kenandy award write up

2017 North American #1 Cloud ERP for Small & Mid-sized Manufacturing

Product Leadership Award

BEST PRACTICES RESEARCH

© Frost & Sullivan 2017 2 “We Accelerate Growth”

Contents Background and Company Performance ...................................................................... 3

Industry Challenges............................................................................................ 3

Product Family Attributes and Business Impact ....................................................... 3

Conclusion ........................................................................................................ 7

Significance of Product Leadership .............................................................................. 8

Understanding Product Leadership .............................................................................. 8

Key Benchmarking Criteria .................................................................................. 9

Product Family Attributes .................................................................................... 9

Business Impact ................................................................................................ 9

Decision Support Matrix .................................................................................... 10

The Intersection between 360-Degree Research and Best Practices Awards .................... 11

Research Methodology ...................................................................................... 11

About Frost & Sullivan ............................................................................................ 11



Background and Company Performance

Industry Challenges

Early enterprise resource planning (ERP) systems that started in the 1970s featured limited computing capabilities and was built as different modules. The notion of building a fully integrated system was simply not possible because the computing infrastructure would not allow it. As a result, today’s leading ERP companies started out by building one module after another, such as a finance module, a supply chain module, a customer relationship management (CRM) module, and an HR module, featuring different tables with different elements (i.e., a table for each small element of business) to ensure businesses ran properly. As applications grew, the end result was tens of thousands of tables, and to enable business processes (i.e., transferring data from one process to another), all these different tables had to be connected to each other to ensure the data flow was correct from one module to another.

The end result, therefore, is a system with tens of thousands of tables and a large number of interconnections between them required to enable a business process, leading to a time-consuming implementation of legacy ERP systems available as well. Populating the different tables to ensure the data is correct and then connecting the tables together takes a long time. In addition, when customers have to extend these legacy ERP systems or add on new capabilities, they have to rewire the systems, which is the fundamental reason why setting up old ERP systems that are rigid and difficult to adapt to new systems takes so long. Consequently, the currently available (legacy) ERP systems that were not designed for today’s businesses force the customer to conform to the available software, which acts an impediment in the customer’s growth path.

Under such circumstances, vendors that can address the aforementioned challenges by providing a cloud-based ERP solution that overcomes the limitations of traditional table-based ERP systems, maps or adapts to customers’ business processes, helps them expand into new product/markets, and innovates and devises new business models in a short time are expected to secure a leadership position in the North American market.

Product Family Attributes and Business Impact

Match to Needs

Keeping the aforementioned challenges in mind, Kenandy Inc. has designed an end-to-end cloud ERP solution that maps to its customers’ business processes and not the other way around, as is the case in old ERP systems. Built on the Salesforce platform, Kenandy’s ERP system has unlimited computing capability, along with a unique architecture of Business Ready Objects.



The top level has 4 important business building blocks that any business should implement: contracts, execution, cash, and financials. Contracts manage relationships with external parties, with the most important being customers, followed by suppliers or partners. The second building block of any business is execution of agreements signed with external parties (build, fulfill, and ship the product to the customer). While the third building block of any business actually relates to financials (i.e., collecting cash from the customer), the fourth building block is managing the operations correctly using the right financial metrics. At the topmost level, Kenandy’s ERP system addresses these 4 fundamental building blocks of any business or process, and beneath these 4 blocks, the company has expanded out to 150 different Business Ready Objects that can fit other areas of business. The way to conceptualize these building blocks is that these objects can be easily and quickly connected to form a business process, which is in contrast to tying together thousands of disconnected tables and modules as in the case of legacy ERP systems. Kenandy’s business processes include: Order Management, Manufacturing, Distribution, Supply Chain Management, Product Data Management, Warehouse Management, and Financials with all supported by rich Analytics.

