Acumatica may not be the biggest brand on the SMB ERP stage, but the 10-year old company is intent on heading into the spotlight. With ten years of experience in the market, and over 4,000 customers, Acumatica has built a solid presence across multiple industries, including manufacturing, distribution, retail and ecommerce, field service, professional services, and food and beverage (Figure 1).
At its September 11 2018 event, Acumatica provided us with a recap of its progress, highlights of its new 2018 R2 release, and a glimpse into its strategy for the future. Since you can read about the new 2018 R2 release here, I’ll focus on how Acumatica has grown, and on its trajectory for the future.
Phases One and Two: Growth, Partner Commitment, and a Focus on Keeping Customers Happy
Founded in 2008. Acumatica spent its first five years—which it calls Phase One—building its solution and reaching milestones for 100 installed base customers and $5 million in annual revenues. From the beginning, Acumatica developed its suite of integrated business management solutions, including financials, distribution, CRM, project accounting as a platform, not just as a collection of applications. The vendor also started with—and has stuck to—a partner-centric sales model.
Acumatica grew significantly in its next five years. In this second phase, the vendor’s installed base rose to 4,000 accounts, and annual revenues climbed to over $40 million, and its reseller network increased to over 400 partners. Notably ,Acumatica doesn’t charge partners a program fee, and offers them some of the best margins and terms in the industry. Acumatica’s commitment to Open API standards in the cloud ERP space has also helped it to attract over 150 ISV partners (Figure 2).
During this period, Acumatica signed six white label partners, including ACCEO, Censof, Lexware, MYOB, Senior Software and Visma. These partners have large installed bases of legacy ERP customers in their geographies, and are upgrading customers to their white-labelled Acumatica cloud offerings.
Acumatica has always offered customers a choice of both on-premises and cloud solutions. In the early years, many customers were reticent to go the cloud. Having an on-premises option allowed Acumatica to cast a wider net than would have been possible if it launched as a cloud-only ERP provider. In fact, 90% of its sales in its first year were for perpetual licenses.
But Acumatica has advocated the benefits of the cloud model from the get-go. As customers’ preferences for cloud ERP grew, Acumatica was ready to capitalize: Today, subscription sales account for 89% of Acumatica’s new sales.
Through the years, Acumatica has remained true to its SMB roots, with solutions designed to provide SMBs with a flexible enterprise ERP platform without enterprise bloat (Figure 3).
Last year, Acumatica introduced a new user interface, which is organized by workspaces to provide users with easy access to key KPIs. The new R2 release takes this a step further, giving users the ability to do things such as drill down into KPIs; create custom fields; enable push notifications across both smart phones and desktop interfaces; and create pop up notifications for contacts and accounts.
Customer experience has been a high priority for Acumatica from its inception. Acumatica has continued to differentiate against some of its rivals by including top-tier support and sandboxes in its standard subscription contracts. This steady focus on service has helped it to boost its Net Promoter Score (NPS) from -17 in the early days to +22 today—even as many of its competitors continue to languish in negative NPS territory.
Acumatica‘s industry strategy has also evolved. Today, Acumatica offers editions for large, must-have ERP verticals, such as advanced distribution and manufacturing, as well as some arguably underserved ones, such as field service and construction. It also offers a small business edition for businesses that have outgrown Intuit QuickBooks or other entry-level accounting solutions.
In spring 2018, Acumatica launched a construction edition, which is now live in over a dozen accounts. The vendor expects to onboard more than 50 construction accounts by year’s end.
What’s in Store for Phase Three
In June, Acumatica received a $25M cash infusion from Accell-KKR, which now has a minority stake in the business. Acumatica intends to use this to fuel aggressive Phase 3 growth goals, supported by several key initiatives, such as:
- Continued technology investments to improve usability, automate workflow and process automation, and develop deeper functionality in both horizontal modules (e.g. financials, CRM, project management, inventory, etc.) and in industry editions. Acumatica also plans to build cross industry workflow capabilities for customers that have businesses that straddle more than one industry—such as retail and distribution.
- Focusing on new technologies that can provide customers with fast time to value. These include IoT, RFID and AI and machine learning, and natural language processing (NLP). Acumatica is taking a best of breed, agnostic approach to AI and ML, and is focusing development on 3 areas: intelligent automation, interactive assistance and intelligent advisor services. The vendor plans to use these technologies to make its solutions run better and to add new capabilities to help its customers more closely connect with their own customers.
- Improving metrics tracking to provide customers with faster time to value when they go live, and more proactive and efficient support resolution throughout the solution life cycle.
- Raising brand awareness and ramping up lead generation. Acumatica will promote its vision of “empowering SMBs to deliver connected experiences and grow their businesses via intelligent, scalable technology,” launch more industry specific campaigns, and introduce new initiatives aimed at bringing CPAs and CFOs into its fold.
- Expanding channel enablement services to help partners build their pipelines, and to add their own IP and managed services on top of Acumatica solutions. The vendor has also set a goal of having new partners close their first deal in 120 days or less—which it supports with weekly presales, practice owner and sales consultant workshops. In addition, Acumatica is encouraging partners to hire marketers to help them generate more leads and close business more quickly.
- Build its customer community and connections with more training and events, free support and access to executives. Partners will be connected to these initiatives via Acumatica’s platform and customer portals.
- Growing its ISV partner network to provide customers with more of the horizontal, vertical, analytics and productivity capabilities that they want. Acumatica is building a more structured onboarding experience and a more rigorous application certification process for ISVs, and adding new tools to make it easier for them to keep their solutions current with Acumatica upgrades.
Acumatica has the basics covered, continually improving customer satisfaction metrics, usability and functionality with each new release. Meanwhile, the vendor’s pragmatic approach to new technology investments—hwhich is to help customers improve business processes and customer experience with minimal disruption to their businesses—is a winning one in the SMB market.
And make no mistake, in an industry in which many vendors are quick to pivot to large enterprises, Acumatica is staying true to its SMB roots. As it turns up the marketing volument, the vendor’s firm commitments to solution usability and value, transparent, growth-friendly pricing, and industry-specific solutions should help it to make the cut on more SMB shortlists.
Meanwhile, with most of its rivals now part of very large companies (Sage Intacct, Oracle NetSuite, Microsoft Dynamics, etc.), Acumatica represents a refreshing, independent alternative for many partners. Additionally, the vendor’s OEM model offers significant upside for growth overseas—and we’ll probably see more of these agreements in the future.
Acumatica is still a relatively small fish in a very big—and ultra-competitive—ERP pond. But, it’s track record to date, strong customer and partner focus, and differentiated vision will help Acumatica accelerate its growth in the SMB ERP space to the next level.
Source: Laurie McCabe’s Blog