Practice software consolidation: when giants collide

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ddruker's picture

See ya, CDs!

ddruker | | Permalink

There was a article in Accounting Technology in the US earlier this week on the subject of the evolution of on-demand / Software as a Service and what it means to accountancy practices. Find it here: See Ya CD's

I added some thoughts in my blog as well: SaaS 2.0

david_terrar's picture

SaaS vs Client/Server, reliability, performance and about Web Se

david_terrar | | Permalink

Ian,
Like Dennis, your contention that "Win will always win over web" or " it is hard to beat the performance of the client/server application" are your opinion, not fact. Just one example where a larger practice has chosen the online route - BDO in The Netherlands provide a web based portal access to all of their clients, backed by a hosted, online accounting solution that is currently in use by the majority of their customers from all of their 32 offices. They are in the process of converting all of their clients to that system. More on performance below.

Also, you've listed some applications of technology and suggested that as a definition of web services, which I think is very misleading. Web Services has a proper definition from W3C as "a software system designed to support interoperable Machine to Machine interaction over a network". AWEB readers can look at Wikipedia for more info: http://en.wikipedia.org/wiki/Web_service. Those of us that provide this technology as a means of integration understand what it is.

Ian and Nicholas,
We work with Software as a Service solutions that have crisp response time and perform just as well or better than (properly configured and supported) client/server equivalents - if they didn't, our customers wouldn't buy them. The better web services are geared up with 24/7 operation, with mirrored disks and hardware configured for redundancy and continuous operation. When they do backups, they are encrypted and stored in the fireproof safe on-site, but also transmitted and stored in data centres on the East coast and West coast of the US - locations across the world. The data is stored for 7 years. Very few medium or small practices can afford that kind of security regime, but with SaaS, the cost is shared amongst the community of users, so it's available to a subscriber whether they have 1 user or 1000+ users.

Nicholas,
Not sure about why you think a SaaS company is any more/less likely to go to the wall than a traditional company. Plenty of examples of failure with traditional companies too.

David Terrar
Business Two Zero and Twinfield and WordFrame

david_terrar's picture

Failure of the Internet? - not any time soon

david_terrar | | Permalink

Nicholas,
I was adding a comment, just as your last one popped in, so updated mine before I posted!

It's good that you aren't against SaaS, and I understand the concern about the Internet. I was speaking at the 21C Global Summit last year, with the likes of many telcos and Cisco were there worrying about the problem. Things like YouTube, music and film downloads mean some analysts predict an exponential growth in bandwidth requirements. The telcos are making significant investments in copper and fibre optics to improve the networks, and are wondering who is actually going to pay for all this, when the expectation is free or fixed rate broadband and wifi.

Actually, just like Moore's Law for processors, there is actually a Nielsen's Law of Internet Bandwidth. He suggests, and has tracked it over the last 10 years, that a high-end user's connection speed grows by 50% per year, which is about right. But that doesn't mean that with the exponential growth in requirements the Internet is going to grind to a halt any time soon. The Internet is too vital a part of the global economy, and there is too much at stake for big business to let that happen. In any case, there are still money making opportunities left to bring high speed connections in to people's homes, that customers like you and me will be prepared to pay for to drive premium services like on demand movies and the like.

David Terrar
Business Two Zero and Twinfield and WordFrame

carnmores's picture

David

carnmores | | Permalink

fast off the mark!

i am not agin SaaS far from it , i was trying to state why some people are but there questions whether the web as it now is will cope with all the (film downloading etc which uses) enormous amounts of bandwith thats is required and is increasing exponentially

david_terrar's picture

Open standards and easy access

david_terrar | | Permalink

David F,
Open data standards are a great idea, but I can't see it being adopted by many providers. Open interchange is much more achievable. Good SaaS providers document their APIs and provide Excel or XML formats for import and export so data exchange or proper Web Service integration to other systems is very straightforward (compared to the integration nightmares some of us have lived with in the past). As JC says this "could well be the enabler/link", and I agree with Dennis it's essential for companies like his and ours.

Also, you said "not when you are using your laptop on the underground". That's true when it's in a tunnel, but most accountants won't have access to their main "in house" client/server applications when they are on the road with a laptop anyway. If they were SaaS/hosted (and used something like Vodafone mobile broadband) they could have access on the Underground when it is above ground, at a coffee shop, across the desk in a new potential client's office, or anywhere.

