Sage regroups for spring offensive

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With a new man in charge of the UK, Sage is aiming to re-establish itself in the practice software market with a rebranded cloud product line.

As we reported last week, 2018 was not a good year for Sage - disappointing half-year results in May acknowledged a “failure to execute” that wasn’t helped by major product family changes. Around 30 mid-level executives including UK managing director Alan Laing left the company and were followed out the door a few months later by CEO Stephen Kelly.

After taking over in September new MD Sabby Gill is determined to address some of those problems. Identifying himself as a part-qualified accountant, Gill emphasised the profession’s pre-eminence in his strategy: “Accountants are the number one priority. They are at the heart of our business. We used to own that channel, but we need to win it back.

“We are renewing our love for them and not just selling to them. We’re talking to them about how to engage with clients and how to do more with automation.”

Gill accepts that Sage faces a long-term ground game to lure accountants away from the discounting offers and field teams that Intuit QuickBooks and Xero have been using to lure them to their products. To counteract that threat, Sage has been mounting its own charm offensive in recent months, with the target of visiting 10,000 accountant customers written into the employee appraisals process.

“We’ve got 3,000 people in Newcastle, which is our customer support hub, and a team in Manchester dedicated to accountants. We can support all sizes of accounting practices – that’s how we use our scale.”

Recent moves by Sage’s two big international rivals into compliance products plays to the company’s strength, according to product marketing director Chris Downing. “We’ve already got online compliance,” he said.

The Sage Accountant Cloud online practice suite is “where it needs to be”, Downing continued. “We don’t shout enough about year-end compliance, but it’s better than the others at compliance. Sage Accountant Cloud is the first end-to-end solution in the cloud.

“If you’ve not seen Sage for a while, you’ll be surprised by how much more it does than bookkeeping and how many efficiency gains are built in.”

With MTD looming, some of that functionality is focused on the admin work and digital bureaucracy of the new regime, including authorising the online client and agent services accounts.

“HMRC statistics indicate that 78% of the 850,000 or so VAT-registered businesses are going to need help becoming compliant,” said Downing. “It’s not core accounting but needs lots of engagement. Sage can help with people, support and holding firms’ hands. That’s what we wrap around the product, with roadshows and Sage University sessions devoted to MTD.”

Spring practice software shopping season

With the spring practice software shopping season getting underway, rival developers aren’t going to give Sage a free run. Practitioners and small businesses won’t be able to turn a corner in the next couple of months without running into roadshows and events such as AccountingWEB’s 12 February MTD webcast, sponsored by QuickBooks and a Sage MTD Surgery on 26 March.

Alongside all these events, representatives from the big cloud bookkeeping vendors are knocking on the doors of accountants’ offices. “The model is having feet on the street,” said Gill.

While Xero and QuickBooks are quoting much bigger cloud user numbers than Sage, the Newcastle-based developer still has relationships with a lot of companies that have been using Sage 50 for years. “We’ve got the brand behind us and the products do what they say. We may be later than competitors to the cloud, but our quality is better. You will see us continue down this path, but faster,” said Gill.

About John Stokdyk

John Stokdyk, AccountingWEB head of insight

AccountingWEB’s Head of Insight has been with the site since 1999 and likes to spend his time studying accountants’ technology habits. When not nerding out, you can find him exploring obscure indie music and searching for the perfect organic sourdough loaf from his base in Brighton, UK.

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07th Feb 2019 10:45

Their problems are summed up in the first sentence with the words "rebranded cloud product line".

Apart from face-lifts, new names and a few new features, Sage 50 Accounts (or whatever it is called now) is fundamentally the same system it was two decades ago.

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07th Feb 2019 12:36

Waiting up to an hour on the phone for a support call doesn't endear any customer to its supplier. Goodness knows what the support times will be when MTD goes live....

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to rememberscarborough
07th Feb 2019 14:10

MTD will be a vital source of additional revenue for them too. Just as CIS, RTI, AE have been in the past.

