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AIA

LexisNexis moves into tax and practice software

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25th Dec 2005
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LexisNexis this week revealed another element of its electronic product development strategy by announcing it is to market low-cost tax and accounts production software.

The new products, Tolley's Accounts Production, Tolley's Personal and Business Tax and Tolley's eForms are rebadged editions of the applications developed by Digita. While the programs are functionally identical to Digita's, the quoted annual subscription price for the bundle of "one pound per client" sets a new benchmark in the tax software market.

"This is a completely different model," said Digita's managing director Jerry Rihll. "Without a large market share, Digita have to follow the pricing levels of our rivals. This deal is like signing up with Tesco's. The level of distribution means we can reach out to a much wider group of people."

For Rihll, the timing is particularly advantageous, because Microsoft's intention to include an entry-level accounting package within the next edition of Office means that practice software houses such as Sage and MYOB are "having to circle their wagons and focus on small business".

LexisNexis business development executive Danny Williams said the Digita link and the company's decision to drop 600 print titles from its catalogue were different elements emerging from a major strategy review within the information group.

"We have come out of a heritage based around tax to address the audit and accounting part of the market," he said. "I think it's fair to say that our customers have been looking for us to come in like this. In certain points of the market there is only one player and they don't like that. They're pleading for another competitor."

Digita and LexisNexis claimed to have a lead in providing a Microsoft-based software environment. But Iris, CCH and Sage all have more mature suites cover the full spectrum of practice software. CCH, for example, has a tax alert service that sends clients readymade client search routines and marketing letter templates based around changes in tax or company regulations. Microsoft paid Digita to develop a similar system as a proof of the potential of .NET-based Web services. No such features were available in the Tolley's product suite, but Rihll commented, "That will come."

In the publishing sphere, LexisNexis is at a disadvantage to CCH not just over general audit and accounting titles, but with financial reporting standards. However, LexisNexis said it too has developed a "strategic relationship" with the IASB to produce next year's IASB Handbook. LexisNexis also said it has access to International Auditing Standards.

Where the relationship does provide a good fit is at the smaller practice level, where the Tolley's market profile matches Digita's. Williams said that putting Tolley's branding on the Digita products was a deliberate way to appeal to that market.

Without being specific, both partners dropped a number of "watch this space" hints about more ambitious and upmarket future developments. Williams pointed out that Tolley's recently migrated to a new Web platform that makes it easier for customers to merge online content into their own office systems. Rihll and Williams admitted that the new partnership was in a development race with rival tax and practice developers, as well as information providers.

The tax and accounts production programs were the "building blocks" of the relationship with smaller firms, Rihll said.

"We've got a whole raft of things under way, and this relationship is our chance to invite people to take a look over the fence," he added.

In addition to the Tolley's branded programs, LexisNexis will market Digita's CoSA corporation tax package and company secretarial application, but at their normal Digita list prices. All the products will now be added to the sales catalogues put out by LexisNexis/Butterworth Tolley's sales teams, which will have to learn how to sell and demonstrate the software.

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By SimonP
16th Nov 2004 22:54

This is a great opportunity ....
.... to review (downwards) the prices of tax books, should they be a part of the 600 titles.

I find it galling that tax annuals basically contain the same information, year on year, with obvious updates for budget changes, yet I am expected to pay the full price for information I purchased in the previous year's edition.

Well, I have news for the publishers: I have seriously cut down my expenditure on books and increasingly use resources which are FREE or sensibly priced. Thank you AccountingWeb et al.

There is no reason why publishers cannot operate some kind of Loyalty Discount Scheme which would reward its customers and also retain them. How about something like: "Buy this year's Tax Annual and get all subsequent editions at 50% off normal retail price, provided that you bought the previous edition from us."

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By User deleted
18th Nov 2004 16:40

Who will suffer in the bloodbath?
What the news from the above suppliers indicates is that that information and software supply is much more sensitive to price than they used be. The prevalence of some information and even some software free availability on the WEB is forcing suppliers to rethink pricing and marketing policies. To echo Michael O' Leary a when discussing the low cost airline industry "there is going to be a lot of blood spilt over the coming few years".

CCH, Iris and Sage are well established in their respective markets and are extremely sound financially. Some of the smaller companies such as PTP, Dromore and VT may have a settled small client base and low overheads.
The companies that are at greatest risk are the ones such as MYOB who were Solution 6, who were Viztopia. Although providing capable software solutions there are no USPs in any of their products or in the manner which they service their customers. Companies like this will have to dramatically change their strategies; perhaps some of their management and/or have very deep pockets to survive the "bloodbath"

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