A review of new software products that can make a big difference to your business

Customer survey roundup no. 3

By Michael Burns

Welcome to the results of our third annual customer survey of accounting and ERP systems. Unfortunately, we received only 61 valid responses for 2006, compared with 267 the year before. The huge drop is hard to explain, but we want to share the results with you in any case.

The survey was announced in the September 2006 print edition of CAmagazine, and can be viewed at http://www.camagazine.com/customersurvey06. Once again, the idea was to see how well readers like the system they’re using, and how they rate the developers and implementation partners. We also asked for some general feedback about return on investment and future plans. Here you’ll find additional information – including charts – that space constraints prevented us from running in the print version.

To ensure the validity of the results, we accepted only one survey per organization and it had to be filled out by an accountant with a CA, CMA, or CGA designation. Last year, we opened up the survey to companies that don’t have CAs on board. This time, 49% of the respondents were CAs, 33% were CGAs and 18% were CMAs. We also excluded responses from any company that sells or implements the system.

Responses by system

As you can see, Syspro dominates the responses for mid-market, as Adagio and QuickBooks do for small business. Congratulations to the marketing group at both Syspro and Adagio for a great job in getting their customers to respond but we don’t think you can draw any conclusions about market share based on our results.

Although there might be a concern that results will be skewed if the vendors are encouraging their customers to respond, we believe the results are still credible. We say this partly because the responses are both good and not so good. And don’t forget that the survey was completed by accountants.

To compare the systems, we split them into mid-market and small business. There were no responses this year for high-end systems such as SAP or Oracle. Since our sample size is limited, we reported our findings on subtotals by tier (mid-market and small business). We have compared this year’s results to those of last year. The changes can be ascribed in part to the influence of Syspro in mid-market systems and Adagio in small business.

System size

As you can see there is a significant difference in costs and number of users between mid-market and small business systems. This does reflect reality and causes problems for companies that have outgrown small business systems and need to dig deep into their pockets to go one up. Why do the numbers jump so much? Supply and demand. There is a huge demand for small business systems. In our September vendor survey of accounting and ERP systems (see http://www.CAmagazine.com/ERPsurvey06), QuickBooks claimed to have 15 million customers. Compare that with, for example, Syspro’s 12,000 customers.

We added named users this year. They are the users who could potentially access the system. Simultaneous users are those who can simultaneously access the system. For example, if a company has 10 people requiring access to the system and five work only during the day while the other five work only in the evening, there would be 10 named users but only five simultaneous users. Some vendors base their pricing on simultaneous users, others on named users.

Overall ranking

We asked respondents to score their systems overall for financial, distribution and manufacturing functionality. The possible responses were excellent (4), good (3), fair (2), poor (1) and n/a. It’s not surprising that mid-market systems score better for manufacturing than for small business systems. If anything, we would expect the variance to be even greater considering that most small business systems don’t include manufacturing or have very limited functionality. The difference in the financial rating may be due to the lack of more sophisticated features in small business systems such as financial statement flexibility, intercompany processing, advanced budgeting or consolidation.

Generic attributes

In terms of generic attributes, there is not much of a difference between mid-market and small business systems except for ease of use. This is not surprising since more features add more complexity.

Developer ratings

Things are looking up on all counts, especially for support.

Implementer ratings

Again things are looking up on all counts, especially for support.

Return on investment

We asked about payback (no. of years), improved customer service (ranging from a high of 4 to a low of 1; these numbers apply to the rest of the questions in this category), increased accuracy, increased revenue, increased control, and better decision-making. Once again ratings are generally looking better across the board, especially in payback time for mid-market systems.

Costs

We asked respondents what percentage of the total cost of implementation they spent over the past five years on licence, maintenance and external consulting fees, upgrade costs related to computer infrastructure and internal costs. Our results show little variance between this year and last year.

Planned investments

Finally, we asked what accounting/ERP system investments were planned over the next two years – replacing the existing system, upgrading to the next version, adding customer relationship management, e-commerce, business intelligence, budgeting and/or forecasting, consolidation, human resources and supply chain management. Most companies will be upgrading their systems. Replacing an ERP or accounting system is a last resort because of the costs and effort involved. Many companies look to improve their business processes by other means, including upgrading their software.

Summing up
Overall, the numbers are fairly consistent with those from the previous survey, which adds to their credibility. We hope our analysis provided some useful insights. Given the disappointing response rate this year, however, we regret that this is the last time we will be conducting the survey.

Michael Burns, MBA, CA, is president of 180 Systems ( http://www.180systems.com/), which provides independent consulting service, including business process review, system selection and IT audit. Michael can be reached at 416-485-2200 or mburns@180systems.com.