Category: outsourcing

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Servicing Fundamentals: Are Vertical Software Products Becoming Obsolete?

Servicing Fundamentals: Are Vertical Software Products Becoming Obsolete?

As mobility and the Internet continue to drive changes in how people interact with technology and each other, businesses are finding that the compelling arguments presented by many cloud service providers are tough to ignore.  Anytime/anywhere/anymode access to business applications and data, focusing on core business issues and outsourcing non-core processes, streamlining and connecting processes to create efficiency and predictability in operations – these are the benefits which “connected” and cloud technology models are delivering.  Cost efficiencies in supporting business operations are also being experienced, as the outsource IT solution often provides fault tolerance, scalability and performance at cost and service levels difficult to achieve with in-house systems and personnel.  The scale economies of the cloud cannot be argued with, and it is this cost-efficient and effective provisioning of fundamental business services to users that is increasingly pressuring vertical software makers to either address the market with more fundamentally useful tools incorporated into their products or risk losing users to generalized and commonly used solutions.

Consider that many accounting solutions today have introduced the ability to connect document files to transactions.  It makes sense, and provides a basic capability for accounting/bookkeeping which is necessary.  On the other hand, what happens to the rest of the documents used in the business – the ones that aren’t associated with a financial transaction?  And, if there isn’t mobile access to the accounting system, how are those attached documents made available to remote users and mobile devices? Another thing to think about is the fact that users now have the ability to interact with various files and applications natively on mobile devices, as opposed to having specialized applications to access limited data sets.  File sharing applications and productivity tools are widely used by these mobile users, as they provide the flexibility to seamlessly access files regardless of device or location.  This fundamental benefit of simple and affordable information access, storage and sharing is proving the value of a generalized approach to enabling users and helps to explain why the operating and file systems were the previous “killer apps” in computing technology.  The question for vertical software developers now is whether or not they can effectively incorporate these popular services into their solution, or if the solution must limit its focus on addressing only the truly unique elements of the business rather than the general or fundamental ones.

A great discussion on the subject is an article on PrismLegal.com where author Ron Friedmann describes his similar question in the context of Box.com increasing use in law office environments and how this impacts the legal software market.

More generally, it should cause us to question the future of legal market specific software. I understand the need for customized software; for example, I am currently involved with developing and deploying legal project management software (Cael LPM™ by Elevate Services). But the market – both customers and vendors – must balance the need to meet legal specific requirements with economics and scale.

Box and other cloud providers can potentially sell millions of seats to thousands of organizations. Contrast that enormous reach, which spreads development cost over so many users, with legal market scale. The large law firm market has no more than 400 organizations and 500,000 seats. The development and service cost per user is much higher. Nonetheless, many companies have prospered creating highly customized software for the legal market. In the age of cloud and economies of scale, however, will those economics still be so favorable?

There will always be a place for vertical and industry-specific solutions of certain types, but there is an increasingly large population of businesses which have adopted generalized solutions to address fundamental business requirements, and users (and solution providers) are recognizing that these essential solutions are meeting the majority of the business requirement without specialization (and additional cost) required.

jmbunnyfeetMake Sense?

J

Read more about Cloud Computing for Small Business: It’s All About 3 Apps

Read about why Lawyer Immunity from Delivering Customer Value is No More

Read about The Line in the Sand: Your RPO (Recovery Point Objective)

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Hosting Intuit QuickBooks Desktop Editions Delivers Big Benefits for Small Business

Big Benefits with Hosted QuickBooks

diagram_self_hosting-500_289Everyone, it seems, is adopting outsourced IT and cloud computing models yet one size does not fit all when it comes to serving business – whether it’s the software or infrastructure under discussion. Cloud, mobile and online application models deliver big benefits for small businesses, but it is important to know the options available before investing in something that’s hard to get out of later. Initially, a hosted application model might be the best approach, allowing the business to achieve the mobility and on-demand service they desire but without an investment in SaaS solutions that are much more difficult to change out of or grow with later.

