Sage transformation - one year in

A year ago Sage launched its far reaching transformation plan which was centred on improved growth and margins, and on becoming fit for business in the cloud (see Sage regroups for growth). Yesterday the British stalwart provided an update on the technical strides it has made and the verdict is there is clear movement but given the scale of the task, progress is measured.

The depth of change within the business should not be underestimated – organisationally, culturally and technically – so it was good to see it has been tackling this head on e.g. where Sage’s Europe consisted of 12 silo’d countries, it has trimmed these down to three segments. On the technical side SaaSy Sage One is proof that it is delivering on its promise of standardising on a global platform (but enabling a thin layer of localisation capability to maintain this USP), rather than continuing its traditional strategy of separate code bases and products for each country.

This global development approach is a critical factor in Sage achieving its goals because as Nick Goode, head of Sage One in Europe pointed out, it means Sage can match its technical solutions to its commercial ambitions. The willingness to change entrenched practices and the legacy portfolio is the most telling sign of the degree of change within Sage. There were other nice Sage One cloud touches such as a deepening relationship with Google and Sage One integration with the Google Apps platform, including Google Drive. However, there are still signs of a silo’d mentality – the online Sage Pay service which is a natural complement to Sage One has not been integrated for example although it is a priority.

Extended availability of Sage ERP Online, which includes Sage 200 in the UK, and is built to run on Microsoft’s Azure platform, and ERP Online Services is another important cloud milestone. The interesting takeaway here is Sage’s view on ERP Online Services and the hybrid cloud model. It is moving beyond defining hybrid as running a mix of complete applications on premise and in the cloud and is adopting the Microsoft approach of deploying granular components and extensions on premise or in the cloud. The challenge here will be aligning the subscription and licence payment models.

Sage still has a way to go with its transformation and as its latest resulted showed, it is not impacting growth as yet (see here) but it is laying the foundations. Timing is still an issue though and Sage remains behind the market compared to NetSuite, KashFlow and even SAP Business ByDesign.