Unit4 CEO Mike Ettling shares his take on the business impact of COVID-19

Profile picture for user pwainewright By Phil Wainewright March 27, 2020
Summary:
Instead of meeting as planned at a trade show, I spoke to Unit4 CEO Mike Ettling via video call this week. He shared what else he thinks is going to change in our business lives thanks to COVID-19

Mike Ettling CEO Unit4
Mike Ettling, Unit4 (Unit4)

This week, instead of a planned meeting with Unit4 CEO Mike Ettling at the Unleash HR technology conference in London, I caught up with him by transatlantic video call. And instead of discussing his planned talk on technology trends and the future of work, inevitably the topic of our conversation was all about how business life has been turned upside down by the COVID-19 Coronavirus pandemic.

He told me how the ERP software vendor is changing its own working practices both internally and in its interactions with customers and prospects. Ettling sees a bigger picture here, too. He believes many of the changes we're seeing aren't going to be undone when we come through the pandemic and the forced shutdown of economic activity that has accompanied it. He explains:

Post every big recession, there's always been a major shift in how technology is used in business. In 07/08, you could argue the cloud era really took off after that. Go prior to that, you've got client-server [after the] early 90s recessions.

This is an interesting opportunity to think about, how do we position our technology post this? My hypothesis is, it will change. The way people consume technology in business will be different in 2021, to the way it's been in 2019 and 2020.

What that trend is, who knows? That's something which software companies really need to think about it, because you saw how it changed the world after 07/08 with cloud.

Making the transition to working from home

One of the most immediate changes, especially in people-centric businesses like Unit4 and many of its customers, has been the shutdown of offices and the move to working from home. Unit4 found the transition relatively painless because it had already made a lot of the necessary changes. It also had some early warning from what it had seen happening on the ground in China and other Asia-Pacific countries.

The company had moved from conference calling for internal communications last year when it made the switch to Microsoft Teams. At the time, "no one was hitting the video button," says Ettling, but that's now changed. Key staff, including those in cloud operations, support and engineering, were mostly already using laptops, so there was no need to quickly source new kit — which might have been a challenge in countries such as the UK:

You try to buy a laptop now, it's almost impossible. There's been a run on toilet paper AND laptops.

All of this means Unit4's move to home working has been straightforward in logistical terms, which means the company can focus on how well people are coping with the change, he adds.

I think the transition to home working, from a technology perspective, for us has been easy. It's enabled us to focus more on people's wellness now. It's one thing when you choose to work from home for variety. It's another thing when you're imprisoned to work from home.

Taking care of employee wellbeing

Some of the actions at Unit4 to help people adapt have included a program of online exercise and meditation sessions. The company is also including mandatory break time in people's diaries so that they don't spend entire days at their laptop without stopping. It will also be important to keep an eye on how people are holding up mentally as the pandemic becomes more intense, he says.

I think we're now starting to see the next wave. The friends of people, the family of people, are going to start being hospitalized or infected. And then it's going to be much closer to you.

This is starting to come up, particularly in places like Spain, where people have now got friends in hospital, or they've got family in hospital. So now we're starting to think about the whole mental wellness — because I think that's going to bring it very close to people and people are going to start having different dynamics about it.

Part of the mechanism for keeping on top of that across the company is to have a way of monitoring how people are feeling. Unit4 uses its own Intuo employee engagement tool to do that internally, and is now offering customers and prospects a free 6-month subscription to do the same, says Ettling.

How do you keep your people engaged and measure the pulse of how they're feeling? It does all of that.

We can get you up and running in a day, and you're going to start pulsing and engaging your people.

Business impact of COVID-19

From a business perspective, Unit4 hasn't yet seen much of a COVID-19 slowdown. Implementation projects are continuing to run using Teams and remote access. Where there are contractual requirements for Unit4 people to come on site, clients have waived them. It's been a good quarter for sales, but the next few days are wait-and-see, says Ettling.

What no one is able to do is forecast just how people are going to behave now in closing moments.

To some extent, Unit4's customers are shielded from the worst effects of the shutdown, because they are largely people-centric businesses where much of the work can continue remotely. He explains:

Consulting firms, ad agencies, lawyers, accountants — a lot of our client base is okay. Not-for-profits are operating as best as they can. The education sector's operating, but I think they are more challenged to switch to virtual because they don't have that technology available.

The other big sector for Unit4 is local government, which may well expand spending if the experience of 07/08 is any guide, he believes.

Once activity starts getting back to normal, Ettling still expects to see some big changes in how businesses go to market as a result of the changes brought by COVID-19. First of all, customer engagement and quality of service will come to the fore, he believes.

In times like this, getting closer to your customer is absolutely crucial. And quality is absolutely crucial. My view is that the tolerance for mistakes goes way down during a recession versus a boom time. Everything you do, the focus on quality has now got to go significantly up in an organization.

Moving business development online

Sales will be much more of an online activity as a result of the new ways of working that people are now being forced to adopt, he says.

I think what's going to come out of this is a fundamental shift in how lead generation and BD [business development] is done. We've been doing pipeline booster days now, all virtually, all remote, people doing calls, coming onto Teams, checking in with their colleagues doing calls, and it's working incredibly well.

Spending on events is unlikely to return to prior levels, he says, as companies discover less costly ways of creating engagement with prospects.

In certain of our markets, being at events was a very big part of our filling the top-of-the-funnel activities. I think people are going to figure out other ways to do that, be it digital, be it phone calls, over this period.

Digital communities that vendors create with their customers and others will become a much more important part of the mix, he adds.

We're very fortunate. We got our customer community deployed last year. I think the digital community will now become the centerpiece and the events will hang more off from that. They may become smaller events with more focused groups, versus the mega type events which we've always had.

And although business routines will change, Ettling is optimistic for the future.

I'm an eternal optimist ... This is a big shock to the system. But it isn't an economic shock. It's a medical shock. It's not like 07/08 ... the banks are now very well capitalized, in a far more healthy position. And, you know, medical ingenuity is always pretty awesome. So I'm optimistic that we'll get through this.

My take

There are two major worries for business leaders at the moment. The first is the wellbeing of their staff during the COVID-19 outbreak. The second is the economic impact of the measures being taken to get us through this time. Enterprise software companies are relatively well positioned to ride this storm, with digital teamwork processes already well established and, in Unit4's case, a customer base that will not be as hard hit as many sectors of the economy.

The more longlasting impact therefore may be on working practices such as the shift to working from home and the move to largely online interactions with customers. Organizations have to rapidly learn how to use digital tools to look after both their employees and their customers remotely.