The series of articles where Technology Evaluation Centers (TEC) asks vendors to provide their input on a number of market trends has received much attention and reaction from readers and vendors. Infor and IFS were the first to respond (see Two Stalwart Vendors Discuss Market Trends), followed by Progress Software (see Open Platform Provider Answers Questions about the State of the Market), xTuple (see A Semi-open Source Vendor Discusses Market Trends), The Sage Group (see A Traditional “Local Touch” Leader Espouses a More Global Vision), and back again to IFS (see Playing Devil’s Advocate with an Innovative Vendor’s “Techies”).
The last one to join the discussion is UNIT4 (formerly Unit 4 Agresso), which is headquartered in Sliedrecht, the Netherlands and was founded in 1980. Today, UNIT4 develops, sells, implements, and supports business software for running, managing, and optimizing a wide range of private and public sector organizations across the globe. The company has 3,500 employees in offices across 14 European countries and five countries outside Europe, from where it supports about 100,000 customers (in part via partners) in all regions of the world.
UNIT4 is continental Europe's second largest enterprise resource planning (ERP) developer (after SAP), with the following two major products: Agresso Business World (ABW) and CODA-Financials. The company is publicly traded on the NYSE Euronext Amsterdam under the U4AGR ticker symbol.
For more information on UNIT4’s recent moves and philosophy, see the following TEC article series:
• Agresso Bucks the Slump (and Fights the “ERP Madness”) – Part 2
• Agresso + CODA, VITA + Link (+ CODA 2go): What’s the Sum? – Part 2
Most recently, the vendor had a global re-branding under the “UNIT4” for umbrella brand and conducted its user conference in the United Kingdom (UK). We attended this conference, which was the first time a conference was held for both its Agresso and CODA users. For more information on the UK event, see the recent TEC article series. For more information on UNIT4’s announcements at the recent Grape Escape 2010 event in Boston see Grape Escape 2010: Of Cloud & Angels, Fun & Games, and “In Vino Veritas” – Part 1.
Instead of giving a ringing endorsement or criticism on UNIT4's moves and directions, we decided to pose a number of provocative questions to the vendor. The answers were provided by Ton Dobbe, Vice President (VP) of Product Marketing for UNIT4’s international flagship products except for FinancialForce.com (which is the joint “cloud accounting” venture between UNIT4 and Salesforce.com).
TEC’s Questions and UNIT4’s Answers:
Q1. How is Agresso Field Force doing (see here for more information on the product)? At the conference, your chief executive officer (CEO) said that it has been sold in four countries, and is a specific solution that sells only in some specific organizations; what is the product’s "sweet spot"?
TD (UNIT4): Agresso Field Force is now being actively sold in the following four countries (regions): Sweden, Norway, the UK, and North America. We have sold it successfully in both the private and public sector. Amongst the recent successes were Herefordshire Council (Local Government), Penspen Ltd (Engineering), El & Industrimontage AB (Construction), Jämtkraft AB (Energy), Skolfastigheter AB (Property Management) and Crista Ministries (Not for Profit) in the Seattle area where they use it to maintain their premises (buildings, camps, schools etc.).
We continue to see that the product fits commercial businesses (who maintain properties for others) and public businesses (who maintain their own assets). The current number of customers has gone up to approximately 80. New functionality is coming in ABW version 5.6, which is due at the end of this year and will focus on usability, billing, self-service, and more.
Q2. How is Agresso CRM doing (coming from the acquisition of CCS, see Agile ERP Vendor Ditches a Microsoft Dynamics CRM Alliance for, well, its own CRM Solution [Part II])? Your CEO said that it sells better than Agresso Field Force since it is generic, but I suspect not nearly as great as Microsoft Dynamics CRM (which reportedly grew 40 percent in revenues in 2009, see Microsoft Dynamics CRM: Much More Than Meets the Eye – Part 2). I was told that in the UK education sector, Agresso partners with Microsoft for CRM, which has been an awful market for UNIT4 in 2009 anyway (in addition to the bad economy globally).
TD (UNIT4): Let me phrase this differently: Agresso CRM is indeed an easier sell than Field Force since it is more generic. It has continued to sell well in Spain and we have a growing (albeit slowly) number of customers outside of Spain (i.e., in France, the Netherlands, and Portugal).