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By Tornado
07th Feb 2019 13:53

My wife's Land Rover suddenly developed a reduced power level a couple of weeks ago, but was drivable to the usual Land Rover Dealership in Sussex (part of a large group in the South of England).

The first thing that servicing reception said was that they could not even look at it for three weeks. When I had got my senses back I made my feelings quite clear that an organisation with the slogan of "Above and Beyond" that charges top rates for servicing (and everything else) was clearly nearer "Below and Lower" if they did not have the facilities for dealing with this type of unexpected problem.

I said, (loudly so that everyone could hear) 'Why would anyone want to buy a Jaguar or Land Rover if this is the sort of treatment they get when they need some urgent help'

I also pointed out that had the small local garage I used to go to been able to deal with the complexity of Jaguars & Land Rovers, their first reaction would have been to give me a cup of coffee, get the car up on a ramp and let me have an idea of the problem there and then and let me know what they were going to do about it.

In the end the dealership took note of my comments and the car was repaired within two and a half days of giving it to them, but this should be normal service and not something you have to fight for. The cost of the repairs was not cheap, but was well worth it compared to the cost in time and money of trying to do without a daily used car for over three weeks.

The message here is that no matter how good your product is and the numbers of features, gimmicks and all the rest it has that sales people promote as exciting and new, the quality of service and support is far more important than the software itself.

To me, it is clear that my business is going to be more profitable if I promote good software to clients and can rest assured that any problems that arise will be dealt with promptly, efficiently and economically.

So Sage, before adding features to your software that do not enhance the basic functionality that most people require, first ensure that your support service is the best it can be, and then the software will sell itself.

Footnote : It did occur to me that perhaps the decline in Jaguar and Land Rover Sales might be partly due to customers receiving the same sort of disgraceful aftercare service as me. It is easy to blame other factors, but the fact is that people who receive bad service will not go back to that shop/product again and, unlike me, would not say anything but just do it.

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to Tornado
08th Feb 2019 16:43

I've started to book viewings on houses and both agents I have called told me their viewing people are completely booked until mid next week. I wonder if the sellers know?

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07th Feb 2019 13:48

Yes, Sage dominate in payroll and used to dominate in bookkeeping, but they have never "owned the accountant's channel." IRIS own compliance and have done for many years.
It's clear from their actions over recent times that Sage does not understand accountants.
Inferior products, poor support and too many senior people changes, the corporate aim of spending 2 years in a role, means that we have had this rallying call from many a Sage Accountants Division MD.
Happy to buy you a coffee Mr Gill, if you want a realistic picture of the UK compliance marketplace.

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By johnt27
10th Feb 2019 10:14

Already had two visits from Sage in the past 4 months. So far I'm yet to be convinced that they have any SME focussed products that are on a par with Xero and QBO. Even with the staggering discounts they're willing to offer it doesn't convince me of the need to sell their products to my clients.

As I said to the team that paid us a visit their cloud products are 5 years behind the rest and the fact that if you don't take a subscription then MTD modules become an additional cost make it easy not to recommend.

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08th Feb 2019 09:15

Have you looked at Sage Business Cloud Accounting (previously Sage One) lately?

Sage is playing catch up but when they deliver it is very good, if not better, then the likes of Xero and QBO and value wise for the Accountant (and hence the client) is nearly half the price of Xero.

According to a post this week Intuit (QBO) is looking to expand into bookkeeping in USA (how long before in the UK) and in effect is competing head to head with the accountant/ bookkeepers. Not sure this would make me want to partner with them.

Where a player has been so dominant for so long as Sage has been it is very easy to slag them off but do have a look at what they are doing first and then make an informed choice as to what is best for your clients. Of course every client is different and may need different solutions as we all know one size does not fit all.

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By johnt27
to North East Accountant
10th Feb 2019 11:08

I think you mean cost wise they are nearly half the price of Xero. But if I wanted something cheap I'd use QBO who only pay lip service to their accountant channel (£5/mth a licence instead of £7 for Sage BCA) or Wave, which is free.

