Leading European growth equity firm and investor in Basis Technologies’ DevOps for SAP platform, Scottish Equity Partners (SEP), recently highlighted some of the key drivers for DevOps transformation in business critical ERP and SAP systems and how Basis Technologies is addressing the market need. Continue on to read the full article:
Business transformation has rapidly accelerated during the global pandemic, fuelling a need for agile software solutions to overcome complex challenges associated with digitisation, cloud migration and adapting to changing customer behaviour.
Basis Technologies, one of the latest additions to the SEP investment portfolio, is at the heart of this dynamic as a leader in specialist software solutions that enable organisations to drive business agility and transformation.
Its leading-edge products are rapidly becoming the industry standard for companies seeking ways to deliver change with reduced effort and risk, and in a fraction of the time of standard solutions.
Basis specialises in DevOps, a set of practices that combine both software development and IT operations. It is a pioneer in solutions and test automation software that are deployed in systems powered by SAP, world leader in Enterprise Resource Planning (ERP).
SEP has invested $25 million in the business to accelerate its global expansion and product development and SEP Partner Keith Davidson has joined Basis as a non-executive director to help guide the next stage of growth.
SAP-based ERP systems are the nerve centre of most of the world’s major enterprises as well as many SMEs. German company SAP was a pioneer in developing ERP software and remains hugely influential with 440,000 customers across all industry sectors.
ERP systems are critical because they drive multiple connected business processes and systems within an organisation. These span accounting and financial controls, human resources and payroll, stock inventory, warehouse logistics and customer relations. The DevOps solutions developed by Basis enable better, faster and cheaper changes in these highly complex interconnected ERP SAP-based systems.
Basis Chief Executive Martin Metcalf, a 30-year IT industry veteran and former senior executive at SAP, says an estimated 77% of the world’s financial transactions touch an SAP system. Also, a huge proportion of world trade is powered by SAP systems, including 78% of the world’s food distribution and 82% of the world’s medical devices.
SAP’s ERP systems are notoriously inflexible and complex. Metcalf says SAP systems have been described as ‘liquid concrete’ or a ‘black box’ – important but opaque and impenetrable. Making changes in one area can have unforeseen negative consequences in another area if the change is not robustly tested and expertly designed and implemented.
Many enterprises are simultaneously dealing with transition to SAP’s new S/4HANA system as well as moving from private server farms to cloud-hosted data and managing digital transformation. It is a hugely challenging situation, fraught with risk.
“If you’re a big consumer brand you also deal with thousands of business partners deep in the supply chain,” says Metcalf.
“Every one of those represents changes that needs to be taken care of when wider system change is occurring. A simple change can lead to system-wide failure if not handled correctly.”
Bungled ERP change programmes feature heavily in the annals of IT disasters. Last year CIO magazine documented a litany of ERP ‘disasters, dust-ups and disappointments’. These included service outages, lost sales and cost overruns running into hundreds of millions of dollars as well as costly lawsuits. The fiascos featured household names including supermarket chain LIDL, cosmetics giant Revlon and retailer Target.
Basis is emerging as a standout leader in its field because of its combination of first-class skills in DevOps, deep expertise in ERP and SAP systems and industry-leading SAP-certified solutions. Its unique proposition includes robust automated testing as well as agile, iterative methods of delivering change. Metcalf says agility and automation are integral to its success.
Its flagship products include ActiveControl which replaces slow, opaque and error-prone processes with fast, reliable, repeatable and automated methods that bridge the gap between SAP systems and a company’s own IT resources. This enables organisations to adopt agile developments, DevOps and continuous delivery.
The second flagship product is Testimony, a powerful software solution that is all about robotic test automation (RTA). It learns how systems operate and uses that knowledge to automatically create a comprehensive test suite, generating coverage in days that would otherwise have taken years.
Metcalf says Basis is differentiated by its innate understanding of SAP and the fact that its solutions can dramatically accelerate and de-risk change for clients: “Our automated workflow allows any SAP applications to change rapidly. Why should companies be held back? Our customers can implement changes to SAP every day without having to wait for quarterly SAP releases.”
He is excited about the future for Basis which has achieved rapid growth over the last eight years. The company currently has more than 70 employees and is headquartered in London, UK with subsidiaries in the US, Australia, Germany and Hungary serving customers worldwide. It is generating growing revenue from its software subscription model and with the investment from SEP future product releases will include SaaS (Software as a Service) capabilities. It is targeting a niche global market for its software valued at more than $1.5 billion per annum.
Basis already has 200 global customers across 26 industry sectors. Its current client roster includes consumer goods giant Procter & Gamble, Universal Music, Lloyds Banking Group, automotive group Honda, utilities EDF and EWE, telecoms company Ericsson, oil & gas company JG Summit and insurer AIA. Metcalf says the top 10 customers (by revenue) have a total stock market value of $1 trillion and Basis also serves SME customers.
Basis was self-funded before the SEP investment and Metcalf says the company turned down approaches from a slew of US investors before partnering with SEP. Being in the same time zone and having SEP geographically close to Basis headquarters was a bonus, he says.
“I was told the only game in town is US investors but I thought differently. We had a meeting of minds and I knew SEP would be the right cultural fit. SEP just ticked all the right boxes. We felt it would be a journey and SEP would make a good supportive partner.”
Metcalf says SEP’s track record in backing and building successful global software businesses was key as was the calibre of the team, advisory board and networks.
“It’s about bringing rigour and expertise to the company on environmental, social and governance issues too. We wanted investors who could also help with growing an ethical successful company and building a board that could facilitate that. SEP are ethically sound and know how to get companies up to speed on those aspects of business.”