At the beginning of January 2019 we met with Martin Kratky, the CEO of Managility and the FP&A Software Group, in our development centre in Byron Bay, the most Eastern part of Australia and asked a few questions on what happened in 2018 and the outlook for next year:
Martin: It definitely has been a very exciting year. The analytics & planning industry has always been dynamic, but the pace of change in recent years is unparalleled.
The launch of the latest release of Acterys this year, that merged the two previously separate brands into one unified solution, was a major milestone in our corporate history. Adding 25 new staff, setting up operations in the US, Europe and Asia as well as releasing major updates on a quarterly basis kept us very busy but to see that a young start-up can successfully compete with multi-billion Dollar industry behemoths was very rewarding.
Martin: Yes, after 20 years people ask: “Aren’t you sick of doing the same thing for that long?” My response is always: Every single year has been different and particularly the pace of change in recent years is unparalleled.
In the industry I see two key trends: The first is the cloud. Not really a new concept but what we experience now particularly in Asia Pacific and the US -Europe is a bit behind- is the full acceptance at customers of cloud solutions in analytics and planning. This is predominantly driven by the obvious benefits: you can get started extremely quickly and cost effectively. With our Acterys Connector product for example our customers can now provision an enterprise grade analytics environment that integrates standard cloud accounting solutions like Xero, Dynamics and QuickBooks in 5 minutes. A few years ago, the implementation of a similar solution took weeks of consulting.
The second key trend that I see is: self-service or as I would call it: “empowering the business user”. Solutions like Power BI have taken the industry by storm. Business users -without in-depth IT skills- have now unparalleled analysis power on simple data sources, at the fraction of the cost of legacy BI, planning and consolidation tools.
Martin: This is a very good and important question: As with many marketing trends, the term “self-service analytics” has to be viewed with a “grain of salt”. On the one hand it is correct: Self-service tools like Power BI and the Acterys Connectors can get you immediate results on standardized data sources. Power BI enables fantastic visualization and AI insights immediately at your fingertips and Acterys now builds the initial data model, logic and reports with a click.
That’s great, but more often than not this is not the end.
We see this quite commonly particularly with clients in the SMB space -enterprise clients are more familiar with the “realities” in that area-: A lot of time and money gets wasted before they realize working with an expert for a few hours or days does really save money.
Doing analysis on a simple, single data source is one thing, integrating multiple, different systems in a comprehensive data model (or “data warehouse”) with the specifically required, custom calculation logic and workflows is a completely different story and will in my opinion always require the expertise of specialists.
We see this quite commonly particularly with clients in the SMB space -enterprise clients are more familiar with the “realities” in that area-: A lot of time and money gets wasted before they realize working with an expert for a few hours or days does really save money.[ut_blockquote_right] “Doing analysis on a simple, single data source is one thing, integrating multiple, different systems in a comprehensive data model including custom calculation logic, workflows, etc. is a completely different story” [/ut_blockquote_right]
Martin: After working with nearly every product in the industry over the last 15 years, we learnt a bit what works and where things are lacking and can be improved:
First -as mentioned- our aim was to leverage the new opportunities with cloud and self-service analytics. Making things easier, quicker and more cost effective.
Second, to integrate silo solutions: there is simply no justification anymore of having a data warehouse solution, a reporting and analytics platform and on top another, separate planning/forecasting/consolidation application. All using their own data storage -in the worst case even with different proprietary databases- resulting in massive overhead costs integrating the data in these silos and paying for expensive specialists for every silo. Our focus is on supporting, standard storage like SQL Server or Oracle and using what is in many cases already there with a wide pool of available knowledge.
And it doesn’t end with storage our focus is on adding where we really add value in modelling, complex write back and analytical application scenarios as well as data warehouse automation. There is no point in re-inventing the wheel and building our own reporting engine. With Power BI we have the most widely used analytics environment and Excel is still the most widely used and versatile business applications. No specialized reporting solution can match that. What Excel is not built for, is acting as a central data model and managing comprehensive multi user write back, forecasting and other analytical application workflows. This is exactly where we come in.
Finally, our industry is unfortunately, notorious for outrageous pricing policies that border on the “rip off”. There is no justification that an annual license for a small global finance team costs more than the CFO’s Porsche. Part of this legacy is driven by overburdening marketing spend by vendors. Some of our competitors had IPO’s recently which makes transparent that their customers are paying 60 cents in the Dollar for exorbitant marketing spend. We invest even more than this percentage in R&D. Our marketing budgets are minimal in comparison to industry standards but very effective, focused on generating inbound traffic through community participation, creating valuable content, etc. Something that has worked tremendously well so far.
Martin: We went through a very interesting transition in the last few years: from having fairly transparent operations in one physical location to a truly global virtual organisation. We added 25 new people to our team, most of them I have never met in person. It’s a bit crazy. Initially, I was skeptical as well if this will work but it does and in opinion even more effectively. We couldn’t exist without tools like MS Teams that help people collaborate effectively. In our case this is not just used internally but our customers are now directly integrated there as well.
The basis for our management philosophy is simple: every employee understands that it’s not the company that signs their pay check but the customer. So, from this everything else derives: make sure the customer is happy with your work and give it all you got. Working on the weekend or after hours is -as a truly global organisation- often goes along with that. In return our team has unparalleled freedom: we encourage work from home. The nine-to-five concept doesn’t exist in our organisation.
Martin: Yes, in addition to having the right team in place and keeping them happy, my key focus as CEO is to ensure that we exceed our customer’s expectations. Direct interaction with clients and prospects is a top priority and takes 50% of my time. I try to be involved as much as I can in the “trenches” in initial client onboarding sessions. The feedback from there is invaluable: To see first-hand the key motivators and pain points, how prospects are using our products and what can we improve. Many of our trial users don’t know they are dealing with the CEO in these sessions, but I think it is absolutely essential to for me to get this unfiltered feedback.
Martin: I am very proud of what my team has achieved in the last few years: with very limited marketing means we now have customers on every continent that can see a clear value with getting started in minutes, automatically generating models from their accounting systems and having a very powerful platform to build analytical applications for planning, forecasting consolidation etc. at their fingertips as business users. All this while seamlessly integrated and extending the capabilities of familiar solutions like Power BI and Excel with a vast knowledge pool that avoids being at the mercy of specialized solutions consultants that charge thousands of dollars a day.
We have come far but we still consider this only an initial building block. For the future one of our key focus areas will be on using AI to make processes even more effective. This ranges from making data integration even more automated and avoiding that finance users have to spend ages on cleansing and maintenance to using ML methods to identify business drivers and improve forecast accuracy. You will see a lot in that space from us in the coming months stay tuned. With our CTO Hesam Ziaei who has next to his demanding role managing the development of Acterys been able to finish his PhD in machine learning last year we are very well placed for that.