February2017

WHATACUMATICACUSTOMERSWANT…ANDGET

OPPENNESS,COLLABORATION,INNOVATION,ACCELERATION

TalktoanyAcumaticacustomerandveryquicklyyouheartheword“open.”That’smostoftencitedasaprimaryreasonthecompanychoseAcumatica’sEnterpriseResourcePlanning(ERP)overothersolutions.Why?Becausethesecustomersvaluefitandfunctionalityandcompletenessofasolution,buttheyalsoneedflexibility,andoften“bestofbreed”and/orcustomizedfunctionalitytohelpthemdifferentiatethemselvesfromtheircompetition.Butcustomizingthesolutioncan’tbuildbarrierstogrowthandchange.Andforthesesmalltomidsizeenterprises(SMEs),aflexible,differentiatedsolutioncan’taddunwantedcomplexityanditcan’tbreakthebank.

WhilemanyERPproviderstodaytrytobe“onestopshops,”thedownsideofthisisaddedcomplexityandcost.Acumaticainsteadchoosestoprovideanopenplatformandtakeacollaborativeapproachtoaccelerateinnovation,collaboratingwithcustomerstoplotaproductroadmapandwithpartnerstofillgapsandprovidespecializedfunctionality.WhileAcumaticacustomersdon’tnecessarilyexpectERPtosatisfyalltheirneeds,theyalsodon’twanttowindupwithahodgepodgeofdisparate,disconnectedsolutions.Infact,thatiswhatmanyarereplacing.TheyturntoAcumaticatofacilitateeasyintegrationandconnectivity.

This“open”approachprovidestheaddedbenefitofagility.Faceit:Weliveindisruptivetimesanddisruptioncanhaveacascadingimpactonbusinessapplicationrequirements,makingtheabilitytoeasilyinnovate,evolveandchangeequally,ifnotmoreimportantthancurrentfunctionality.

WHYOPEN?AMEANSTOANENDAcumatica’s“openness”caninpartbeattributedtothefactthatitportraysitselfasa“technology”company.WhileotherERPsolutionprovidersdedicateaconsiderablepercentageoftheiroperatingbudgetstosalesandmarketing,Acumaticarelies100%onitschannelforsalesandisthereforeabletoredirectthatfundingbackintotheproduct.Theriskinthisapproach:Technologyfortechnologysake.ButAcumaticaavoidsthistrapbyhavingakeenfocusonitscustomers.WhileitdedicatessignificantresourcestodevelopingitsxRPCloudPlatform,Acumaticadoesthisfortheexpresspurposeofdeliveringmorefunctionalityandmoreinnovation,faster.

About Acumatica

Acumaticaisaleadingproviderofcloudbusinessmanagementsoftwareforsmallandmid-sizebusinesses.BuiltontherobustandflexiblexRPcloudplatform,AcumaticadeliversasuiteoffullyintegratedERPmodules,includingFinancials,Distribution,CRM,ProjectAccountingandmostrecentlyFieldServiceandeCommerce.

Withover2,000customers,Acumaticaoperateswith3differentgo-to-marketmodels:

üAcumaticabrandedresellers:AcumaticaCloudERPis100%soldthroughchannelpartners

ü Privatelabel(OEM)business:Visma,andMYOB,Acceo,SeniorSoftwareandLexWaregiveAcumaticaexpandedinternationalreach

ü xRPCloudPlatformforverticalISVs(e.g.hotelorpropertymanagement,non-profitfundraising,publichousing,etc.)

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AsnotedintheMintJutrasreportonWhatAcumatica6MeanstoDigitalTransformation,Acumaticahasinvestedheavilyincreatingplatformcapabilitiesthatsupportcustomizationwithoutcreatingbarrierstoupgrades.Thisapproachalsoelevatestheimportanceofintegrationcapabilitiesthatencouragecustomerstoextendthesolutionratherthanmakeinvasivechangesinplace.Tothisend,AcumaticahasmadeitslatestreleasesmoreflexiblebysupportingREST(representationalstatetransfer)API(applicationprogramminginterface)withwebservices,makingtheplatformmoreadaptableandcustomizable.“Open”isnotthegoal.Thegoalistoaccelerateinnovationcollaboratively.

Inordertofullyappreciatethesignificanceof,andthepotentialbenefitsderivedfromthisapproach,weneedanewandfreshwayofthinkingaboutERPsolutionsandhowtheyareconstructed.Weneedtorevisittheage-olddebatebetweenanintegratedsuiteand“bestofbreed,”butwithanewtwist.

