Cloud And SaaS Have Not Made Companies More Alike
By Erik Damgaard, CEO Uniconta
When I decided to develop a modern Cloud-based ERP system, I knew that companies are very different. They need industry features and functionality that supports their specific way of doing business.
By the late 1980s, I had discovered the importance of making ERP software flexible. In this context, flexibility meant that the software could be configured with new or customized screen layouts, data fields, labels, tables, computations and menus.
Each time we added that type of configurability, our resellers immediately used it to develop industry features and customizations. With the launch of Concorde XAL in 1991, Damgaard Data were among the first in the world to launch ERP systems with a complete SDK (Software Development Kit).
When Concorde XAL, C5 and AXAPTA* became such huge successes, it was due to two critical factors:
- Businesses were not alike and had vastly different needs
- Resellers could add value by meeting these needs
The resellers, who were very close to their customers, were often met with a long wish list that our otherwise comprehensive standard products could not fulfil. With the SDK toolbox, resellers could now develop the features themselves and thus quickly accommodate the customers’ requests. The customers got their needs covered, and it was a profitable activity for the resellers.
Many resellers discovered that they could develop new modules that an entire industry needed. Alongside their first customers, they invested in the development and then the product could be more easily sold to other companies in the same segment. Eventually, the resellers’ combination of industry insight and product knowledge was highly sought after by the customers.
The Other Side Of The Coin
Industry and customized solutions added tremendous value to the customers, but it was costly to keep them up to date. If customers were to benefit from the advancements in IT technology and the functions of new versions of our software, they would need to upgrade their solutions continually. If they did not need any of the new features, it might seem like an unnecessary cost.
Thus, many customized solutions were not upgraded, and an update eventually grew into an extensive and costly affair.
One Size Still Does Not Fit All
The flexibility disappeared as the ERP industry went from the prepaid perpetual license format (on-premises) to SaaS (subscriptions) in the Cloud. The first SaaS solutions were launched in the SoHo (Small Office Home Office) segment of the market, where the need for customization is small. They were sold directly to customers without the involvement of resellers. The software suppliers made a big deal out of the fact that the solutions were standardized, and it also nicely matched the market where they operated.
In the early 2010s, the larger and slightly more complex companies became interested in Cloud solutions.
They were tempted to avoid having to operate the IT systems themselves, but the standard functionality offered was not sufficient. Therefore, many chose to continue with their on-premises solutions. Today, most of the solutions that ERP companies have provided software for still run on the customers’ computers.
Uniconta is The Flexible ERP System in the Cloud
When I initially thought about developing a modern Cloud-based ERP system, I knew that companies are very different and need features that suit their industry and their specific way of doing business.
What companies want to get rid of is the internal IT operations and the costs of the ongoing upgrades. What they want to achieve is to be able to benefit from the technological development continuously. However, they can only switch from an on-premise solution to SaaS if the ERP product can meet their specific needs.
However, the way we ensure flexibility today is entirely different from the SDKs of yesterday.
The Goal Is The Same, But The Means Are Different
When a travel agency sells a holiday package, they need to create and store a variety of special information. Name of hotels, room types, hospitality packages, smoker/non-smoker, participant lists, and travel plans are just some of the information that needs to be linked to their products and customers.
When booking flights and hotels, it is done through external services with which Uniconta must communicate.
When a customer sells particularly hazardous materials, it must be possible to attach safety regulations and certificates to a product or product group. Transport method and deviation reports must be filed.
In Uniconta, we solve such and thousands of other assignments by making it possible to create customer-specific screen layouts, data fields, labels (own texts), tables, computations and menus, all integrating with external services and apps.
The range of special needs associated with data that already exists in the financial system is endless. Therefore, the need for customer- and industry-specific solutions has not changed, but the way we deliver them has.
Compared to earlier systems, there is more integration and setup work and less actual programming. Uniconta has more than 100 standard integrations for BI programs, payment services, e.commerce, logistics suppliers, CRM systems, POS terminals, document management, production planning, task management, EDI, payroll, inventory management and many more.
If new functionality is to be developed, it can be done with .NET in Microsoft Visual Studio and linked to Uniconta with a standard DLL. The advantage is that the program can be executed by and within Uniconta and that the functionality can be made available from our menus.
Uniconta is also PIM, CRM, MRP, And More
In any company, there are data and functions attached to the same information that we store in the ERP system. The need for additional features can often be accommodated by creating a set of new data fields and customizing or creating a couple of new screen layouts. The advantage for the customer is that data is only stored in one place and that the IT support of the business process can be implemented quickly and at a very modest cost.
Many companies prefer this solution compared to having to procure, implement and integrate a separate IT system for the task.
With our development tools, many of our customers have, for example, expanded their product catalogue to become a complete PIM system (Product Information Management). Especially within retail and e-commerce, it is a significant advantage to have product information and variant management in one place. As one of our resellers says, “PIM systems only exist because customers have acquired an inflexible ERP system.”
I am not arguing that Uniconta should cover all the company’s IT needs. That’s why we, as mentioned earlier, also integrate into many external solutions. Nevertheless, most needs can be met with a couple of customizations or a small addon module, which is always the faster and inexpensive solution.
The Reseller Model Is Still Popular
Although customers also have access to the customization tools, the vast majority choose to let the experts do the work.
It makes no sense that our software, by default, should cover all needs across all industries. We develop software and tools while resellers take care of industry solutions, customizations and bespoke integrations. In this way, Uniconta is the foundation for a consulting business that both resellers and customers greatly appreciate.
Customers still prefer that their ERP supplier understands their business and can quickly implement the unique customizations that make their everyday life easier. Therefore, the business partner model, which Damgaard introduced in the 1980s, is still prevalent.
*Damgaard Axapta is currently marketed as Microsoft Dynamics 365 for Finance and Operations.