Sage analyst briefing - AI innovation progress on show

ERP vendor Sage plc recently held an analyst event in Atlanta. In a few weeks’ time, Sage will conduct a major customer event in San Francisco. Vendors frequently test-drive potential announcements and messaging with an analyst event prior to their user conference. Attendees at this analyst event offered a lot of feedback to Sage executives and some things shared with us are not covered in this article as they will be announced at the conference.

The analyst event attracted a number of analysts with many covering the mid-to-high-end ERP space and others covering the SMB (small-medium business) ERP market. While Sage has been a big player in the SMB space for decades, they have clearly advanced their mid-market aspirations with the ever more functional Intacct and X3 product lines leading this charge. Those products have more and deeper functionality that helps serve ever-larger customers.

(In addition to this article, colleague Jon Reed and I did a quick event recap podcast before leaving Atlanta. You can catch it here. )

Key takeaways

• The Intacct product line that Sage acquired in 2017 has become a cornerstone of Sage’s vertical applications and a star suite in its own right. Sage Intacct is now used in 120+ countries and supports 160+ currencies. While many software firms that get acquired by a large software company often disappear in a sea of tuck-in and bolt-on niches, Intacct’s importance and visibility within the Sage constellation of applications just keeps growing.
• We heard a lot about Sage’s plans and penetration in the construction and not-for-profit sectors.
• Sage’s partnership with ADP for payroll is still a key value-producing relationship.
• Sage is rapidly expanding the breadth and depth of its banking relationships. These deals open up new potential customer pools to Sage and also enable new banking products and tools to Sage’s customers. These relationships also present the opportunity for Sage to offer more real-time cash management and forecasting capabilities to mutual customers and if paired with future AI capabilities could be a significant differentiator for the firm. We’ll have to see how this evolves.
• Carbon accounting functionality is a core business requirement in many of Sage’s target markets (e.g., Western Europe). The Sage carbon accounting functionality looks somewhat beefy although it appears limited to just carbon accounting for now. No word on whether it will expand into other ESG spaces like DEI, social and governance.
• Sage executives didn’t speak much about the problems affecting customers from citizen-AI tools. There was some acknowledgement of AI-enabled invoice fraud in Accounts Payable and synthetic jobseekers in HR but clearly executives wanted to discuss Agentic AI innovations along more traditional transaction areas.
• Sage’s solution portfolio is significant and their executives had to decide on what to focus on given our short time together. They did give us a taste of additional improvements in areas like:
  
  • Continuous planning
  • AI expense management
  • AI-powered Close Agent
  • Time Tracking Agent
  • Etc.
• We also got fast brief updates on their:
  
  • Agent builder tools
  • MCP (model context protocol) capabilities
• Analysts also got briefed on a couple of interesting technical matters that definitely got everyone’s interest. One of these was in the difficulties that AP (accounts payable) automation utilities have in reading pdf invoices. This is a critical business need as more companies are submitting digital invoices instead of paper documents. CTO Aaron Harris quickly covered a number of problematic invoices whose pdf formats would challenge many AP tools, AI-powered or not.
• Sage’s expertise on invoice processing is significant and the company has already processed millions of customer invoices over the last several years. Sage knows the characteristics and formats of millions of vendors’ invoices as a result of this. That knowledge can be highly instructive to AI tools in detecting fraud as well as processing invoices with little, if any, human intervention or coding issues. This kind of vendor-specific knowledge will only make Sage’s invoice automation functionality more valuable and reliable.
• Some Sage Intacct early adopters are working with Sage’s new Finance Intelligence Agent capabilities. What I saw was this:
  
  • Finance/Accounting users can select the kinds of data, metrics, etc. that they like to see and monitor on a very frequent basis. The software not only serves this information up on a custom, dynamic dashboard but it can provide insights, recommend courses of action and trigger other agents to complete desired tasks. In technical speak, it strongly resembles an event architecture with a headless app structure and a collection of empowered agents behind it.
  • Directionally this is correct and we’ll all want to watch how Sage continues to develop this capability. In a one-on-one I had with Harris, we spoke about how Sage could repurpose critical aspects of the existing Sage applications and make these into callable agents. For example, planning modules, financial statement printing routines, payroll gross-to-net calculation engines, etc. could be repurposed into callable agents.
• Sage is also rolling out a Sales Intelligence Agent
• Sage (very) briefly touched on new/additional capabilities for their Insurance and Lending market solutions.
• Lastly, Sage X3, a discrete manufacturing solution originally developed in France (but now sold in most major global markets) is assuming a greater ERP role in the Sage product lines. It’s also getting a big AI capability infusion as well. AI will make for a more functionally robust solution while also triggering shorter implementation timeframes for customers.
• Readers should expect to see X3 grow deeper functionality in several existing and new verticals. Sage may also do more tuck-in deals here as well to round out these vertical capabilities.

My take

I went back to re-read the slides that Sage presented. I’m glad I did as Sage prepared far more material for this event than there was time to fully discuss it with analysts.  After doing this, I noted:

• The amount of AI progress Sage has made has been extensive and deep.
• The kinds of automated AI tools Sage has built reflect long-term, considered/thoughtful and appropriate considerations regarding cost, scalability, trust and accuracy. Sage isn’t rushing out AI capabilities just to be able to check off some boxes. Their approach has been focused, fast and deliberate. Customers will be the big beneficiaries here and should experience fewer unplanned results than competitor solutions might generate.
• Sage solutions have matured mightily in recent years although this hasn’t exactly generated a lot of headlines. Buyer’s will find today’s solutions, like Sage Intacct, to possess capabilities and functionality more often found in higher-end solutions.
• Sage executives also pointed out a number of accountability and traceability capabilities within the new solutions. These concerns should be more frequently covered by other vendors as they are often brought up to me by their prospective customers.
• AI solutions have the potential to be implemented quickly but for a real productivity improvement in package software implementations, vendors need to provide more intellectual property (IP). Some examples of that could include more benchmarks, process workflow examples, sample policy documents, suggested control points, staffing requirements, etc. This could help determine which agent workflows are desirable and how these decisions will affect project ROI. This should a topic for Sage executives to cover at the next analyst event.

I suspect Sage’s customers will see a ton of innovations at the upcoming San Francisco event. AI will be the star component at the show. But it will certainly trigger a ton of customer introspection and a lot of thinking about the future of their firms, too. Interestingly, that’s what a great tech conference is supposed to do.