The announcement of diving into customer relationship management (CRM) came at an unfortunate point though where the market started to get worse. This is the key reason why some country offices have decided not to touch it since selling CRM requires a completely different approach then selling finance, accounting, project management, or field service solutions.
The end of 2008 and 2009 was all about "do what you are best at"—so we didn’t push for further international adoption. Having said that, the development has moved on and the product is mimicking the ABW user interface (UI) now and has seen continued efforts related to integration.
Q3. UNIT4 was quite upbeat at its recent UK user conference about UNIT4 Collaboration Software Ltd (formerly Business Collaborator Ltd), which CODA initially acquired (but did not do much with), whereas UNIT4 has embraced it quite well (apparently by using it internally). What does it do, and what is so special about the product?
TD (UNIT4): Business Collaborator is indeed an acquired product from the time CODA was still independent. It is successful in the UK and it sells to the engineering space (e.g., Halcrow is using it successfully and strategically in conjunction with ABW). The offering is a strong contender as an extranet solution that fundamentally covers the environment to share documents and discussions.
I would not compare it to Microsoft SharePoint though. UNIT4 Collaboration Software is all about working with various external stakeholders that all have a key role in a project (e.g., the mega development project of the Dubai Palm Islands. So, it is about sharing of drawings, contracts, instructions, and what have you, all in a secure way, between organizations that all run their own part of the project.
Q4. There seems to be a variety of product flavors for education: QL Student (from former Distinction Systems) in the UK and then also an Agresso-based product in North America. What's the difference (in terms of who uses them and for what)?
TD (UNIT4): Indeed. Agresso UK has always been very successful selling into the university education market, but without touching the core business, i.e. student administration. Conversely, the North American subsidiary saw the requirement to respond to tenders with an integrated Financials and Student Management suite way earlier in the US market. That's why they developed Agresso EMS (Education Management System).
The UK subsidiary has looked at that integration several times, but never got to sell it mainly due to the very different local rules (e.g., around privacy and how students apply and get selected for a university). Three years ago we realized that we had to protect our position in the UK Higher Education market and we also wanted to get a stake in the Further Education market.
That's when we bought Distinction, which was the dominant player in the Further Education market and had a Finance system, QL Finance (QLF) and a Student Management system QL Student (QLS). The latter product was brought to market together with the CRM for Education module, with Microsoft Dynamics CRM as the engine underneath with a specialty education layer on top of it. The QLS system is being delivered with Agresso Business World as a plug-in solution.
In summary, two different regions have two different approaches up to now. I think this will change over time, but when and how has not been decided yet.
Q5. There was hardly any talk about the Agresso Talent Management offering at the UK conference. I’ve noticed that sometimes product offerings for UNIT4 seem to be promoted or not promoted locally; i.e. as with Agresso CRM and Field Force product. Why is that?
TD (UNIT4): At a corporate/global level, our policy is to prioritize and deliver solutions based on the requests voiced by our individual country operations. In some cases, there is a large immediate demand/opportunity in one country, with the potential for that demand to spread to other countries. The individual country management has the latitude to assess where their best product/sales opportunities are, and to introduce, promote and train their localized resources accordingly. Agresso Talent Management is actively developed and sold in collaboration with other subsidiaries both as a best-of-breed as well as an integrated solution with Agresso. At the moment, Talent Management has close to 50 mid-sized to large national and international customers (added 10 last year), whereby eight are integrated to ABW.
Q6. The so-called “Project X2”—is it about these role-based UI and for ABW only, or for all UNIT4 products?
TD (UNIT4): It’s actually much more than that. The key goal we have with “Project X2” is redefining ERP user experience and consequently the project is aimed at identifying key concepts of how users work and how we can build software solutions that are focused on doing some key tasks fundamentally better than anyone else in the market. The first target for the outcome is ABW, however, the knowledge we have gained is going to be shared with other development teams in our group and will therefore showcase (over time) in other solutions as well.
