The increasing reliance on computer systems by businesses of all sizes is driving fundamental change in the way accounting software is being provided to the SME sector.
More and more business owners recognise that technology can allow for far greater control and foresight into their accounts, in turn making it easier to analyse their business and exercise more efficient management of their finances.
Similarly, as technology becomes more pervasive and intensifies, so information becomes more readily available and the ability for competitors to replicate is becoming easier and easier, so companies today can no longer differentiate themselves on product alone.
Therefore, it is important for small businesses that wish to benefit from long-term sustainability to identify their unique competitive advantage. Greater operational efficiency, facilitated by sophisticated accounting and CRM software, as well as other Web-based application technologies, can help achieve this.
Healthy competition
No traditional software application is immune to Web-based competition, so it stands to reason that adopting Web application technologies and business practices is an area that local vendors and customers are sitting up and taking notice of.
Over the past decade, we've seen a shift in the industry - from customers installing software themselves, to starting to consider the adoption of SaaS models wherein Web-based applications are outsourced to a vendor. Perhaps one of the most challenging aspects of SaaS implementation for the small business owner is simply deciding which application/s is most appropriate to outsource.
In the past, SaaS offerings were limited to applications such as ERP, CRM, and the like. Today companies of all sizes are also looking at online infrastructure services - applications such as backup and storage.
Online backup can help small businesses deal with the challenge of exponentially growing data volumes. It presents a new opportunity for small businesses by giving them all the benefits of enterprise-class backup without the associated management complexity and cost.
Better yet, as more mature backup vendors start to offer their software through an online delivery model, small businesses can be sure their data is safely in the hands of proven experts.
Although the benefits of Web-based accounting solutions have heightened interest in the SME sector in South Africa, the uptake hasn't yet been significant. Bandwidth limitations remain a big challenge here, and some businesses, particularly SMEs, are simply not comfortable giving their sensitive accounting data to others to manage.
Others have found that a Web-based solution may actually be more secure than their current configuration. Either way, business owners should carefully investigate the issue of security in more detail if they're exploring the benefits of Web-based accounting for their business. Leading Web-based vendors realise that this is a critical issue, and they have taken significant measures to ensure the security of their customers' data files. Vendors must provide a secure data environment for their customers.
Taking the bait
Although the benefits of Web-based accounting solutions have heightened interest in the SME sector in South Africa, the uptake hasn't yet been significant
Ivan Epstein is CEO of Softline.
The current pricing modules shouldn't be radically affected by the increased interest in Web-based accounting solutions. The biggest lure for vendors is that Web-based customers offer an annuity-based revenue stream, making business more stable. Vendors can also provide better support and service in the Web-based environment. Another great advantage is they can analyse customer usage and thereby determine which parts of the application they are having difficulty with, or achieving the most benefit from.
Traditionally, once a customer has paid for a software program - some of which can be complex and difficult to operate - there is sometimes little incentive for the vendor to follow up and ensure the service is efficiently fulfilling the customer's needs or being used to its full potential. However, if customers prescribe to an ongoing service they may benefit from ongoing training, support and guidance from their vendor.
They will also receive the latest upgrades where applicable. If the vendor doesn't ensure adequate training and support, the customer will simply stop using the solution. This gives software providers incentive to pay attention to customer usage, to proactively identify whether or not the technology is providing business value, and strive to increase its value.
For customers, the biggest buy-in is the low cost of entry. Instead of paying a lot of money to implement a complex solution across the company, customers can roll out a small test department, thereby ensuring the risk is very low if it fails. Also, in this model of software provision, the vendor works for the buyer. As everything is securely managed at the vendor's location, customers don't have to rely solely on their IT department to install an application, which is particularly attractive for smaller businesses, which often don't have a dedicated IT resource at all.
Irrespective of the nature of a business, selecting the right accounting software is important for streamlining the financial management of the business. Having a handle on the accounting, inventory control, customer data and the availability to generate powerful reporting are useful when meeting the challenges of today's business demands.
Opportunities for both Web and non-Web based solutions continue to abound in SA. Businesses are in a good position to embrace the emerging markets, and the SME sector is still showing strong signs of growth.
* Ivan Epstein is CEO of Softline.
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