David Terrar
Business Two Zero and Twinfield and WordFrame

carnmores's picture

i am not against you Dennis

carnmores | | Permalink

i was saying 2 things 1. some clients are resisting 2. that the web may fall over - you say cmon on - well i have given situations where other infallibles could not fal over and did - and if it does the SaaS companies will p[ossibly be among the first to go to the wall. however thats a risk we take

carnmores's picture

Thank you David

carnmores | | Permalink

i agree that its less likely to happen if people are awre of it!

like the llok of word frame will have a gander at that as soon as i can

dahowlett's picture

This is what worries me...

dahowlett | | Permalink

Is not the arguments about on-demand because for me that's a done deal. Check CODA - they're coming out with an on-demand offering in early May. I'll be previewing it soon.

What worries me more is the failure to recognize that change is coming at the profession and that one of the solutions is to move to an on-demand method of working with clients and other stakeholders. It's ostrich thinking rooted in stale DNA.

Check what I had to say here

daveforbes's picture

Good to hear

daveforbes | | Permalink

I am glad IRIS have delivered - beaten us to it on CD to boot. We have had our software available for download for a couple of weeks now but the CDs have only gone in the post today. It looks like most of the vendors have managed it all in the end.

As for web based software - not when you are using your laptop on the underground !

David Forbes
Forbes Computer Systems Ltd

dahowlett's picture

Last time I checked

dahowlett | | Permalink

@nicholas c'mon - surely you can do better than throw in the old reliability card? I thought we'd got well past that old chestnut. I'll lob the failed drive, clapped out CD drive or missed backup.

Fact is that the online world is gaining momentum while the offline world is shrinking. If not then none of us who are invested in this would have a business. Suggest checking the progress FreshBooks made in the last 2 years. Phenomenal. 65>300K users.

On the weekly thing - yep - we mint new stuff every week, much to the delight of our customers. We also run service and support out in the open. No hiding behind login walls etc.

New Tax Software

mcilveen | | Permalink

We received our new 2008 tax year software from IRIS this AM. Thought David Forbes might be interested!

carnmores's picture

Dennis you are over egging the pudding

carnmores | | Permalink

i have seen plenty of cases where what you say runs true and equally many cases where it does NOT. to me it seems to depend on the size of the operation, whether its a family busines, etc etc.

in time you may be correct but what if all the premonitions of the web are true and it falls over - after years saying things cant happen they do - HMRC records being lost , Northern Rock , Bank madness the list increases every day.

there is a whiff about a self fulfiliing prophecy about your vested interest commenst. Something you always own upto.

personally like you i am in favour of web applications (and XML XBR imetroperability) but the clients just arent ready or willing yet.

keep up the good work , glad to see that we see an update for Free Agent at what appears to be once a week.

dahowlett's picture

You guys are just not getting it

dahowlett | | Permalink

@ian: you say: "Win will always win over web but win supplemented by web is very popular. The average accountant works in their own office on their own data. They will at times require access to their data remotely but on the whole while working in your own practice it is hard to beat the performance of the client server application. Web based services such as web timesheets are then a useful extension of this service."

I'm not picking on you deliberately but this is so wrong and out of touch with what's going on.

Clients hate that their accountants are in control of the engagement. That's why the on-demand players that can hook the professional accounting functionality to the transaction systems are going to eat the incumbents alive. Control the relationship where it matters - with the client. Do that and all this other stuff about timesheets becomes totally irrelevant.

When it comes to getting data out, that's EXACTLY what using XML etc is all about. That's why my startup and others are giving access to the data in whatever format the downstream production system needs.

Teminology & context ...

Anonymous | | Permalink

Surely it is about universal understanding and not individuals assigning their own meaning

http://www.webopedia.com/TERM/W/Web_services.html
http://www.w3.org/TR/ws-arch/
http://www.google.co.uk/search?hl=en&defl=en&q=define:Web+Service&sa=X&oi=glossary_definition&ct=title

One wouldn't say user uptake for API's has been poor because like web-services they are background tasks (services) and have no real meaning in this context for an end user

daveforbes's picture

Open Data standards

daveforbes | | Permalink

The trouble with open data formats is that software vendors are keen to put in facilities for importing and never for exporting !