The difference between a table-based legacy ERP approach and Kenandy’s technologically advanced object-based approach is that instead of having to connect different tables to each other to create a business process, Kenandy’s ERP system runs the entire sub-process within an object. When the sub-process is complete, the system processes information on the next object, which largely simplifies data management in the ERP system as the number of objects that need to be tracked becomes much smaller than the tens of thousands of tables in a legacy ERP system.

Kenandy’s offering has 150 objects that are easy to track, and the information model on what each object does is much easier to understand. In addition, the system can easily talk to a particular object and extract information quickly to create new reports and provide strong analytics. The system is easier to assemble a new process because each sub-process can be taken out and mapped to a new business process. Therefore, leveraging the power of the Salesforce App Cloud, Kenandy’s Business Ready Objects simplify information management as well as define business processes based on each customer’s specific needs.

In essence, Kenandy is redefining the ERP market by allowing customers to map to their existing business processes, enabling them to scale their businesses easily, grow their revenues quickly, update their models as their businesses evolve in tandem with emerging market trends, and be unrestrained by outdated table-based ERP systems.

Design

Unlike its competitors that built their ERP systems based on a rigid traditional architecture, Kenandy built its ERP system on the Salesforce App Cloud, the leading platform-as-a-service (PaaS). Kenandy Cloud ERP is the only end-to-end ERP solution on



the Salesforce App Cloud. One of the key advantages of building the ERP solution on the Salesforce platform is that all of its platform-as-a-service capabilities become native to Kenandy. As a result, when customers leverage Kenandy’s ERP system, they do not have to worry about the underlying computing infrastructure or security as this is managed by the Salesforce App Cloud. In addition, services such as Analytics, Reporting, and Mobility are fully available in Kenandy. Importantly, a customer’s ability to customize Kenandy is vastly increased because it is built natively on a platform-as-a-service. This approach is strikingly different from competing ERP systems that are not completely built on PaaS. In other words, if a customer wants to extend their core ERP or add on services such as Mobility or reporting, they either are unable to do so without extensive source code updates, or they have to go to a different bolt-on PaaS to build a non-native extension. In such cases, the amount of extensibility customers have is not the same, and in this context, Kenandy’s ERP system has a much greater advantage over other solutions. As a result of having been built on the Salesforce platform, Kenandy’s ERP system can take advantage of the complete Salesforce eco-system to provide the complete set of processes (by integrating sales quotes and opportunities from Salesforce CRM with other vital business processes, including order-to-cash, planning and production, procure-to-pay, and global financials) needed to run any business as well as talk to the 2,700 different applications and integrate them seamlessly into Kenandy’s ERP. Being on the same database, the connection between Kenandy’s ERP system and the different apps is quick and easy, with no need for any middleware to connect to different applications. Additional functionalities can be easily integrated with other apps from the Salesforce AppExchange or Salesforce application program interface (API). As a result, customers can enjoy a seamless, end-to-end business process on a single platform at a lower cost of integration and a faster return on investment.

Product/Service Value

In the era of table-driven ERP, data had to be stored in distributed tables to identify a solution (a solution with hardware as well as software and services). With information residing in multiple different tables, making sense of the information became difficult as there was no central repository. Consequently, companies were unable to enter or diversify into new geographies or launch a new product line or a new business model as they did not have the right underlying supporting software infrastructure. To make the supporting software infrastructure functional under the old systems, the tens of thousands of tables present in legacy ERP systems need to be wired correctly to ensure they work for the new business model.

Kenandy encapsulates all the information required for a particular sub-process within the object itself, as opposed to being placed in a physical level within each of the tables in legacy ERP systems. Kenandy’s Business Ready Objects have both data and the intelligence embedded in them to manage the data within the object itself, compared to tables that only have data. Because of the intelligence embedded in objects, an issue occurring within the sub-process is immediately flagged/ identified and brought to the



user’s attention. In a nutshell, if customers’ business processes change, Kenandy’s ERP system can change with them and help them innovate and realize those business opportunities in a short time frame.

