Unit4, long-time European ERP leader, is making a concerted push into North America. To that end, it hosted industry analysts at the beautiful 60 State Street Boston venue on June 10. Read my Storify account of the event here.
Over the past several years, cloud-based solutions have helped SMBs put technology solutions to work with less cost and complexity, and more flexibility, than traditional on-premise deployments. The technology underlying cloud ERP solutions provides SMBs with agility, efficiency and financial benefits. For instance, cloud solutions:
- Capitalize on virtualization and load-balancing technology. Applications are more easily deployed, managed, and even scaled across multiple servers and database resources as demand and growth changes
- Provide access to software, server, storage and other computing resources that you provision—and users access—over the Internet or a private network via browser, so you don’t need to deal with client upgrades.
- Store data resources in the cloud instead of on individual devices, easing management and security concerns.
- Typically take a layered security approach, which includes encryption, key management, strong access controls, and security intelligence to further increase data security.
This translates into big advantages for businesses. For instance, one of the biggest benefits cloud solutions provide is on the mobile front. Users can easily self-provision and use cloud applications from a web browser, through Apple and Android mobile devices, or Windows, Mac or Linux desktop platforms—without expensive, complex VPN and remote access software. This makes it easier for businesses to support BYOD (Bring Your Own Device) programs.
These kinds of benefits have convinced many SMBs to adopt cloud solutions in areas such as CRM and collaboration. As they realize benefits in these areas, they are increasingly likely to consider the cloud for core business functions, such as accounting, financials, and ERP. As indicated on Figure 1, only 14% of SMBs currently use cloud Accounting/ERP solution. However, among those planning to purchase or upgrade, 20% plan to select cloud Accounting/ERP. 14% are not sure, and likely to consider both options.
However, clouds come in different shapes and sizes, including public (software-as-a-service or SaaS) private clouds and hybrid clouds. Adding to the confusion, the lines between different cloud models are blurring. Finally, the list of vendors offering cloud financials and ERP solutions for SMBs is growing.
So how can you determine which cloud ERP approach is right for your business? .
Sponsored by Acumatica, SMB Group’s free ebook, Clearing the SMB Clouds will help you understand the cloud variants that you’re most likely to encounter when evaluating ERP solutions and deployment alternatives, the tradeoffs between them, and critical security questions. The ebook provides guidance to help you determine which model will best match your company’s strategy, workloads, performance and security needs, and how to assess cloud ERP providers, partners, and solution capabilities.
The bottom line is that the business models, goals and requirements of SMBs are as diverse as the cloud ERP choices available–there is no “one size fits all” cloud ERP choice that’s right for all SMBs. While cloud ERP solutions offer SMBs the means to streamline operations, adapt, and grow in today’s fast-paced business environment, it’s important to do your homework to figure out which solution will be the best fit for your business.
This video interview was originally posted on SMB Group Spotlight.
Laurie: Hi, this is Laurie McCabe from SMB Group and today I’m here on the SMB Spotlight at Salesforce’s Dreamforce 2014 Conference. I’m talking to Aaron Harris, who is the Chief Technology Officer for Intacct. Aaron, thank you for sharing time with me today. Can you tell me a little bit about Intacct, who you are, what you do?
Aaron: Sure. Thanks Laurie. Intacct is a cloud accounting and finance solution that we have designed for small and medium-sized businesses. We’ve taken a best in class approach, so all of our resources are targeted at building just what the accounting and finance team needs, the general ledger, payables, receivables. We’ve got a strong relationship with Salesforce, so if you’re using Salesforce we’ve got a very nice native integration where Intacct and Salesforce synchronize data and processes and it’s a beautiful way to get your front office and your back office working together.
Laurie: So what are you highlighting here? I know you have an announcement about some new collaboration capabilities with Salesforce. What’s going on with that?
Aaron: That’s right. So at Dreamforce this year we are announcing Intacct Collaborate. What Intacct Collaborate does it takes Salesforce Chatter and extends it into Intacct so that your sales and your marketing and support people who are using Salesforce today and who are collaborating on Chatter are using now the same network that the accounting team, the finance team, project managers are using on the backend. So there’s one social network, there’s one collaborative network across the enterprise for the whole organization to work on.
