„Integration, integration, and integration – that really is our big buzzword.“
BY TEMEL KAHYAOGLU
(Published in The Produktkulturmagazin issue 2 2019)
There’s a new kid on the block – Uniconta is a completely cloud-based ERP system created by Erik Damgaard, an institution in the ERP market. In contrast to traditional solutions, Uniconta is a fast and lean app from the cloud with a strong focus on integration and the essential aspects of Enterprise Resource Planning. We spoke with its founder on the historic development of the market and the reasons why the traditional approach of ERP will not survive modern workplaces.
Mr. Damgaard, you have been developing ERP systems since the early 80s and are therefore a real expert in this field – how have the market and the requirements changed over the past decades?
Good question. I think that the most important requirement for companies has always been to be more efficient. This has not changed so far. But what has really changed is that today they have to interact via multiple channels. An order can be placed on a website or by calling a sales person, for example. However, we see that companies are increasingly receiving XML documents directly through their ERP system, which indicates that these solutions are no longer pure in-house systems that only interact with employees, but are starting to interact with the whole world, with third-party websites or with other ERP systems as well. Hence, ERP systems have actually started to send information to one another. At the same time, companies are still trying to optimise their businesses by reducing costs and delivering the shipments to the right destination. So it is not really the planning routines that have changed, but rather how you interact with your clients.
The German market for ERP systems is by and large saturated. What gave you the idea to bring yet another system to the market and why do you think Uniconta can compete?
To answer this, let’s go back in time to the late 80s or 90s, before local area networks were invented. Back then, big software companies such as Siemens sold their unique systems to enterprises. With the invention of the personal computer in the mid-80s, companies such as Novell started to provide local area networks. That really blew up the whole software market in the 90s. Since then, not a lot has changed however – enterprises are still using on-premise ERP systems, although with the emergence of cloud computing and the increasing power of computers, there is no more need for companies to host their servers in-house nowadays. However, existing ERP systems are not yet geared toward this business model. A cloud-based model requires an ERP system to connect to servers via APIs and it should be possible to modify the solution for each customer individually. Therefore, while existing ERP systems may offer excelling inventory planning, they keep struggling with new challenges. And I don’t think that you can take an old system and just change a little bit here and a little bit there. Of course, big companies such as SAP or Microsoft will keep on reengineering and reinventing. But many of the smaller ERP systems are dying and there will come a new generation of ERP systems, such as Uniconta.
What kind of enterprises do you address with your solution?
It is meant for small and medium-sized enterprises. Finance, wholesale distribution, assembly production, and project management are the target of Uniconta. These businesses are super mobile, they want to work everywhere and they want to outsource things, which leads to specific requirements. Project companies, for instance, are constantly sending out employees to do maintenance. They have cars with a lot of inventory and a lot of components, all of which are registered in the system and can easily be marked as used via mobile or tablet.
In your opinion, how will the market develop in the next few years? Where do you see the greatest potential but also the biggest challenges for organisations in the area of resource planning?
It will be much more mobile, people increasingly want to work from home. Nowadays, you can contact your customers from anywhere, but you still have to go to work to receive their orders, since the ERP system is the last big thing in many companies that is not yet mobile. I expect this to change in the near future – ERP systems will start to integrate with the digital world, for instance, with regard to invoices. They will no longer be sent in paper format, but electronically.
You once spoke about the trend towards ERP as a platform – what do you mean by this and what are the reasons for this trend?
The reason is that ERP systems are no longer serving employees only, but customers and suppliers too. Some companies already built their entire web platform on top of Uniconta because of its cloud-based technology – thanks to the APIs, you can easily enter data and access relevant information. Therefore, there really is no reason for them to have extra databases – the ERP system has become a platform for all the information about customers, products and finance.
Even if the advantages of cloud-based ERP systems are convincing, many decision-makers still worry about security issues. How do you counter these concerns?
Yes, that’s right – there are still big security issues. There are some companies that explicitly demand higher security levels. Therefore, we are constantly working on this area. The login procedure resembles that of an in-house system: you log in with your username and your password. The rules for user authorisations can be set up by the administration, so there are actually no differences compared to in-house solutions. Many decision-makers fear that cloud-based systems can be hacked from anywhere, so we added a feature called “IP restrictions” to address these concerns. The feature inhibits access to the system for users with an IP address other than the approved ones. Nonetheless, there still are concerns about data theft – no matter where your data is, there will always be a certain risk level. It is ok to be concerned and ask about how we ensure security. However, for the data transfer between companies, I can guarantee that there is no risk to security issues. We do back-ups three times a day and we have fall-back servers and many more extra features that a normal company wouldn’t do if it hosted its own ERP. I think people will quickly understand that we probably take better care of their data than they could themselves.
Why did you choose an app approach? Which benefits does this create for the users?
That is a good question. When you start to make a new system, you have to decide how you want to design it. Should it be a browser front-end or rather a mobile app or a windows app? I looked at what Microsoft did with Office 365; they took the e-mailing system, which is actually the whole exchange server, and put it in the cloud. So I asked myself: why not do the same? On the desktop, the user experience is usually very easy and convenient thanks to features such as copy and paste and drag and drop. These integrations of different programmes work better on the desktop than in the browser. The same is true for shortcuts. That’s why we went for a native app approach: we wanted to give the best possible user experience. Additionally, with the app store customers enjoy the benefits of automatic updates. Although I know that people are always a little bit cautious when having to download something they are not yet sure is the best choice for them, I am convinced that this is the best approach for our solution – particularly when you use it on a daily basis. I think this is actually one of the main aspects that differentiates us from our competitors.
Is there anything on your roadmap you can tell us about?
We have some ideas in the roadmap, for instance, we are working on offering users the option to have a private database. We will still run it for them, but instead of storing the data together with that of all our other customers in a big database, we can store it in a private database to make it accessible to other tools too, if required. One of the main aspects of Uniconta is that it is very much integrated with the customer’s bank, which means that bank statements are automatically imported into the system, for example. Additionally, all currency exchange rates are automatically updated at the end of each day. We are looking into more things that can be done automatically, especially when it comes to the integration with banks, because bank statements are an important part of any ERP system. Integration, integration, and integration – that really is our big buzzword. Earlier, you asked why we built a new ERP system when there are already so many. It is not because I have invented a better way to do stock management or order management. It is because I have just integrated it in a much better way. Just to name another example, we have integrated a service which can read scanned pictures. A lot of companies want to go digital, thereby scanning all their documents. But a scanned document is basically just an image, you still have to open the document and read it – unless you have a tool to do it for you.
Erik Damgaard has been developing ERP since 1983, when he and his brother founded Damgaard Data. With more than 35 years of experience in the development of globally-recognised ERP systems including his flagship Axapta and XAL, he has established himself as one of the most reputed experts in his field. Microsoft acquired Erik’s software in 2002 and it went on to become a central part of Microsoft’s ERP and business application products under the Microsoft Dynamics brand names. Erik Damgaard is the founder and CEO of Uniconta.
Picture credits © Erik Damgaard