Midmarket enterprise applications vendor Unit4 today announced an expansion of its source-to-pay capabilities with the acquisition of source-to-contract vendor Scanmarket, which is headquartered in Denmark. Separately, Unit4 also shared its product roadmap at a meeting last Friday in London with industry analysts, including a preview of UX enhancements and a no/low-code application builder called App Studio, due for release later this year.
Scanmarket's cloud-based product will be integrated with Unit4's existing procure-to-pay capabilities, adding strategic procurement functionality including sourcing, spend analytics, supplier management and contract lifecycle management. Scanmarket has over 300 customers operating in more than 85 countries, including Emirates Flight Catering, NatWest, ISS Facility Services, MacMillan Cancer Support and Kärcher. The acquisition chimes with a need among Unit4's customers to manage their supply chain much more proactively than in the past, according to its CEO Mike Ettling. He says:
Cost effectiveness as a supply chain is still important. But supply chain reorganization is now the real big thing, because everyone's reorganizing their supply chains — because of COVID, because of sanctions on Russia, because of supply issues out of Ukraine. The biggest issue on procurement managers' mind today is supply chain reorganization.
Due to Unit4's focus on people-centric businesses across industries including professional services, public sector, non-profit and higher education, the source-to-pay offering will focus on indirect spend rather than the type of supply chain issues manufacturers face in sourcing components for their production lines. But indirect spend can be just as mission-critical in a people business, for example in ensuring that consultants have laptops and mobile phones, that frontline staff have appropriate PPE, or that university staff have teaching tools ready for the start of a semester. Ettling says:
We see in our base, there's a very big supply chain of not-for-resale ... They're doing all the buying which a manufacturing firm is doing on supply chain, they're just not selling it through.
The expansion of the source-to-pay capability is part of Unit4's mission to offer midmarket people businesses an end-to-end platform that covers core needs across finance, HR and project accounting. Ettling says the company will continue to look at other areas where it makes sense to add functionality, citing treasury management as an example.
Adding App Studio
Meanwhile, the addition of the app builder, due for release in Q3, is part of ensuring the platform remains fit for purpose — or as, Ettling puts it, "the last ERP you'll have to buy." Based on the existing extension kit, it provides a visual tool for building workflow automations and independent services that connect into the core ERP.
Originally developed internally to help Unit4's own developers deal with localizations and industry customizations, they are also now using it to speed delivery of new development. Now it will be opened up to customers and partners, allowing them to extend Unit4 applications to meet their own needs. The initial release will be entirely no-code, but it will later become low-code, with the ability to drill down into code as needed to further customize how the application performs.
The App Studio creates responsive, reusable applications that each run as independent microservices hosted in the Unit4 multi-tenant cloud, subject to the platform's identity services and data access controls, and using the same design system. Customers will be able to subscribe to applications created in App Studio from the same multi-tenant repository as the Industry Mesh marketplace.
The development process using the tool starts from a set of templates representing the most common patterns in Unit4 applications. There are a set of components that users can drag and drop into the canvas, and then they refine a set of properties to configure the application, keeping connections to the data separate from the business logic in the UI. Machine learning will provide suggestions when adding integrations from the app store, while an extensive business rules engine does additional validation before data is posted from an app to the transaction system.
Having this no-code tool provided as part of the Unit4 platform ensures that customers have much simpler governance processes than if the applications were created in a third-party tool, such as Microsoft Power Apps. Claus Jepsen, Unit4's CTO, explains:
If you go out and acquire a toolset from an external vendor, that's a huge risk. However, if our customer uses our toolset, it's all on our platform. So you control it through the platform, you can see in a repository, so we have full visibility, what actually runs against the ERP.
Together with Unit4's underlying messaging architecture, this offers customers huge flexibility to cater to the needs of a global business. He elaborates:
This gets us to how we see the world going forward, because in the core, you have all your transactional data. But then at the edges, you have all these services. Not only does it allow you to actually apply cheaper technology in terms of running it, but it also allows you to distribute further up and on the edge.
He cites the example of a company operating in Europe but which has subsidiaries in Australia:
Traditionally what happens if they want to run on the same system is they have to go through this huge discussion around data getting moved out of one database to another database, and then you have to synchronize it. The database vendors are very happy to help you, but it's very expensive to get help to get that problem solved. You end up having two different systems with different access control.
In contrast, Unit4's architecture moves the data where it's needed and uses messaging to communicate transaction updates instead of attempting to synchronize geographically dispersed databases, with all the latency issues that entails. He continues:
Through messaging, where things flow back and forward, you solve the transactional problem of making sure your back office transaction system is always up-to-date. In general when you talk user experience, if it takes a couple of seconds to get from and maybe longer, it doesn't really matter much for users, we are pretty slow. So nobody's going see that there may be some time in process.
The architecture also allows more flexibility over data residency. He adds:
What data resides where [is] something a lot of companies are very worried about. What data do we move outside the EU? What do we move to the US? Where do we move this stuff?
With this architecture, we can actually put that sort of decision in very early in the process, and ensure that only the data allowed to move out of a certain region actually moves between regions.
Bringing spend management under the purview of the office of the CFO is a trend we're seeing other vendors address, including Workday's acquisition of Scout RFP. At the same time, the events of the past two years have left businesses seeking more agility in their sourcing strategies, while increased focus on ESG has increased the need for better information and monitoring around suppliers. The old approach of having a different application look after each of these aspects is no longer tenable at a time when businesses need to move faster — a joined-up, frictionless operating model becomes essential.
For midmarket companies in particular, being able to have as much as possible on a single platform makes sense, and Unit4 has been making strong progress towards enabling this for its customers. The new App Studio adds further flexibility into its offering, and coupled with the Industry Mesh packaged integration service launched last year, it's starting to tick a lot of boxes for its target market.