The cloud space has moved on significantly in the last few years and it's no longer good enough just to have a product in the cloud. I have seen Sage BCA - it has 3 features that set it apart from Xero:
1. A direct Lloyds bank feed (expected to come to other products soon)
2. Batch processing (a feature now obsolete in a world of OCR apps)
3. More granular user settings (a nice to have but for many clients not a game-changer on balance of better features/integrations elsewhere)
4. I forgot Sage Pegg - the incredibly gimmicky chatbot

A modern day cloud accounting system delivers value through its support of multiple business processes, helping to streamline these processes and drive efficiency. This is where both Xero and QBO have a massive head start on Sage with their API integrations with 3rd party products. These integrations are also mature and well embedded unlike the ones Sage has which remind of when I was first trying these new apps with Xero about 9 years ago.

Just to demonstrate why this is important, strategically, for Sage: 9 Spokes is a slick looking dashboard app that I came across in 2016. At the time they only integrated with Sage One and a number of other online tools (facebook, google analytics etc), but their market penetration has been poor (their financials back this up - 80,000 worldwide users) and most accountants I speak to have never heard of it. They now integrate with QBO and FreeAgent and a number of the usual suspects (Vend, Spotlight, Expensify etc) and 30,000 of those users were put on in 2018 since these new integrations launched. If you check out their branding it now leads with QBO and not Sage and this is the problem Sage need to address.

The question is: are Sage's SME products the next ICL or are they going to do what Intuit did and spend shed loads of money to get a competitive product back in the market?

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08th Feb 2019 12:25

Sage may be "renewing their love" but from this angle there is little chance of reciprocation. Too many years of inferior products, poor service and generally being a dreadful company to deal with are not going to be forgotten overnight.

Their sole raison d'etre for many years seems to have been to screw as much money out of everybody as they can (not uncommon with software suppliers with four letter names) and that's being manifested again with prices charged for upgrading to MTD

The idea of renewing their love reminds me of the Pink Floyd track Lost for Words. :-)

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By Tornado
to Cloudcounter
08th Feb 2019 14:49

"The idea of renewing their love reminds me of the Pink Floyd track Lost for Words. :-)"

I think I can safely say that when it comes to advances from software developers, after 36 years I am 'Comfortably Numb' to their sales patter.

This particularly applies to Sage whose bullying tactics some 17 years ago prompted me to develop my own spreadsheet based accounting software which is still in use today and will cope with MTD for VAT with little or no changes using bridging software. I must have saved tens of thousands of pounds by doing this and all because Sage did not love me.

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to Tornado
09th Feb 2019 08:31

The message is in the lyrics, not the title.

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By Jdopus
11th Feb 2019 10:59

The fact that Mr Gill identifies Sage's problems in the field as arising from "Discounting offers and field teams" from their competitors gives me little hope that we'll see an improvement in Sage's offerings any time soon.

My experience time and again with Sage is that they have very little understanding of how our job is carried out in practice. Their software is designed to do things in one specific way which they have decided is the correct way and you hit a brick wall the moment you have to do something they didn't decide you were allowed to do. This has been my experience both with their accounts prep packages, their bookkeeping packages and their payroll packages. The icing on the cake is their poor attitude and their general appalling treatment towards the SME sector.

To sum up Sage's approach to business: A lot of years back our practice was the largest regional distributor of Sage software, selling and installing it to hundreds of clients and generating enormous sales for them. This changed when we discovered that Sage's Sales team were taking leads generated by us and having their direct sales team approach our clients behind our back to undercut our price offers. The practice ended up having to take Sage to court and winning for breach of contract. Sage have done nothing since to convince me that they aren't at the heart of their culture the same company which did all the above.

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By Tornado
to Jdopus
11th Feb 2019 11:28

Oh dear, they did not love you either.

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