Pace of change puts pressure on suppliers

Organisations are opting for a mix of larger systems and smaller, nimble cloud-enabled solutions, writes JENNIGAY COETZER

LOCAL accounting, ERP and payroll software suppliers have varying views about how globalisation and the rapid rate of change is influencing customer expectations and buying decisions.

Jane Thomson, MD of Softworx, says two to three years ago a common strategy among organisations operating internationally was to standardise on a single large ERP system and roll it out across their local and international operations.

But this proved to be difficult, because different operations often had completely different, firmly entrenched business processes.

“Another issue was the same team would do the installations around the world, and did not always understand the local environment of different countries,” says Thomson.

Having discovered that one size does not necessarily fit all, many organisations are opting for a mix of larger systems and smaller, more nimble cloudenabled solutions that suit the specific needs of individual operations and can be implemented and supported by local IT companies in three to four months, she says.

They then put an enterprise performance management system, previously known as business intelligence software, on top to get consistent reporting across the organisation, says Thomson.

Simon Carpenter, chief customer officer at SAP, says the fast pace of change and the quest to reduce costs and complexity is encouraging companies to move away from customising or tweaking ERP systems, which was common practice in the past.

He says the ERP products of the mid-1990s had limited functionality, but these systems have evolved to the point where customisation should no longer be necessary.

Companies are also realising that it is difficult to differentiate themselves through ERP and that customisation makes it more difficult to move functionality to the cloud and to interact with other systems.

He says another trend is that customers are under pressure to simplify their ERP landscape and consolidate their systems to reduce costs.

“We have a customer that had 53 different ERP systems which it has replaced with a single solution.”

Gary Epstein, MD of QuickBooks in SA, says the functionality of accounting systems has not been affected significantly by the escalating pace of change, but the number of products on offer from local and global suppliers customers has multiplied.

“Dozens of PC-based and web-based accounting applications are on offer.”

However, the question is whether suppliers that are located at the other end of the world can give local customers the level of support they need, especially when it comes to web-based applications.

“A lot of overseas suppliers only provide support by e-mail,” says Epstein.

Stephen Corrigan, MD of Palladium Software, says the need for smaller companies to compete with their larger counterparts in a rapidly changing market is driving them to migrate from accounting systems to ERP solutions.

There will be an increasing amount of activity in this area as ERP products become cheaper.

“This is a buyers’ market — price wars are forcing ERP prices down and even blue chip suppliers are offering discounts.”

Sandra Swanepoel, sales director at Sage VIP, says companies are expanding their businesses across continents and they are looking for payroll software solutions that cater for the requirements of different countries. “At the same time they want to be able to consolidate all the data, which is difficult to do with hybrid systems without manual intervention,” she says.

This has opened up an opportunity to provide global solutions that can be supported locally in respective countries.

“SA’s payroll software suppliers need to at least be able to do this in Africa.”

She says some 20% of local companies pay employees based in other parts of Africa, where the fastest growth lies.

Rob Bothma, industry specialist for HCM solutions at NGA Africa, says the cloud is breaking down barriers and enabling payroll and human resources functionality to be accessed from anywhere.

“As the cloud trend gains traction, service providers will be able to offer a basket of value-added payroll services to customers,” he says.

This will enable customers to hand over an increasing number of elements of payroll and HR processes to a service provider such as tax return submissions, paying employees and handling third-party payments.