CLASSIFYING ACCOUNTING SOFTWARE PRODUCTS BASED ON TARGET CUSTOMER
Although the basic functions of accounting remain mostly the same across different types of industries, the scale at which they are being operated often is quite different depending upon the size of the organization. These can be broadly classified as under:
- 1. Enterprise Level:
Large organizations with various business units have very complicated and complex accounting requirements. This calls for evolved enterprise level products like accounting module of ERP packages like SAP, Oracle Peoplesoft, etc.
These organizations have presence in different business verticals, have number of subsidiaries and sister concerns, have business spread across different locations and have transactions happening across the border in different currencies.
Such complexities call for an evolved customized software product which is tightly integrated with the overall automation software product being used at the enterprise level by the organization (i.e. ERP). Implementing these products in organization is a long process and requires a significant investment both in terms of financial and human resources. Proper full-scale IT infrastructure with special training for operating the ERP package is required
- 2. Mid-Level:
For organizations which have scaled up to be major players in their own domains/locations have specific needs around their business automation process. These are generally upcoming stars that are entering the big league of business, but haven’t yet arrived at the big screen. Often a part of their different business functions are under process of actual large scale automation, and accounting becomes the foremost candidate for this process.
Such organizations typically choose mid-level enterprise products by companies like Ramco OnDemand ERP, BAAN, Navision, etc. These are not full-scale ERP with all the other modules concerning procurement, sales management, HR management, etc.; but rather are concentrated towards the accounting and related function of the business. Though not exactly customized for the individual business, these products are often made with a particular industry in mind, covering the specific needs of these industries.
For these products, a reasonable IT infrastructure is needed and a dedicated trained resource is needed to maintain the system. These products come at a reasonable cost, making them affordable only for businesses with a particular threshold valuation.
- 3. SMB/ Proprietary Business Level:
SMB or proprietary business owners have unique needs. These are often small companies, often doing city/region specific business, and having less than 10 employees on rolls. A lot of their business functions are being handled by the owner/partners themselves. As the volume of business transactions and information is not overwhelming at this level, updating this information and its retrieval is often on ad-hoc basis. Not many in this category have a proper established IT infrastructure within their organization and hence application of enterprise level products is not possible.
For such requirements, small scale accounting products like Tally, Quicken by Intuit, OfficeBOX, E.X. from TCS are a few examples in this category. With the exception of OfficeBOX, these products are mostly desktop based and are operated by either the semi-trained owner/partner or by the accounts guy in the company. Although the specific requirement in terms of IT infrastructure is not needed, it requires maintaining the software product on desktop (data management/backup, virus protection, etc.). Since the product is sold in form of off-the-shelf disk, any upgrades to the product need to be installed manually by the IT maintenance person in the organization. Besides, being desktop based, these software products needs purchase of one-time/periodical license, making it a decent upfront investment for the SMB in contention.
With the growing economy of India, this segment of accounting automation products is witnessing rapid growth in demand, and also evolution in technology. Innovative modes of delivery and constantly dropping prices by the new entrants in the market are making this space very competitive. One such new entrant – OfficeBOX has developed products that are served on software-as-a-service platform, resulting into zero IT investment and maintenance cost for the SMB. While it provides for all the functionalities as provided by other products in this category, it’s SaaS based offering allows product to be offered at a very cheap cost, hence increasing the very reach of the accounting automation products industry. In fact the basic version of OfficeBOX products is available for free.