When “QuickBooks” and “cloud” are mentioned in the same sentence, most people are likely to think about the QuickBooks Online Edition, which is Intuit’s version of QuickBooks accounting software that was developed specifically for the web.  But QuickBooks Online isn’t the only QuickBooks “flavor” finding success in the cloud.  QuickBooks desktop editions have made their way into online and hosted deliveries, giving customers the ability to run the business and grow the organization with the software they’ve already invested in, but running the apps in the cloud.

QuickBooks Online lacks the features and functionality present in the desktop product lines, and the range of 3rd party applications which integrate or work in conjunction with QuickBooks desktop is huge and continues to grow.  Developers with SaaS products often find that their target customers prefer the desktop editions of QuickBooks, even though there may be connections to QBO available.  All of these connected software products can be hosted with or connected to hosted QuickBooks, providing businesses with mobile and remote access for all their business applications, not just the web-based ones. *Note: not all QuickBooks hosting companies will also host whatever 3rd party integrations a business needs, so make sure to verify before you buy! What sounds like a great hosting deal now could turn into something you need to change later.  The good thing is, you can change…. unlike with QBO.

The popularity of desktop application hosting continues to grow because users have investments in software, data and business processes. Adding remote access and mobility doesn’t require an entire change of software, but it does introduce new benefits that can have a big positive impact on work quality, productivity and efficiency. QuickBooks hosting models and application hosting in general gives business owners a basis for helping employees balance (or integrate) work and life time and activities, and addresses the issues of data security and mobility by keeping information securely stored on the host.

Better information security, work/life balance, mobility, making the most of your existing investments and creating sustainability in the business so you can grow. These and more are benefits of hosting QuickBooks software for your business.

jmbunnyfeet Make Sense?

J

 

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Is it Cloud or is it Desktop?

Is it Cloud or is it Desktop?

There are a few realities that users of purely SaaS-based solutions are finding, and among them is that most web-based applications don’t readily integrate with the desktop – and the desktop is still where a lot of the real work gets done.  Yes, users are increasingly mobile and are using smartphones and tablets to create and access information via mobile applications and services, yet the PC desktop – whether it’s an actual desktop computer, laptop or full-featured tablet – remains as the workhorse for business.  Even the most popular SaaS applications continue to rely upon the desktop and locally installed applications to get some of the work done (note that many Salesforce.com users still find Excel to be their most effective reporting tool).  In an effort to deliver mobility for those applications traditionally tied to the desktop, software developers have adopted two main approaches: redevelop the application for the web (which usually means bringing functionality down to a lowest-common-denominator approach), or applying a traditional terminal server or virtualized application approach and calling it “cloud”.

desktop-apps

Neither option is awesome for the software maker – the time and cost of development certainly isn’t low, and the realities of hosting conventional desktop or LAN-based applications in shared infrastructure are pretty ugly at best.  What these software makers need is a way to allow businesses to continue to use their software for the desktop and LAN, enabling the user with software license use rights to access that software product and associated data on any of their “desktops”, regardless of where that desktop might be (or what device it is running on).  The model is cloud, but then it’s a desktop model too.

Independent software vendors are more frequently turning to platform providers (PaaS) to help deliver whatever “cloud” approach the company elects, and these ISVs are also feeling the bite of outsourced service fees and growing costs of delivery.  It is not just the direct customer questioning the cost of deploying resources in the cloud – software providers are questioning these costs, too, especially as they attempt to deliver resource-intensive solutions from hosted infrastructure that bills them based on resource utilization.  MyQuickCloud is proving that ISVs and their customers no longer have to bear large infrastructure costs in order to deliver complete user mobility. MyQuickCloud supports IaaS providers and their partner networks, allowing infrastructure-as-a-service offerings to include a simple and fast way to immediately make that infrastructure useful for desktop and application delivery.