For instance, a Fortune 500 medical device manufacturer wanted to move from a model where it was selling MRI machines to hospitals on a capital expenditure (CAPEX) basis to a model that charges by the image or, in other words, offers its system as a subscription service. Kenandy enabled this company to transition to this new business model more flexibly and efficiently as it did not have to do any of the rewiring. Kenandy offered an information model that contains all of these different elements in one object, which makes it easy to track the associated hardware, software, services, and location of one particular solution as well as the customer that owns the solution. Adopting this model enabled the company to implement a subscription-based billing for its imaging equipment in weeks, which clearly demonstrates the ability of Kenandy’s ERP system to enable new business models that deal with hardware as well as software and services.

Customer Acquisition

Kenandy’s object-based approach has helped it scale up its services and be highly successful in deploying its ERP system in small and midsize manufacturing across North America. The company’s flexible design and faster implementation capabilities have enabled manufacturers to boost output as well as time-to-market products with a more efficient production and inventory management. With most other ERP systems not ready for today’s businesses and that force businesses to conform to the software, Kenandy’s cloud platform (for fully scalable enterprise software) can map the ERP to customers’ business processes and allow them to innovate businesses, products, services, operations, and relationships. Therefore, Kenandy effectively addresses the evolving customer requirements with its advanced ERP system and supports various layers of its customers’ engagement models.

Some of the leading companies that have reaped huge benefits by deploying Kenandy’s ERP system include Merrow Inc, which started 7 new businesses and added a new repair business and a new clothing line in weeks; 3 SIGMA Corporation, which implemented a new barcode on a mobile device scanner in days; SFEG, which implemented and integrated robots on its production floor and consolidated 3 businesses into 1, and Blue Clover Devices which developed an unique business model spanning the US and China for the design, development and manufacture of IoT (Internet of Things) devices. These examples clearly indicate how Kenandy’s customers can ramp up fully in weeks, make ERP changes for their business needs anytime, and easily develop new products or penetrate markets.



Growth Potential

With 100 employees and over 60% growth in employees since June 2015, new CEO and executive team as well as 300% growth of the product codebase in 2015, Kenandy has had a 200% year-on-year (YoY) growth rate with a positive cash flow and has raised more than $55 million in venture funding. Users select an ERP system based on its completeness in terms of the depth of functionality in different areas and the degree of flexibility it offers. Legacy ERP systems are only functionally complete, whereas Kenandy’s ERP system meets both requirements, which has been highly beneficial for Kenandy in successfully establishing its product leadership and in drawing the attention of companies from a number of verticals, including shopping bag manufacturers, medical equipment, solar panel suppliers, pet food, and renewables and environment. The company caters to niche participants as well as market leaders, such as Chico Bag, Big Heart Pet Brands, Natural Balance Pet Foods, Primus Power, and CivicSolar Inc. The company’s high rate of customer satisfaction across a plethora of industry verticals is expected to boost its growth potential in the coming years.

Conclusion

Kenandy has successfully addressed the requirements for current and futuristic businesses with its end-to-end cloud ERP architecture of 150 Business Ready Objects (building blocks of any business process), providing customers with the flexibility to respond to the constantly changing business requirements and processes. Freeing customers from issues associated with traditional table-based ERP systems with thousands of disconnected tables and modules, Kenandy is facilitating innovation in products, services, operations, and relationships and enabling new business models, making ERP system changes for its business needs at any time and easily launching new products or penetrating new markets, unlike competing systems available in the market that force customers to conform to software. Leveraging the power of the Salesforce App Cloud, Kenandy enables its customers to scale easily, grow quickly, update their model as their businesses evolve in tandem with emerging market trends, and be unrestrained by outdated table-based ERP systems. With its strong overall performance, Kenandy has earned Frost & Sullivan’s 2017 Product Leadership Award as the #1 Cloud ERP for Small & Mid-sized Manufacturing.



Significance of Product Leadership Ultimately, growth in any organization depends upon customers purchasing from your company, and then making the decision to return time and again. A comprehensive product line, filled with high-quality, value-driven options, is the key to building an engaged customer base. To achieve and maintain product excellence, an organization must strive to be best-in-class in three key areas: understanding demand, nurturing the brand, and differentiating from the competition.

