Aaron Harris is the CTO of Sage; he is the architect of Sage Intacct and a multi-tenant cloud evangelist. Enterprise Times spoke to him shortly after his keynote was streamed at the virtual Sage Advantage keynote.
During the keynote, an upcoming integration between Sage People and Sage Intacct was announced. Does that mean you’re tightening the integration to Salesforce for some of the other Sage solutions as well?
“One thing for sure that’s emerging from this is more general-purpose infrastructure to support Salesforce to Sage integration. There’s no concrete roadmap for other integrations at the moment. But there is a recognition that there will be opportunities in the future, to do more with Salesforce. This is an opportunity to build something reusable across our portfolio.”
The future of Sage X3
Sage Intacct is the service-based ERP for Sage. However, Sage X3, is not a multi-tenant solution yet, so what is the strategy for X3?
“The first is that the way we’ve designed the Business Cloud, it’s a collection of web services. Whether you’re a native cloud product, or you’re a locally deployed product, if you can access the internet, you can access these services: banking, integration, payments, document exchange. X3 can access those in the same way that Intacct can. There will be some cases where just by nature of it being on-premise, we’re not going to be able to create the same level of experience that we would like.
“We are quite a bit more focused on how we position X3 in the market, to which customers and in which industries we sell it to. We’re being a bit less religious about whether the product needs to be multi-tenant for the targets we are looking at. We think that an integrated offering with X3 and Intacct might be the way to solve the problem.
“What customers care about, something that became obvious with COVID was they need anytime, anywhere access. They need the solution to be on vendor managed, reliable infrastructure, and they want the vendor to manage the upgrade process. We can deliver that today with our X3 cloud version, even though it’s not multi-tenant. I know I sound a bit sacrilegious since I’m one of the early believers.”
Does that mean you’re not developing multi-tenant X3
“We’ve paused those efforts to focus on the cloud single-tenant version, and focus on the product based industries where we expect X3 to perform well.
“In the Sage Business Cloud Intacct will be the finance engine for medium-sized businesses. Sage accounting will be the finance engine for small businesses. Those are our target, accounting platforms for each of those segments.”
Are you, therefore, selling Sage X3 with a Sage Intacct back end?
“Not yet, but that’s directionally where we will probably head.”
On the other Sage Business Cloud applications
With Sage people, what is the strategy around payroll?
“We are actively developing a payroll product tightly integrated with People. We are targeting a limited release in the second half of our fiscal year. (after April 2021) The plan is for a tightly integrated payroll offering, starting with a focus on the US market in all states.”
Sage Business Cloud still includes Sage 200 Cloud-connected. At what point will that disappear and be replaced by X3 or Intacct?
“We don’t have any firm plans there. We’re taking a customer-first approach of not forcing migrations. Our objective is to create enough compelling value with Intacct and X3, so there’s an incentive for those customers to move.
“We made a very clear decision that we were not going to create copies of our on-premise products in the cloud. Rather, we would create cloud products that leveraged cloud capabilities and, solve problems for customers, using available technology and ways of building software. It’s not a lift and shift from 200 to Intacct or X3, it’s not just migrating the data. It’s re-implementing your business processes; we can’t force customers to make that change.”
Migration strategy for Sage Business Cloud
What is the migration strategy within Sage Business Cloud?
“Core to our message is that customers can grow with us, from startup to a scaled-up, medium-sized businesses. This can be a bit lost in the details. Once you’ve connected to the Sage Business Cloud, we then enable digitised relationships with your financial institutions and regulatory agencies, your accountant, your customers and suppliers. They carry with you when you graduate from one product to the next right.
“There is no reimplementation of all of that. You’re just connecting from a different product now. We are creating mechanisms to ease the migration for sure. Encouraging customers to stay within Sage and continue to use all the services from the Sage Business Cloud that they were using on a product targeted for smaller businesses.”
What makes a good SaaS business
What are the three components for a successful SaaS business?
“The first is that SaaS businesses need to be able to operate with agility. They have to be able to use that agility to continuously deliver value to customers. Every SaaS company needs to get really good at that.
“Second, is reimagining the relationship with the customer. It’s not just changing your commercial models, it’s changing culture. Changing that relationship from being a transactional relationship to a continuous partnership is critical. Part of that is recognising that the product that you build in the cloud is the business. In other words, the product is not just the functionality that customers use day to day to run their businesses. The product is also the ongoing operations to keep this product running, updated and current. Customers interact with you through the product, whether it’s getting support, whether it’s accessing their bill, so the product becomes the primary focal point of interaction, and it represents the business.
