Sage Intacct Advantage 2020 in review - how partner AcctTwo helps customers track mission-critical metrics with SaaS Intelligence

Jon Reed Profile picture for user jreed October 29, 2020
Sage Intacct Advantage 2020 brought a load of ideas to digest, and, yes - a few buzzwords. One that we must get a handle on: "continuous insight." Here's a look back at the show, with a focus on how Sage Intacct partner AcctTwo helps customers track SaaS metrics in real time.

Sage Intacct - customer churn
(via Sage Intacct Advantage session)

Last week's Sage Intacct Advantage brought a surprising flurry of news - more than we typically get from a virtual event in 2020. As I previewed:

How Sage Intacct manages to expand vertically, while also bolstering its horizontal ERP offering as part of Sage proper - that to me is the big story to watch at this year's show.

And so it was. Sage People's integration with Sage Intacct is a big part of that - I covered that in Sage Intacct Advantage 2020 - Sage People crashes the Intacct party with a keynote challenge to HR leaders.

Brian Sommer's deep dive took it further: Sage's mid-market evolution - insights on how Sage Intacct, People, and X3 are converging. But there's a problem - so many vendors talk about "intelligent" this or that. How should we make sense of it?

What the heck is an "intelligent organization"?

When Sage Intacct talks about the "Intelligent GL," and now, the "Intelligent Organization," we need to know what are they getting at. Sage Intacct Advantage addressed that question in the context of, well, continuous everything. "Continuous accounting," "Continuous trust, insight," and eventually - as CFOs hope and maybe fear - the so-called "continuous close." Obviously "continuous" is aspirational. Take HR departments - they may aspire to move from yearly performance reviews to a near-daily feedback loop between employees and management, but that's not the reality today.

Despite my buzzword-wariness, continuous insight does sound desirable, especially when compared to static, IT-generated report requests, which have no place in the pandemic economy. But customers need to know: what does it take to get to so-called "continuous insights"?

Sage Intacct believes they are a big step closer to that via the Interactive Visual Explorer announced at Sage Intacct Advantage, which, as they enthusiastically put it in the press release, "Propels finance teams beyond basic monthly reporting, enabling proactive decisions based on multidimensional graphical analysis and collaboration." Another piece of that continuous insight puzzle: enhancements to Sage Intacct Budgeting and Planning, a topic I delved into in Customers weigh in on budgeting and planning in 2020, and the impact of the intelligent GL - a Sage Intacct Advantage preview.

Why do I call continuous insights a puzzle? Because most companies are still on the path towards the right data model. They are still making sense of the analytics they do have, still pushing to get insights they can truly act on. And, they need to figure out:

When do I use the vendors' analytics, when do I turn to external analytics providers, and what is the role of specialized partners?

Continuous insights - how should customers weigh their options?

For answers, I've been watching the Sage Intacct partner situation closely. Sage Intacct has one of the most respected/energized partner programs in the cloud ERP industry, but, up until the last year or so, I hadn't seen too many examples of partners building out functionality on the Sage Intacct platform. That's definitely changing.

Prior to the show, I spoke with one of the leading Sage Intacct partners, AcctTwo, via a catch up with CEO Marcus Wagner (for more on AcctTwo and their impressive bootstrap story, see my 2019 piece, Cloud ERP success is vertical - learning from Sage Intacct partner AcctTwo). Wagner gave me a heads up on a dashboarding collaboration with Sage Intacct. I caught an overview at the Sage Intacct Advantage show, via AcctTwo's presentation, Layering Intelligence Into Your SaaS Metrics for Deeper Insights. This topic matters - and not just for SaaS customers. Why?

Any company pursuing subscription models needs to measure their success - or not, and either make course corrections, or double down. I'm always on the lookout for discussions that go beyond the obvious SaaS metrics, like churn, or net monthly recurring revenue. Not that those metrics aren't useful, but what else is there?

Given that Sage Intacct already has solid capabilities for the SaaS industry, my first question for Wagner is: why do we need AcctTwo's SaaS dashboarding? Wagner told me the origins of their product, officially dubbed SaaS Intelligence, dates back to a customer engagement in 2016. At the time, Sage had a product called Digital Board Book under development, but AcctTwo felt they needed to get something for their customer out quickly. From there, they continued to build the solution out. How good is the tool now? Well, Wagner is obviously biased, but he believes it can be a competitive advantage against NetSuite. I don't mind a bit of product swagger; you need that out in the field these days. But what backs that up? Wagner told me:

Number one, SaaS Intelligence literally is real time. So if a sales rep books a subscription in Salesforce, and pushes it as a booking into the Sage Intacct accounting system for billing and all that, it will automatically update the dashboard. 