Laurie: Good. It sounds like that makes it easier for everybody to feed information into the whole financial process.
Aaron: That’s right. There’s a lot pieces to it. Obviously there are some great stories, right? I’m a sales rep, I’ve got a deal that I want to get done, I need to get a 10% discount approved on that deal. In the old world I’d write an email to the CFO, the CFO doesn’t know anything about what I’m talking about so the CFO has got to go do some research. She responds to the email, there’s lots of back and forth, none of the communication is captured, right? So it slows down the sale, it adds frustration, there’s no log to what happened. So in this world that all happens via chatting and collaborating, and it’s all in real-time, it’s all captured, it’s all part of the record. We also see this being useful within the accounting and finance team, getting them to collaborate over some of the more tricky business processes. I was talking to a CFO the other day who said 20% of finance transactions are exceptional, they’re complex. And we spend 80% of our time on those 20% of the transactions, the exceptions. We have to find out what’s going on, what do we do? Having Collaborate allows them to not only more efficiently communicate about these transactions and these exceptions, but it generates a log that you keep the communication around the transaction.
Laurie: I know Intacct is really aimed at small and medium businesses, but that’s a very diverse audience, so what segments of the SNB market are really the sweet spot for Intacct?
Aaron: Sure, so there’s really two categories of customers who are choosing Intacct. The first is companies who have outgrown their first accounting product, usually it’s QuickBooks. They’ll outgrow it when they need to automate processes that are manual. Perhaps they’re now a multi-location business and it’s just too difficult to aggregate or consolidate data across the locations. It might be that the reporting tools available in QuickBooks don’t give them kind of insight that they need, which product lines are the most profitable, which of my professional services engagements are losing money and which are making money? This kind of insight is just not possible in some of the low-end products. Or it may just be that this is a growing company that expects to go public, they need to have proper controls in place, they need to have a certain way they’re going to get through their Sarbanes–Oxley audits, so they need a product that will help them…
Laurie: Even if you’re preparing to be acquired or something like that. If you sell the business you would need that.
Aaron: Exactly. You need a product that cannot just assure external auditors that you’re following these controls, but that allows you to provide the evidence that you’re doing it.
Laurie: And that’s about half of your customers are coming from that.
Aaron: About half. So the other half are people who have embraced the cloud. They love Salesforce, they love some of the other cloud products. They can see that with Salesforce they’re getting constant innovation, it embraces mobile technology. You know what I’m talking about.
Laurie: Yeah, they just want to be able to do things on the fly, they way they want, on the device of choice.
Aaron: And no more headaches about hosting the infrastructure, that’s security, right?
Laurie: No, they don’t want to mess with that.
Aaron: So they want to take their accounting and finance processes and modernize them to the same extent as they already have sales and marketing. So they’re choosing Intacct not just because it’s cloud and it gives them the same advantages they’re getting through Salesforce, they’re also choosing it because it’s fully integrated with Salesforce. They’ve got the full front office/back office integration, data synchronization, process integration.
Laurie: It takes the integration headache away too.
Aaron: That’s right. No more disconnect in the process.
Laurie: So how can a potential customer or prospect learn a little bit more or better evaluate whether this might be a good fit for them?
Aaron: The easiest way is to go to our website, go to www.intacct.com. There’s a number of things you can do there, but maybe the easiest is just to get a trial.
Laurie: So you do still offer a free trial? I think a lot of them don’t anymore
Aaron: We do. We’re very proud of our product, we think it’s very easy to use, so get a trial. We actually walk you through how to learn more. It’s actually a really nice way to learn about Intacct.
Laurie: That’s great. Well Aaron, thank you again for sharing that information with me about Intacct. I think it will be really valuable for a lot of small and medium businesses out there. Have a great rest of Dreamforce.
Aaron: Thanks Laurie.
Laurie: Thank you.
