Beware the 'twin peaks' effect

The great late-1990s accountancy software boom is on the wane,cy software market, writes John Stokdyk. according to the latest MarTrak market survey from Accountancy Age and Softworld Research.

The research team contacted 369 companies and found the number planning to change their software within the next 12 months had dropped by almost 20% since the autumn. Where 52% of respondents were shopping for new software in September 1997, only 43% were doing so in March 1998.

MarTrak confirmed that problems associated with the year-2000 date change fuelled the sales boom. In the period since the last MarTrak survey, the number of companies claiming year-2000 compliance as a strength of their software jumped to 62% from 53%. The survey revealed 91% of firms now claimed to have a year-2000 IT strategy.

In spite of the apparent slowdown, Softworld research manager Wendy Kane said the results indicated that the industry may be in for a ‘twin peaks’ effect. While most companies had begun to tackle the year-2000 problem, they were far less prepared for the euro, with only 15% claiming to have an EMU strategy.

Once companies have negotiated the millennium, Kane suggested they would look at upgrades. ‘Even people who have changed in the past 12 months will be likely to go back and modify their systems. Purchasing is now more a continuous process than a one-off.’

Overall, customer satisfaction levels improved over the past eight months – over one-third of respondents were either ‘extremely’ or ‘very’ happy with their current product and 39% said they would use their existing supplier for their next change. Buyers’ priorities are changing, however, and suppliers will need to keep on their toes to maintain satisfaction levels. In September 1997, implementation support was the most important factor for purchasers.

Since then, on-going maintenance and support has edged it out of first place. The emphasis is even more marked among the senior finance staff who are responsible for managing and running the systems, 64% of whom mentioned ongoing support as a key supplier requirement.

Suppliers’ knowledge of client businesses and of the finance function both gained in importance between the two MarTrak studies. With the exception of a small increase in ratings for business knowledge, however, customers in the latest study judged their current suppliers to be weaker in implementation support, ongoing support, consultancy and training and knowledge of finance.

‘Customers don’t want to feel they’re being handled by people who don’t understand their business or needs,’ warned Kane. Accountancy software users are becoming more demanding, she added. Most use other business applications and know what to expect from technology. ‘They perceive buying as a hassle and prefer to stick with what they have as long as it meets their expectations.’