Fulfilling the needs of mid-market businesses for accounting and ERP systems is more demanding than many software houses imagine. Suppliers frequently underestimate the complexity of mid-market businesses, mistakenly believing that a cut down version of a major ERP package is the solution. But in practice, owner managed businesses that make up the majority of companies in the £1million to £50million range have their own special needs. Recognising the characteristics of these family run businesses or smaller limited companies is critical to success yet so few software vendors seem capable of meeting their basic needs. So FSN talks to a typical mid-market company to find out what it takes to succeed in the mid-market and why is it that many of the world's largest software vendors fail to make even an impression on this challenging yet rewarding segment?
Bob Barnard, Managing Director of DBD Distribution Limited, a provider of kitchen appliances to house builders with a turnover of £13.5m is a typical mid-market customer. He told FSN, "We were using Sage Line 100 but found it inflexible and no longer matched the way we do things. It was an 'off the shelf' solution but we needed more and more information to run our business and whilst we considered a Sage upgrade, the economics of the situation made it sensible to look around more widely."
Nevertheless, Barnard did not want to entertain a complex solution that would require a great deal of retraining. In common with many mid-market businesses he needed a broad set of competent functionality 'out of the box', that could be readily configured for his industry and integrated with other specialised applications.
Managing forward contracts on a call off basis was of particular concern to DBD Distribution. "Around 95 percent of our business comes from the major house builders who order kitchen appliances on a call-off basis against a forward schedule. These are usually new-builds and property buyers who often upgrade the specification of the standard equipment supplied by the developer. Our system has to handle these complexities and insert the correct prices and discounts so that the margins are calculated correctly," says Barnard.
After a 'beauty parade' involving other well known packages, Barnard and his colleagues alighted upon the Dimensions package from Access Accounting, a British software house with a 15 year history of supplying accounting systems to the mid-market. One of the attractions of the package was that their leading reseller, Armstrong Consultants, had a product called "Service Manager" that could cope with the invoicing of forward contracts as well as invoicing the work of maintenance engineers.
"We have around 20 service engineers and the combination of Service Manager and standard sales order processing and invoicing in Access Dimensions is as close as you could get to our requirements from standard functionality. It is a very neat solution to what was a paper intensive process," says Barnard.
Like many businesses of a similar size, DBD Distribution does not have significant in-house IT skills and any solution has to be easy to learn and use, quick to configure and make use of standard and inexpensive technology. Bob Barnard was impressed that Access Dimensions is based on a standard Microsoft platform and that all of his solutions including Crystal Reports, Service Manager and a document management system called Tokairo share the same 'open' SQL Server platform.
This technology foundation suits the mid-market particularly well. Chris Bayne, Managing Director of Armstrong Consultants, the company that supplied the system to DBD Distribution told FSN, "Access Accounting were probably the first in the mid-market to adopt the Windows platform and have stayed loyal to Microsoft ever since. From a technical point of view, they have always been ahead of the curve without being too far ahead. What I like about them is their willingness to push the frontiers of a technical solution without taking unnecessary risks so that they always supply established and appropriate technology."
Barnard believes that the combination of standard technology and an open systems platform gives him outstanding value for money, and is constantly surprised that many of his large suppliers using apparently respected ERP systems seem to suffer from so much difficulty. "Unbelievably, one supplier cannot handle a sales order from our purchasing department if we order too much! If the order cannot fit onto one delivery lorry it has to be split over two vehicles and entered manually as two transactions. They always manage to lose the order when this happens," complains Barnard.
However, Barnard has few complaints about the breadth, reliability and robustness of functionality from Access Accounts. It has software accreditations that provide peace of mind for SMEs that do not have the resources to validate functionality in depth before making a buying decision. For example it has product accreditations from the ICAEW ( Institute of Chartered Accountants in England and Wales ) as well as accreditation under the HM Revenue and Customs Payroll Standards Scheme, as well as a clutch of awards from industry and trade magazines.
It means that support calls to Access Accounting are few and far between. "The Sage help desk was also good - it's just that we seem to use the Access Accounting support and help desk less frequently."
However, no matter how good the software, the relationship with the software re-seller remains pivotal to delivering a workable all round solution into mid-market companies with limited in-house capability and resources. Referring to Armstrong Consultants, Barnard told FSN, "They listened to what we had to say right from the beginning and rather than moulding us to the package they adapted the use of the package where feasible to our business processes. They didn't just try to sell us a fixed solution and leave, but displayed a more consultative approach."
Since those early days around five years ago DBD Distribution's needs have changed, but the software has always been capable of adapting to the new demands and Barnard has nothing but praise for his software suppliers. Good functionality 'out of the box' combined with a standard technology solution at a sensible price point, delivered by an interested and capable re-seller is a winning combination in the mid-market. One would think that such a straightforward formula would be easy to deliver, yet many vendors struggle and apparently, it takes an up and coming British software house like Access Accounting to show the way.
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