Sage Intacct Advantage 2019 - Marc Linden reveals why CFOs need an Intelligent GL

Profile picture for user jreed By Jon Reed October 24, 2019
Sage Intacct Advantage 2019 brought a slew of announcements and changes. But at the core was an AI push, centered on the "Intelligent GL." I did the gut check with a boatload of execs and customers - here's my day one analysis.

Sage - Marc Linden
Sage Intacct's Marc Linden at Advantage '19

Last year's Sage Intacct Advantage featured ambitious talk about Financial Leadership 3.0. Yep, that's the so-called "continuous close," and can AI could help CFOs get there. But the show left me with big questions, such as:

  • How will Sage Intacct make AI real for finance teams? What products or functions will get an AI makeover?
  • Will Sage demonstrate its value to Intacct customers, or will this be one of those "wait and see and wait some more" acquisitions?

This year, we got some answers - along with a slew of product news, including the announced integration of Sage People HCM with Sage Intacct.

We also saw a passing of the keynote torch. Sage Intacct Advantage keynote fixture Robert Reid, Chairman of Sage's MidMarket Solutions, was only on stage for a few minutes, before handing over the keynote baton to Marc Linden, who presided over a keynote for a record 3,500+ Sage Intacct Advantage attendees.

That wasn't the only keynote change:

I have no quarrel whatsoever with Sage Intacct pushing CFOs to think about leadership in a so-called "3.0" context. The two problems are: explaining that vision in a clear, energizing way - and helping CFOs who may be knee deep in corporate administrivia to get there.

Reid has talked persuasively about the goal of enabling finance teams to be 80 percent strategic (finance), and 20 percent accounting/admin. But plenty of finance folks at this year's Sage Intacct Advantage aren't there yet. Example: I talked to one CFO last year who told me they were well on the way. But this year, unexpected new mergers have distracted - including a NetSuite-to-Intacct transition for one of the acquired companies.

During his keynote, Linden explained the finance 3.0 thing. Here's how I'd put it: finance 1.0 reports on what happened, finance 2.0 analyzes why it happened, and finance 3.0 predicts what is going to happen, and what you should do about it. Linden's slide puts it in Sage Intacct lingo, and proclaims that finance 3.0 is ready to go:

finance 3.0

You're obviously not getting to that 3.0 point without "AI" and predictive/prescriptive capabilities. Cue one of the most interesting Advantage 2019 product announcements: predictive billing.

Sage Intacct on AI - "customers want us to figure it out for them"

That's the AI talk I heard from Sage Intacct this year: unapologetically practical, stemming from the so-called "Intelligent GL" into tangible products and automated workflows. In our talk after his keynote, Linden told me that customer CFOs influenced that approach:

Either three or four years ago as part of our CFO track, we ended with a session from an AI visionary. The consistent feedback we got from the CFOs in the audience was - and it's particularly true in mid-sized organizations - that they're never going to be able to take an AI toolkit and understand it, and figure out what to do with it in their business.

They don't have a team of data scientists... What their expectation of Sage Intacct was: they wanted us to figure that out for them, and give them something they can use. Hopefully you saw some of that coming through today.

Aaron Harris explained the Intelligent GL in a crisper way that I've from Sage Intacct in the past:

intelligent GL sage intacct

But Linden's point is that customers don't have to create this framework on their own:

In some cases, you may not even know that AI is underneath the feature. It might end up being completely invisible, and it's just a new functionality that we show. People don't necessarily understand this yet. We're basically saying you don't have to.

It wasn't long ago you could talk about Sage Intacct as a cloud financials play. But with their announced tie-in to Sage People - which Linden also runs, along with the continued push into budgeting, planning, and analytics, Sage Intacct is now a different thing for customers to wrap their heads around. Linden:

The other big change is yes, we're not just Sage Intacct anymore. We're Sage Budgeting and Planning, we're Sage People.

No, Sage Intacct isn't necessarily looking to compete on the open market with other Financial Planning and Analysis vendors. It's about what they think their customers need:

It doesn't mean we're not going to be best of breed. We still deeply believe that you should have a solution set of functionality that works best for your business. We just have a broader set of choices that we can deliver to you as a vendor. We are working on finding those interconnections and making those real between those different products.

