From the Oct. 2007 Issue
The software business is one of the toughest on the planet with thousands of
lines of codes that must be perfect, long development cycles, astronomical support
costs and a host of other challenges. But the accounting software industry hasn’t
made its life any easier by following the herd.
Back in the days when I was hawking accounting software for a company long
since forgotten, we watched the competition closely so that we could immediately
copy any new ideas or features they had. They, in turn, watched us. “Product
differentiation” was almost unheard of.
That made it even more amusing to watch as the accounting software industry
almost completely abandoned the Small to Medium Business (SMB) marketplace in
order to chase after the large, multinational enterprise customers of the Fortune
100. That, everyone said, is where the real money was to be found.
A decade later, that movement has resulted in a round of consolidation, the
emergence of the Three Sisters (Microsoft, Sage, Thomson) as the dominant vendors
at the high end of the market-place and the near-annihilation of profitability
for everyone else.
None of this was bad … exactly. Lots of small, hopelessly “me-too”
products were swallowed up or simply disappeared. But it soon became clear that
the problem with serving the Fortune 100 is … well, there are only a hundred
of them. There just isn’t room for everyone to prosper.
So now the pendulum is swinging back the other way, and everyone in the herd
is mooing about the SMB market. They are largely overlooking the fact that whatever
part of that market is not owned already by Intuit is being served by Peachtree
by Sage or Microsoft. Or that there are some classes of accounting software
that small businesses simply are not prepared to make effective use of.
Which brings me to the subject of Corporate Performance Management software,
or CPM. It’s currently the darling of the accounting world, having cut
its teeth in enterprise applications where data can be more easily merged, mashed,
sliced and diced into meaningful decision-support and business intelligence
reports. It is a clear winner in the enterprise world that is being pushed downward
as companies flee the profitless competition for the 100 companies at the top
in an effort to regain sales.
The problem is that the majority of smaller businesses don’t have the
resources to amass that data, nor do they have the skills required to make it
work for them. Most of them would trade a year’s worth of CPM for a little
help in making payroll this coming week. Nonetheless, we are seeing CPM crop
up as part of any number of offerings, with no vendor willing to admit that
they don’t have a clue as to how it would benefit a small business owner.
They’re just copying the features of competitors and hoping to glean out
another point of market share.
Sure, the mid-market could surely make use of better decision support data
than it currently has. And certainly there is room for improvement and innovation
in how that data is collected and processed. And that’s what the whole
movement to better serve the SMB market should be about — innovation,
not repetition. No one needs a small business accounting package that works
like the one General Motors uses. They need a small business accounting package
that works just like the best accountant they ever knew.
And for the software vendors who are desperately fleeing the enterprise market,
hoping to push their feature-laden, bloated software applications into the SMB
market, there is perhaps only one thing we can say: Moo.
INTERNET SITE OF THE MONTH
For those of us who spend a lot of time traveling, one of the small pleasures
is the SkyMall catalogue, which nearly always has something on its pages of
neat stuff for sale that I can’t live without. Taking the magazine home
to order, however, is too often like work. So instead, I haunt the catalogue’s
website — an exceptional shopping site for the interesting and weird.