@Wini Thanks!

$8CO has a lot to digest over the next 2-3 years with the already mandated GovERP departments. In that respect, a longer timeframe for DoD would be a good thing. $8CO is a small business, so no need to bite everything off at once. So, I guess DoD is more of a medium term, than a short term catalyst. Thanks for clarifying and your comments make total sense.

@mikebrisy great write up as always.

In terms of a substantial move away from using ERPs to specialist platforms like 8common, it happens but I would say its equally likely to happen the other way. I worked for a couple of years on a $20+ million Workday Financials implementation (at a university ironically enough) and I think the biggest question faced by the powers that be was whether they would take the opportunity to move from their existing Travel and Expenses (T&E) tool - Concur - to Workday's offering i.e. the ERP. It was a bigger decision than going from on premise to cloud. It was a bigger decision than choosing Workday in the first place (they had been an Oracle 'house' - Financials and HR - and Workday hadn't implemented at a university in Australia). It was bigger even than choosing to bin the old Chart of Accounts and start from scratch, which for anyone who has been through it at a big corporate would know is less fun than going on holidays with your mother-in-law.

The reason it was such a laboured decision was because it affects so many people. Most of the system is just going to be used by beancounters. A decent number of non-finance people will use purchasing, but almost everyone will use T&E at some point. The risk was that if T&E was perceived as a failure than it didn't matter how good the rest of the implementation went - this $20 million+ implementation project would be seen as a dud. We were probably 2/3rds of the way into the implementation before the T&E decision got made, so they waited to the last minute, but in the end they decided to ditch Concur and go with Workday.

It probably didn't hurt that Concur was less than loved but what was interesting in seeing that decision play out was they just wanted to know that Workday's T&E functionality/UX was 'good enough'. It didn't have to be perfect because the advantages of having one integrated platform were just too compelling. These include at least one less integration, maintenance of a single delegation and approval matrix, fewer systems specialists, live updating of commitments/actuals, budget checking and probably most importantly lower overall cost.

I'm always a little wary of companies that bolt on functionality to ERPs that either the ERP can do 'good enough' or that could be disrupted by the ERP company putting it on their roadmap. That goes for a whole load of companies, including XRef, which I do own. Having said that I do have 8CO on my watchlist and have been close to pulling the trigger a couple of times, but my thesis (and I think I'm right in saying your central thesis) is around the rollout of the mandated government work. Anything else would at this point be gravy.

One final point in relation to universities given you addressed them specifically. That university may have been the first to implement Workday in Australia but others have quickly followed. Just as TechOne has been optimised for local council use and has an effective monopoly in that space, overseas Workday has been optimised for education and higher ed in particular. It will be interesting to see the extent to which they successfully tender for future university implementations. If that plays out as it might, with reference sites using Workday T&E already, it may become increasingly difficult for companies like Concur and 8common to win university work.

Great points @Noddy74. Over the years I have been a user of SAP, SAP Concur, PeopleSoft T&E and (today) WorkDay (in a Uni environment where I do casual gigs from time to time). The last 3 were all "good enough" to get the job done - and from my perspective all were fine, even if I don't love any.

Only with SAP did I find the U/X so horrible, it became a job for my PA (when I used to have one). Of course, the reason that the SAP U/X was so bad was actually because the Corporate ERP Implementation was focused on the needs of the central finance department (CFO), that business user modules, customisations, and training were cut from the rollout. Getting these scopes added in further down the track proved to be hideously expensive, and so the door opened for the niche solutions.

I think this is a common experience with big ERP implementations - they are left ragged around the edges, even when they are implemented successfully for their core purpose.

A whole industry for Robotic Process Automation (RPA) has sprung up over the last decade to "patch" the interfaces between the ERPs and the user (spreadsheets, emails, etc.), to take admin labour out of the equation. Globally it is a huge industry. Its so big that some of the big Business Process Outsourcing providers are implementing RPA solutions in their offshore processing centres. This is a different issue altogether that niche solutions like $8CO, but it stems from the same root cause - poor and incomplete ERP implementations, with flawed or absent integrations to users and related systems.

So while niche SaaS solutions and RPA can both be cast as "A New Hope", your question asks will "The E(RP)mpire Strike Back"? Clearly they are trying.

Like you, I have been suspicious of "bolt-ons" that seek to address perceived problems with "core platforms", and have always believed the core solution would get improved to render the "bolt-on" redundant. But I am now counting 25 years of observations in different situations, and it often doesn't appear to happen.

But your point is well made. How sustainable is a niche solution predicated on meeting an unmet need in a bigger platform that is capable (or can be made capable)? Is it simply a matter of time until "your feature" is added, removing the need for "my product"? I don't know the answer to the question, but it is one to be alert to.

Looking at my own portfolio I see $ALC (for things that EPIC and Cerner aren't great at), $DSE (for gaps in MS-365, and Quickbooks etc.). You can even argue that $VHT and $M7T address different scopes that you'd think $PME could mop up. Although that's more of a stretch as none of those solutions can yet claim to be a complete platform.

This is quite different to the truly new platforms that have created or are in the process of creating new integrated workflow solutions like $XRO for SME accounting, $ALU for integrated circuit design, and $WTC for integrated logistics and supply chain. And indeed, as you say, $TNE has provided integrated solutions for Local Government and, less completely, for Universities.

Finally, what I am reminded of, however, is that when I did my deep dive earlier this year on $WTC, is how vast the software ecosystems are in any industry vertical and function across the world. Many industry structures are quite fragemented, indicating there is room for mulitple winners. One good case study to following is $TNE in the UK, where it is late to the party both for academia and local government. I'm watching that one closely.

It is good to challenge our own portfolio allocations and never be complacement.