The is little commercial incentive to do a lot of work producing export functions ! Pressure must come from the users in general.

I think the first step would be that all software should be provide a "Save This Client As XML" and "Save All Clients As XML" facility No restrictions on the format other than

1. not unnecessarily obscure
2. stable
3. complete

Each vendor can choose whatever xml format they like as long as it complies with the above which could be vetted by some body or other.

Soon there would be middleware to map from vendor A to vendor B.

This will only happen if there is user pressure - someone should start a campaign now - no export no buy ! Before anyone buys or renews software they should be asking "Its my data - show me how do to get it out if everything goes pear shaped".

David Forbes
Forbes Computer Systems Ltd

Centralised data is a good concept ...

Anonymous | | Permalink

Just been re-visiting old copies of specs for a Practice Management (central) system by MCS from 1994, which even included a basic document management approach. Therefore concept of a central system is not new

Frankly so far as existing products are concerned there has not really been much of an epiphany since then - yes delivery mechanisms have changed as has the technology but other than those factors ... little ground breaking progress/innovation

Ian' comment '..web-services as this has held limited appeal to practices..' indicates a blinkered approach to this area and completely ignores the fact that web-services could well be the enabler/link to ensure '..ability to access and centralise all the different data they hold..' by pulling together the diverse data stores holding practice data

Nevertheless this is an ideal opportunity for an OpenSource data structure in the 'Cloud' where everyone could collaborate to ensure a universal structure (how many times do we need to reinvent the wheel).

This approach would place the emphasis on the software provider to concentrate on delivering innovative solutions based on best of breed rather than messing about with re-inventing incompatible data structures and locking in users

Additionally, because users could move seemlessly between software suppliers in the knowledge that their data was portable and wholely accesible by plugging a different product, it would weed out the software leaders & laggards.

Small reactive software houses would flourish whilst the majors would have to sharpen up or die

But it will not happen .....

david_terrar's picture

There is a lot more to practices than just the compliance tools

david_terrar | | Permalink

John,
Many thanks for the name check alongside Dennis. Since we came in to the practice and accounting market with Twinfield, you know that I've been frustrated with the so called "practice management" solutions that are available from the major providers. Ian is spot on when he says "there is a lot more to practices than just the compliance tools". I'm convinced there is a major opportunity to pull together a properly integrated solution that handles the various client activities in a coherent approach. It sounds like Relate are heading in that direction - I would argue that a web based SaaS approach is absolutely the way to go.

You mention online filing - XBRL will be a disruptive factor here. The use of that technology is going to significantly change accounts production requirements, and make a big impact on some of the software providers you mention, unless they have got their act together.

Some of the smart people we work with are building their own solutions to address this area. Adrian Pearson, of Pearson Associates is behind the HQ for Accountants you mention. He's been using the solution for years, but is now branching out to sell it to other practices - we've already started talking to him about the possibility of integrating Twinfield in to the solution. Another of our practices, CWM, has developed their own document management solution, called PaperFree. Mark Cooper is making scan and retrieval of all documents in the practice affordable for small firms as well as the big boys. There is plenty of opportunity for this type of innovation, but it's a surprise that the major vendors are dragging their heels… actually, strike that - why should I be surprised?

David Terrar
Business Two Zero and Twinfield and WordFrame

dahowlett's picture

yeah but...

dahowlett | | Permalink

...thanks for the name check John. There is an implied assumption in the recent consolidation that the status quo doesn't change from a product standpoint. That's good news for the new boys as they can take advantage of the maintenance stagnation that will arise.

There is nothing to stop the on-demand vendors from taking advantage of the online filing regime. In fact they'd be daft not to do so. Remember that currently, online is pretty much restricted to end user systems but that doesn't preclude them from shaving more cost from the financial supply chain.

If they're really smart,they could bypass about 70% of what all professionals do today but again I have long argued this is a good thing because it recognizes the need to reshape the way the profession operates and the value it delivers.

They can help transform the profession from one of being incessant navel gazers to value driven and client aware. I doubt the consolidated groups get that or that they can move fast enough.

daveforbes's picture

What will actually be available on Monday

daveforbes | | Permalink

One real question is what personal tax software will actually be available at the start of the new tax year (Monday !).

David Forbes
Forbes Computer Systems Ltd