Unit4 embraces its cloud destiny with latest release

Profile picture for user pwainewright By Phil Wainewright April 10, 2016
Unit4 goes cloud-first with the latest release of its ERP software, also launching a new PSA product and a digital assistant to help automate routine tasks

Jose Duarte Unit4 Connect Amsterdam 2016-04-04 by @philww
Jose Duarte, Unit4

European ERP giant Unit4 advanced further on its journey into the cloud last week with the launch of a new, cloud-first version of its flagship ERP suite, called Business World On! While there is an option for customers to implement the software on-premise, Unit4 is calling it the 'cloud-at-your-speed' option, making the ultimate destination a foregone conclusion even while leaving the timing up to customers. As CMO Ivo Totev told media and analysts in Amsterdam last week:

Everything is going to the cloud. Even the most conservative German administration in 20 years will move to the cloud. Customers, no matter who, will move to the cloud.

Unit4's own move is underpinned by a partnership with Microsoft, under which it is transitioning its cloud infrastructure to the Azure public cloud. As part of that, it is tapping Azure machine learning (AzureML) to power a new, intelligent digital assistant which it showed off for the first time last week to more than 1,000 customers attending its European conference in Amsterdam.

The digital assistant understands natural language commands and interacts with users to complete tasks such as submitting timesheets and expense reports, making routine purchases or prioritizing actions based on risk profiles. The functionality, which will not be generally available to customers until 2017, is part of Unit4's drive to automate routine tasks and boost the productivity of end users.

More efficient systems

The vendor's goal is to replace historic layers of piecemeal automation with a more efficient alternative, says CEO Jose Duarte:

Technology has been more of a time killer than a time liberator. We have taken that paper-based process, digitized it, and created bolt-on solutions — you get mobile and you plug the mobile to the system that existed. You bolt on BI, you bolt on workflow. You add layers of concrete on the system.

What if we could think of systems where automation is such that there is no UI? What if the system could proactively show you the best way, predict what you wanted to do next?

Duarte cites examples such as healthcare wearables that feed data directly into systems to help carers optimize treatment, mobile apps for students that perform automated course enrollment, or project planning systems that automatically assemble teams and schedules.

In pursuing such capabilities, Unit4 is responding to a demand from enterprises for more efficient back-end systems that support greater business agility in how they respond to customers. Duarte says:

In every one of the industries Unit4 is serving, we see specific needs to serve our clients in this digital disruption that is happening.

We are announcing new solutions so that we can be relevant in today's reality and not the legacy of yesterday ...

We like ERP and we believe ERP is fundamental for every company, but it's undifferentiated. We believe this market will grow into a commodity. The right solution for the customer is going to be a front-to-back integration.

The pace of change and innovation on the front end is going to be bigger than on the back end. But you can't stay frozen on the back end.

Target industries

A new professional services automation (PSA) solution launched last week is part of that new focus, providing a cloud-first, mobile-first set of capabilities that works with other vendors' ERP suites as well as Unit4's own software. It includes integration to fast-rising collaboration platform Slack as well as tapping predictive analytics to help forecast project outcomes.

Unit4 also announced European availability of its new student information system, launched in the US last October.

The company also held its first meetings last week of advisory councils in its four target industries of professional services, education, not-for-profit and public services, along a fifth advisory council on financial performance management.

Although its traditional revenue stream continues to grow, SaaS revenues are the company's growth engine. Duarte says Unit4 posted 31% SaaS growth in its most recent financials, with SaaS bookings now 45% of the total. 60% of its more than 1,200 new customers are SaaS buyers, and the company now has more than 2,600 SaaS customers, he says.

The announcement of Unit4's digital assistant came in the same week that Microsoft CEO Satya Nadella was encouraging businesses at his company's Envision conference in New Orleans to take advantage of 'bots' — autonomous software agents — to improve customer service. Unit4's CTO Erik Tiden says that the company is offering a development kit that will allow its customer to develop their own microservices and automated business agents that can be called by the digital assistant.

My take

Talking to customers at last week's event, it's evident that there's a real demand for Unit4 to deliver leaner, lower-cost products that can deliver better data analysis. In the company's core professional services market, its role is very much a back-office, support function. Its customers sell professional expertise and the value that Unit4 delivers is measured in its impact on productivity and cost of ownership. Michael Rogerson, commercial and operations director for the UK arm of global professional services firm WSP, sums up that role:

Over the past few years we've been migrating a lot of our back-office functions, support processes, into the Unit4 solution. That doesn't have a massive impact in terms of how people deliver the work to our clients — that's about providing structural engineering design or mechanical and electrical work.

But it does make us a lot more efficient in the back office, which means we're more competitive and can win more work. It enables people to do things like their timesheets or their expenses or their procurement all in one place, and in a much easier way than they used to have to do two or three years ago.

WSP is about to embark on an upgrade project to move to the latest version and Rogerson expects to see benefits from better analytics too, with the ability to compare projects more easily and spot trends.

But WSP is not moving to the cloud yet, nor are others that I met last week. Unit4 faces the same challenge that other vendors with an established customer base are facing — despite all the exciting potential that a cloud-first, mobile-first, intelligent software product offers, its customers have to balance that against their other priorities. Often the incentive to move is simply not strong enough, or the change appears too daunting. As Eric Overvoorde, CIO of global engineering consultancy Royal HaskoningDHV, explains:

On changing processes, we're not always fast, but that's not due to the systems, but to the way the organization wants to discuss how to change things.

So while it's good to see Unit4 embracing its cloud destiny, the question now becomes, how is it going to persuade its customers to do the same?