Awards - Not a soft option

In accountancy software, as in politics, the UK is caught between two conflicting blocs – Europe and the US. Although this country boasts a healthy population of indigenous suppliers, it has become a key battleground in the struggle for world domination.

Ever since the wartime D-Day invasions, North American IT companies have used the UK as a staging post for assaults on the continent. But in the 1990s, European developers such as Navision and SAP have fought back.

Judges in the Accountancy Age awards for accounting software packages will look across the board. There are three awards in this category covering off-the shelf packages, mid-range systems and enterprise systems.

Just because so many outsiders want a piece of the UK action, it would be foolish to overlook the claim of home-based vendors such as Access Accounts, Exchequer, Pegasus, Sage and Systems Union. Many of the first and best accountancy software packages were born in this country. People tend to be influenced by the first software they use and once a package enters your bloodstream, any rival system can feel inferior. Thanks to the pervasive influence of Microsoft Windows, most accouncancy software looks the same. Until you start using it.

But, in a market increasingly dominated by brand-led marketing, the loyalty and trust UK vendors have cultivated is a valuable asset.

Such subjective factors make it impossible for the judging panel to choose the winners in lofty isolation. Instead, they will go out to the market and seek the views of the users – the people who can really tell if systems are delivering on suppliers’ promises.

In doing this, they are following the advice of Andy Grove, chief executive of microprocessor manufacturer Intel. He argues that the Internet is transforming customers’ expectations for service, speed and convenience. ‘Competition will be between business models, not products,’ he says.

The Year 2000 problem has concentrated the minds of IT users and suppliers since the last awards were presented in 1996. Instead of updating their programs every year as they have done in the past, software companies heeded the cries of users suffering ‘upgrade fatigue’ and slowed down their development programmes – at least until the turn of the millennium.

Californian enterprise resource planning supplier PeopleSoft pioneered this sharing, caring approach last year and has been followed by rival ERP vendors. While the Year 2000 problem slowed down their development cycles, it has encouraged vendors to speed up the delivery and installation of their products.

JD Edwards, Baan, Oracle, PeopleSoft and SAP – the ‘J-BOPS’ of enterprise software – all now offer pre-packaged, fixed-price rapid implementation services. Their target customers are no longer Fortune 1000 multinationals but smaller national and regional enterprises.

But in their haste to get new software in, customers could be sacrificing the flexibility of their systems. US vendor JD Edwards, played this card earlier this year when it launched its One World suite. The software includes a Wizard-type feature called Idea To Action that lets users reconfigure processes such as invoicing and reporting on the fly. The business rules are defined by following simple click-and-point guidelines and the One World code rewrites itself internally.

To package and deploy financial software more quickly, companies such as SAP and PeopleSoft have resurrected the 1970s timeshare bureau. ‘Application hosting’ gives users access to all the normal functions via the Internet and standard browser programs.

SAP teamed up with BT to offer R/3 online, while Australian software house Solution 6 has introduced a similar service down under and plans to bring it to the UK next year.

Scandinavian companies have probably had the most impact on the market over the past year. By targeting the UK’s mid-market, the fastest growing sector, Navision, Damgaard, Scala and Maconomy have boosted revenues.

Danish company Navision has a strongest presence in this country and was rewarded this year with funds to expand when it floated on the Copenhagen stock exchange.

The Accountancy Age awards are not just about bookkeeping and general ledger software. As has already been noted, most new ground for these applications has already been broken.

Derby-based Dragnet caught much bigger suppliers on the hop when it introduced an online catalogue that integrates with Pegasus Opera and Exchequer accounting programs, while Great Plains, Navision, Sage Tetra and the J-BOPS are also selling electronic commerce applications.

Business analysis tools and real-time reporting are changing the role finance departments play, while electronic commerce is placing new demands on vendors to link online catalogues and order processing to back-office ledgers.

One of the UK’s success stories is Analyst Financials. Analyst’s founders were keen to create a suite of programs that would improve the production and dissemination of management reports. A lot of their effort focused on extracting and re-using information from Microsoft Excel spreadsheets.

‘Most accountants speak Excel as their second language,’ says Analyst managing director Mike Evans. ‘But getting a £100 plus per hour professional to spend a few hours on basic data entry makes very little financial sense.’

The company’s technical prowess has been recognised by Microsoft and Sage, both of which approached Analyst for help with programming work.

Hailing from the corporate high ground of financial planning software, Comshare and Hyperion are anticipating that Web-based versions of their budgeting and planning applications will attract customers in small and medium-sized businesses. Cognos and Seagate Software, volume suppliers of financial reporting software, rely heavily on indirect sales where mainstream accountancy vendors bundle products like Cognos’ PowerPlay and Seagate’s Crystal Reports. To broaden the reach of its applications, Seagate is offering two of its products free of charge.

Long may this customer-focus continue, and may the best business models win.