Interview with Stephan Sieber, CEO of Unit4

The first months must have been incredibly hectic. Please share with readers your initial thoughts from the new job.

First of all yes, it has been hectic, but in a positive way. I am doing two jobs – as CEO and continuing my old job as head of sales. My successor as head of sales will join us n early July.

In many ways, I am executing on a strategy that has been worked on for years. When I joined Unit4 in April, 2014, I joined initially as head of strategy. I think I was quite instrumental in putting the company on the journey that we have taken.

I think my biggest surprise is seeing the massive amount of opportunity in the market. Of course, I knew that in my earlier strategy job, but I was more occupied, to be honest, with a lot of internal work developing our operating model. Then I took over sales in mid ’15 and I spent significantly more time playing outside with very tangible customer opportunities and prospect opportunities. Now as CEO, I can step back a bit from the more tactical day to day business and look at the market and the company from a more strategic point of view.

When I look at what is going on in the IT industry and how we can bring new technology to service organizations (Unit4’s focus in verticals) it’s just amazing to see the massive amount of opportunity that lies ahead of us. Our margin is improving quite nicely as a result of the changes in the operating model we have adopted, but even more importantly, our top line is trending the right way.

The previous CEO, Jose Duarte had a services background. You have a strategy and sales background. Is that causing any transition challenges for your organization?

I think Jose and I have a pretty comparable background when it comes to focus on sales and services. He was running a global services organization at SAP. This is something that I had not done but I was a general manager at SAP managing large regions and geographies and they had a strong service footprint as well.

Where I want to be different is to be even more specific in our vertical definitions. I think a definition like professional services is too broad of a target market. A law firm or a marketing agency or an engineering, procurement and contracting (EPC) are not comparable. I think we need to be even more specific on how we differentiate and how we help our customers to better manage their business.

Talking of your focus services industries – your higher education sector seems to be doing very well from the number of customer wins you keep announcing. Both you and Jose had identified a handful of other service verticals. Are you going to accelerate your move into some of the other service verticals, either via acquisitions or other investments?

As you know, till we took the company private in early 2014, Unit4 was run more as a conglomerate of technology firms than as a single global technology firm. We wanted to change this and make it a global tech leader with a global operating model. As part of that shift, we put acquisitions on hold and decided we would also change the style of acquisitions when we did them again. We didn’t want to just acquire market share, installed base and recurring revenues. We wanted to acquire technology and also team members that help us to innovate and grow.

When we came across the higher education player, Three Rivers, it was the type of solution we’re looking for. It’s state of the art. It’s modern technology with mobile capabilities and embedded analytics and provides a 360 degree view on student success. It puts the student in the center of the application while allowing for multiple views of administration for the university.

Three Rivers was our first attempt at a different way to grow. From that point of view it has been a major success because as you rightfully pointed out we see the market reacting to that. We win a lot of new business. We see installed base customers migrating. We also see that we have been able to integrate this company in record time and to use the flexible platforms (for example, in RD, but also customer support or our global deliver center in Lisbon for implementation services) to create synergies with acquisitions. From that point of view this is clearly the prototype or the poster child for what we want to do going forward and yes, you will be seeing us more active in the MA space.

Don’t forget though – we are still heavily focused on organic investments in our own RD. Our CTO and his team are working on a completely new standalone professional service automation (PSA) solution. You could look at this PSA project almost like an acquisition that we did because we’re putting additional, incremental teams, on top of the platforms that we have created.

The Unit4 brand is much stronger in Europe than in North America. What’s your vision for changing that?

In fairness, North America is already around 15% of our revenue. In 2015, we grew licenses by 20% and doubled our bookings in the region. Doubling bookings is not something too many of our competitors can claim to have done in the region.

We certainly have appetite for more growth. However, we also have to factor that it is expensive to grow brand recognition in North America. Many European companies have burned their fingers attempting North American expansion because it is a rather complex market. It’s probably more homogeneous than Europe but still there are huge differences between east coast, west coast, and whatever, the states in between and so on and so forth.

Yes, we are reminded of that every four years as we go through the US Presidential primaries how diverse this market is

We are being selective. North America higher education, public sector – especially in Canada-,Professional Services are very promising. I would love to be in a position to do massive airport advertising, but we’re still working on getting the cash for something like that.

How do you see your competitive landscape changing in the next couple of years?

I would say we have three different types of competitors. We have, of course, to compete against the big ERP players, like Oracle, SAP, Microsoft and to a lesser degree, Infor, Epicor and Sage. Next we have a set of local players that we see quite often. In the Nordics, it’s predominately Visma. In the Benelux, players like Afas. Then last we have the vertical players, so in PSA we face Deltek. In higher education we see Ellucian, Jenzabar, Oracle, Workday and Tribal Group. In not for profit we’re meeting Abila and even more verticalized special players. I think that there is no significant change to be expected there, at least for in the next two years.

What we definitely will be seeing is cloud players becoming more aggressive, which will also further drive the vertical offering. Take NetSuite in what they do in not for profit, take Workday with what they do in higher education. Plus, I think there is a growing number of smaller startup firms that offer very specific best of breed functionality.

At the end of the day I don’t really think that this is fundamentally changing the competitive dynamics. What’s changing is the business model. We are more moving into a true as-a-service offering, not only deploying technology as a service but deploying business processes as a service. I could imagine that in a few years from now, we could be selling student success, selling better ranking for universities, selling less project risk for service organizations rather than just selling a set of functionality.

Let’s talk about your product side. What excites you as you walk around your RD lab?

I would say there are many things that excite me. If I had to focus I would focus on two things. Number one is the deep vertical expertise that we have and the conviction that we get again and again that our applications have been built from scratch for service organizations. We’ve launched what we call advisory councils. We have them for industries and also horizontal capabilities like corporate performance management. In each advisory council we’ve selected between 6 and 12 customers from Europe and the same number from North America. We spent a day with them talking about what changes on their businesses and how can we support them better with technology. The expertise that we bring to the table combined with the expertise and the collaboration that we have with our customers, this is something that I’m truly excited about.

The second thing is our self-driving ERP concept and related plans for a digital assistant . Through our partnerships, predominately with Microsoft, we clearly see that there are technology components we can use and add our own algorithms and expertise to truly build applications that are different and provide a unique consumer-like experience. We are building applications that really support people to be smarter, to be more efficient, and ultimately to be more productive.

I strongly believe this self driving concept is something that is highly differentiating. This is something that can’t be replicated easily because it requires more than just technological expertise. It requires the understanding of the industry, the understanding of human behavior in business processes, and emerging technology. Combining these three elements into something that is completely new and completely different is hopefully a big differentiator for us.

Article source: https://www.enterpriseirregulars.com/107804/interview-stephan-sieber-ceo-unit4/



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