Sage says that while it is pursuing change on multiple fronts, it has taken concrete steps to deliver a more agile culture of innovation, which is already seeing strong returns.
NEW ORLEANS – This year at Sage Summit, the company is strongly pounding drums delivering a message of change. It means change in the way they go to market, to make it more global. It means change in their channel strategy, to make it more partner-driven. And it means change in their culture of product innovation and development.
Klaus-Michael Vogelberg, Sage’s CTO, said that when Stephen Kelly joined the company as CEO he indicated that he wanted a development cycle in which the process of going from idea to concept took one month, and then it took only six months to go from concept to delivery.
“That’s how he wanted to do it,” Vogelberg said. “This sounded pretty impossible, but if you go back to the early years of Sage, that was how it worked. So the issue became how to change the culture around that.”
Vogelberg said that Sage had fallen into a trap where a company gets big, and creates a very Tayloristic approach, referring to the early 20th century expert and founder of time and motion studies, who believed in measuring all aspects of the work process to try and find efficiencies.
“A Tayloristic approach is having experts around everything, which is very powerful if you apply it the right way, but can also stifle, because nobody has a license to just charge off to and do things,” he said. The newly announced Sage Live solution, which even given its developmental advantage in being produced for a pre-existing Salesforce platform was still created in very rapid time, shows that kind of quick, effective development is possible.
“Sage Live is more than what we produced,” Vogelberg said. “It demonstrates internally that we can do things in a different way.”
The accomplishment with Sage Live doesn’t mean the whole culture has been changed though, said Himanshu Palsule, CTO, Sage North America.
“Since this was a global effort we all put our best people on that team,” Palsule said. Changing the culture to give the desired efficiency without the assistance of an all-star squad will require more change.
Vogelberg said the key thing to accomplish here isn’t improving the strategy itself, but the execution.
“When Stephen Kelly reviewed the strategy, he said the strategy was good, but the execution will need to happen at a very different velocity,” he said. Thus, there has been very little tweaking of strategy, which remains focused on putting the customer first. On the other hand, on the execution side, changes involved changing the scale of operations, and making it easier to create Centers of Excellence.
“He said if you want to create a Center of Excellence in one area, just go and do it,” Vogelberg stated. “That takes away a lot of obstacles because it makes decision making easy. In addition, if a product manager has a business case for change, he can put it in front of Stephen and Stephen will probably give him money to do that. As he said this morning [in his keynote], ‘why follow if you can leapfrog.’ That’s what we did with Sage 100c and Sage 300c, the modernized versions of Sage 100 and Sage 300.”
Sage 100c and 300c are also important because they show that Sage is now committed to a release cycle every four months for on-prem solutions, and on-demand for SaaS solutions.
“Like Salesforce, we will have predictable releases that vou can plan around,” Palsule said. “That means that the release cycle for on-prem has to be seamless, in the form of a consumable download. If you can do that, customers will absolutely accept that.”
Palsule also emphasized that the shorter development cycles help to dramatically change the roadmap.
“300c wasn’t originally on the road map, as we were going to do a pure cloud solution, and customers said that they don’t want this as a cloud right now,” he said.
The Sage Innovation Labs, announced at last year’s Sage Summit, also play a key role in change, Palsule said.
“A year ago, we started Sage Labs to incubate fresh ideas and see what hits,” he said. “It started out as North American, and we are now rolling them out globally. A product manager needs to come in and build a case around that. Still, we have a ways to go in the market we serve now, and until the Labs come up with a sustainable business model we can make money off of, I would personally leave it there.”
Palsule also stressed that Sage has become very good at driving out a lot of costs in areas that don’t have a lot of return, and using the savings to double down in areas that do.
“With Sage Live, we didn’t have time to go through a budget cycle, and budgeting isn’t an issue at the scale we drive at, so funding is not a problem and is not an impediment slowing us down,” he said. “We also sold a non-profit business, as well as ACT! and SalesLogix – all the things we were not good at.”
Finally, while Kelly had stated in his opening keynote that Sage would stop using the term ERP, saying it had become associated with painful and expensive projects, Vogelberg said that this is part of changing the culture.
“What we were trying to say with No More ERP is that in the past, we, as well as our competitors, created those kind of feature monsters where everyone used 10 per cent of the features, even if they were not the same per cent, but which had the complexity of 100 per cent,” he said. Those days are done.