New owners of Unit4 – what does that mean?

Unit4 has been a successful investment for the current principal owner Advent International as the acquiring company in 2014. At that time (when Advent made a buy-out of Unit4 from the stock market), Advent paid $ 1.6 billion for Unit4. The new owner TA Associates together with Partner Group now buys the company for about 2 billion dollars.
During the years of ownership of Advent, Unit4 has experienced a steady and strong journey up to today being considered as one of the global and leading suppliers of ERP systems And then you have to remember that the flagship Unit4 Business World or the recently launched ERPx originates from Agresso, which 15 years ago was still considered a Nordic application and with a relatively narrow business focus. When the Norwegian Agresso was acquired by the Dutch Unit4 in 2000, two relatively small organizations merged and formed the basis for what has today developed into an international success.
Many of us who have insight into both the company and the product for +20 years probably had a hard time seeing the potential for the merged business at the time of the acquisition. Unit4 (formerly Agresso) has always been regarded as an exceptionally strong financial system and with some strengths in project accounting. But also where parts of the product (under the hood) did not impress. Relatively often (though many years ago) it was clear that the product was developed in a way that created a lot of problems and challenges when ever larger customers required continued broadening and deepening of the software. Much of the strength of the product lay in the technical finesse behind multidimensional accounting and the product’s highly competitive reporting and query engine. But where new requirements and needs regarding surrounding ledgers and processes and continued development required that they had to challenge old truths and modify the engine under the hood.
At the same time, it is completely natural that applications that have survived 30-40 years at intervals of about 10-15 years are set in the situation that the software must be vigorously renovated to cope with the next generational change. And then a new interface is not enough, the engine must be taken down and rebuilt.
When we are now in 2021, we can state that Unit4 has made it through several generational shifts and where the new version ERPx is being launched. And over the past 20 years, Unit4 has gradually moved its target group from small / medium-sized organizations and established itself as a vendor to large and international organizations as well. They cannot yet fully compete with SAP and Oracle when it comes to “multinational and global customers”, but they are not far behind. And with each passing year, we see that Unit4 is moving up on the list of leading global ERP vendors.
One should adopt a cautious approach when comparing ERP systems against each other. Although many of the large systems SAP, Oracle, Microsoft, Infor, IFS, etc often are compared to each other, there are very large differences, which makes many comparisons unfair. In the case of Unit4, it is definitely an ERP system but also a significantly narrower ERP system compared to the just mentioned competitors.
The successes for Unit4 are primarily within the target group of customers who are looking for financial systems and preferably with a project-oriented focus and with needs in purchasing and service. This target group includes both construction and contracting, but also a large part of the service sector and public organizations. But we also see that Unit4 sometimes takes on the role of financial system for manufacturing customers that use several or other ERP systems for their production and logistics.
There are several reasons behind Unit4’s journey to becoming an international success. On the one hand, it is connected with the involvement of a board and management team with extensive experience from competing ERP systems and with experience of leading global companies. But it is also connected with the trend that more and more companies have begun to question whether you really must have a “large and fully integrated ERP system” that covers everything in the business, and where many customers today see the benefits of partially breaking up the concrete and accepting a landscape where several different applications with unique strengths interact (what we sometimes call best-of-breed). And in the transition to a cloud-based world where the customer more demands a service that will support parts of the business, it fits in well with a strong and well-developed financial system (now Unit4 is significantly more than a financial system, but compared to many competitors it has a touch as a financial system).
It should be added above that Unit4 (like many other large suppliers) has made large investments in order to move to becoming a cloud vendor and with a very strong focus on building in and being able to apply new smart “intelligent” services in the form of machine learning and digital assistants.
Unit4’s ambitions going forward are to become a global leader of business software for organizations that work according to the modern principles of “project-centric” and “people-centric”. This means organizations where a significant part of the business is based on services (and not manufacturing, trade, logistics) with many employees and with great need for interaction between the employees, between the projects and with customers and partners who interact in the projects that the business conducts .
With the new version ERPx, Unit4 has further moved forward in the market and can today seriously compete with “all” large and global suppliers of business systems – as long as it concerns the target group that Unit4 has as a focus. No, Unit4 does not yet support +200 countries, but still has the conditions to cope with all continents and many of the major countries.
Having said all that about Unit4’s success and position in the market today, it should be added that competition going forward will be even more difficult than it has been for the past 20 years. And it is in the light of this that one should see the change of ownership in Unit4 and that new muscles are coming in that can give power in the great work that is still ahead. Tomorrow’s ERP systems will not survive solely on merits in functionality or industry knowledge. We are in a time of rapid change and a significant part of this change is related to the availability of and opportunities with all smart services that are under development within the concepts of voice recognition, machine learning, big data, predictive analytics, etc.
We are on the threshold of what could be called “intelligent” systems and where the system is becoming increasingly self-propelled and self-learning. But to succeed with this, very large investments are required and in addition, many of today’s technologies will be replaced with new ones, which requires that you need to both invest and reinvest when technical shifts occur and where you cannot be sure which technology will survive on long term.
Unit4 has fought for a place among the large and respected vendors of ERP systems and is now gaining new energy in the business through new owners and continued efforts towards growth and acquisitions. At the same time, the view of the concepts of ERP systems and apps is changing and it is not a given what type of vendors are still strong if we look 10 years ahead. Unit4 will continue to, like other major vendors, have to constantly prove its capacity to stay amongst the leaders.