The financial software market for large companies is a very different beast from the same market for medium sized enterprises. The former is going through a period of intense consolidation, with the top two players, SAP and Oracle, now way out in front of any other vendor as far as their market share and size is concerned.

At the mid-range level, while mergers and acquisitions between the players take place all the time, the sheer number of suppliers seems to prevent any real consolidation from taking place. As Andrew Clayson, head of product management at Sage says, ‘No player in the small to mid range market can claim more than 10% market share.’ Moreover, Clayson does not expect this position to change any time soon.

‘In the mid range there are any number of niche plays that particular vendors can aim for. They can, for example, target specific industries, such as car dealers, or NHS trusts,’ he says.

One thing the majority of financial systems vendors, large and small, agree on is that today, all vendors tend to have a relatively decent set of ledgers to offer their user base. The question for both sets of vendors then, those at the top as well as those targeting the mid range, is how to differentiate themselves from the pack. In essence this comes down to deciding what it is that users really want and then building a strategy to deliver this.

For Judy Griffiths, financial solutions manager at Oracle UK, what finance directors in larger companies really want right now is a neat solution to a rather murky set of problems. ‘Reducing cost is a big requirement but they also have to deal with ever increasing compliance requirements that have cost implications. They want better visibility across their organisation to help them with both these issues and the big enemy for them is opacity in the system, which means anything they can’t immediately drill into or resolve without detailed additional research,’ she says.

Griffiths argues that the days when the finance function used to be about looking backwards and carrying out a technical exercise that did not mean a lot, are gone. ‘Canny FDs now want their teams to be advising operational leaders on business decisions and this is driving demand for integrated enterprise applications. At the same time companies want compliance built in to the systems so there is the proper sign off and documentation,’ she says.

WHAT'S NEW?

Microsoft: a new game or more of the same?

Microsoft sits squarely in the middle of the financial software market with its Dynamic range. This range is aimed at companies that are mature or complex enough to require a full time finance director. It comprises the first reworking of the old Navision, Great Plains and Axapta software suites, all acquired by Microsoft in recent years.

As the director of Microsoft UK Dynamics Paul White explains the aim is to achieve a completely new suite combining the best of all three packages, but that project will take several years to complete. The aim of the rewrite, White says, will be to achieve a much tighter alignment between a company’s IT systems and the way the people in the company do their jobs than is offered by existing systems.

SAP: extending to the desktop

SAP and Microsoft have launched a product called Duet which SAP claims significantly changes or enhances the way users can interact with SAP enterprise applications. The basic idea is that Duet allows users to use Microsoft Outlook to grab information directly from SAP systems for certain key applications.

While the system is easy for end users, it has been a slog for SAP and Microsoft developers, working hand in hand, to get the two systems to combine neatly. There is a good deal of code ‘under the bonnet’ to ensure the whole thing works smoothly.
Duet currently has four applications, time management, budget management, leave management and organisational management.

SAGE REALISES CRM POTENTIAL AND UK FINANCIAL SYSTEMS TO BE SHAKEN UP

Sage sees mileage in CRM

CRM, or customer relationship management, has had a chequered history as a ‘must have’ add on to financial systems. The idea generally is that the salesman uses the CRM system, ideally on a wirelessly enabled hand held, to check a customer’s profile before a customer contact call, as well as using the system to update the results of the call.

Where CRM fails, as Sage head of product management Andrew Clayson says, it tends to do so because front line staff find it difficult or unwieldy. But Sage reckons that CRM still has a great future and Clayson sees it as a natural, logical development of end user organisations.
‘We see a real demand for sales people to ‘own’ their customer accounts, so instead of having a team of credit controllers internally, the company will ‘push ’the credit information to the sales person concerned and they will deal with the client, chasing debt or discussing disputes as part of their relationship building.’

‘We see this as a very interesting way forward, ’he says. On its high end system Line 500,Sage has integrated its CRM offering to create a new product, Sage 1000.The aim is to capitalise on this growing trend to extend financial systems into operational systems.

Basda view– trouble ahead

The UK financial systems market is about to undergo a shaking up, courtesy of government inspired changes such as e-VAT filing and the introduction of ‘reverse charging’, which it hasn’t experienced since the EU open market requirements back in 1993 says Dennis Keeling, CEO of the Business Applications Software Developers Association.

‘Systems are going to have to be upgraded or in some cases rewritten at the vendors ’own expense, since these are changes introduced by government, and so covered by ordinary maintenance contracts. Many vendors are going to be forced out of the financial systems market as a result.

‘Our advice to customers is to make sure that their chosen vendor is able to stay the course,‘ says Keeling. He points out too, that many customers will use the furore these changes will create as an occasion to revisit the market and change their applications vendor.

‘Many companies are still running DOS based ledgers and this has to be the end for many of those systems,‘ he says. Keeling expects a number of smaller vendors with niche offerings to get out of the ledgers market altogether and to link their core, specialist ‘value added’ systems instead to a Microsoft or a Sage product.

Anthony Harrington is a freelance journalist