Business software: The mid and upper-mid marketplace is changing

Lorge Press Office
[Johannesburg, 25 July 2003] Many ERP business software solutions are today beginning to be seen by the marketplace as “over-promised, over-priced and under-delivered”.

The reason for this, according to Errol Wills, managing director of ACCPAC accounting software reseller and solutions provider Softline Lorge, is that the functionality of ERP systems in the main cannot compare with that of “best of breed” applications designed for specific or vertical markets.

“What is emerging is a trend to mate industry-specific solutions with an accounting software package. This requires minimal reconfiguration and modification if using open architecture.

“Accounting software is the core, the engine room, of any overall business software solution. This makes sense because accounting practices are dictated by international regulations and local legislation, so it is a consistent, repetitive series of processes. Accounting software works – it has to because of the regulated environment.”

Wills adds that total cost of software solution ownership and return on investment are becoming critical factors for businesses planning to implement a financial system. He says the cost of implementing a 100-user financial software application amounts to about a third of the cost of implementing a typical first tier ERP system. The ongoing annual maintenance, support and licence fees are also about a third of the cost.

“The once off cost of implementing a financial software application could be financed by two to three years of annual maintenance, support and licence fees of a typical first tier ERP system.

On this basis, a user implementing a financial software application could expect to get a return on investment in about 30 months, compared against the cost of retaining a first-tier ERP system.

“The investment is also protected by the fact that the user is free to choose infrastructures and products in an open rather than a proprietary architecture, operating system and database environment.”

For this and other reasons, accounting software in an open architecture, combined with modules for activities such as CRM, e-business, warehouse management, and business intelligence is fast becoming a more attractive option than ERP proprietary systems, even for large companies.

“Management is beginning to appreciate that in many cases it is prudent to start with the core accounting software, achieve competency in the financial function and then add specialist software modules as required.”

Wills believes building a business software solution in bite-sized chunks as the company expands and changes direction, instead of going the whole way from the start, has many advantages in terms of cost, flexibility and the ability to select specialist software that is designed specifically to enable the needs of the business, instead of tailoring the business to meet the needs of the software.

“It makes sense to gain an understanding of all the aspects of a total business software solution. If it is a proprietary system the company becomes locked into an architecture that, if it proves unsuitable later on, will require an expensive re-implementation of the solution from scratch. Thus the selection of accounting software is both strategic and critical.”

Wills sees the answer lying in accounting software that is able to grow and expand with the business, going beyond just the financial reporting requirements with added-value modules that bring additional business functionality into the solution in an uncomplicated, easy-to-use manner.

“Our approach to business solutions for our customers is made on this basis. Almost across the board, our clients are looking for flexibility and simplicity – accounting and business software solutions that give them options and as well as accommodating new directions that the business might take.”

Issued by: TMC

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