Make smart and accurate
software selection decisions
Podcasts, Webinars, and Videos
Interactive Case Studies
ERGO Decision Support System
Private Label Partnerships
TEC Case Studies
Software Evaluation Reports
Meet TEC's Experts
News and Press Releases
Working at TEC
Partner with TEC
UNIT4: The (Largely) Untold Story - Part 1
UNIT4: The (Largely) Untold Story - Part 1
February and bleak mid-winters are not exactly the high season for software user conferences in North America, and thus I accepted the invitation by
Unit 4 Agresso
), the second-largest business applications provider in continental Europe
, to i
ts UK 2010 user conference
. The attraction, in addition to
Celtic Manor Resort
in lush South Wales as the venue (where the
2010 Ryder Cup
will take place later this year
), was the fact that this was, for the first time, a unified event for both
Agresso Business World (ABW)
customers (and customers of many other lesser-known products in the large UNIT4 family).
Frankly, I was a bit skeptical about what new and exciting I might see and hear about at this event in light of the vendor’s analyst tour in Boston in late 2009. Even that very recent analyst tour did not present any earth-shattering news compared to what I had already ascertained in my
mid-2009 report on positioning of
, CODA, and
within Unit 4 Agresso.
Change Remains the Only Constant
Sure, at that event we all learned about another survey with sobering results that purported what UNIT4 has been successfully preaching for last several years: the end-user's need to easily change their
enterprise resource planning (ERP)
systems. To that end, a new white paper from
featured the experiences of 214 executives from mid-sized businesses, who reported a major failing in the technology infrastructure that companies have often spent millions of dollars to implement.
The survey, sponsored by Agresso (UNIT4’s North American subsidiary) found that today's ERP systems are not providing businesses with the architectural agility necessary to support businesses adequately in today's high-change, global environment. IDC’s 2009 survey
“Modifying and Maintaining ERP Systems: The High Cost of Business Disruption”
showed that substantial business disruption occurs to most ERP solutions in the following cases: business process change, financial management change, company reorganization/restructuring, mergers and acquisitions (M&A), or new regulatory requirements.
The longer it takes to make a financial software change, the greater the disruptive impact to the organization. At the event, we learned about the following reported staggering costs of business disruption when a deployed ERP system is not architected for continual change: 20.9 percent decline in stock price, 16.6 percent customer satisfaction erosion, and 14.3 percent lost revenues.
This survey followed closely on the heels of the two predecessor surveys on the “ERP change” theme. In early 2008, a survey of nearly 900 users by
(some shameless plugging here), which aimed to determine the impact of ERP solutions on an organization’s perceived ability to make changes,
reported that 70 percent of ERP users felt notably disadvantaged by their existing systems. Subsequently, TEC prepared a report detailing the ability of different ERP vendors to manage a comprehensive list of business change scenarios
An analysis of these results showed the sizeable advantage ABW offers to companies facing change. Namely, Agresso users were able to expedite required changes to their ERP solution, largely at the non-invasive
graphical user interface (GUI)
level, to support over 95 percent of the change areas studied. At that time,
systems required invasive application development (i.e.,
-level programming) conducted by external IT consultants to support more than 95 per cent of these changes.
Then, at the end of 2008,
announced the research results from a survey of 157 senior finance executives, examining ongoing ERP system ownership costs. A key finding of the report entitled
“The High Cost of Change for ERP”
revealed that the continuing costs to an organization to keep its ERP system in line with its business can be substantial, especially after the system is customized and installed (up to over $1.24 million annually).
All three surveys agree that a proper evaluation of ERP solutions must not ignore the ability to manage change, or companies risk overlooking significant
total cost of ownership (TCO)
. During the Boston analyst tour, the vendor forewarned us to watch for another survey in early 2010 whereby UNIT4 customers will calculate their cost of change.
UNIT4 end user-based r
esults were just announced in mid-March
. Comparing the results of the abovementioned two surveys that UNIT4 conducted over the past 12 months via outside research companies, changes to ABW reportedly take half the time (or less) required by other ERP system users.
