Unit4 buys prevero, expands footprint in CPM and Germany

Phil Wainewright Profile picture for user pwainewright July 11, 2016
ERP vendor Unit4 buys prevero to strengthen its financial analysis and CPM product set while stepping up its presence in Europe's German-speaking markets

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European ERP giant Unit4 is beefing up its analytics credentials today with the acquisition of prevero, a corporate performance management (CPM) and business intelligence (BI) provider.

Headquartered in Munich, Germany, most of prevero's 4,000-strong customer base resides in German-speaking Europe, though in recent years it has sought to expand its presence in other markets such as the UK and Asia.

Briefing diginomica today on Unit4's first acquisition since he took over as CEO, Stephan Sieber says the addition of prevero will add valuable forecasting, planning and analysis (FP&A) capabilities that Unit4 has previously lacked.

We had multiple different products that covered parts of what prevero can do, but they were never as strong and complete.

We can now offer a 360-degree decision-making platform supporting all business areas.

The whole FP&A discipline is something that goes across different areas of the business and we never had such a complete offering.

Sieber said that prevero's leadership will now head up a Unit4 center of excellence for CPM and BI, and that all of Unit4's existing resources in the space, such as its WebInfo product team, will now come under their direction.

Technology integration

Although prevero is based on Java whereas Unit4's products have a Microsoft foundation, Sieber sought to minimize the reengineering needed to incorporate its technology. While continuing to support on-premise versions, there will be a strong focus on promoting prevero as a cloud solution, he added, where it will be easier to deal with integrating the two stacks. Alex Springer, CEO and co-founder of prevero, says that providing insights based on real-time data from the Unit4 ERP system will be an important objective:

A lot of effort will be put into the integration so that real-time analytics will be very compelling on our platform.

Prevero's customer list extends across midmarket and large enterprise and includes major names such as ABB, Audi, BMW, Endemol, Heidelberg, Konica-Minolta, Mercedes, SwissLife and Swisscom. Many of its customers use it with SAP back-office systems and Springer confirmed that integrations to SAP and other systems will continue to be supported and developed.

According to Unit4's press release today, key capabilities of the prevero suite include:

  • Predictive analytics and business insights
  • Modeling and simulations
  • Ubiquitous access to information via in-memory technology
  • Corporate-wide collaboration and planning
  • Pre-built content for CxO offices and specific verticals

There will be a special focus on delivering pre-built content for Unit4's key verticals including education and professional services.

Joining forces

Springer said that an important motivation for prevero in joining forces with Unit4 was to be able to capitalize on growing acceptance of the cloud model in its main market, as well as accelerating its global expansion. It also sees a growing demand for automation of budget forecasting, planning and analysis.

We really want to drive the cloud approach in the German speaking region.

We are at a turning point there, this new combination gives us many new opportunities ...

The strategic merger gives us a great opportunity to scale our success and make use of the global operations of Unit4.

Sieber said he foresees the acquisition having a positive impact on Unit4's sales in three main ways.

  • Increasing Unit4's presence in the German-speaking countries of Europe. "That is the largest technology market in Europe and up until today we haven't had a presence as strong as we want it to be."
  • Cross-selling and up-selling the prevero capabilities to Unit4's many thousands of small and mid-sized business customers in the Benelux countries and in Spain. He believes these are businesses that are ready to look at alternatives to their current budgeting and planning solutions. "It's a highly volatile type of market and we are positioning ourselves much stronger to gain market share."
  • Increasing Unit4's appeal to new customers. Sieber believes prevero's ability to help manage financial risk and project planning will appeal strongly across industries including professional services, education and utilities, as well as the services divisions of manufacturers. "This will help us accelerate wins for new logos."

My take

In a recent diginomica analysis, Brian Sommer mapped out the imminent changes technology is bringing to the automation of budgeting, planning and forecasting, also known as corporate performance management (CPM) and in financial circles as forecasting, planning and analysis (FP&A). As an aside, let me note that the inability to even standardize on a single name says a lot about the historic fragmentation of this market. But back to Sommer, whose key point was that the move to the cloud coupled with the addition of artificial intelligence would mean big changes:

A new generation of CPM will emerge soon and it will come with a very different underpinning or foundation: in-memory computational capabilities that are married with outstanding machine learning, predictive capabilities and more ...

These tools will understand, with a growing amount of history and other data points, how the predictions/plans can be made ever more accurate. This will be transformative as it will allow firms to get almost real-time, updated plans/forecasts based on the use of massive datasets, a wealth of history, improved correlations and unlimited computational power.

For a relatively small company like prevero, which although classed as a visionary by Gartner gets marked down by the analyst for below-par execution, embracing this future requires substantial investment. No doubt that is the main benefit of joining forces with Unit4, which is now firmly committed both to the cloud and to leveraging machine learning as part of its vision of "self-driving ERP."

Meanwhile Unit4 is following the advice contained in Sommer's article for ERP vendors, to synchronize financial management and CPM tools, apply in-memory and big data technologies, and:

Focus your pre-existing and deep industry knowledge to create the powerful and valuable big data-fed algorithms and planning predictions that will power next-gen CPM tools.

Unit4 also boosts its credibility in an important market in Europe as well as getting introductions to some very large enterprise prospects. The only worry is that there perhaps isn't enough of a match between the two company's customer bases to find sufficient synergy. And this does little to further whatever ambitions Unit4 has in the US market. Still, Sieber says the company has other potential acquisitions in its sights, so there may be further developments to come in the future.

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