As for "intelligence":

It's smart enough to go, "Oh, this is the first order we've ever received from this customer. This is a new business booking." Or it can go, "Okay, this customer has been here for three years. They're just adding the Budgeting and Planning module - that's an add on." So it auto-categorizes all that stuff.

Then there is SaaS revenue compliance:

It works with Sage Intacct's order entry module, as well as their contracts module. The contracts module is a new module that handles ASC 606 in the subscription billing... Our module will actually work with both, and produce a unified dashboard of SaaS metrics.

SaaS Intelligence - beyond the classic SaaS metrics

So how does SaaS Intelligence look in practice? That job was for Chris Price, Head of SaaS Vertical with AcctTwo, who delivered the product session at Sage Intacct Advantage. He showed attendees dashboard screens to track the expected SaaS metrics, but then things got interesting. Price talked about distinguishing between different types of churn. This slide on avoidable versus unavoidable churn is a keeper:

Sage Intacct - customer churn
(via Sage Intacct Advantage session)

If you can drill into data with this type of precision and sensibility, you're in business. Price broke it down:

One thing to keep in mind is that not all churn is actually created equally. You really ought to segment your churn into avoidable versus unavoidable churn, i.e. that churn which could have been remediated or avoided, versus that which could not have been. You have various examples of those things: lack of support might be avoidable, but a company going out of business may be out of your control.

Unexpected-versus-expected churn is a great lesson: how well do you predict customer health? Could you eventually get prompts to pro-actively intervene, and help those customers - and perhaps save those accounts?

Price advised attendees to start categorizing expected versus unexpected churn within Sage Intacct. One thing I always hear from Sage Intacct customers: the power of dimensions, and refining data into useful cohorts. Price had a good example of this, where subscription renewals are sliced and diced by acquisition date, industry, customer service rep, product, or product category. Many of those are on this slide:

Sage Intacct - power of cohorts
(via Sage Intacct Advantage session)

Price elaborated:

You should really consider using Sage Intacct's customer record, and their features of tracking custom data, to track information like churn reasons and churn dates, so that you can do analysis by those cohorts of customer, not only by the reasons in which they churn, whether those were avoidable or unavoidable, but also by these various cohorts. Track customer churn by a logo and a revenue basis, because those distinctions matter.

In case I missed the session, I asked AcctTwo for a few of their favorite demo slides. Here's one that stood out:

SaaS Intelligence – Graphs & Cohort Analysis

SaaS Intelligence – Graphs & Cohort Analysis
(Screenshot via AcctTwo)

Price provided context:

SaaS Intelligence delivers a number of visualizations to expose trends in KPIs such as CMRR Growth Momentum, Dollar Retention Rates, CMRR (Revenue) Churn Rates, Unit Economics, and more... In this example, the entire dashboard has been refined by the user to review the trending behavior of customers in the mid-market segment with subscriptions in the Machine Learning product family.  This level of analysis empowers SaaS business leaders to identify and proactively address critical trends within their subscription base.

My take

One thing you cannot miss at cloud ERP events this year: all cloud ERP vendors are pushing to be perceived as strategic/analytical systems, and not only operational/transactional. That's a welcome trend - ERP applications are not cheap. The impact on the business is the true ROI, not just getting off of legacy systems or spreadsheets.

However, it does create challenges for customers as they figure out their data and analytics strategies. There are arguments for third party planning and analytics solutions. There are equally valid points for embedding such tools. There isn't one right answer, though I would argue that a huge consideration is whether the solution in question pulls in the variety of data needed to make a proper decision. Often that benefit goes to third party analytics, but that doesn't have to be the case, if ERP vendors get their data platforms right. Usually, some of that "variety" goes beyond their software, into other applications.

On the other hand, no one knows the customers' data needs as well as the vendor serving them - or, in this case, the partner. Being able to populate info in real time as AcctTwo has done here - if that's what we mean by "continuous insights," despite the buzzword overdose, I think we're on the right track.

For Sage Intacct to welcome a partner that offers, to some extent, overlapping capabilities with their own tools, that's also the right move. These dashboarding and metric-tracking needs are too important, and too specific, to hold customers to a one-size-fits-all solution.

As for how Sage Intacct will balance its vertical ambitions with the "horizontalization" we all saw at this year's show, well, that will take some time to unfold. We'll be watching.

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