Acumatica: Mapping ERP to SMB Customers

acumaticaI had the opportunity to talk with Jon Roskill, Acumatica CEO, at the company’s September 7 analyst event. We talked about Acumatica’s solution, customers, and the newly released Acumatica 6.0. Here’s a summary and video excerpts from our conversation. 

Laurie: Hi Jon, thanks for speaking with me today. Before we get into what’s new with Acumatica 6.0, can you start by giving us some background as Acumatica?

Jon: Sure, Acumatica develops and sells business applications to mid-market companies. Typically, companies that are about a $10 million revenue number, going up to…we have customers now that are in the billions. The company was formed in 2008, by a set of folks who were really ERP veterans from the ’90s, by some of the founders of Solomon saw the cloud transition happening. They said, “Wow, this cloud platform is real, and we should build an ERP product for the mid-market for that platform.” And that’s how Acumatica started.

How Is Acumatica Different Than Other ERP Vendors?

Laurie:   As you know, there are a number of companies competing for business in that space. What differentiates Acumatica from the pack?

Jon: A few things. One is we had the advantage of coming to market a bit later than many. We were founded in 2008, the year the iPhone shipped, and the year HTML5 was ratified as an internet standard. So we’re built on modern cloud technologies. But, 2008, that’s not yesterday either. It takes about five years to build a very robust platform. So, we have the right combination of new technology, and we have thousands of customers using it. It’s proven and tested. The second thing is our licensing policy’s very different from most ERP vendors, who are trying to milk as much money as they can on a user model basis.

Laurie:  With per user, per month pricing?

Jon: Exactly. Our philosophy is that ERP is the system of record for the company, and that it’s very important that people in the company who should get access to that information should be able to get that access when it’s needed–without this having to drive a decision of when the business should have to pay for another license or not. So, we basically slot customers into small, medium, or large configurations. From then they get unlimited access, both for employees but also sometimes more importantly is their partners.

Laurie:  What about their customers?

John: Yes. We service a lot of businesses that are in ecommerce distribution, wholesale warehouse-type operations, and they have customers or partners interfacing through some sort of portal, and you don’t want to have to pay a license for those customers, who may place an order once a month. And the third differentiator is mobile. Our mobile solution is really unique in that it’s extremely rich, available on iOS and Android, and we truly differentiate versus any of our competitors.

Laurie: In what respect?

Jon: It’s included. What most of the competitors do is they give you a fixed application. They’ll give you an expense app, or a time reporting app. What Acumatica does, we’ll give you a set of applications out of the box, but because we deliver through a channel–this is another thing we should talk about some point, is our partner channel–because we deliver through a channel, our partners can add value and customize so that time and reporting application is unique to your company, and not a generic.

Laurie: What kind of uptake are you seeing on the mobile capabilities in your customer base? .

Jon: Very strong. Especially lately this year, pretty much everybody is doing something with mobile. Some vendors will tell you that because they have a browser-based solution, that means they’re mobile, but it really isn’t. If you look at the typical accounting screen, it’s very complicated. So, you don’t want to take this really complicated screen and look at it on a little phone screen. You want to have simplified screens, tailored to the device, that work with your workflow.

At this point, all of our customers are using our expense app. So if you’re having dinner with a customer, you just snap picture of the receipt, and automatically file the expense report from your phone. So you don’t have a stack of them on your desk at the end of the month, which I certainly used to have.

Laurie: That brings up another question. ERP, enterprise resource management, and business application management–these labels can cover many different functions. What are the key functions that the Acumatica handles?

Mapping Functionality to Customer Stages

Jon: The starting point is financials. In fact, 20% of our customers are coming from QuickBooks. They’ve outgrown QuickBooks, and need to figure out something else. If they’re in QuickBooks Online, they’re already in the cloud, so it’s a very easy migration to an Acumatica solution. It’s typically driven by something such as having to process multi-currency transactions, because they’re getting paid in other currencies. Or they open another office as a different subsidiary. So, it starts with the financials, I call called that “tracking the business”. You go into Acumatica, and you can see what’s going on with the money.

The second phase is that customers may start using Acumatica for things like CRM and distribution. You’ve got your customers in your system, and you want to help drive renewals or service opportunities for your business. Acumatica distribution capabilities help you track inventory, shipments, and more. At this point you’re truly operating your business on top of Acumatica.

The third stage is when customers become very thoughtful about their business processes and workflows. You know, there are too many companies out there that I see where they make the business fit the software, and that’s just wrong. The software should fit the business. So, you want to think about how should your business operate, what processes do you really want to get good at. At this point, Acumatica has a workflow engine that lets you encode these processes into Acumatica.

Laurie: A company’s unique workflow?

Jon: Your unique processes, right. Our partners help our customer do that, so at that point you have a custom business solution with Acumatica, probably in the price range of $75,000 to $200,000.

Laurie: So what’s new with Acumatica 6.0? Are you announcing a new vertical focus?

What’s New In Acumatica 6.0

Jon: Our customers fall into some major verticals. Professional services, manufacturing, ecommerce, and retail solutions, and distribution or wholesale distribution are the top ones for us. We announced in February that we had acquired M5 Solutions, a service management company, and we’re integrating that with Acumatica–and it’s been selling like crazy. Q2 was awesome, awesome results for the company, partially driven by how much that new service module that we’ve been attaching.

Laurie: In addition to the fact that companies like to have things their way, what else have you heard from customers that influences product development?

Jon: Our CRM product is a good example of that. Often customers buy ERP from one vendor and CRM from another. Then you need to bring the two together and synchronize them, and you wind up with two separate customer formats. The fact that Acumatica sells both an ERP and a CRM is an advantage for half of our customers, 50% use our CRM, and they love it. There’s one version of the truth all the time, and that’s a place where…

Laurie: And what’s new in Acumatica 6.0 in terms of Office 365 integration?

Jon: In the 5.0 release, we introduced Office 365 integration, and integrated Office 365 contacts and tasks and calendar with Acumatica CRM. But we know that many users don’t spend their life in the accounting system, they actually live in things like Outlook as well. I certainly do. You probably do as well. So in 6.0, we’re launching a new Acumatica Outlook add-in. So, when you’re working inside Outlook, you’ll have the context of all of your Acumatica contacts there. So, if you’re looking at an email from Laurie McCabe and Laurie McCabe has an outstanding invoice for$200,000, it will pop up and show me that. Or if, for instance, a regular service update needs to be done, that will show up. So, it’s the sort of thing you would have in your system automatically. So, when you’re talking or emailing with someone, you see it in context.

Laurie: It sounds like Acumatica 6 has some great updates, and thanks for sharing some high-level background as well.

 

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