Xledger plans to conquer the UK mid-market
Cloud-based enterprise tool Xledger is aiming to take UK mid-market businesses by storm through the use of automated, flexible business software, but a tough task awaits them as competition hots up in the sector.
Norwegian-owned enterprise software developer Xledger is cranking up its UK with the appointment of its first UK CEO, former InterWorks Europe sales chief Mark Pullen. He has been tasked with helping the cloud-based business management system achieve ambitious international growth targets over the next five years.
Launched in 2006 by three former Agresso executives, Xledger is a pure-cloud product offering a large range of modules for fast-growing, mid-market businesses. These functions include core accounting, accounts payable and receivable, budgeting and forecasting, expenses, workflow and more.
Its four offices currently serve more than 10,000 customers in 50 countries. After a period of consolidation, the software house is now looking to scale up, with the UK mid-market high on its hit list.
“In the UK mid-market businesses are not as well-served as small businesses by cloud software,” Pullen told AccountingWEB, “and we hope to bring many of the advantages smaller businesses get from the cloud up to the mid-market.”In true SaaS fashion, Xledger offers a fixed-price monthly subscription service based on individual users’ requirements. However, it also has transaction-based options for companies that don’t want to pay a monthly fee for services like expenses, where some users only login and use the tool three times a year.
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After a long period of stagnation, AccountingWEB’s annual software surveys showed an upsurge in cloud use in this sector in 2017 from the likes of AccountsIQ, Oracle NetSuite and Sage X3 (now Sage Business Cloud Enterprise).
In recent months, Microsoft Dynamics, iPlicit and Advanced Group have all put forward their credentials to serve these users, but the pace of cloud conversions slowed in the 2019 AccountingWEB software survey, with the proportion of cloud users in the mid-market/ERP category dropping to 43% after peaking at 53% last year.
With economic uncertainty hanging over the UK market, and more of it on the way, what can Xledger offer prospects that might lure them out of their “if it ain’t broke, don’t fix it” accounting software bunkers?
One way in which Xledger hopes to crack the mid-market code is to work out which businesses are appropriate for its product, and by the process of elimination which are not – in other words adopting a laser focus on its target market. This is an approach that has worked well for the firm in the past and led to a 98% customer retention rate globally over the company’s last full financial year.
“We’re really focussed on not shoe-horning in Xledger where it’s not appropriate,” said Pullen. “Companies with a simpler requirement might not need it right away. There’s a lot of functionality in Xledger you won’t need to use. You may well be scaling in that direction but now is not the right time. Come back when you’ve reached a certain size and complexity.
“Cloud products like Xero have done a phenomenal job catering for simple businesses at the smaller end of the market,” said Pullen. “The mid-market is more complicated, requires more configuration, needs more consultation, more support.”
Att the other end of the scale, larger organisations are looking for customised systems. Pullen highlighted Xledger’s built-in automation of key processes as a strength, but said it can impose a ceiling on configuration once companies scale past a certain size.
“Xledger is built as a tool that’s very functional right out of the box,” said Pullen. “If you’re at enterprise level, very large with very complex requirements and want 50% customisation, then it might not be right.”
In targeting the mid-market, Pullen believes that customer service is crucial, with users always able to speak to a human representative. Xledger is not aiming to “blaze a trail” with its growth plans, but instead has “measured scaling” marked out in its five-year growth plan, he said.
Automate, update, drill down
Part of Xledger’s plan, as outlined to AccountingWEB by Pullen, is to enhance the automated elements of its cloud software, encouraging businesses to abandon outdated and expensive legacy systems.
According to Pullen, automation will slim down admin-heavy processes and allow executives and employees to run their business, rather than their business system.
For group entities, directors or partners can also use the system to drill down within different levels and different entities and extract detailed data on which parts of the business are performing well (or not so well).
The automated architecture of pure-cloud software mitigates the risk of any updates taking place while systems are being used, cutting into valuable business time.
The Brexit conundrum
Economic uncertainty remains one of the defining factors in the UK business landscape, but Pullen remains chipper about the prospects for his new employer despite the unstable environment.
“It plays to our strengths in many ways, as businesses will need to focus on being reactive and will need a very fast turning circle,” he said. “Organisations will need to change and change quickly. Being proactive is nigh on impossible. However, the advantage of pure cloud software is its flexibility to update and quickly administer compliance updates which will greatly assist the efficiency of adapting to any outcomes from the Brexit process.”
At Pullen’s behest, Xledger is adding a localised UK development team, whose focus will be on speed of response to any changes coming down the line.
Pullen added that Xledger’s ability to target niches would play well in the UK market. Globally, one of the vendor’s greatest successes has been with charity and not-for-profit organisations, particularly larger charities that are generally not able to enjoy the benefits of cloud software in the same way as their for-profit counterparts.
Charities have specific regulatory reporting requirements that are already built into Xledger, it puts the software house in a good position to serve the sector.
Due to the nature of their work, certain charities only use of elements the reporting software twice a year, due making the fixed subscription or transaction pricing options particularly appealing to this sector.
Pullen added that Xledger’s core functionality also lends itself to distributed businesses with multiple entities and those looking to integrate new acquisitions into a group structure.
“The pre-requisite data and hierarchy is automatically populated and built-in, which mitigates the risk of the inclusion of new entities,” said Pullen. “From a reporting point of view, this means you can report and control that hierarchy. The hierarchy is therefore easy to manage from a reporting perspective, and very transparent.”