ERPisattheverycoreofthisdebate,sincebydefinitionitisanintegratedsuite.MintJutrasdefinesERPasanintegratedsuiteofmodulesthatformstheoperationalandtransactionalsystemofrecordofabusiness.Thisisarudimentarydefinition,notonlybecausedifferenttypesofbusinesseshavedifferentrequirements,butalsobecausetodayERPislikelytodomuchmorethanthis.AsthefootprintofERPhasexpandedovertheyears,thependulumhasswunginthisdirection,infavorofcompleteend-to-endsolutions.

Asa“suite”allmodulesofanERPsolutionshareacommondatabase,andallaredevelopedusingthesametoolsandtechnology.Thiseliminatesdataredundancyandanyneedforseparateintegrationefforts.Traditionallytheyallmoveforwardinlockstep.

Acommonplatformfordevelopmentisbeneficialtoboththecustomerandthevendor,andyetthisapproachhasstifledinnovation.WhennewfeaturesandfunctionsareaddedtoERP,thistightintegrationimpliesthatallmodules,allfunctions,andthereforealldepartmentswithinanorganizationmustmoveforwardtogether.Thiscanslowdowntheupgradecycle,butevenmoretroublesome:Ittakesmassiveeffortsofcoordinationforalldepartmentswithinacustomer’sorganizationtotakethosenextstepsalltogether.Andallmightnothavethesamelevelofmotivation.Ifcustomizationsareaddedthroughinvasivecodechanges,thisaddsevenmorebarrierstomovingforward.

AnopenenvironmentcanbeaneffectiveantidotetotakingastepbackwardstowardsindependentpointsolutionsthatneedtobeinterfacedorintegratedbackintoERP.Opennessprovidesanewwayofconstructingacompletesolution,onethatis“component-based”or“service-based.”ThisistheAcumaticaapproach.

TheconceptandtheapproachdiffersfromtraditionalERPwhereallfeaturesareembeddedandallmodulesareverytightlyintegrated.Inanutshell:When

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itcomestimetoofferupnewfeaturesandfunctions,insteadofinsertinglinesofcodedirectlyintoERP,youinsteadcalluponastandard“service.”Whenitcomestimetoupgradeoraddnewfunctionality,simplyswapouttheold“service”forthenew.Youmightalsoviewtheseservicesasexternalcomponents,whichcanbeofferedeitherbyAcumaticaorbyoneofitsgrowingcommunityofpartners.Whilethisisanoversimplification,itconceptuallydescribeshowAcumaticacaneffectivelydelivernew,targetedinnovationwithoutforcingalldepartmentsservedbyERPtomarchforwardtogether.

Anopenplatformalsoprovidesavehiclebywhichpartnerscanofferadditionalfunctionalitytargetedtospecificindustriesorevenspecificcustomersinsearchofdifferentiation.Ofcoursetheriskisinthisbecominga“freeforall”wherebyanydeveloperwithsomecodingskillscanthrowsomethingoutthere.ButAcumaticadoesn’tletthathappen.Itisquiterigorousinacceptingandcertifyingpotentialpartners.Thatsaid,over30newvalueaddedreseller(VAR)partnersjoinedin2016foratotalofover250.Inaddition,Acumaticapartnerswithover100independentsoftwarevendors(ISVs)whoprovideverticalsolutionstobetterservicespecificindustrysectorslikemanufacturing,non-profitsorpropertymanagement,tonamejustafew.

CHOOSINGPARTNERSWISELY…ANDSTRATEGICALLYWhileAcumaticadoesn’ttrytobeacustomer’sentireuniverse,itdoeswanttobeatthecenterofthatuniverse.Thereforeitchoosesitspartnerscarefully.Ofcoursesometimestheconverseistrue.SomepartnerschooseAcumatica.Long-timepartnerJAASSystemsextendsAcumatica’ssolutionwithmanufacturingcapabilities.OperatingmuchlikeAcumatica,ittoopartnerswithotherAcumaticaresellerswhowanttosellintomanufacturing.AndFusionSoftwareprovidesretailmanagement,warehousemanagementandpointofsale(POS)extensionsforretailers.AndofcoursetherearemanymorethathavebeenpartoftheAcumaticacommunityforyearsnow.

