Interview with Chris Ouwinga - CEO UNIT 4 AGRESSO   20th February 2006 UNIT4 Agresso is an international software house that has been listed on the Dutch stock exchange since 1998. It has about 1,800 employees and reported a net turnover of € 276 million in 2004. Although it has multinational operations, its real strength lies in its pan-European presence and is probably best known for the popularity of its Agresso Business World software, an enterprise financials system addressing the mid-market and the public sector. However, the business also has operations in the SME market for accounting and business software, as well as sizeable interests in internet security and web development. As such, its CEO, Chris Ouwinga, is well placed to comment objectively on issues such regulation, competition and technology impacting the European mid-market. As a true European operator, Chris Ouwinga has been supportive of the move towards International Financial Reporting Standards (IFRS) and although not an accountant by background appreciates that transparency and comparability between accounts in different regions could be helpful to business. But like many businessmen, Ouwinga questions whether the IFRS has really met its objectives. “Personally, I don't think that the IFRS initiative has been a success. Matters that used to be clear in the accounts are now subject to judgment and in my view, this has weakened the comparability of accounts,” he says. “The initiative has added around €200,000 to our audit and administration costs although it has had little impact on the functionality of the business software that we sell.” However, Ouwinga is more vociferous in his opposition to corporate governance and in particular the relatively harsh Dutch flavour of corporate governance, the so called, “Tabaksblat” (named after Morris Tabaksblat, the chairman of the committee) recently introduced into the Netherlands . “I believe that the regulations are over the top, especially in the Netherlands where the rules are more severe. They are of course a reaction to Enron but small companies cannot employ compliance specialists and teams of lawyers. It is a lot of red tape and cumbersome to operate so it represents a real burden on smaller enterprises.” On competition, Ouwinga is especially well qualified to comment since Unit 4 Agresso has diverse business interests and a foot in both the mid-market and SME sector in most regions. He seems relaxed about the competitive threat to his business from the large global players such as SAP and Microsoft. “The competitive landscape varies from one vertical market to another and also from one geography to another,” he says. “SAP has come a long way and produced good results but I believe it has reached saturation point in large multinationals and needs to exploit the mid-market to continue to grow. But you have to look at the competition on a market by market basis. For example in the UK , Agresso is very strong in the public sector, so we tend to meet Oracle, but in Scandinavian territories we may see more of Navision. But I don't see any significant shift in competition in favour of say, Microsoft or SAP,” remarks Ouwinga. Unit 4 Agresso is almost unique in owning a sizeable business in internet security alongside traditional business software, a combination which Ouwinga reveals is an accident of history. By good fortune, the internet business has flourished as the threat from viruses has grown and the group has enjoyed significant success selling virus checking and firewall software. Nevertheless, he does not consider that the threat of viruses and hacking is holding back the growth of e-commerce. In fact Ouwinga believes that quite the reverse is happening. “People are getting used to the internet and managing the security risks involved. They are much more knowledgeable and able to deal with the issues.” To illustrate his view, Ouwinga points to the uptake of ASP services, i.e. applications made available over the web, as evidence of the increased confidence that people have in the internet. “We first introduced web based services around the time of the millennium but it was really too early. However, we are now seeing a significant uptake in ASP services because people appreciate that others are better at providing the infrastructure, backup and security and are more prepared to trust others with business sensitive data.” Uptake of the ASP model is growing stronger in the SME market, says Ouwinga. “Businesses like the notion of paying a fixed fee to access the software and services they require. All they need is a browser and they are up and running. Many of our users are firms of accountants who are themselves offering accounting services to their clients by taking advantage of the ASP model. This drives benefits in quicker and cleaner audits, so everyone wins,” he says. Interestingly, Ouwinga believes that the growth in the ASP model is part of a much broader trend to self-service. “We're seeing the growth of self-service in both the private and public sector. E-government initiatives are about empowering the citizen to provide and manage their personal data themselves. It has enormous benefits in terms of reduced administration, increased accuracy and responsiveness. The same is true in the private sector with, say, self-service applications in payroll becoming ever more popular.” These trends point to potential developments in the way that software houses charge for their services. “Businesses can choose to pay a flat fee if they want or they can retain ownership of the software licences but simply have someone else run it. We are also seeing the rise of public sector consortia which club together to buy software and run it on an ASP or shared service basis for members of the consortium.” This says Ouwinga has been popularised by the not-for-profit sector, for example local government or health trusts where competition is not really an issue. But most importantly, the increase in ASP and self-service more generally also defines where software development effort will need to be concentrated. “The future is going to be less about functionality and more about making the user interface simpler and more intuitive to use. It's also going to mean better workflow technology, more automation and allowing users to retrieve information more easily,” says Ouwinga. Ouwinga's views are encouraging. As confidence in web deployment increases business applications are being opened up to larger groups of users, for instance, via self-service applications such as payroll and e-government or a resurgence in ASP activity. Unfortunately, this growth has not always been matched by ease of use and as a result, too many projects falter. However, if Ouwinga is right, software products will increasingly be differentiated on the basis of ease of use. In these circumstances, projects will be more successful, end users will be more satisfied and software vendors at the leading edge of usability will flourish. That's a vision of the software industry that everyone can subscribe to. Related FSN articles Meeting the Implementation Challenge of IFRS with AGRESSO Business World Agresso to head £11 million ARIES project Agresso replaces Peoplesoft in £1.1m contract
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