Winning the cloud ERP services game - two Sage Intacct partners share their secrets
- Summary:
- At Sage Intacct Advantage, we heard from two services partners and cloud ERP advocates. AcctTwo and JMT Consulting Group shared their growth secrets - and why a vertical ERP focus pays off.
At Sage Intacct Advantage, the analysts and assorted punditry heard from two successful Sage Intacct partners, Marcus Wagner, CEO of AcctTwo Shared Services, and Jacqueline Tiso, CEO and Founder, JMT Consulting Group. Sage Intacct's Taylor Macdonald facilitated the talk, which went beyond the keys to SaaS success. We also heard the partners' reactions to Sage's acquisition of Intacct, and where they see opportunities.
Wagner founded AcctTwo in Houston in 2011. Since then, they've grown from three people to fifty-five, with a compound annual growth rate of 70%. For ERP services, all AcctTwo does is Sage Intacct. Based on my firsthand interactions/arguments with Wagner, they are passionate about it - and the impact of multi-tenant cloud for customers.
Find the early adopters - and build from there
Cloud services are not restricted by geography. That comes in handy when your local market is limited, or, in AcctTwo's case back in 2011, not as open to cloud. Wagner hit the road to find SaaS clients:
In 2011, we were explaining what cloud was to CFOs who said that it was not safe... So really that led us to going to places elsewhere, like Austin, which is a big technology hub. And ultimately we became a national Intacct VAR. Half of our business today is outside of Texas, and half is in Texas.
Those who resisted cloud ERP software in 2011 are coming around:
The late adopters, or the late pragmatists, are starting to come around to the fact that cloud is actually a viable option for their ERP system.
Wagner led his team into vertical specialization. Tiso has done the same. JMT Consulting Group is focused on non-profits. They have over 2,000 clients across the U.S., with 30 employees and offices in New York, Austin, and Nashville. Both partners are known to go after big accounts. Wagner has sold Sage Intacct into one billion dollar companies, beating out household names in the ERP space. Tiso has sold into some of the biggest non-profits in the U.S.
Use add-ons for vertical success
Both partners have utilized Sage Intacct's software partners to bolster their vertical specializations. Tiso:
For us, it really depends on the organization we're working with. With allocations, some of the organizations work fine with the core [Intacct] functionality, and some of them have more advanced allocation needs. So that's an ancillary solution that we bring and sell.
Wagner says expense management is a common need. In some of the microverticals they serve, such as churches, an add-on solution pays off:
Intacct's native expense management tool is great, but if they want a mobile offline capability, and those types of things, Nexonia's the one that we tend to recommend. For churches, they need expense management because they've got missionaries, or missionary leaders, who have an expense credit card, so they're going out and incurring expenses on behalf of the church. They need to get reimbursed. They also need a budgeting tool.
Functionality is not the only consideration for add-ons. Sometimes the client's budget is a big factor. Both AcctTwo and JMT Consulting Group use Adaptive Insights for clients with budgeting and planning needs, but Wagner says that for most of his church clients - except megachurches - Adaptive Insights is out of their price range. In those cases, AcctTwo is ready with a lower-cost solution that integrates natively with Intacct.
Develop your own vertical IP - with platform apps
Sometimes building your own app is the way forward. AcctTwo has used that strategy for their other big microvertical: oil, gas and oilfield services. When I asked Wagner about their approach, he made two big clarifications:
- It's not about vertical apps, but microverticals
- Avoid unwanted overlap with your vendor partner
Wagner added:
The Intacct architecture is very powerful, and can be applied to a number of different verticals. You can say it's great for nonprofits, because they have the need to slice and dice by fund, or by grant, or whatever. But to say nonprofit is a vertical is like saying "for profit" is a vertical... We've been very careful to not pursue microverticals that are clearly going to be pursued by Intacct.
That strategy led AcctTwo to develop oil and gas add-ons for clients, which they can re-use on other projects. They have also built up IP in farming and agriculture. Wagner said he doesn't see Intacct building out their own modules in those areas - making them ideal for a partner like AcctTwo with vertical know-how, and app building skills. AcctTwo has a small offshore team in Romania that helps with the development.
Wagner says sometimes you don't need all the app functionality expertise; the customer can provide it. He cited a recent farming scenario:
A good example is this company that buys and sells frozen and live chicken by the truckload. Is that a vertical? But when we started implementing Intacct, they said, "Hey, by the way, in parallel to this initiative, we're running a search process for a trading platform for agricultural commodities. And whatever we select, you're gonna have to incorporate and integrate with that."
But the customer ran into a challenge:
Well, about three months later, they came back and said, "We can't find one we like. Can you build it?" And we did. We built a trade module. You know, that really speaks to the power of the Intacct platform, where you can build an entire fully functional application, but it's actually integrated with both the order entry and the purchasing modules - the native modules of Intacct.
Educating prospects is part of the job
One thing that never changes in consulting: understanding the customer. For Tiso, that means educating non-profits on the potential of cloud tech:
I view the cloud as a great equalizer for organizations. [Our customers] are able to get, for the first time, functionality that is current and kept current - without having to update all of their infrastructure and everything else.
That means taking the time to help prospects understand how this will play out:
This is a really big thing for all of our clients, so we really do spend a lot of time educating them and communicating with them about the benefit of moving to the cloud, and helping them to understand when's the right time, and how it should be done the right way, so that they're successful with it.
The wrap - how will Sage help?
Tiso said JMT had previously been a partner of Sage's for 13 years, so she was "very interested" in the acquisition. Sage's solutions could fit with some of their "low entry level" stage clients.
Wagner said his clients are too big for Sage One and Sage Live, and X3 Manufacturing doesn't fit in with their current verticals. But, like Tiso, he's very interested in Sage People (formerly Fairsail):
When it comes to oilfield service companies and oil and gas companies, even though they're a very blue collar industry, the workforce is a difficult management challenge. Because you have the transient workforce, you have to have safety certifications. You have to schedule people from job to job, so we're talking to several oilfield service companies who say, "We need an HCM solution." We're going to take a real hard look at Sage People to see if that's something that we can incorporate into our portfolio.
One change Wagner is happy about: as generations shift, so do cloud attitudes.
If you follow the oil and gas industry, one of the biggest problems they have is succession planning, because that generation is retiring. So they've been working very hard to recruit the new generation of leaders.
In 2011, I was sitting in front of 60 year old CFOs, not getting very far. And today I'm sitting in front of 40 year old CFOs, and they're driving the conversation. They're saying, "We want best in class. We want cloud."
And I'm saying, "Where have you been all my life?"