Dispersing Any Clouds over CODA’s Future
To be fair, the Boston tour did shed some light on one salient issue for me, at least. Namely, in the fall of 2009, UNIT4’s on-demand venture,
CODA 2go, evolved into
, backed by both UNIT4 and
. The spin-off joint venture combines CODA’s 30 years of designing and building financial applications with Salesforce.com’s cloud computing development platform,
UNIT4 and Salesforce.com plan to deliver a range of
applications, starting with
– an international
accounting application, delivered on a subscription basis from US$175 per user per month. When deployed in conjunction with
Sales Cloud 2
), clients are provided with an integrated/unified
, and the ability to leverage Force.com’s strong customization, visualization (reporting and dashboard), and workflow capabilities.
My initial quandary about this joint venture was about what all this might mean to the
CODA offerings. Namely, the apparent statements of commitment by both UNIT4 and Salesforce.com, and the fact that CODA’s Chairman Jeremy Roche took the helm of the new SaaS accounting start-up (bringing along several former CODA staffers), made me initially think that CODA’s importance within UNIT4 might now be de-emphasized.
Indeed, Salesforce.com’s minority investment and especially the FinancialForce.com name (i.e., Salesforce.com has also contributed the vaunted and jealously protected “force.com” name and the URL rights to the new company) means that the new SaaS solution has the clear endorsement of Salesforce.com. Not counting its
offering for startups
, I believe this is the first third-party application in which Salesforce.com has invested; the vendor has invested in some services partners, but not in applications
Is Salesforce.com Warming Up to SaaS Accounting?
It is also a key signal that Salesforce.com is putting its weight behind SaaS accounting as a market, which has not long been the case. Not that long ago I remember the vendor’s senior executive telling me how
’s strategic error might be its attempt to offer on-demand
, since “bean-counters will not easily jump on the SaaS bandwagon.”
Indeed, the SaaS CRM pioneer and leader has long stayed away from the market for finance and accounting applications and solutions, as one of the toughest markets to crack. Not only is it one of the most highly penetrated software segments, but its current offerings are also functionally mature and on-par, if not even commoditized. Additionally, the target purse-holders (CFOs and controllers) typically have very conservative mindsets and feel uneasy about having their
and other related data kept outside the firewall.
These folks also regard any deployment decision that would either negatively impact the ability of a company to manage its financials or render them superfluous as career threatening. For the above reasons, the axiom “if it ain’t broke, don’t fix it” has been particularly true.
But these traditional mindsets and market dynamics have lately begun to change. In my previous blog post I analyzed the stratification of CFOs and controllers into the two distinct gr
oups: tactical bean-counters and a new breed of strategic CFOs and controllers
This distinction especially applies to addressing broader organizational mandates that have emerged, such as compliance and business strategy. Strategic CFOs are moving well beyond merely mitigating risks towards managing them proactively across a competitive environment.
Modern CFOs must manage risks and business performance beyond the company’s four walls, encompassing business partners and the value chain, competitors, prospects, and customers. To that end, SaaS lends itself well as an enabling technology to accomplish these objectives. The recent
“Accountants Head to the Cloud”
conveys that sentiment, while the
entry lists a number of articles that purport the rise of strategic CFOs
In fact, no longer are installed on-premise finance management and accounting solutions considered safe from the strong encroachment of SaaS peers. If one adds onto all that
’s estimate that the SaaS market would reach $8 billion in 2009, a 21.9 percent increase from 2008 revenue of US$6.6 billion, no wonder that Salesforce.com has increased its interest in SaaS accounting (and likely in other applications down the track).
Part 2 of this series will focus on FinancialForce.com’s strengths and potential challenges and on its on-premise step-sibling CODA’s recent developments. Your comments and opinions about post-implementation agility and UNIT4’s diversified strategy are welcome in the meantime. To be more precise, how crucial are a system’s inherent agility and
as well as SaaS capabilities in your evaluation efforts?
comments powered by Disqus.
comments powered by
Interested in a better way to make software decisions?
Give us a call now: 1-800-496-1303 ext:404
Software Requirements Sets and Comparison Reports
Click here to leverage the experience of our 360 industry perspective