How Mozaic faced COVID and ransomware disruptions with cloud ERP - an Acumatica use case

Profile picture for user jreed By Jon Reed August 6, 2021 Audio mode
Summary:
COVID scuttled the plans of many companies. But for Mozaic, a ransomware attack added another unwelcome twist. How did this non-profit make it through, and wind up with the Impact Customer award at this year's Acumatica Summit? It's a story worth telling.

Allen Connely, CEO of Mozaic
(Allen Connely of Mozaic at Acumatica Summit 2021)

The debate over modern ERP can be aggravating. Yes, modernizing your ERP is not the only transformation model. Yes, historically ERP did not deliver, from an "ROI promises" standpoint.

But when I hear an "expert" tell me - as I heard this week - that ERP really hasn't evolved, well, that irritates me. The proof points are piling up.

Want another proof point? How about this one from the Acumatica Summit in Vegas: your organization is besieged by ransomware. But your division running on cloud ERP holds up. That's the story of Mozaic, a New York non-profit with a fascinating operating model.

"Then ransomware hit our legacy on-premise system"

As CFO Tammy Raub shared during the keynote, when Mozaic ran into COVID-19, everything changed:

Well, we started 2020 with the merger of two chapters...  We were going to merge systems; we were going to merge teams - and then COVID. And that made everything more difficult. We had to lay people off; it was very difficult for us. And then we decided to soldier on and keep working.

But it didn't stop there - more adversity hit. This time, by way of a ransomware attack, which crippled mission-critical systems. Well, as I alluded to, not all of them - the division running on Acumatica held up fine. Raub:

Then ransomware hit our legacy on-premise system. We were down for about two weeks; we couldn't use our Internet or anything. Arc of Yates had been on Acumatica since 2018. That could still run, so we could still run a portion of our business. 

The other business was "demolished." But Mozaic refused to pay the ransom:

They even wanted to charge us an additional ransom to try to bring it back. So we pulled the copy off our backup, and put it back on there, because we didn't want to pay that.

Mozaic found their way through - and onto the Acumatica Summit keynote stage, where they received Acumatica's Impact Customer of the year award. After the keynote, I dug into the story via a sit-down with Raub and Mozaic CEO Allen Connely.

About Mozaic: "100% of the profits go back into the mission"

Mozaic's nonprofit origins are a bit complicated, but the basics are: this Waterloo, New York organization launched in 2021 as a merger between two "Arcs," the Arc of Yates and the Arc of Seneca Cayuga. As you might guess, different divisions running on different systems are part of this merger story. When I sat down with Mozaic, foremost on my mind was: what is their secret to overcoming all the adversity that's thrown their way? Connely said it's all about holding fast to their mission:

It is totally about supporting people with diverse abilities, particularly those with developmental or intellectual disabilities. And so what gets people up is, depending on what their role is within that mission, be that direct support where they touch the mission every day, working with the individuals that we support, or those that might be an administrative staff who may not touch the individuals every day, but they know that the work that they're doing has an impact on the lives of the individuals, because we're there to help them be successful, whatever that means to them.

As Connely says, you can't do this work on an organizational island. Collaboration is a constant:

We also have certain other populations, veterans that might have a disability, that come and work with the contracts that we have. We do a lot of contracting with the state of New York, or federal contracting with the Department of Defense. So everyone works together, because we understand that the mission in what we do impacts the lives of the people that we support.

Raub sees this in their pre-school, where children come in who can't walk or talk. Mozaic has OT, PT and speech therapists on-site at the school: "By the end, they are [walking and talking]. It's like miracles almost." Connely sees that same inspiration from their Spotlight Studio, where adults get up on stage, sing and dance:

They are the heroes. We have a real stage. Many times when they come, they're not able to talk or see, or used to being in front of people. We believe in that aspect; we are transforming lives, and in all the other things that we do, from our manufacturing facility and working for the Department of Defense, or having our own branded product. 100% of the profits go back into serving the mission, in whatever form that might take.

Why Acumatica? "You need to be efficient; you need to have the data."

In case you're losing track of all the things Mozaic does, well, I had that same problem. From pre-school to stagecraft to selling their own nifty hats via their Arctic Gear storefront, Mozaic has an ambitious agenda. And, as you might imagine, some pretty complex software requirements. So how does their back-end impact their front-end results? Raub explained: 

You need to be efficient; you need to have the data. We're so diverse. We use so much of Acumatica. We use Nonprofit+. We are also rep payees for our individuals, so we have to keep a balance sheet and an income statement on each separate person. So the fund accounting there is very necessary. And then, we've got manufacturing so we're implementing [Acumatica Manufacturing].

We need to know that we're not going to lose money on a job, because we can't afford to lose any money on a job. That helps us keep our mission going. It's so important to have the right data at the right time. [Author's note: Nonprofit+ is a third party non-profit vertical extension built on the Acumatica platform by Accounting System Integrators].

Smaller organizations can be complex - they also need to punch above their weight. As Connely told me, that's why they are implementing Acumatica Manufacturing: 

When you're a Department of Defense contractor, you're competing against big players that do this every day. You've really got to know your cost. You've got to be able to know, so that you can win. Even though we're a nonprofit, we compete. We see ourselves as a business with a social mission. We have to balance the document of business and mission... I think that makes us a bit different than a lot of nonprofits in our area.

The wrap - can modern ERP hedge against disruption?

During his keynote, Acumatica CEO Jon Roskill emphasized the transformation imperative. Did this message have relevance to customers? Every customer I asked, including Mozaic, said yes. But with this caveat: sometimes the unanticipated puts everything in flux. Mozaic experienced that head-on. But their plan to move all divisions to Acumatica carries on, with a new planned go-live of September 1. Connely:

It's so interesting what Jon was talking about today, about being cloud-based. We were exactly like he talked about. We had older servers; they were taken down [by ransomware]. We had older computer systems; they were taken down. Some of the software was just blown up.

One small silver lining from the setbacks: it confirmed Mozaic's software strategy.

Through this process, it really did help us to say, 'We're going in the right direction.' Do we have servers today? Yes, of course, we have some requirements because we're a heavily-regulated entity, but we're in a lot better place. We have multiple security systems, dual-factor authentication.

We wish it didn't happen, but at the same time, it put us in a place where we know we can manage other nonprofits as a line of business. We can be confident that we're doing everything to keep their information safe as well.

One big cloud ERP benefit is pushing for that single source of truth. The Mozaic team told me they are already gaining from Acumatica's reporting, but they plan to invest more with budgeting and planning via their new system. No, you can't anticipate every adverse event. I don't happen to believe there is such a thing as a "future proof" system. But I do believe some systems are more resilient than others. Mozaic seems to feel the same. As Connely told me:

Our industry changes all the time, so you really do have to be able to pivot... These types of systems, these type of business applications allow us to be agile. Even though we're a large organization, 700 employees. We have 2,000 individuals that we support.

In our area, we deal with major manufacturers and major retailers. We deal with regulatory bodies. The only way that we can be a company of the future is to really be agile in what we do. That's what we are focused on with the systems that we are replacing, is to give us that agility.

Raub added:

and scalability.

A worthy goal to end on.