Analyst Perspectives

Sage recently held its Future user conference in Atlanta. Our ISG Buyers Guide for Midsize ERP Financial Management (2024) rated Sage Intacct as one of the top three providers, reflecting its strong performance in both product capabilities and customer experience. The event showcased its advances and roadmap aimed at embedding artificial intelligence (AI), generative AI (GenAI) and agentic AI in its applications, especially ERP. In 2024, nearly every software provider highlighted its (mostly potential) use of AI and GenAI capabilities in their products, especially in the form of assistants and copilots. Today, Sage has already deployed its copilot to assist finance organizations with invoice processing, automating data entry, and repetitive tasks and workflows. It can monitor business data to prevent errors and anomalies from being entered into its system as well as create alerts for key metrics and financial activity that requires immediate attention. ISG Research asserts that by 2028, almost all providers of ERP software will have incorporated AI to reduce workloads, speed processes and reduce errors. This year, Sage (like many other software providers) is emphasizing agents and agentic capabilities along with AI and GenAI. Agents are especially useful because they enable business applications to extend and amplify their offerings’ existing capabilities while making it easier for their customers to adopt and employ AI technology.

That said, as is often the case in technology, the age of agents is being proclaimed ahead of their actual arrival, practical accessibility and adoption. Sage’s agents (like others) do not fully fit our definition of agentic systems, but they are an important, useful first step that facilitates technology adoption by customers. These superbots are likely to evolve over the next few years into true agentic systems. To avoid potential confusion, I will use the agent terminology in this research note.

It’s also the case that truly hands-off, autonomous agentic systems are still somewhere well into the future. User-defined guardrails will be an essential part of systems design for years to come. This in no way diminishes the transformative potential for the gradual adoption of agent-like technology in the near term because this is a way to build trust and create a path from today’s practices to those of the future that can make best use of AI technology.

Agent-enabled software is the latest step in applying AI and GenAI technology in business applications. For decades, a principal aim of systems was decision support, providing information so that management actions were based on data rather than intuition. But knowing is not enough. Agentic AI moves the focus to facilitating action, either by executing tasks automatically or by providing the best options and their likely consequences to enable individuals to make reliably better decisions faster.

Agents harness AI and GenAI to orchestrate and execute anything from simple to complex tasks and processes with limited or no human intervention. One small example that’s already available is the ability to pull invoices or sales orders out of emails, either in the body of the message or as an attachment, parse the information contained in the business document and correctly enter the data directly into a system with limited or no human intervention. Shortly, utterly tedious but necessary accounting tasks such as the flux analysis (comparing financial figures across two or more periods, calculating the difference and documenting the causes for the most relevant changes) have the potential to be completely automated, requiring only review and approvals.

More advanced use cases in limited release or on product roadmaps from Sage include coordinating tasks, making data-driven decisions autonomously where sufficient certainty exists, or providing human operators with the best, most relevant options to choose from. Harnessing GenAI and natural language processing, agents can enable people to ask questions or receive summarizations related to the content of documents. Agents also have the potential to autonomously create tables that summarize data, generate charts that illustrate the data, and offer comments about the data.

Sage Intacct has embraced continuous accounting as a means of substantially reducing the amount of period-end work necessary to complete the accounting close. We have used the term since 2015 to focus on the use of technology to spread departmental workloads as continuously as possible across the accounting calendar to avoid period-end workload spikes and provide a better work-life balance for staff. At the Future event, Sage presented several innovations on the near-term roadmap including a dedicated Close Workspace within its Copilot that tracks tasks, identifies process bottlenecks and generates suggestions that can streamline and accelerate the close. The software will orchestrate repetitive tasks, standardize journal entries and automate data entry. Currently, our research finds that half of midsize and larger companies take more than ten business days to complete their quarterly close. Closing sooner is a measure of staff productivity and provides vital financial and management data to executives and managers sooner, making this information more actionable.