So far, Linden believes customers are on board:

With the Sage People/Sage Intacct integration, what kind of surprised me a little was the level of applause we got around it, because this isn't an HR/HCM conference.

My take

I haven't even touched on the impact of Sage on Intacct, which was clearly evident in Intacct's international expansion, with two partners and one customer live in Australia, and the UK region about to launch.

When Sage acquired Intacct, I worried Intacct would lose its talent and focus as Sage leveraged Intacct executives to build Sage's multi-tenant cloud applications business. So far, I've seen no signs of that, though a few folks have broader roles now, such as Aaron Harris, who went from CTO of Intacct to CTO of Sage Intacct. But my conversations with Harris this week confirmed he's very much invested in the Intacct part of the business.

Intacct's international expansion has been enabled by a pretty nifty setup with Sage applications overall, where Intacct is able to pull in relevant web services from Sage into Intacct. Internally, they call this the "service fabric"; here's how Harris explained it to me:

It's not something we talk about externally, but internally, we've essentially built teams around core product capabilities like tax and compliance, regulatory reporting, and banking payments... So when Intacct launched into Australia, and we're about to launch into the UK, the Intacct team didn't have to build any of our localized tax banking reporting requirements. All they had to do is connect to web services that we've already built within Sage, which is really, really critical.

The Sage Intacct executives I've spoken are more confident than I am about customers grasping the spread of Sage Intacct's solutions. What they've all told me, in various ways, is that Sage Intacct remains consistent in enabling customers towards finance transformation. This is the 80/20 goal Robert Reid talked about. So all of these tie-ins are about that underlying goal.

Now, the "AI" solutions demonstrated yesterday are not available yet (I haven't yet mentioned the automated time card solution, aka "intelligent time capture," which customers loved on stage). But all of them have 2020 release targets, so Sage Intacct has publicly committed to release goals they have to get done.

Some of these AI products will be embedded into Sage Intacct and will have no additional cost for customers. Others will be distinct, add-on services on the price list (I was told intelligent time capture would fit into the latter category, as it would be an add-on type of service).

Sage Intacct presents a very optimistic and practical view of AI. I prefer a bit more time on the dark side of AI, from privacy and security issues to the problem of algorithmic bias. More discussion on data plumbing and how external data sets can be pulled in would be welcome also. I suspect Sage Intacct will tweak some of their Intelligent GL verbiage. "Continuous audit," for example, is not necessarily an appetizing tag line. What Harris means by "continuous audits" is the benefit of knowing your numbers are continuously validated, and automatically checked for anomalies.

Early testing with customers on anomaly detection has been promising, with the machines flagging problematic journal entries in real-time. I can't think of a finance leader who wouldn't be excited about that. Harris is clearly proud of the young developer teams brought on stage to show off their AI projects. That talent is a good acquisition benefit also: Sage is using Intacct as a proving ground for many AI capabilities, which can then be sourced into other products. I don't think Intacct customers would be unhappy to learn that.

Sage Intacct customers remain a happy bunch, with several of them extolling the impact of the software to me. No, customers are not at the ambitious heights of Financial Leadership 3.0 yet, but being more efficient/invaluable to your business is a good baseline. I'll have a use case from The Khan Academy tomorrow on that very subject.

Sage Intacct is asking their finance teams to take an AI journey with them. They already have a strong connection to their customer CFOs, so it's an ask customers should be up for. However, all the "coming in 2020" AI talk should not overshadow areas where Sage Intacct is already delivering. For that, look no further than Sage Intacct's advanced functionality for the subscription economy. While this is of particular interest to Sage's Intacct's software industry customers, the impact of subscriptions, revenue recognition, and offering products as services will cross many industries.

Sage Intacct looks very well positioned here. During a packed software industry keynote, Sage Intacct software industry lead David Appel brought several customers on stage to share compelling results:

Here's a close-up of one of those ROI slides:

Sage Acquia slide

When you can quantify results like "50 percent order-to-billing processing time" across customers, with plenty of subscription economy features like automated billing, you have a strong foundation. Sage Intacct's story around subscription-based finance is mature; they could use it in their keynote messaging more than they do.

If David Appel is right that finance teams are rapidly transitioning from processing orders to managing subscriptions, then Sage Intacct's positioning in that type of market looks promising indeed. But I have more questions, and more interviews on deck. Time to get to it.