“The third is around innovation and data. SaaS businesses need to be data-driven businesses in multiple ways. They need to leverage data to create compelling capabilities for customers. They also need to use data to optimise their relationship with customers, to build better experiences, to build better interactions. Data becomes the most valuable asset in a SaaS business because it’s what enables breakthrough innovation and delivering value to customers. It also is what enables that great customer relationship where more and more of the relationship needs to happen digitally, versus, human to human.”
Is Sage leveraging that data?
Following up from that, is Sage considering benchmarking in the same way that Xero, Workday and NetSuite are looking at it?
“Yes, that’s part of the vision for the Sage Business Cloud. As part of making all these connections, we can apply our data strategy to the collective in addition to the individual. We’ve got millions of employees who access their payslips through the Sage Business Cloud. That gives us a huge opportunity to learn in the aggregate.
“Another great example is our Autoentry product. It’s quite a bit smarter when it can learn from the activity of millions of businesses as opposed to just a few businesses. Collective intelligence is natural; it understands the trends, the levers within peer groups, and, driving recommendations based on that. We acquired a company three years ago, called Compass. The Core of that compass team is now Sage AI labs, and collective intelligence is one of their pillars of investment. What are the new technologies you’re currently investigating into 2021?”
On new technology
What new technologies is Sage investigating in?
“I’m not saying AI/ML, because it’s mainstream now. We don’t have to experiment to see if it’s going to do something for us.”
“Blockchain, we are developing a proof of concept in partnership with Amazon, using their quantum ledger database to create what we call the trust fabric. For Sage Business Cloud, a key proposition is digitally connecting relationships. The relationship between a business and their supplier and with their customer.
“When you’ve digitally connected that relationship, you can now create a distributed ledger. This allows transactions that happen digitally across that relationship to be written to a distributed ledger. We believe that creating trust around business activity is one of the most valuable things we can do. The Sage Business Cloud architecture reflects the opportunity to create what we call programmatic trust.”
“Next, after Blockchain would be identity management. We are also a bit bold here. The traditional relationship between a software vendor and their customer, which happens through user licences is incredibly dated. Instead, we need to have a relationship with every individual with every organisation that interacts with our technology.
“Every individual needs to be able to manage their identity, and through that make decisions about privacy, about data disclosure. That identity allows us to create an experience that spans multiple products and services, agnostic to the underlying technology. We’re taking a pretty ambitious position that we can stake out a leadership claim on privacy and data ownership, not just for businesses, but for the employees in those businesses.”
What is the timescale for this?
“We’re working on it. We already have millions of individuals and organisations that have a Sage Identity, roughly 7 million logins per month, as of last month. The first step is getting them that identity and using that identity to manage other interactions.”
Workday has a vision of creating a CV that employees can take with them as they move between jobs, how will Sage Identity work?
“Our vision is that when an employee leaves an employer, that employee still has rights to their pay information, to their performance reviews, to any of their contracts with their previous employer. They still fundamentally own that data and can leverage it, not just to get their next job, but also to get housing, to get credit. If we can manage the experience around identities and abstract that away from individual products, then we can create that data ownership and create, a value story for these individuals. We’re very, very committed to this idea.”
The next user experience
“We see corporate communications platforms as a new model of interaction. I said it the other day in a call, that Microsoft Teams or Slack is the new virtual office. It’s probably going to be WeChat and WhatsApp and other tools, but Teams and Slack to start with. That’s where people want to work. We think we can include many more people in business workflows if we enable them to be successful in corporate communications platforms.”
What are your current challenges?
“I’m championing something that’s going to take some time for me to create converts. We should no longer be building technology around optimising for scaled efficiency. It’s all about agility now. It’s about enabling each team to make their own technology decisions and to move at pace. That’s bucking the thinking of the last several decades.”
Surely if a developer ignores efficiency, that will create new problems?
“What it comes down to, is I place greater risk on agility than I do efficiency. I choose to optimise for agility with the expectation that we can better serve our customers. That’s not to say that the efficiency doesn’t matter. It does but what I don’t want to see happen, which I still see happening is developers making decisions about technology because they assume they’re not going to get supported. Because they think, that maybe it’s too expensive. Or they think that it’s a departure from some corporate standards. I want us to have those conversations, and that’s the behaviour that we have to change over time.”
The book question
Impressively Harris reads around 12-13 business or technology books simultaneously. He is currently reading the novel Lonesome Dove by Larry McMurty and The Pillars of the Earth by Ken Follett for the first time.