It shouldn’t be overlooked that agents are an important evolutionary step in business applications because they give software providers the ability to improve functionality and system performance while minimizing the use of compute resources. For example, especially as agents perform routines that involve GenAI, they ensure that the system is employing the optimal wording and structure of prompts involved in the execution of some tasks, compared to leaving it to the individual operator who may lack the skills to do so.

Agents are especially important for midsize companies, which I define as those with between 100 and 1,000 employees. Sage’s accounting software portfolio is designed to address the specific needs of this market segment. These companies sit uncomfortably between small businesses and large enterprises because they have many of the same needs as bigger organizations but don’t have the same level of resources. People working in these enterprises typically perform more roles with more diverse responsibilities, and managers often don’t have access to the same level of skills that a larger enterprise can attract. Increasingly, though, software is able to fill the gaps, especially in the use of agents to improve productivity and performance.

Beyond needing to create functional, reliable agentic systems that address common use cases as fast as possible to remain competitive, business software providers face other challenges that will affect their future market share.

Software providers that can demonstrate proven customer success in using AI and agents earliest will have a competitive advantage because of the power of peer endorsement. One measure of success with AI and agents is how well the system can upskill workers. This is especially the case for finance and accounting departments and particularly for midsize companies where people have multiple responsibilities and the enterprises are not necessarily going to have access to all the talent they need. There are two parts to upskilling. One is freeing up time by eliminating repetitive work that can be automated or significantly assisted by technology. The other is making it easier for individuals to take on work that in the past has been relegated to a nice-to-have status. Both require degrees of change management to alter the inclinations and behavior of the staff. CFO leadership is necessary for the former, but training is another matter, which is where Sage’s High-Performance Finance Software initiative comes in. The program, just announced, has the potential to enable highly motivated accounting organizations to achieve better results from AI more rapidly.

Accountants tend to be technologically averse, which impedes software adoption and the full utilization of available capabilities. To begin to address this challenge, Sage has been collaborating with the American Institute of Certified Public Accountants (AICPA) aimed at aligning GenAI with AICPA standards and professional literature in the U.S. This initiative involves licensing select AICPA resources to train Sage Copilot, Sage’s GenAI assistant. The goal is to enhance the assistant’s ability to provide authoritative, context-aware guidance for accountants and finance professionals. This should serve as a first step in making technology a core discipline of accounting. Acceptance (or at least the absence of wholesale rejection) of the technology by auditors and accountants is essential to adoption. The shortage of accountants is driving the need for greater productivity, and the ability of technology to reduce the tedium of traditional bookkeeping will go a long way to making the profession a more attractive career option.  

ISG Research asserts that by 2028, one-half of all finance and accounting departments will be using some form of agentic AI to boost productivity, reduce costs and improve performance. Adoption of the technology will be facilitated by the ability to take a measured approach to its use. Some organizations will be aggressive while others take a more cautious stance because they will have that choice. Even with modest steps, these agents will be useful for proving AI’s feasibility and value, a key part of building trust and reducing perceived risk in utilizing this technology. The business impact of AI and agents will be measured, but cumulatively exponential—the result of what I’ve called productivity by 1,000 cuts. This means that these initial, relatively simple steps are likely to produce an underappreciated boost to productivity that continually cascades into greater results.

Sage’s technology foundation is strong, and the company has demonstrated its reliability in delivering on its product roadmap. I strongly recommend that midsize enterprises adopt a fast follower approach to adopting AI and agents in their finance and accounting organization. A fast-follower approach is now a necessity because software designed for finance and accounting departments is evolving rapidly to address the need to improve departmental productivity, attract and retain the best (and scarce) accounting talent and improve performance. Fast followers will have a very real advantage in utilizing technology because they will be able to quickly take advantage of advances as they become available. Those that pursue a wait-and-see strategy—and there will be many—will fall behind and underperform their peers. I also recommend that those CFOs who are examining the ability of their ERP system to support their digital transformation efforts and finding it lacking should assess Sage Intacct or Sage X3 to see if these fit their needs.

Regards,

Robert Kugel