Six months on from taking up the reins as CEO of Unit4, Mike Ettling has just completed his refresh of the management team and today the company launches a new branding for its core ERP product, renaming it as the People Experience Suite. I caught up with him at UNLEASH World, which opened today in Paris, to get an update on what's next for the company.
Under Ettling's leadership, Unit4 is doubling down on its pre-existing strategy of targeting people-intensive industries, from professional services to education and local government. The product rebranding is all about making the user experience an integral part of the ERP platform. Ettling believes that's distinctive from other vendors that lead on people experience as either an HCM proposition or something that happens in the messaging and collaboration layer. A further differentiation is that other ERP vendors in the midmarket space tend to focus on manufacturing rather than people-intensive industries, he believes:
You've got Workday playing in enterprise, you've got us playing in midmarket and not much else, in terms of very verticalized solutions for industry. What we are doing with the whole brand relaunch is really sharpening this whole positioning around people experience.
The messaging is emphasizing the importance of the whole employee experience at work, not just what they see when they interact with HR technology. Employee experience goes beyond the realm of HCM, says Ettling:
Everyone at the moment is taking a view of, buy some more cool West Coast HR technology, and you'll fix your employee experience. Well, if you're running your German grandfather's ERP with West Coast HR technology, it's not going to change the employee experience — particularly in people-based businesses where, if you're a professional services consultant, you're spending 80% of your time in ERP not in HR technology.
Unit4's existing investments in what it calls self-driving software, which adapts to and anticipates user needs, means that it can deliver an experience that is more than skin-deep, he believes:
For us, it's about, how do you fundamentally change all the processes and the core ERP, not layer something on top of it? One of the things I find is that you take the hot topics everyone plasters all over — AI, machine learning, predictive, chatbots — I don't believe there's a monetization model for any of them. Customers today expect that in their software, because they've been trained to expect it by Amazon and Google in the B2C world.
Our view is, that's where the core ERP has got to go to. That is where we're taking it to, versus, you can still have legacy, old-fashioned ERP and then try and layer on all the stuff to compensate for it.
That's especially relevant for a vendor like Unit4, which targets midmarket enterprises rather than better-resourced, larger businesses:
In my world, the midmarket, people-based world, those organizations want a one-stop shop. They're not going to go and deploy twenty pieces of technology to deliver an outcome.
Middle office capabilities
Ettling argues that Unit4 has a particular strength in the industries it serves through building up industry-specific middle-office capabilities alongside more horizontal back-office functions. In recruiting, it provides all the accounting around allocating resources to projects and engagements, billing and paying them. In local government it has capabilities for processing revenue collection such as local taxes, parking fines and so on. In the non-profit sector, it caters for grant management and maintaining the integrity of grant funding and how it's being used.
Every vertical has what I call this unique middle office capability. Where we are the best in competing is where we have really good middle office and the client is looking for a proper vertical solution — not just an accounting system, which is quite horizontal. So that is driving our thinking around growth, where we're going to build and pick up.
Unit4 is also drilling down on the professional services vertical and separating it out into industries such as consultancies, law firms, software companies and recruiters.
You'll see us take this as we'll get much more vertically focused and we'll talk about individual brand verticals as opposed to professional services as a bit of a catch-all.
Ettling is also looking forward to the turn of the year, when Unit4 will roll out its full multi-tenant cloud architecture. But he acknowledges that will require some re-education of the existing partner channels.
[The former product] UBW was quite a flexible customizable product. So the SIs came along and the customers were like, 'We want this beautiful legacy process in your new technology.'
Now the partners have got to say, 'Well, no, here's your three standard options. If you really need that, and you think it's differentiating, we'll do it in an extension app for you.'
It's a totally different approach, which partners need to take with the customer. It gets to what I think is a better outcome, which is less customization, and the stuff which is differentiating, sitting in extensions apps not in customised code.
To coincide with the Unleash event, Unit4 has also announced a new people planning and analytics offering, which combines its prevero analytics tool with the core HR and finance products to provide deeper, more real-time insights into people constraints and trends. The full HCM offering includes payroll and the recently acquired Intuo employee engagement tool.
There's a clear trend in the enterprise applications market at the moment towards a more adaptive, conversational user experience. Should that be delivered in a separate conversational layer, in an employee experience layer, or as part of the core systems that employees use throughout their working day? The jury's still out on that, but in the midmarket that Unit4 targets, there's a strong argument for delivering a single platform solution.
It's also interesting to hear Ettling talk about middle office as a differentiator. Being able to automate end-to-end processes is especially important in cost-conscious midmarket organizations. It makes sense that it's a competitive advantage to have tailored industry solutions. For many such organizations, this will prove even more compelling than the trendy people experience proposition.