Getting the message across
This point was the crux of our December meeting between accountants and Cloud developers. While previous content posted in this group highlighted some of the barriers to adoption, several points were raised that pointed to good market development opportunities. Each of these might merit discussion in their own right, but I'll post them here and anyone interested in talking about the issue further can start a new thread to pursue the topic. Here is a summary of the points raised:
Is “the Cloud” relevant to accountants and their clients?
No. When we set out to find accountants to attend our accounting event at the Business Cloud Summit, nearly two-thirds of the accountants we approached said it wasn’t part of their thinking. We got a similar reaction when we tested the phrase on sole practitioners at an ICAEW conference. Here’s what our panel participants had to say on this subject:
- “They just want software to do the job. What the majority of clients want to know is how much tax do they have to pay and when. Have you filed the corporation tax return? They’re only interested in having something that works.”
- “I don’t have any clients at the moment that talk to me about Cloud Computing. They’d like to be able to see the data, but they don’t talk about Cloud.”
“Focus not on the technology but on the need behind it.”
This was the message from Xero’s Gary Turner & Liquid’s Matt Holmes, and was endorsed by one of our accountant panellists: “I think it’s a means to an end. I’d rather talk about the benefits of the software rather than the fact that it’s online. Some clients are going to be really interested and others don’t care at all. Some clients don’t want to hear anything about accounting, they just want you to do it.”
- Come up with messages that emphasise the compliance and business benefits for accountants and their clients, eg “avoid CIS late filing fees”, “Are you ready for filing P45s online?”, “Do you know where your finances stand at this moment?”. Focus on how applications can make work processes more efficient.
- There was underlying interest in all-in-one solutions that remove as much of the administrative hassle as possible for SME customers. One accountant was offering hosted apps, including MS Office for £50/user/month, where the eventual upgrade to the 2007 edition won’t cost them extra: “I want my clients to be able to run their businesses without having to think about IT or accountancy. “ Just as Salesforce and NetSuite are doing, think about companion HR, payroll, office tools; for example, an online start-up kit could be an attractive option that would appeal to some of the accountants at the fringe meeting who currently provide hosted applications for their clients.
- “Make it exciting for us and end users.”
The business benefits
- Collaboration “People need access to their data and they’ll use the method that’s most appropriate. Driven by the way they need to collaborate with their clients.”
“Some clients would like a more collaborative approach and would like to see their reports online.”
- All the data in one place [Liberty’s Alan Wright]: “Success is if the clients can input data they need to input, if it’s accurate, at the same time accessible for checking and reconciling, then both parties can run reports. I don’t know any [desktop app] that can do that successfully at the moment.”
- Improved access and information security “Are we worse off by having hosted applications, or are we worse off by having it under the desk and it could still go down?”
“I think host solutions are more secure. I’ve been in practices where the server is under the MD’s desk and hasn’t been updated for years, let alone backed up or taken home. In the event of a flood this wouldn’t be good! Cloud apps are hosted in a proper secure, managed solution where they can deal with back-ups and attacks. Also see the business continuity thread in this discussion group.
- Costs:See the business case thread in this discussion group and the total cost of ownership comparisons (which might benefit from some first-hand data from members and developers)
- efiling opportunity While on-premise developers are competent enough to cope with the demands of online PAYE & VAT filing, the Carter programme to universal online filing will force disruption and change within the accounting software market. This presents Cloud developers with an opportunity to get their foot in the door to talk accountants. Hosted software makes it easier to cope with glitches or unexpected changes at HMRC Online or the government gateway. Cloud developers have demonstrated that they’re better able to cater for regulatory changes (eg the VAT increase-decrease). Agents (and some of their clients) are nervous about companies handling PAYE and VAT submissions themselves and mandatory filing may see a lot of them move into bureau services. Some developers have already focused on developing integrated payroll and VAT reporting tools and this could prove a fruitful area for market development between now and 2012.
- Integrated practice management “There are huge advantages for practitioners to get a view of their clients from a single database. From the accountant’s perspective, the practice management view is an important part of the potential benefit, because it helps them to provide a better service to clients.
- Education Sage’s success in infiltrating the training colleges has been documented in another thread. Cloud vendors are beginning to talk to this sector, where their online applications have obvious advantages for accessibility and cost.
- Target start-ups “The start ups are getting it. Roll on swine flu because when everyone is working at home they’ll need it.”
“The Cloud is cheaper than having your own server, without a doubt. Anyone starting up now would be crazy not to have it. The question is, do they know it exists?”
- Should the approach be top down? Not necessarily - ”Look at Excel adoptions. Before Excel, accountants used Lotus. What drove them to Excel was not Microsoft, it was clients starting to send information in Excel. It was bottom up, not top down... Once there is a significant mass of market using Cloud systems, then practices will adopt them.”
“Got to make the benefits real for practitioners, and get them enthused.”
“Give it free to accountants... If you can get a critical mass of accountants [using the application], others will follow”
- Exploit opportunities presented by desktop app shortcomings While one participant commented, “The incumbent supplier needs to do something really wrong to get the client to change,” the desktop application model does present occasional openings for Cloud suppliers. There’s a thread in the Sage 50 Accounts discussion group that is highlighting issues with the upgrade to Sage 50 Accounts 2010; the severity of the problems varies, but this is pretty much an annual occurrence. The message from one Cloud supplier at the fringe meeting was: “If Sage has dropped the ball, give us a go.”
Cyclical operating system, server and database upgrades add to the headaches experienced by on-premise software users.
“People get used to using a certain system, until they have to fork out a reasonable amount of money to continue doing so... The thing about Sage is it’s too accountanty and too complex for many clients.”
“Clients say they can’t cope with all the versions of Sage they have to support and are now looking at cloud alternatives.”
Look at reporting capabilities – “a decent way of doing a cash flow forecast for the year would interest accountants.