The information technology industry has seen a lot of disruption in recent years, with complexity and risk in systems rising as users demand more functional mobile capability and software developers struggle to protect and preserve their assets (users included).  MyQuickCloud jumps right into the middle of it, delivering solutions for business customers, software developers and cloud providers alike, and answering the question of whether it’s cloud or desktop.  The answer is “yes”.

jmbunnyfeetMake Sense?

J

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Lawyer Immunity from Delivering Customer Value is No More

Lawyer Immunity from Delivering Customer Value is No More

All indications are that business and revenue growth for law firms is no longer a function of head count.  As with other professional service providers, lawyers are experiencing increased competition from a variety of new sources, and client demands and needs are changing as society adopts and embraces technology, social computing, and self-service solutions.  The problem is that many partners and firm leaders don’t really know what do to about it, and are attempting to fuel continued growth of revenues and profitability while essentially maintaining status quo.

Looking to reduce costs and pushing for more billable hours is standard fare among firm managers, yet the results to be gained from these efforts have pretty much reached their maximum potential.  You can only cut so much, and you can only work your people so hard.  Unfortunately, many partners and managers simply look away from the problem and continue along the path that has been successful in the past.  But growth has slowed, revenues have not grown as expected, and firms are literally being forced to adjust to market forces or go out of business.  It’s just too competitive and the pace of change is too rapid.  There is no immunity for lawyers in this changing market – service quality and value must improve.

Instead of taking the legacy approach of hiring more people so they can bill for more hours, successful firms are taking a few queues from other professional service providers and are recognizing that individualized client service, consistently high-quality and timely service, and service priced commensurate with the value delivered are at least parts of the solution.

There is quite a lot that law firms and accounting firms have in common, particularly when it comes to the fact that most of these entities are viewed – perhaps rightly so – as being “old school”, with a managing partner or board with intractable views and grey hair.  Lawyers, like accountants, are inherently wary of new-fangled concepts and wild ideas.  They’re a cautious bunch, and tend to be resistant to change.  Yet accounting professionals are beginning to embrace new tools and new ideas when it comes to delivering service and value, and forward-thinking law firms are following suit.

For successful firms, the focus is on the client and the value delivered – on internal process improvements and a better value proposition for the customer – not on the billable hour.  Yes, there are investments required.  The firm must invest time most of all.  It takes time to get everyone educated about issues the firm is facing in the changing marketplace.  Unless everyone knows what they’re up against, there will be continued resistance to new ideas and concepts.  It also takes time with clients to understand their needs, which is the essential element to delivering service valuable to them.  And it takes time to develop and nurture a long-term vision, recognizing that the vision may change as conditions change, and that regular monitoring and adjustment may be necessary.

Investing time and consideration in these areas is the key to delivering customer (and shareholder) value.  The result is satisfied and loyal clients, repeat business and increased growth and profitability.  Rather than viewing this brave new world as a challenge to the firm’s traditional model, it should be viewed as the opportunity to deliver new and greater value to the firm’s customers.

Make Sense?

J

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Accounting Professional Value is Insight and Advice, Not Just a Hosted Server

Accounting Professional Value is Insight and Advice, Not Just a Hosted Server

Back in the late 90’s, when the application service provider model was first established, a number of providers recognized how beneficial it would be for public accountants to use hosted applications to work more closely with their accounting and bookkeeping clients.  Seeking markets which would rapidly adopt a hosted application model, these providers focused on hosting small business accounting solutions such as Intuit QuickBooks desktop products, and then sought participation by the largest addressable communities of users working with those products – QuickBooks ProAdvisors, bookkeepers and accountants.  The idea was that the community of QuickBooks professionals would benefit by bringing their clients onto the hosting platform, and service providers could sell to one professional and gain a bunch of small business users.  It made sense, too, as it allowed the professional to have a single service and login that allowed them to access all their client QuickBooks company files.  The client could log in to the system, too, delivering remote access and managed service benefits to the client, as well.  But there was a catch, and it didn’t fully reveal itself until recently as cloud-based applications and true SaaS applications began to gain market adoption.

