After raising $90 million in funding in January this year the media started reporting on the UK’s latest tech unicorn: Enterprise resource planning (ERP) software platform Anaplan. What they didn’t report was what Anaplan actually does.
With headquarters in San Francisco, Anaplan could be mistaken for just another disruptive software firm. However Michael Gould’s story of building the platform out of York in the north of England is quite unique.
After leaving Cognos in 2006, before the business intelligence software provider was acquired by IBM for $4.9bn in 2007, Gould started building a Java-based, core in-memory calculation engine on his own, upon which he would eventually launch Anaplan’s enterprise resource planning (ERP) platform.
Now chief architect and CTO at Anaplan, Gould told Computerworld UK where the idea for Anaplan came from: “I was with Cognos and have been working in the ERP space for most of my working life.
"The reason I started Anaplan was primarily from seeing that the tools out there had been around for a long time, dating back to the mid-80s, and they were getting old and really not satisfying the needs of businesses to model and plan around large data volumes and a lot of complexity.”
Without the right tools, companies started reverting to their standard process: spreadsheets. The problem with spreadsheets is that they aren’t naturally collaborative or linked up, creating a fragmented view of the business, which is far from ideal when it comes to complex business planning.
After two years Gould had the core engine, called Hyperblock. It needed to handle the volumes of data that modern day enterprises require. Hyperblock is designed to handle “trillions of planning cells for thousands of users across multiple models,” according to Anaplan.
Once the core was in place Gould hired some help and started looking for funding before launching the SaaS platform in 2010. Since then Anaplan has launched off-the-shelf apps for financial planning, sales, marketing, supply chain and HR. Partners can also build apps off of the core platform themselves and post them in the app marketplace.
As Anaplan’s head of applications Michel Morel puts it: “[Anaplan] has an incredibility smart and versatile technology that allow users to model virtually any business. Dozens of independent, ad-hoc systems can be replaced by a single platform. You just need a browser and internet access.”
Opening up databases
Anaplan is in essence doing for ERP what the likes of Salesforce.com and Workday have already done for CRM and HR. By going cloud only and utilising in-memory storage and compute power Anaplan is re-imagining an established enterprise product.
This means no dedicated hardware, and in turn less dedicated maintenance requirements. There is almost zero deployment cost and customers can use the platform on a subscription basis. Issues that come with legacy products from the big four software vendors: IBM, Oracle, SAP and Microsoft.
“This allows us to run very large structured models with multiple log-ins, in real time,” says Gould. What this looks like in practice is a constantly updating spreadsheet or model that can make calculations with enough speed to update in real-time, even with a whole sales team logged in and inputting data.
As well as better collaboration, Anaplan gives managers a more holistic view compared to Excel spreadsheets being dotted around different servers. As Sue Barsamian, SVP of worldwide indirect sales at HP puts it: “Before Anaplan, we were always looking at what actually got deployed in a rearview mirror. This was a spreadsheet-run exercise, and by the time that all got rolled back up, and people corrected minor errors along the way, we were usually at the beginning of Q2.”
Anaplan integrates with existing enterprise systems, so customers can link data from other systems, be it Excel, business intelligence or transactional services like Salesforce. “We want to be open and integrate nicely with other platforms,” says Gould, “trying to cover everything doesn’t make sense so we are primarily focusing on core planning, but then providing good functionality in other areas as needed.”
Customer case study: RSA Insurance
Anaplan already counts a solid customer base, from technology to insurance. Mark Laughton, finance director for UK Commercial Insurance at RSA said he started using Anaplan over other ERP options because: “We were impressed by the modelling flexibility of the tool; the speed we could deploy it; plus the cost model that was aligned to our usage with the option to increase our licences and storage space over time as needed.”
Laughton uses Anaplan to run RSA’s day-to-day expenses and people planning. “We were living in spreadsheet hell prior to that point,” he says, “and what we have done is created simplicity to the way we delivered consistency across UK business.”
Small things, like an expense model that converts all input currencies to pound sterling instantly, brings cycle times down for the finance team. “That creates a return because finance people are freed up from some of the weeds they would have been in previously and improves engagement with the business,” according to Laughton.
RSA was able to deploy Anaplan within six months, with minimal disruption to existing processes. And the system is adaptable enough that changes can be made to the model after each cycle. Laughton does admit that it takes two or three cycles to get the model locked in though, “and then we had a version that works for us and now we’re able to add to it,” he says.
Laughton is excited to see how the new Powerpoint add-on helps with simplifying business reporting for his finance team as, “that’s a nut we still need to crack”.
Finally, Laughton would like to see Anaplan continue developing its scenario modelling capability for more predictive planning: “So that you create not just single point estimates but ranges of outcomes. What we have now is basic “what if” analysis, so developing that further with additional functionality.”
Anaplan completed a $90m (£62m) funding round in January which secured the company a $1bn (£760m) valuation and unicorn status.
The label doesn’t excite Gould though: “It’s kind of a funny one to be honest. What excites me about it is the people investing are savvy investors and talk to a lot of our customers and if they the feel like they can invest then that’s a great sign that we are doing some things right.”
Anaplan is using this funding to continue a worldwide expansion, particularly across the lucrative enterprise software market in the USA, as well as growing staff numbers and its customer base in France and northern Europe. Global staff numbers are set to balloon this year, but the R&D department will be staying firmly rooted in York.
Anaplan has a solid head start when it comes to this kind of hybrid, cloud-only ERP platform. It will always have to compete with the big four vendors, but by being small and built-for-purpose it can be agile to customer needs. Anaplan will continue to grown and spin powerful products off from its core calculator engine, such as predictive analytics and business intelligence.
Anaplan is a genuine player in a lucrative niche of the enterprise software market.