We are on schedule to unveil/launch the X2 project in early 2012. Meanwhile we are finalizing the release of ABW 5.6 where the major research and development (R&D) themes are as follows: Reach, Usability, and Functionality. Some concrete ABW 5.6 upcoming features are: type-ahead, dynamic role-based information pages, generic drag and drop, product search, commitment accounting, etc.
Q7. There was a somewhat confusing and unclear message about the UNIT4 umbrella name and about fostering/embracing change. Namely, according to the CEO, "UNIT4" was to signal to the market that you are a single large company rather than being recognized by any individual product/brand (e.g., Agresso, CODA, CCS, KIRP, etc.). On the other hand, all UNIT4 executives kept talking about was providing a future platform for all your products (and even the third-party products) but were adamantly against some imposed convergence of products (a la Oracle Fusion Applications) and were pointing out the importance of support revenues from legacy customers/products. Can you perhaps make sense out of what they are talking about (a bit conflicting, eating the cake and having it)?
TD (UNIT4): UNIT 4 is the umbrella name. Marketing-wise, we all invest our Dollars, Euros, Pounds, etc. into one brand (rather than into 20), and in one position statement (i.e., Embracing Change). When we do new acquisitions, they will all be called UNIT4.
Having said that, we continue to have different solutions. Agresso and CODA are our strategic international suites. These platforms remain our flagship solutions for Businesses Living IN Change (BLINC) ™.
Q8. UNIT4 executives praised CODA for a great performance of late, why? Is it because the public sector is frozen across the European Union (EU) for Agresso, while the private sector is slowly recovering for CODA-Financials?
TD (UNIT4): This has to do with the following two phenomena:
1. CODA has always been very good in making sound profits (i.e., financial performance).
2. CODA sales have seen a jump in the latter part of the year (see the press release [December 2009]) since the organizations that needed to take control of their finances decided not to postpone investments, but rather buy CODA.
Q9. Any idea how CODA-Control Manager is doing and where it is selling?
TD (UNIT4): Control Manager has been sold by a number of countries that made an effort out of selling solutions around governance, risk management, and compliance (GRC). Control Manager has fundamentally been designed to help organizations control processes (typically manual) that impact the financial processes from the outside. It's a toolbox and is therefore used at customers that have a particular business case.
Typically, that case is always something else, idiosyncratic. Some countries have therefore productized the solution to address one particular issue (and make an easier sell). We are now changing strategies. Control Manager is a fundamental part of the total concept (LINK architecture if you want) and will come with every CODA deal.
This approach adds to the differentiation and is used best for addressing smaller challenges and requirements to keep an organization in control while implementing a best-of-breed strategy (i.e., corporate financials integrated to many other solutions). Control manager is the “control glue”—the CODA LINK architecture deals with the communication in/out.
Q10. At UNIT4’s UK conference I saw a number of independent software vendor (ISV) partners for procurement, imaging, electronic invoice processing and presentment (EIPP), etc. that I wasn't aware of in the US. Are you using solutions from Proactis, VersionOne, Image Integrators, etc. in Europe mainly, and why not in the US?
TD (UNIT4): Correct, Europe is Europe and the US is the US. The good thing in the US is that once you sell in the US, you sell everywhere. Europe is different, whereby a Norwegian vendor sells only in Norway and a Swedish vendor only in Sweden. Once they want to sell outside their borders it becomes a major obstacle in terms of language, local legal requirements, and so on.
So in Europe we typically have our local heroes. In UK we work with Hireserve for recruitment. In Scandinavia Stepstone is used. We have tried to introduce Alito (procurement sourcing) to Sweden and they didn’t even bother because it was easier to sell a local variant in that region.
Q11. As a bonus question, immediately after the UK conference, UNIT4 and International Business Systems (IBS) have agreed on the acquisition of IBS Consist by Unit 4. Any light to shed in this regard?
TD (UNIT4): There's IBS, the Sweden-based large provider of distribution resource management solutions, and IBS Consist, the Dutch subsidiary of IBS. We bought the Dutch subsidiary, which is a relatively small acquisition of customer base on an IBM System i (formerly AS/400) financials platform. If you are positing as to what this might mean—think of how well this AS/400 base could gradually be offered a transition to solutions such as CODA-Financials or FinancialForce.com.