The problem actually started to reveal itself as more businesses elected to adopt hosting services.  There’s a saying amongst the QuickBooks hosting providers that “nobody uses just QuickBooks”.  Saying “nobody” uses just QuickBooks is a bit of a stretch, but the reality is that numerous businesses use other applications and software solutions in addition to their QuickBooks product.  Sometimes these products integrate with QuickBooks and sometimes they don’t, but it is not often that a business utilizes just the one software solution.  At minimum, there are likely email or productivity tools in use, too.  The point is that the QuickBooks hosting providers – those hosts focusing on providing service to QuickBooks accountants and small business clients – realized that the number and variety of applications desired by their customers would grow very quickly, as would the variety of needed implementation models.  The unfortunate solution of the time was to just put it all on the same environment.

The original selling message to the QuickBooks consultant and accountant markets was that they should get all their clients on to the hosting service, and then the accountant could benefit from an “economy of scale”, making the cost of the overall delivery lower.  Further, by grouping the firm and the clients into a single hosting environment, it would make application and data sharing easier.  Both of these messages are true, but putting the firm and its clients into a single environment – with the firm as the “sponsor” and front line promoter of the service – began to have impacts which were not clearly foreseen.

  1. Accounting professionals and consultants changed the nature of their relationship with the client, going from trusted advisors to technology and solution vendors.
  2. Client business technology needs were placed as secondary to “enabling” the working relationship between the accountant and the small business client.
  3. Attempts to fully satisfy client technology requirements overburdened and impacted the environment, reducing overall service quality and satisfaction and diminishing the value of the scale economy (as well as the clients’ perception of their accounting professional).
  4. Firms structured their processes to support a single technology and operating model, and found difficulties in adopting new strategies or solutions.

In concept, having accounting professionals and their clients all working seamlessly together in the same systems sounds great.  For some firms, a cloud server packed with all the firm and client applications and data enables an entirely new business and service model, which is very cool and it actually works (for some firms and their clients).  But the problem – a problem which may not be fully revealed in the short term – is that the various businesses involved, from the accounting practice to each and every client, has different business needs and operates as a unique organization.  While there may be fundamental similarities, “the devil is in the details” as they say, and a single platform or hosting solution is unlikely to really work well for all.  Even more potentially damaging, the perception of the trusted advisor who is now viewed as a vendor of IT services or software erodes the value of the client engagement and the potential for the firm to deliver greater benefit through their core offerings.  A business owner is more likely to change vendors of IT service than they are their trusted accounting or finance professional.   And they’re also more likely to change IT service providers if the provider cannot deliver exactly the application or service desired.  When the accounting professional is perceived to be the IT service provider, the lines are blurred and the client ends up attaching their loyalty to a software product or business solution instead of the accountant advisor OR the IT provider.

With SaaS and native web-based applications being broadly adopted by small businesses, the opportunity for firms to engage with clients in different ways and with different solutions started to break the one-size-fits-all hosting approach.  Professionals found that empowering their clients by supporting properly fitted solutions which work for the client business delivered the opportunity to become more operationally and strategically involved with the client business.  Deeper operational and strategic involvement with the client became the means to drive increased value in the engagement and services offered and delivered.  The client business was able to benefit from the involvement of their trusted advisor, regardless of what platforms or systems might be in place.

Accountants and bookkeepers are recognizing that the previous model of aligning the practice with a particular software product or delivery system may not be the best approach to building and retaining the customer base.  With new business accounting and bookkeeping solutions emerging regularly – and gaining broad market adoption – and as more and more varied cloud based services and solutions are applied to various business problems – professionals will further recognize that their value is not tied to a cloud server, a single small business accounting solution, or to any particular technology.  The value of the accounting professional is not in the software they support or the server it runs on.  The value of the accounting professional is in the insight gathered and advice provided – services offered which help support better business management, growth and profitability.