Understanding Product Leadership Demand forecasting, branding, and differentiation all play a critical role in finding growth opportunities for your product line. This three-fold focus, however, must be complemented by an equally rigorous focus on pursuing those opportunities to a best-in-class standard. Customer communications, customer feedback, pricing, and competitor actions must all be managed and monitored for ongoing success. If an organization can successfully parlay product excellence into positive business impact, increased market share will inevitably follow over time.



Key Benchmarking Criteria

For the Product Leadership Award, Frost & Sullivan analysts independently evaluated two key factors—Product Family Attributes and Business Impact—according to the criteria identified below.

Product Family Attributes Criterion 1: Match to Needs Requirement: Customer needs directly influence and inspire the design and positioning of the product family

Criterion 2: Reliability and Quality Requirement: Products consistently meet or exceed customer expectations for performance and length of service

Criterion 3: Product/Service Value Requirement: Products or services offer the best value for the price, compared to similar offerings in the market

Criterion 4: Positioning Requirement: Products or services unique, unmet need that competitors cannot easily replicate or replace

Criterion 5: Design Requirement: The product features an innovative design, enhancing both visual appeal and ease of use

Business Impact Criterion 1: Financial Performance Requirement: Strong overall financial performance in terms of revenues, revenue growth, operating margin and other key financial metrics

Criterion 2: Customer Acquisition Requirement: Product strength enables acquisition of new customers, even as it enhances retention of current customers

Criterion 3: Operational Efficiency Requirement: Staff is able to perform assigned tasks productively, quickly, and to a high quality standard

Criterion 4: Growth Potential Requirements: Product quality strengthens brand, reinforces customer loyalty and enhances growth potential

Criterion 5: Human Capital Requirement: Company culture is characterized by a strong commitment to product quality and customer impact, which in turn enhances employee morale and retention



Decision Support Matrix Once all companies have been evaluated according to the Decision Support Scorecard, analysts can then position the candidates on the matrix shown below, enabling them to visualize which companies are truly breakthrough and which ones are not yet operating at best-in-class levels.

DECISION SUPPORT MATRIX FOR PRODUCT LEADERSHIP AWARD

High

Low

Low High

Bu

sin

ess

Imp

act

Product Family Attributes

Kenandy

Competitor 2

Competitor 3



The Intersection between 360-Degree Research and Best Practices Awards

Research Methodology Frost & Sullivan’s 360-degree research methodology represents the analytical rigor of our research process. It offers a 360-degree-view of industry challenges, trends, and issues by integrating all 7 of Frost & Sullivan's research methodologies. Too often, companies make important growth decisions based on a narrow understanding of their environment, leading to errors of both omission and commission. Successful growth strategies are founded on a thorough understanding of market, technical, economic, financial, customer, best practices, and demographic analyses. The integration of these research disciplines into the 360-degree research methodology provides an evaluation platform for benchmarking industry players and for identifying those performing at best-in-class levels.

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best in class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best practice models to drive the generation, evaluation and implementation of powerful growth strategies. Frost & Sullivan leverages almost 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 31 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com.

360-DEGREE RESEARCH: SEEING ORDER IN THE CHAOS

TechnologyObsolescence

DisruptiveTechnologies

NewApplications

CEO

Demographics

Needsand

PerceptionsSegmentation

BuyingBehavior

Brandingand

Positioning

CompetitiveBenchmarking

EmergingCompetition

CompetitiveStrategy

CapitalInvestments

Availabilityof

Capital

CountryRisk

EconomicTrends

CrowdSourcing

GrowthStrategies

CareerDevelopment

GrowthImplementation

IndustryEvolution

New VerticalMarkets

IndustryExpansion

IndustryConvergence

EmergingTechnologies

Smart Cities

Sustainability

New BusinessCultures

GeoPoliticalStability

kenandy award write up

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