Blog - Archive for 'April, 2010'
Cloud Accounting Software
[This post was originally made on the AccountingWeb 'Cloud Accounting Discussion Group' forum.]
A different perspective on the cloud from an accounting software developer
As an established business software developer, including accounts packages, we are keeping a close eye on the cloud accounting software market and wanted to make some comments from a developer’s viewpoint that wasn’t based on trying to sell our cloud application.
There are obvious benefits to cloud-delivered software, but for most established businesses and accountants, the benefits aren’t significant enough and there is not enough pain being experienced with existing systems to make them jump over to cloud applications. Yet. No doubt this will change but not at the speed interested parties say it will and maybe not for all markets. Accountsportal’s estimate of 5-10 years seems realistic. Getting some decent Broadband speeds might be a start.
Talking to our customers, mostly established businesses, many aren’t bothered about cloud computing even if they know what it really is. And I’m not talking about people who don’t know much about IT. Accounting software is a tool at the core of their business. It works and they aren’t going to change just because they can access the software from home if there’s a rail strike or someone can’t get a child minder? They deal with these things already. (VPN’s aren’t that expensive or difficult to set up, and remote access software is child’s play.) The view is often that the cloud model is too new and unproven, security is not adequate (even if theirs is worse!) and broadband is too slow and unreliable. This will change, but it will take time.
There are early adopters in all markets and there are clearly benefits to cloud accounting software for many businesses, particularly sole traders and start-ups. However, I wonder how many of them will end up moving to more established desktop applications as their business grows? Ridiculous? Well, that depends on many factors including new operating systems and how quickly the functionality of cloud accounts packages develops.
From what we’ve seen, there isn’t anywhere near the level of functionality in cloud accounting software that you can get with desktop applications. We feel one reason for this is that the development tools for developing cloud applications are not as advanced or mature as those for local applications. What is available is fine for basic book-keeping, CRM, document management systems etc, but not for more advanced accounting. Looking at Microsoft’s Silverlight last year it was clear it just wasn’t up to the task. With the latest version, a lot, but not all, of these issues have been addressed.
One comment was that this discussion wasn’t about technology. Of course it is. People don’t trust new technology and IT firms very much where their business is concerned. Unfortunately this is based on experience. They aren’t bothered about getting cloud software just because it’s new. In fact that’s more likely to put them off. Keeping their business functioning is too important and many are sensibly cautious.
There are also issues about broadband speeds and data centres being able to deliver the reliability and access people need. I saw a message recently: “Twitter is over capacity.Too many tweets! Please wait a moment and try again.”! How is a business going to feel if that starts happening to them when they’re trying to allocate 5,000 order lines? Admittedly, they already experience down-time with existing systems, but at least they know what demands are going to be put on their IT systems and they are in control of dealing with it.
Another advantage to Cloud-based applications is the developer being able to update the software version at a single point and not having to upgrade each customer individually. True, but is this a benefit to the customer or the developer? One customer of ours doesn’t install the latest version of their CAD software until they see the first Service Pack. If the developer is in charge on when the cloud-based application is upgraded, how much hassle could a ‘buggy’ release cause businesses who have no control about when they start to use a new version?
Are cloud applications the future? Certainly in some markets, but maybe not in others. Cloud-based Corporate Social Responsibility (CSR) software is ideal for global organizations, but that is completely different to accounting software for UK SME’s. We are developing cloud applications, but our customers tell us it will be some time before they’re interested in a cloud alternative to accounting software. As we’ve said, it’s a naturally cautious market. Are accountant’s who don’t embrace cloud accounting software right now going to disappear? I’m sure any accountant who has survived the technology changes of the last ten years will adapt to cloud computing as and when they feel it is appropriate and what their clients want and need.
We think we’re being realistic about what our customers’ needs and expectations are. Others may disagree, but experience tells us that it’s going to happen when businesses feel that the advantages outweigh the disadvantages and this will take longer than people think.
Posted on 28/04/2010 in Accounting Software by Simon Harvey (No comments)
Can businesses make money from Twitter and Facebook?
It was quite odd to see the headline, “Can Twitter Make Money?” on the front cover of April 2010’s Technology Review.
Despite its massive popularity and potential as a source of real-time news, Twitter doesn’t really have a formal business model yet and no-one is quite sure how (or if) it’s going to make any money. (Apart from the $160 million stumped up by venture capitalists!) One revenue stream they are considering is advertising. In fact, as I write, it has been announced that Twitter will be launching promoted tweets.
There’s no doubt that many business-to-consumer companies have been very successful in making use of Twitter, Facebook, MySpace etc., collectively called Social Media or Social Networking. It can be a great way of building brand loyalty by getting friends and followers who like a certain chocolate bar, beer or musician to spread the word. It is a form of “viral” marketing and the frivolous, leisure-time nature of Social Media suits these types of business.
