Online reporting service - promotional gimmick or the way forward?

In a bold move, set to add a new dimension to mid-size business intelligence (BI), Alchemex last week announced the launch of its software-as-a-service (SaaS) products in the UK, available at www.mymonthlyreports.com.

The dynamic South African-based software vendor introduced its monthly SaaS management pack free to Sage50 users in a move intended to offer relief to those inconvenienced by the discontinuation of Sage Intelligent Reporting as well as provide time savings in the form of automated Excel reports to all Sage50 users.

Powered by Alchemex, www.mymonthlyreports.com provides a secure online reporting solution for small businesses, drawing data directly from a company's existing accounting package into formatted Excel report templates automatically and on demand, making business intelligence technology easy and accessible. Valuable time savings can be made every month through the elimination of manual report preparation and repetitive data extracts, while users can view, manipulate and analyse trusted information in the familiar environment of Excel. No large budgets, no specialist staff, no hassles.

In response to the launch, John Stokdyk, Technology Editor of www.accountingweb.co.uk, posed a number of questions to Alchemex MD, Gary Boddington, and received the following answers:

A: The question is not just Alchemex-specific but industry wide. How big a shift is this for the industry and how will the market respond? We have completely embraced SaaS technology in our development roadmap and frankly www.mymonthlyreports.com (MMR) as it stands is just the very tip of the iceberg of what we believe is the future of BI opportunities in this space. Your question regarding promotional gimmicks is relevant and, we believe, one of the big issues in this new frontier that we are going to have to overcome. How can BI be done so simply in the cloud when traditionally it has been such a complex matter? It must be a gimmick!

Our three-month campaign with accountingweb.com is intended to flush out the early adopters and within that time frame we should learn some invaluable feedback that will assist us to polish the offering and overcome this potential early market perception. Suffice to say that we have merged the better part of a decade's worth of development of IP in the BI space with nearly two years of SaaS development in MMR. Please be under no illusion that MMR is a gimmick. Although accountingweb and the UK/Europe might not know who Alchemex is (yet, but we have plans to change that) we have a reputation at stake and are not in the vapourware business. MMR is not a smoke and mirrors campaign, we have ploughed no small investment into R&D and now marketing of our online reporting service and it's a genuine attempt to offer small to mid-sized companies BI at affordable prices.

A: As you know, this is a very difficult one to project but we are backing this to be the future of our business and BI in general. Our current MMR solution only provides for the end-user reporting side of BI (P&L statements, balance sheets, dashboards- simple but effective reports) but in time we see our entire Alchemex technology stack (including OLAP and more advanced BI) and many more reports (ratios, KPIs, debtors analysis etc) becoming available in the cloud as adoption grows .

We don't believe it will ever completely replace our desktop application because there will always be the need for on-site BI, although we can test that statement in five years time again. Our model in BI has always been different to the traditional, ie we sell pre-packaged solutions in big install-bases where the user requirement is the same, so we are in the high volume low margin game. SaaS, and specifically MMR, is a logical product extension that fits easily into our existing commercial model and we believe, in the short- to medium-term, it will become a major revenue contributor to our business.

A: That's a question we are constantly asking and can only speculate at this stage. For various reasons we don't believe so but time will tell.

Having provided BI solutions to the mid-sized space, and specifically working with FDs and FMs of businesses, for as many businesses as we have, we have learnt that there are different BI profiles of businesses in the mid-tier space, some of which simply will not shell out any cash for a BI solution - regardless of how reasonable we, as the vendor, think the price is. However, these guys do want some form of BI even if it is just automating their monthly management pack and eliminating the routine grind of repetitive export to Excel and manual manipulation to get the workbook complete. So we anticipate that MMR will be a good entry point at low risk for those punters that want to test the BI waters. Then, as they are enlightened as to what BI can do for them and their business, we can upgrade them through our stack. BI is also very much a seeing-is-believing sales game and the cost of trying to get out to do demonstrations on client sites is not viable when you have low ticket prices. MMR allows proof of concept demonstration on live client data at little or no cost. So at this early stage we see MMR as complimenting our install base. That's the theory right now anyway, but we have a lot to learn in the SaaS space.

A: Global expansion aspirations at Alchemex, technology we are confident in and proud of and which has an extensive installed user base, technology which is very relevant and applicable to a very broad audience, the prohibitive cost of building or buying a channel to sell our desktop applications using traditional distribution methods in new markets, ubiquitous broadband technology, rapid adoption of SaaS as a way of life beyond banking and buying books or bidding at auctions for used memorabilia online. There are a multitude of reasons, some also covered in the case study we did with Microsoft http://www.microsoft.com/southafrica/casestudies/it_alchemex.mspx , but MMR is the culmination of a call we made nearly two years ago that the ASP model was gone and replaced with SaaS but that this time around it would be different, would stick and we needed to get in ahead of the curve. All the signs are in the market that we made the right decision but we now need to make MMR commercially viable to validate our decision completely.

A: We have had to re-engineer how data is constructed and aggregated at the back-end so as to make delivery bandwidth-friendly, so to speak.

Our core BI engine and technology stack was used as the base and we had to do some minor changes to make it all run in the cloud.

Our IP with regards to the Sage50 solution (connectors to the database which is the pipeline between the source data and the Excel workbook) was already written from our traditional business model. We have had to make some minor changes here as well.

The SaaS components were designed and built from the ground up using all the latest technology our developers could get their hands on and this project was not unlike a typical Web project applying Web 2.0 thinking aiming at a simple and intuitive user experience. This has been the major R&D component to make MMR a reality.

From a go-to-market point of view we have had to rethink our marketing strategies because traditional doesn't work on the Web, so we have had to revisit search engine optimisation issues, search engine marketing, social networking, strategic alignments (like accountingweb) - all sorts of marketing techniques that I don't think one would normally associate with a traditional BI vendor.

A: That would be giving the game away! But we do have many connectors already which we will leak out based on the feedback and learning we take out of our Sage50 initiative. MMR currently has also released MYOB AP and MYOB Premier reports, although our PR doesn't talk about it now, this will be the subject of a subsequent campaign early in 2009. Over time we will release more reports - we have great insight into what Sage50 users can't get, and we can write them and publish them for purchase - and across more install bases. Mamut springs to mind, and we have just started discussions with Xero, but there is an enormous mid-sized accounting/ERP application market, as you know, and although we are aware of all of them and have solutions written for many of them, the Web ,SaaS and MMR give us the ability to go after even the likes of Peachtree in North America very easily and cost-effectively - but our strategy at Alchemex has always been to eat the elephant in bite-sized chunks, so we will bide our time and make sure that our solutions are taken seriously because they address real issues - and we overcome the gimmick issue! Your software satisfaction awards have also been a hot topic of debate at Alchemex for 2009 because we would like to get MMR to a level where it becomes considered among the other solutions out there.

I hope I covered some ground for you. It is a fascinating subject in its scope and the way it is evolving so rapidly.