Unit4, the Netherlands-based ERP provider, has acquired a new customer, nuclear power specialist Magnox, who will pay £2.5 million to put Unit4’s Agresso Business World ERP suite in place. What is notable about the deal is that Magnox is replacing SAP with Unit4.
According to Andrew Taylor, Head of Project Delivery for Magnox, “We were feeling increasingly limited by our existing system as we could not make the changes required at the speed of change we were experiencing.” It’s no surprise that Magnox’s statement chimes with the key feature of the Agresso ERP suite and Unit4’s core marketing message - and if this was the only indicator that Unit4 was achieving something of note it would not be significant.
However, it is the latest in a steady stream of positive news (Unit4: positive performance all round). The company is also confident enough to successfully tackle tier one vendors head on, particularly in the public sector (Unit4 to challenge SAP in larger local authorities). Note also that during financial year 2010 the UK division alone added 75 new customers to its ranks (the UK is the largest single contributor to the overall Unit4 group business).
So, what is the secret of Unit4’s growing success? In my view, a key factor is an application architecture that does indeed allow for rapid and thus cost effective change. This brings down the long-term cost of ownership and is a counterpoint to systems that are infamous for difficult and costly management. Unit4’s assertion that at the end of an implementation project it aims to leave customers self-sufficient with no need for on-going work, and attendant costs, with either Unit4 or service providers is also an enticing proposition and contrasts with the traditional ERP dependency model. Of course, post implementation assistance is unlikely to be completely ruled out but anything that reduces the requirement will be received positively. Outcome based value assessments are also good news.
It has a long way to go and is not in a position to seriously challenge larger competitors, but Unit4 has demonstrated it can successfully chip away at their customer bases. We’ll continue to monitor its progress with great interest.