I attended SAP’s SAPPHIRE NOW 2012 several weeks ago and am finally getting a chance to share my thoughts on the customer meetings I had with Big Byte Corporation and KEEN Footwear at the event. These two customers are very “real” SMBs. BigByte has 52 employees; KEEN has 130. Neither is a Silicon Valley venture capital startup, which let’s face it, is a very different breed. Why did they choose SAP, which, after all, is best known for its footprint in large companies? Their perspectives about this are quite interesting because they personify what we at the SMB Group call “Progressive SMBs.”
The Progressive SMB Class–What is it, and Why is it Important?
Our 2011 SMB Routes to Market Study indicated that many SMBs are tightening their tech wallets for 2012 as compared to 2011 (Figure 1). But the study also showed a distinct segment of SMBs that we call “Progressive SMBs.” Despite economic uncertainties, Progressive SMBs plan to increase IT investments. They see IT as a tool for business transformation, and a way to create market advantage and level the playing field against bigger companies. Although while price is a factor, they rate other criteria–such as the ability to customize solutions, strong vendor reputation, and local support and service–higher than other SMBs when making technology purchase decisions. Figure 1: SMB IT Spending Plans and Revenue Expectations More important, Progressive SMBs have higher revenues expectations than their peers. For instance, 75% of the Progressive medium businesses (who are increasing technology spending) anticipate revenue gains in 2012, compared to just 17% of medium businesses that plan to decrease IT spending. BigByte and KEEN Footwear have both adopted a Progressive strategy. They illuminate how Progressive SMBs think about IT, and how their businesses have benefitted by making a bigger investment in IT than most of their SMB peers.
BigByte’s SAP Story
Founded twenty years ago, BigByte provides annual global warranty services, after-sales tech support, product repair and refurbishment and reverse logistics services to large companies such as Apple, Cisco and Panasonic. BigByte had used a combination of entry-level financials, homegrown apps, spreadsheets and manual processes for a long time. But keeping track of the significant inventory on consignment from its customers became more challenging over time. And, since every manufacturer has its own, unique set of processes to handle warranty service, BigByte was struggling to accommodate each company’s individual workflow. By 2009, BigByte’s resources were stretched thin. It didn’t have the inventory controls it needed, and was spending too much time pulling data together for reports. At the same time, the company’s owner wanted to prepare the business for growth and/or acquisition. He realized that to accomplish this, the business had to become more efficient. Michael Franklin, who I spoke with at SAPPHIRE NOW, was hired as COO to fix the problem. Initially, Mike hadn’t considered SAP; he had a couple of other ERP solutions he was vetting for the job. But the company’s owner spotted an SAP ad in Golf Magazine, and thought, why not get information? Mike went to SAP’s web site and was connected to Softengine, an SAP Business One partner. Why did BigByte decide to buy SAP Business One? The other solutions Mike was looking at promised many of the same things, such as a unified management for core business functions and embedded analytics. What sold the company on SAP Business One echoes what we heard in our survey about what Progressive SMBs are looking for:
- Good value and no pricing surprises. Soft Engine offered a fixed price for implementation, and fixed monthly price per user, per month pricing for everything else (hosting management, 24×7 support, upgrades, etc.).
- Fast time to value. As part of the fixed scope implementation BigByte got the software and 21 users up and running in less than 6 months via Softengine’s hosting program for Business One.
- The ability to customize. BigByte needed to tailor return authorization functionality tailored for each of its customers–and be able to customize for future ones too.
- Trust in and credibility. Softengine had a strong mix of SAP credentials and competencies, along with managed services and cloud infrastructure design and deployment.
Interestingly, although debating what isn’t and isn’t really a “true” cloud solution has become the most popular past time for many of us in the industry, this was not an issue for BigByte. Mike wanted the best ERP solution for BigByte, but didn’t want to manage the IT infrastructure needed to support it. Two years later, Mike says that Business One has given the company what it needs: automated processes and efficiencies; reliable, unified and real-time data; dashboards, tools and reporting for better decision-making. BigByte also uses Business One mobile apps for things such as approving purchase orders. Net-net, Mike estimates the company cut labor costs by about 15%, and cut IT costs by about 80%, because it now outsources hardware maintenance. IT now helps power the business, instead of just supporting it. BigByte can adjust to different customers’ processes and requirements, giving the company the agility to replace shrinking customer demand in the optical disk drive sector with the new customers in the growing LCD market. And, with its business processes in order, BigByte is also much more credible to potential buyers.