Being invited by a friend to join a Facebook group or follow someone on Twitter has an inherent ‘recommendation’ element to it, but has no real cost to the organization being recommended, the person making the recommendation, or the person accepting the invitation. Social media allows people to prompt others to join up to a group and support a business at any time, with just a few clicks. And all someone has to do to accept that recommendation is click on a link.
It’s not just big brands making the most of this communication channel either. One of our customers, Cornish Traditional Cottages, is doing extremely well making the most of social networking.
It is also important to point out that a lot of these brands are actually just as interested in limiting any negative publicity that could get out of hand. I was recently sent a request to join a group boycotting Shell and BP.
But how can Social Media benefit business-to-business organizations?
Every business knows how powerful recommendations are and surely this one area where there is potential for Social Media in the business-to-business arena. But the dynamics are very different and how social media can be used for these organizations is much less clear.
For one thing, what people choose to buy for their business can have a significant positive or negative impact and they are more likely to make considered buying decisions. The buying process has moved from being frivolous to being serious.
That said, one significant business-to-business growth area has been consultants telling companies that they are missing out on the Social Media phenomenon. Fear of loss is a powerful incentive! Seminar anyone?
If you consider social networking as a form of marketing communication, like any other advertising, PR or marketing, it can be a powerful and very inexpensive way to get your name in front of potential business customers. Or can it? Are you getting in front of the right type of people? Are they business people and will they be in a business frame-of-mind when they see it? Facebook is not the obvious choice when you want to buy a new server or accounting software. Even if they do see you and consider what you offer, will they take you seriously if they see you being promoted on Facebook? Or tweeting amongst all the inane chatter? Possibly not.
It is after all Social Networking, not business networking, and there is an associated sense of quality linked with it. Marmite’s recent “Spread the Word” spoof election campaign is pure genius and ideally suited to Social Media. On the other hand, Alfred Dunhill, the long-established, high-end gentleman’s outfitters seems oddly out of place on Facebook and it feels like they’re weakening their exclusive brand. One way they appear to be using Facebook is to get feedback on certain “looks”, but I don’t think it works.
In short, do you really want your business to be associated with Facebook and Twitter?
That was a question we asked ourselves at Benchmark and knowing what some of some of the content is like on Facebook and Twitter we weren’t sure we did? (One US study of 2,000 Tweets found that 62.2% were “pointless babble”.) Is everyone talking but no-one is really saying anything? Does the business really want to be a part of that?
The other question was whether Benchmark would actually benefit from being on Facebook or Twitter? Could it help the business in some way we hadn’t thought of? We weren’t sure it could but there was that itching feeling that we were missing out on something even though we weren’t quite sure what. As I said, fear of loss, or missing out, is a powerful motivator.
It is very important to mention at this point that search engines and especially Google LOVE blogs and social media. The right content can make dramatic differences to your search results and this was one of the main reasons for thinking about using it.
So we kept doing research and trying to think creatively about social media as a communication channel and ways we could use it that didn’t weaken our brand but got us “out there”. It had to be done the right way and we weren’t sure what that was.
Finally, we realized how both Facebook and Twitter could be used to help us and our customers. It certainly isn’t in any traditional sense of straightforward advertising or sales, and any return will be almost impossible to measure, but a lot of marketing, branding and customer service is like that. We’re starting out on the Social Media journey and time will tell.
Let’s start with Twitter. We are continually developing our accounting, CRM, payroll and sustainability software, usually based on user feedback. When new versions go out, there is a list of the changes made, referencing the name of the company where they had input. Customers also want to know what new features, programs and modules we are working on. We use our emailed newsletters to do this.
We decided that Twitter would be an ideal way to let people know about these changes and upgrades and with the right content, we could get better search results for our products, particularly the sustainability software which is a very new market and has huge potential given the importance of sustainability to business now.
As far as Facebook is concerned, our approach was very different. A couple of years ago, we set up an exhibition of vintage computing and gaming to celebrate 30 years in business. It was very popular but only lasted two-months. Since then we haven’t had the time or a suitable venue to set up another exhibition, although we have done some talks at local schools to ‘Gifted and Talented’ groups, which the pupils loved! So we thought a virtual museum would be ideal (there are already plenty on the Web) and where better than Facebook to set up a community? Our experience was that people love seeing old computers and computer games and reminiscing about them.
The benefits to the business? Well again, links to our Web site should improve our site’s page ranking and by the museum Facebook page generating interest, Benchmark should increase its profile by being associated with it, without weakening our brand, as the museum is a form of business philanthropy. Effectively we are sponsoring the museum, a well-established form of marketing.
Admittedly, some of these benefits seem woolly at best, but we’re getting started. After all, if Twitter isn’t even sure how they’re going to make money, we can give ourselves a bit of slack.
Posted on 20/04/2010 in General Business by Simon Harvey (No comments)