Morerecentlyannouncedpartnerships(January2017)includethosewithDocusign,MagentoandInfinityHR.Thesethreehaveafewthingsincommon.Firstofalltheyaddressfairlyuniversalneeds.Whatcompanywouldn’tbenefitfromDocusign’selectronicsignaturetechnology?Moreandmorecompaniestoday,eventhosethatoperateexclusivelyinabusiness-to-business(B2B)environment,alsorequireaneCommerceplatform.Magento’sopensourceframeworkmakesitaffordableforeventhesmallestofcompaniesbutthenprovidesroomtogrow.Andofcourse,allbutthetiniestofcompaniesmustmanageemployeebenefits,humanresources(HR)andpayroll.

Inaddition,thesearenotcompaniesthattendtogetlostinacrowdofferingsolutionsinveryfragmentedmarkets.Docusignisaclearmarketleader.Magentoisgaininginpopularityandhastheaddedadvantageofbeingan

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attractiveandaffordableplatformforsmalltomidsizebusinesses(SMBs)(Acumatica’sdeclaredtarget).AndwhileautomatedHRmightseemlikealuxurytoasmallcompany,InfinityHRisbasedinthecloudandfullyintegratedtoAcumatica,makingitalsoaffordableandattractivetoSMBs.

Whilethesethreepartnershipsspeakvolumes,therecentlyannouncedintegrationwithSalesforcespeakstheloudestintermsofAcumatica’sopennessanditswillingnesstolistentoitscustomers.Acumaticaalsoprovidescustomerrelationshipmanagement(CRM),soobviouslyitsfirstchoiceistoincludethisoffering.Butinthiscase,integrationtoSalesforceCRMisindirectresponsetocustomerdemand.

MicrosoftisalsoanimportantpartnerresultinginaCRMpluginforOutlook,whichputsabuttonrightinyourMicrosoftOutlooktoolbarthatallowsyoutoeasilyaddanewperson(prospect?)toAcumaticaCRMuponfirstcontact.AndthenthereisintegrationtoMicrosoft’sPowerBIforpowerfulvisualizationanddataanalysis.Insteadofanarm’slengthinterfaceandmultipledownloads,AcumaticaissimplyaddedasadatasourcetoPowerBI.

Andfinally,Acumaticaisworkingwithaselectgroupofpartnerstopushitscustomersalongintermsofdigitaltransformation.MintJutrasapplaudsthisgentlepush.The2016MintJutrasEnterpriseSolutionStudyfound84%ofparticipantsagreethatdigitaltechnologieshavethepotentialoffundamentallychangingthewaywedobusinessand88%agreethatembracingdigitaltechnologiesisnecessaryforsurvival.Yetwealsofoundthat77%to89%stillrelyatleastinpartonspreadsheets,orevenworse,paperandmanualprocesses,toperformbasicactivities(Table1).Sothispushisindeednecessaryinmanyinstances.

Table1:Towhatextentaretheseactivitiesperformed/manageddigitally?

Source: Mint Jutras 2016 Enterprise Solution Study

Data Source Inthisreport,MintJutrasreferencesdatacollectedfromits2016EnterpriseSolutionStudy,investigatinggoals,challenges,statusandperformanceofsoftwareusedtorunabusiness.

Atotalof525responseswerecollectedfromcompaniesacrossabroadrangeofindustries,rangingfromverysmalltoverylargeenterprises.

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Acumaticaislookingtopushtheboundariesonseveralfronts,activelyinvestigatingawiderangeofoptionsincludingBlockchaintechnology,machinelearning,botsandanaturallanguageinterfaceusinganAmazonEchodevice.Thecompanyhasgonesofarastoproduceprototypedemosofeach.ButthepartnershipwithAbbyyCloudisperhapstheoneclosesttofruition.

AbbyyCloudprovidesopticalcharacterrecognition(OCR),documentcaptureandlanguagesoftwareintendedtosimplifyconvertingpaperdocumentstodigitaldata.IfAcumaticacustomersreceivepurchaseordersand/orsupplierinvoicesinpdfformatviaemail,theycanautomatethesubsequentmanualentryintoAcumatica.WiththeembeddedartificialintelligenceandmachinelearningcapabilitiesofAbbyyCloud,thetransformationintodigitaldataisnotonlyautomated,butbecomescleanerandmoreefficientveryquicklyasit“learns.”

COLLABORATINGWITHCUSTOMERSASWELLWhiletheseforaysintodigitaltechnologiesareAcumaticainitiativesthatshouldservetoeducateandinspirecustomers,italsokeepsaseartothegroundintermsoflisteningtowhatcustomerswantandneednow.Andthatrelationshipwiththecustomerisgettingstronger.Whilecustomersoftenusepartnersastheirfirstlineofsupport,Acumaticaalsooffersapremiumsupportpackage,wherebythecustomercangetsupportdirectlyfromAcumatica.AndnowAcumaticaistakingthatonestepfurtherandbundlingdirectsupportintothelicenseorsubscription(Acumaticaoffersmultipledeploymentoptions:on-premise,publicorprivatecloud)forthefirstyearatnoadditionalcharge.