If you’re an outdoor enthusiast, you know (and probably love) KEEN Footwear, a Portland, Oregon-based footwear designer and distributor. KEEN’s founders went into business to invent sandals that protect the toes with a signature protective “toe bumper.” Today the company offers shoes, bags and socks for many outdoor activities and for casual wear. I had the opportunity to talk to David Boeschenstein, KEEN’s COO about their SAP story. When Dave came to KEEN from Adidas in 2008, the company had outgrown its ERP system. Dave’s charge was to select a scalable solution that could adapt as the company continues to grow. He looked at a few options–including SAP Business All-in-One (BAiO) for apparel and footwear, which is used by several others in the outdoor and specialty footwear sectors. After extensive evaluation involving multiple users from each department, KEEN decided SAP BAiO–along with SAP Business Objects and Business Warehouse–would be the best fit for the company. Now remember, KEEN has only just over 130 employees! But they are another prime example of a Progressive SMB. KEEN views IT as an essential enabler to drive business growth, and wanted solutions that will scale to support the initiatives they have planned for the next 5 years and beyond. According to Dave, Keen’s motivation for installing SAP solutions was “to ensure we provide our customers with excellent service. Our business operations mandate is to make it easy for customers to do business with KEEN wherever in the world they interact with our products and our fans.”. SAP partner Gravity Pro helped KEEN deploy BAiO (using Rapid Deployment Solutions, or RDS), Business Objects and Business Warehouse in July 2011. KEEN is now live in the U.S., Canada, and The Netherlands.
Customer Stories are Worth 1,000 Analyst Words (or more!)
Much has already been written about the details of the new products, strategies and solutions that SAP announced at Sapphire, and this is, of course, very valuable to understand. But sometimes not enough is discussed from the customer’s point of view–and some of the most important things–namely the business outcomes from technology–can get lost in translation. The BigByte and KEEN experiences help put the SAP into perspective for SMBs, and illustrate how Progressive SMBs are making their decisions about business solutions. They also highlight why it is so important to be–or become–a Progressive SMB.
Filed under: Small Business Software, SMB, Uncategorized | Tagged: BAiO, BigByte, business software, ERP, KEEN, progressive SMB, SAP, SAP Business All-in-One, SAP Business One, small business, SMB, trends | 2 Comments »
I’m back to serve up the second edition of Tech Tidbits, with a new sampling of SMB solutions that you might not know about, but could provide just what you’re looking for.
On the menu this time are PaySimple and BizSlate. If you use or try either of these solutions, please let me know what you think!
PaySimple. Our SMB Group studies consistently indicate that improving cash flow is a top SMB business challenge. But many small businesses still collect payments the old-fashioned way–handwriting invoices or using word processing or spreadsheet apps to create invoices. This can slow down receivables cycles, or worse, make it easy to forget to invoice or follow-up on overdue payments.
PaySimple’s solution automates and simplifies billing and collections with a cloud-based (aka software-as-a-service) solution so you can manage everything from one place. The all-in-one service integrates multiple payment types (credit card, ACH and eCheck), multiple payment channels (virtual terminal, recurring billing, email invoicing, web payments and mobile payments). PaySimple is great for service businesses that are built around repeat customers, offering capabilities for things such as subscription billing and automated communications.
If you don’t have a merchant account yet, PaySimple will get you up and running. PaySimple also provides an import/export function that can map custom fields for integration with most small business accounting solutions, and offers a mobile app so that you can use it when you’re on the go. With this type of solution, SMBs can cut the time they spend on billing and collection, save money and get paid faster. PaySimple is available direct and through private label partners such as American Express Open, Chase, Western Union, among others. Pricing direct from PaySimple is $34.95/month, plus transaction fees.
BizSlate. It’s not too often that customers guide product development from inception, but BizSlate, which provides cloud-based ERP for small businesses, took exactly this approach. In his prior role as CEO of eZCom Software Inc., a cloud-based EDI (Electronic Data Interchange) provider for SMBs, BizSlate founder Marc Kalman saw that many customers needed to move beyond entry-level accounting software to an ERP solution, but hadn’t found a solution to fit their needs and budgets. So Kalman left eZCom to start BizSlate–convincing over a dozen of his eZCom customers to kick an average of $18,000 each into the venture and join a steering committee to guide product development.
