While financial software vendors benefited from the technology boom of the late nineties and early noughties, not least because the Y2K issue and Euro changeover directly impacted financial systems, sales have been harder to come by in the intervening period. The response has been a period of intense innovation with current financial systems packing for more functionality and ease of use than the 16-bit DOS and Unix based systems that only started to be retired in the last few years.
The good news from a customer perspective is that the innovation looks set to continue as the software vendors seek to add new functionality that will drive sales. One way of passing that innovation on to customers is through modular products that can be customised to meet the specific needs of individual customers but without the need to re-invent the wheel each time it is implemented.
“A solution is typically made up of 10pc hardware, 30pc the application software, 30pc the supplier and 30pc the customer,” says Charles Alken, director of Quantum Business Solutions. “So basically 60pc of the solution is made up of the customer and supplier interacting and only 40pc of it is the tools.”
Alken believes that traditionally not enough time has been spent on getting the interaction right and what are required are “accounting architects” who can outline the necessary design and scope. “I think it will become a profession in its own right,” says Alken. “It’s someone who can establish the variables, scope the requirements and prepare an architectural plan to provide a top ten percent solution for the customer.”
Integration of existing applications has long been a theme in large business. Suzanne McClelland (pictured), an account manager with SAP Ireland, estimates that about 99pc of its customers who use SAP Financials would have it integrated with other ERP elements provided by SAP.
With cost reduction having become such an over-arching concern for business in the last few years, integration of different systems has become a vital component in getting a handle on the costs, according to McClelland. “Data warehousing solutions which allow you report across different functional areas are becoming increasingly popular,” she says. “Companies need to know where the costs are in the business but if a data warehouse is to be successful you need management buy-in to ensure everyone keeps the data up to date.”
But integration is now becoming something that is becoming more important for small and medium sized businesses, according to Alan Connor, commercial director of Exchequer. He has observed integration becoming a growing phenomenon as SMEs look to have their financials integrated with other applications such as CRM and even desktop software such as Microsoft Word and Outlook so that they can get the maximum return on the technology investments they have already made.
The likely impact of XML for allowing communication between non-compatible financial packages, but also with other types of applications, tends to get the software industry in a bit of a lather. While XML is one of those technologies that has been coming down the tracks for a number of years, it looks as if the benefits for users are about to be realised. Alan Connor believes that XML support in common desktop applications such as Microsoft Word is the catalyst required to make XML ubiquitous. “With Word 2003 you are able to use an invoice or order template and save it as XML,” he explains. “If you email it can be imported into the recipients accounts system with no need for re-keying. With support in Word, everyone will be able to produce standard XML documents.”
The public sector is also rushing to take advantage of the new capabilities of financial software. David Knapp, sales and marketing director with Mentec, believes that procurement is one of the main areas they are trying to use technology to become more efficient in, with the Local Government Computer Services Board’s (LGCSB) Business Purchase Exchange likely to become a showcase of what’s possible.
The exchange will allow suppliers to update product information and other details on a central website that can be accessed by local authorities. In order to gain the efficiencies of centralised purchasing, specific local authorities will specialise in the procurement of certain types of products and that information will be published and made available to all the others. The cutting edge new system will be based on XML.
The financial systems that Mentec sells into the Government sector are also increasingly being called on to support customer and supplier self-service. Knapp says the wider availability of faster internet access is behind this trend, which requires that financial systems can interface with a range of other back office applications.
“Planning applications are a big source of revenue for local authorities but the planning process has nothing to do with the financials,” says Knapp. “But when you charge for it, the onus was to pay on completion, which meant it was down to a council official to follow up on it. Now they are looking to link the invoice to the planning process. Even non accountancy functions always have a link back to financial systems.”
By John Collins