It’s the Sage of ERP automation

Sage, arguably one of Britain’s best technology success stories, is no stranger to reinvention. As a financial software pioneer, having launched in 1981, it has had to evolve with whatever new technologies were shaping the market at any given time.

While yesterday it was the Windows PC and the emergence of the internet, today, it’s the cloud and AI. Over time, the business has resolutely stuck to its guns and resisted any temptation to wander from its core markets.

But in this age of increased demands for automation and cloud-based enterprise resource planning (ERP), is Sage keeping pace with current change and fending off competition?

Like many software-as-a-service (SaaS) providers in its space, Sage has seen a surge in demand in recent years for cloud-based applications. The latest financial results have been healthy, with the business posting year-end 2023 revenues of more than £2bn (a 12% increase on the previous year), with Sage Business Cloud accounting for £1.6bn, a 25% increase over 2022.

Sage CEO Steve Hare said at the time that a lot of this was down to the fact that its core markets – small to midsized businesses – are continuing to digitally transform despite the current economic pressures.

These transformations increasingly have automation in mind. Independent finance and business consultant Gareth Morley-Jones, who advises customers on ERP and financial software strategies, said that he is seeing a lot of businesses looking for ways to improve processes and reduce costs.

“Efficiencies and automation are top of the wish list,” said Morely-Jones. “Invoice scanning and matching solutions is the number one request. Removing duplication of data entry, bringing functions that were being handled in Excel into the finance system to avoid a disconnect, and data quality issues are really driving transformations.”

For Morley-Jones’ mid-sized clients, a lot of interest is focused on Sage’s Intacct cloud finance software. According to Morley-Jones, many of his clients “have been waiting for Sage to have a proper born-in-the-cloud ERP, [but] it is not quite there yet”. He said that if customers are into financials-only, Sage is “a really strong play”, adding that with the new modules and features unveiled in February, Sage is now “very close to a well-rounded solution”.

Sage Intacct has been getting a lot of attention, not least for its Copilot automation system. A recent event in Las Vegas for Intacct customers pushed the new features and in particular the automation. For Kevin Permenter, research director at IDC, this represents a clear signal from Sage that its future lies in cloud-based products with automation at the core.

“Sage is moving very much towards cloud native, more modern solutions, putting Sage Intacct out front,” Permenter told Computer Weekly. “When I think of Sage and Sage Intacct in particular, I think of software built for accountants, built to make the accountant’s job a lot easier.”

That has been Sage’s strapline for some time, but this is a new age with new challenges and strong competition, not least from NetSuite, an Oracle business since its acquisition back in 2016. And yet Sage has managed to hold its own, operating as, what Gartner would refer to in its Magic quadrant reports, as a niche player.

“Sage has pushed for the continuous close,” said Permenter. “That’s one of the most chaotic areas in accounting. So, it’s definitely a lifestyle improvement for an accountant.”

However, while Intacct has been front and centre, other ERP products appear to have been left behind a little, although Permenter reckons that SME users will see X3 and Sage50 get update treatments in the near future. The emphasis on Copilot and what automation can bring to its customer base has been a clear priority for Sage, across its entire range.

For Rob Sinfield, an executive product leader strategist at Sage, ERP lends itself nicely to automation, so Copliot makes a lot of sense for users looking to find those efficiencies that Morely-Jones spoke about.

“AI-powered solutions are ideal for ERP, featuring large language models tailored to accounting, financials, planning, HR, and operations processes,” said Sinfield. “Sage embeds AI into the very foundation of our new ERP offerings. Our strategy focuses on user-centric design, adaptive user experiences, and expansive choices.

“Specifically, Sage Copilot and Generative-AI powered services will enable us to reimagine processes and how we help our customers get work done, providing highly contextualised, relevant, and personalised insights and actions.”

Permenter believes the narrative around AI is in fact “very mature”. He has high hopes for what Sage is going to do with AI in general and not just Copilot. Permenter said that in many ways, Sage is able to be more cohesive and clear in its approach to automation because it is very focused on accountants. It is not trying to be all things to all people, unlike some of its larger ERP competitors, although Permenter does suggest that the Sage product portfolio has “a bit of overlap” and could maybe do with a bit of “rationalising” at some stage.

Sinfield accepts that as time goes by, there will be an increased shift of customers to the cloud and this could mean a few changes. “You’ll see us simplifying our story to customers,” he said, adding that Sage would continue to evolve its technologies to address the specific needs of customers, covering a variety of vertical sectors.