He conducted extensive interviews with each, asking them to throw out their old ideas about software and focus instead on helping him better understand what they really needed to solve their business problems. What he came up with is BizSlate, an ERP system that spans areas such as customer management, vendor management, order management, product management, multiple warehouse and inventory management, receiving from vendors and shipping to customers.
Interestingly, BizSlate doesn’t aim to create another accounting system, so you can, for instance, strap QuickBooks right onto it. BizSlate’s initial focus is on manufacturing, wholesale and distribution industries, but the company plans to extend into the services verticals also. The original 12 customers/investors are using BizSlate now, and the public beta starts this week–so check it out if you’ve been searching for this type of solution.
Filed under: cloud computing, SMB, Uncategorized | Tagged: accounting, BizSlate, cash flow, cloud computing, ERP, invoicing, mobile commerce, payments, PaySimple, SaaS, small business, SMB | Leave a comment »
Just want to let you know that we are publishing highlights from recent vendor briefings on the SMB Group web site. As time permits, we discuss our takeaways from the more interesting briefings. I’ll try to remember to post them here as well. There are several up there already, here is the most recent one.
Acumatica is a relatively new player on the SMB ERP scene. It delivers its web-based ERP solution both on premise, and via a software-as-a-service (SaaS) model. Targeting companies with 5–1,000 employees (or roughly $5M – $500M in annual revenues), Acumatica provides accounting, CRM and distribution capabilities, and worldwide currency and language customization.
Acumatica offers customers a choice to run its solutions on-premise or via the SaaS model, providing the benefits of cloud technology and social media capabilities in both delivery models. Subscription pricing for the SaaS version of the accounting module starts at $12,000 annually, while on-premise licenses start at $15,000. On-premise pricing is CPU-based, not per-user based, enabling customers to maximize the ERP user base without incurring added costs. The company has more than 50 customers using its solutions to-date. About 30% use Acumatica via the SaaS modes, and the other 70% have deployed it on-premise.
Acumatica has a 100% indirect sales model, which provides an attractive and neutral compensation model to motivate value-added resellers (VARs) to sell the solution that will work best for the end-user customer. The vendor has signed up more than 40 VARs to date—mostly from the ranks of Microsoft Dynamics and Sage.
Acumatica intends to capitalize on key trends and requirements in the traditional VAR community and it the SMB market. First, as I’ve written many times, SaaS vendors have yet to crack the code on creating a VAR-friendly model. Customer demand for SaaS is on the rise, and many VARs want to add a SaaS offering to their line-up. But, they worry that SaaS vendors (who often sell both direct and through channels) will disintermediate them once the partner has brought in the business. VARs searching for a SaaS option are likely to find Acumatica’s 100% indirect model, combined with a choice of delivery options and a Microsoft-centric approach, quite attractive. The fact that VARs can sell the same solution via either delivery model is also a plus—most VARs don’t want to be evangelists, they want to sell the solution that best fits the customer’s needs.
Acumatica offers customers a distinct value proposition as well. Customers can either self-select what model (SaaS or on-premise) will work best for them, or Acumatica and its partners can help them decide what will work best. In contrast, other major vendors in the mid-market space—including Intacct, NetSuite, Microsoft, Sage, etc.—have a pre-determined agenda. Acumatica also offers customers that want to switch from one delivery mode to the other discounts that take into account their prior investments.
As a relative newcomer, Acumatica will have to work harder than more established rivals to prove that it has both the product capabilities and corporate viability to be a “safe” choice. However, if Acumatica can keep pulling in VARs, and broadcast its best of both worlds story out to the market, it should be able to cross this chasm.
Filed under: Uncategorized | Tagged: accounting, acumatica, business model, cloud, cloud computing, ERP, financial software, Intacct, microsoft dynamics, NetSuite, on-premise, partner, Sage, small business, SMB, Software as a Service, VAR | Leave a comment »