supply chain, definitely a focus on workforce management, and making sure that your employees have the best tools, the best access to the system. Then obviously, because of labor shortages, automation is still key.

On the other hand, there are some in the customer base who are not yet ready to make that move. Pope says:

Many of our customers, whether they're larger and have their own IT staff, or some family run businesses, still prefer to run things on-premise. So we do offer choice across our product lines, so that companies can make that decision, and we have a value process to help them do that. We've even seen some companies with some applications, where it just did not make sense to move them to the cloud due to some specialized app that they ran on-premise that potentially could cause performance or latency issues.

Meanwhile, other customers have grown, whether organically or by acquisition, and the company has ensured that its software and resources can scale to support those larger businesses. One of the surprises coming out of the pandemic has been the strength of demand. She comments:

One might expect that customers would have pulled back and been in a waiting situation. We haven't seen that at all. We really have had record growth over the last two years — probably because that's coming from our customers. They're growing, and then we're growing.

My take

Pope shows some invaluable leadership in helping Epicor adjust to the ongoing engagement of the SaaS model. This is an interesting example of how concepts of value engineering have been adapted to provide regular check-ins as part of a customer success program, ensuring that customers are achieving the outcomes they expect from their software investment.