CustomersarealsostronglyencouragedtousetheAcumaticacustomerportaltorequestenhancements.Acumaticausesthissitetogaugeinterest,allowingcustomersto“vote”onrequests.WhenAcumaticamakesachangetothesoftwareasaresult,therequestismarkedas“shipped”andallthosewhovotedontheenhancementgetanemailnotifyingthemofthechange.

ThisishappeningmoreandmorefrequentlythesedayssinceAcumaticaintroduceditsoptional“continuousreleasecycle”featuringbi-weeklyupdates.Ofcoursethisisreallyonlyfeasibleforthoseoperatinginthepubliccloud,whichiswhyitisoptional.Thisisofferedinadditiontothelong-termsupportoptionpreviouslyoffered,givingcustomersachoiceastowhichupgradeprocessbestfitstheirbusinessneeds.Butitalsoprovidesaddedincentivetocustomerstomoveinthisdirection.Thosewhochoosetostayontheoldprogramwillnotbeabletoimmediatelytakeadvantageofthenewfeaturesastheyareintroduced.

CLOUDPLAYSAKEYROLEAcumatica’scontinuousreleasecycleisnottheonlybenefitcustomersrealizebyoperatinginthecloud.MintJutrashasbeentrackingperceptionsand

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preferencesfordifferentdeploymentoptionsforyearsnow,alongwiththeanticipatedbenefitsandthoseactuallyrealized.MintJutrashaslongbeenafanofclouddeployment,longbeforecloudandSaaSbecamewellaccepted.WehavewatchedasmoreandmoreofourresearchparticipantsarewillingtoconsiderSaaSandfewerandfeweraredrawntoatraditionallicensedmodel.In2013weobservedalargedropininterestinon-premisesolutions.Beginningin2015,SoftwareasaService(SaaS)hasbeenthedeploymentoptionmostwidelyconsideredfornewpurchases(Figure1)andveryearlyresultsfromour2017studycontinuesthistrendwith67%willingtoconsiderSaaSand51%selectingthisdeploymentoptionastheirfirstchoice(newquestionin2017).

Figure1:Ifyouweretoselectasystemtoday,whichdeploymentoptionswouldyouconsider(Selectallthatapply)?

Source: Mint Jutras Enterprise Solution Studies

WhileAcumaticahasbeenengineeredinthecloud,thecompanyoffersallofthesedifferentoptions.SaaSisequivalenttoitspubliccloudoption,whileitsprivatecloudoptionisreallyequivalenttoahostedenvironment.ButAcumaticacustomerscanalsolicenseanddeploythesoftwareonpremise.Thosethatchooseon-premisebutextendorsurroundthesolutionwithSaaS-onlysolutionsarerunninghybridenvironments.

InsomewaysAcumaticacustomersfollowthistrend,withfewerandfeweroptingforon-premisedeployments.However,intheAcumaticainstalledbasethereisstillastrongpreferenceforprivateclouds.MintJutraswouldcautionthosethatfeelaprivatecloudismoreflexibleandagiletoconsiderthis:Allofthecustomizationsthatcanbebuiltinaprivatecloud,usingthexRPplatform,canalsobebuiltinAWS,whichiswhereAcumaticadeliversitspubliccloudversion.Andwhichisultimatelymorescalable?Yourowndatacenter,thatofapartner’sorthemassiveresource-richenvironmentofAWS?Wherewillyougetimmediateandautomaticroll-overintheeventofanaturalorman-madedisaster?Andwherewillyouhavetheoptionofacontinuousreleasecycle?

Cloud versus SaaS

Cloudreferstoaccesstocomputing,software,storageofdataoveranetwork(generallytheInternet.)Youmaypurchasealicenseforthesoftwareandinstallitonyourowncomputersorthoseownedandmanagedbyanothercompany,butyouraccessisthroughtheInternetandthereforethroughthe“cloud,”whetherprivateorpublic.

SaaSisexactlywhatisimpliedbywhattheacronymstandsfor:SoftwareasaService.Softwareisdeliveredonlyasaservice.ItisnotdeliveredonaCDorothermediatobeloadedonyourown(oranother’s)computer.ItisaccessedovertheInternetandisgenerallypaidforonasubscriptionbasis.

