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Agile ERP Vendor Ditches a Microsoft Dynamics CRM Alliance for, well,...
Agile ERP Vendor Ditches a Microsoft Dynamics CRM Alliance for, well, its own CRM Solution (Part I)
January 14 2008
Writing about failed partnerships in the enterprise applications market is like writing about the sun setting in the evening and to the west, given almost daily occurrences of vendors announcing alliances that never materialize. However, it doesn't happen every day that a potential high-profile alliance gets called off at the 11th hour and in favor of an overlooked in-house solution.
The protagonist of the story is enterprise resource planning (ERP) vendor
, which reported approximately US$225 million in revenue in 2006. Agresso is the primary operating business of the Netherlands-based
Unit 4 Agresso
(Dutch Stock Exchange EURONEXT-U4AGR) and has subsidiaries selling its ERP platforms (
Agresso Business World
and others) around the world. In aggregate, Agresso is one of the top five providers of ERP solutions for people-based businesses, i.e., professional services and public sector organizations (besides
Agresso targets businesses with over 500 and fewer than 5,000 employees, and has been the market leader in the United Kingdom (UK), Norway, and Swedish public sectors. The vendor has been thriving lately owing to the market drivers requiring post-implementation
agility within such rapidly changing people- and project-based business environments
. Some of these change-inducing drivers are:
The industry consolidation landscape (with constant acquisitions/divestments);
Ongoing organizational changes of direction due to compliance, accounting laws, obsolescence and so on;
Initial public offering (IPO) pursuers requiring "Best-Margin" practice;
Many public sectors pushing for "Best Value" for constituents ; and
Intensified "C-Level" executive turnover (i.e. according to the
CFO "Churn-O-Meter" article, there were 208 executive departures only in August 2007).
Although founded in 1980, and with nearly 2,900 employees, over 2,700 customers, 10,000 deployments and 1.5 million users in about 100 countries, Agresso is fighting aggressively to broaden its name recognition beyond European service industries.
In the last six months alone, a host of North America analyst firms (
IDC, Forrester, TechVentive
, etc.) have reported on or ranked Agresso based on both its global revenue surge and have taken notice of staggering growth stats in North America: 200 percent annual revenue growth, a, 370 percent surge in average deal size from new customers, 320 percent spike in qualified business leads, 40 percent increase in deals with an over $1 million value, about 30 percent year-over-year growth in new ERP deals (not re-sales/services), over 90 percent year-over-year growth in the $500,000-990,000 buyer market, and so on.
The overall Unit4Agresso corporation, of which Agresso is a major part (
estimates 65 percent or more), plans to grow to a $700 million company by 2010. One avenue to this ambitious target is via a continued accelerated organic growth, since the company has been growing organically at 40 percent or more in 2007 on the strength of its flagship ERP product line,
Agresso Business World 5.5
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], which was released with advanced features in late 2005. Over 2,700 companies and organizations in 100 countries deploy Agresso Business World for both operational support and strategic management.
The suite's role-based,
Web Services and Services-Oriented Architecture (SOA) enabled
solutions include: Financial Management, Human Resources (HR) and Payroll, Procurement Management, Project Costing and Billing, Reporting and Analytics and Business Process Automation (BPA). Industries that need these capabilities are governments, higher education, Not-For-Profits (NFPs), utilities, architecture, engineering and construction (A/E/C) bureaus, information technology (IT) services, real estate and other business service firms.
Since 2005, the company has been aiming its flagship ERP product exclusively at a fast-growing market segment that Agresso calls
Businesses Living IN Change[TM]
that require dynamic change features, especially after implementation). This post-implementation agility is enabled via Agresso's underlying
architecture, whereby Agresso is housed on a one-of-a-kind "outside-in" reversely engineered metadata model: data, business process and the delivery (reporting and analytics) are tightly coupled, move in lockstep and are focused outward.
In other words, while most other ERP vendors were initially concerned with ensuring fixed positions for inputting data into the ERP database (without much thought about how to extract it afterwards), Agresso rather designed its applications with the "extrovert" logical system of how to add, modify and, especially, easily retrieve any piece of data (even though their physical position in the database is not necessarily fixed).
In layman's terms, this is like a wardrobe, where we can arrange our clothes and know the exact position where certain items should always be (unless being worn or washed, which is a bad utilization of the space). Alternatively, we can have some effective logical system to know where to look for something when retrieving it or when adding a new item of clothing to the closet (even though these will not always be in the same physical location).
To that end, Agresso VITA's difference is a service
model-based data and architecture foundation
, with the focus of complete insulation of business logic from data. While unjustifiable physical changes in data are not allowed (for integrity and consistency sake), data is captured and coded by many attributes like Dimension (e.g., Name), Measurement (e.g. Salary), Time (e.g., Fixed or Within Range), and so on. This makes business change much easier (often with no required IT expertise), faster (often in an elegant drag-and-drop fashion) and more efficient (with no pesky data re-entry, re-checking, replication, and so on).
Agresso offers a closely integrated data/process/reports delivery architecture designed specifically for the above-mentioned BLINC environments. The vendor prides itself as "The ERP Market's Definition of Agility" as it allows an unlimited amount of ongoing, post-implementation changes without the typical external IT costs and interventions that can save pretty dollar amounts in revenue for the forward-thinking user enterprises.
Outside of the native architecture and the more recent Agresso Business World 5.5 release at the end of 2005, the company’s functional (product) footprint has not grown aggressively in recent years, although the company expects to add up to four new functional products in the
Governanace, Risk management & Compliance (GRC)
Human Capital Management (HCM)
and Financials realm in 2008 .
The most recent 2007 additions to the product footprint were
Agresso Field Force
in June 2007
, (please see an in-depth analysis of that product soon at TEC's site and newsletter) and in November 2007 Agresso announced the immediate availability of
, a customer relationship management (CRM) solution aimed specifically at the mid-market services sector that Agresso has addressed for more than 20 years. It is fully web based, and can run on multiple databases, operating systems, and stationery or mobile devices. Agresso CRM is being rolled out globally via either a standard, on-site license or
Agresso CRM is the first in a series of so-called "BLINC Solution Plug-Ins" to its native architecture, and the product will achieve integration into the Agresso Business World ERP suite similar to that of SOA platforms. Revenue from these BLINC Plug-Ins is critical to the Agresso parent company achieving the above mentioned ambitious $700 million revenue mark by year-end 2009.
Going back to the beginning of the story, Agresso's parent, Unit4Agresso in the Netherlands, initially evaluated a wide scope of global CRM partnership strategies, including an alliance with
. It was the original intention to partner with Microsoft who Agresso thought might come closest to meeting the CRM needs of mid-market, services organizations with
Microsoft Dynamics CRM
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Part II of this blog topic will analyze why Agresso had a last-minute change of heart. Your comments and opinions about post-implementation agility and Agresso' growth strategy are welcome in the meantime.
To be more precise, how crucial is a system's inherent agility in your evaluation efforts? Are rigid architectures, which entail deep (and painfully costly) modifications at the database and/or application server level in order to accommodate business changes (rather than on the user interface [UI] level in a drag-and-drop or point-and-click fashion), still and acceptable standard for you?
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