Make Sense?

J

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Banks and Small Business: Finding the “Just Right” Fit Isn’t Easy

Banks and Small Business: Finding the “Just Right” Fit Isn’t Easy

Banks need business customers because business accounts provide more profitability than consumer accounts.  By volume, there are more small businesses in the US than mid-size or enterprise businesses, which you would think would be a good thing for the banks – more business customers, right?  It seems not so much.

For many banks, the problem is that they don’t appear to really know how to service – or even identify – these small business customers.  The majority of small businesses in the US don’t have employees, so direct deposit and payroll solutions aren’t something they are looking for.  Many of these small businesses operate from the business owner’s home rather than an office, and don’t generate the revenues (=deposits) that bigger businesses do.

To a bank, most small businesses look like consumers.  These small businesses are treated like consumers – are offered consumer-level services and are not educated on what business banking services might be able to do for them.  In reality, the banks really don’t have much to say to these small business owners, because the services offered by the banks are simply not a great fit.  There are studies which suggest that the small business market is fairly evenly divided, with approximately 50% using consumer banking services rather than those designed for business use.  Given the inability of the banks to even identify those consumer banking customers who are actually small businesses, I would suggest that the percentage is even higher.

There are three primary elements tied to banking which should be better-positioned to assist small business owners in leveraging their banking relationships to the benefit of the business and not just the bank.   If the financial institutions can find a way to meet these three essential needs for smaller businesses, they would likely find that more small businesses would embrace business banking services, resulting in greater profitability for the bank.

e-Payments

Use of electronic payments services represents a growing trend in small businesses and needs to be better-addressed by the financial institutions rather than purely retail providers.  Small businesses are increasingly using the Internet and online technologies to service their various business needs, and payments processing is among the top sellers.  Providing SOLO/SOHO and other small businesses with the ability to process payments at any time and from anywhere has become a big driver for this type of solution.  The popularity of Pay Pal, Intuit GoPayment and Square payment solutions is a testament to the need for such services in the small business market, yet the broadest use continues to be within retail providers rather than directly via the financial institutions.

Entitlements

Security and access controls to account and transaction information (frequently referred to as “entitlements” attached to business accounts) are hugely valuable for small businesses.  Most small business owners engage bookkeeping or accounting professionals at some point, and the process of accounting for the business activities is improved dramatically when those professionals are able to access the information directly from the financial institution.  Unfortunately, it is only with the more expensive business class accounts that most banks provide the means for account holders to grant access to account and/or transaction information for accountants and bookkeepers, financial advisors, etc.  Allowing small businesses to benefit from this type of security and control of their accounts is tremendous, yet the overall costs of the associated business banking solutions are often simply too great for the small business to bear.  The result is either a lack of privacy, security and control, where the business owner must grant unfettered access to account information to a 3rd party bookkeeper or accountant, or the business owner simply continues to pay for manual bookkeeping transaction entry.

Cash Management

Most small businesses operate on cash, and expense and cash management is essential to maintaining operations.  Consumer banking solutions may offer limited capabilities for expense and cash reporting, but the services offered through many business banking portals would be far more beneficial for the business, reflecting trends and providing more insight relating to business financial activities and business behavior.  Unfortunately, many of these services designed for business customers are oriented towards the larger organization, and are far too complicated or expensive to provide real value to the owner of a small business.

Small businesses fuel the economy, yet remain a largely untapped market in terms of business banking and other services.  Small businesses run “under the radar” of many service providers because they have not reached the point where the obviously available business services (e.g, the more profitable banking solutions) seem attractive to them.  Banks need to recognize that serving the small business customer well – providing the services which help small businesses grow into bigger businesses – is ultimately the key to acquiring new customers for whom the big banking solutions fit.

jmbunnyfeetMake Sense?

J

Read more about small business banking and credit