Usingthesedefinitions,wecanconfidentlysayallSaaSiscloudcomputing,butnotallcloudcomputingisSaaS.

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MintJutrasresearchtheappealofSaaSgrowingeachyear.AndwhenwecomparetheanticipatedbenefitsofSaaSandthoseactuallyrealized,wefindSaaSisgenerallydeliveringmorebenefitsthananticipated(Table2).

Table2:AnticipatedversusRealizedBenefitsofSaaS?

Source: Mint Jutras 2016 Enterprise Solution Study

Thesingleexceptionisinanticipatingthereducedcostandeffortofupgrades,butweattributethistoanexceptionallyhighpercentageanticipatingthisasabenefitin2016,muchhigherthaninprioryears.

Table2isactuallyacompilationofanswerstotwodifferent(butverysimilar)questions.ThefirstwasposedtothosenotrunningSaaS(thereforeanticipatingthebenefits)andthesecondtothoserunningSaaS.ThequestionsonITstaffingwereslightlydifferent;hencenocomparisonispresented.

Basedonexperienceandthesesurveyresults,MintJutraswouldsuggestsomeoftheAcumaticacustomersrunninginprivatecloudsmightexperienceevenmorevaluethroughmovingtoapubliccloud.Andwewouldstronglyrecommendanyrunningon-premisetomovetothecloud.

CONCLUSIONANDRECOMMENDATIONSManycompanies,particularlySMBs,strugglewithahodgepodgeofdisparateanddisconnectedsolutions.Theytakevaluabletimeawayfromrunningandgrowingtheirbusinessestodealwiththesesystemsandyetgetlittleinreturn.Inshort,theyneedtoreplacethoseexistingsystemsandmoreandmorecompaniestodayofallsizesseekacomplete,end-to-endsolution.Theyneedagoodfit,alotoffunctionality,andtheabilitytotailorandcustomizetodifferentiatetheirbusinesses.Andiftheygointoanewselectionwiththeir

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eyeswideopentheyrealizetherequirementstheyhavetodaywillchangeovertimeastheirbusinessesgrowandevolve.

Ifyoufindyourselfinthisposition,searchingforthatsolutionthatwillgrowandchangewithyou,weofferthefollowingrecommendations:

• Lookforasolutionthatmeetsthelion’sshareofyourfunctionalneedstoday.Fitandfunctionalityandcompletenessofsolutionarestillofprimaryimportance.

• Iftherearefeaturesandfunctionsmissing,beforeyoureinventthewheel,lookfirsttoseeifacomplementarysolutionexists.Thenlooktoseeifintegrationisavailableandifso,isitseamless.Aclumsy,arms-lengthinterfaceissometimesworsethannone.Arethetwovendorsevenonspeakingterms?Aretheypartners?AndistheERPsolution“open”tocomplementarysolutions.

• Ifyoufindyouneedcustomizations,askyourselfiftheywillprovideyouwithdifferentiationinyourmarket.Ifnot,considereliminatingtheminfavorofusingstandardfunctions.Ifyes,canyouaddthemwithoutbuildingbarrierstoconsuminginnovationyoursolutionprovideroffers?You’repayingforit.Youmightaswelluseit.

• Lookforastrongpartnercommunity.Thatisatestamenttothesolutionprovidersrelationshipbuildingcapabilitiesinadditiontoatestamenttoitsdevelopmentplatform.

• ConsideraSaaSdeployment.Aprivatecloudbringsyoumuchofthebenefits(e.g.lowercosts,includingthecostofobsolescence,reduceeffortofupgrade,accessanytime,fromanywhere),butapubliccloudcanbringyouadditionalinnovation,faster.

• Andfinally…lookforopenness,collaboration,andinnovationtoacceleratebothyourimplementationaswellasyourbusiness.

Acumaticahasbuiltitsbusinessaroundtheseabilities.Itmightbeagoodplacetostart.

Abouttheauthor:CindyJutrasisawidelyrecognizedexpertinanalyzingtheimpactofenterpriseapplicationsonbusinessperformance.Utilizingover40yearsofcorporateexperienceandspecificexpertiseinmanufacturing,supplychain,customerserviceandbusinessperformancemanagement,Cindyhasspentthepast11yearsbenchmarkingtheperformanceofsoftwaresolutionsinthecontextofthebusinessbenefitsoftechnology.In2011CindyfoundedMintJutrasLLC(www.mintjutras.com),specializinginanalyzingandcommunicatingthebusinessvalueenterpriseapplicationsbringtotheenterprise.