From the Trenches

From the Sept. 2006 Issue

Working in the mid-market continues to evolve. To best serve your clients who
work in this space, consider your current strategies and what you recommend
for clients. It’s hard to believe that we’re over halfway through
the first decade of the 21st century, and for many of my friends and colleagues
this has meant retirement! For those of us still active and leading market changes,
we need to think about how our strategies are going to make a difference in
this decade and beyond.

As I follow technology and try to report, inform and strategize with you,
it is clear that the next five years will lead to some radically different strategies,
particularly in the small to mid-markets. Competitors are becoming more sophisticated,
information is being used for a competitive edge, remote and ongoing access
to data and customer information is becoming cheaper and more common, applications
are becoming more web-enabled, more innovation is being applied to web-enabled
applications (particularly through the use of AJAX and mash-ups), business analytics
are becoming more meaningful and easier to use, and infrastructure is changing
to include virtualization.

Accounting Software. I consider accounting software the key foundation and
building block for business information. As covered in other articles in this
issue, accounting software continues to become more sophisticated and easier
to use. Additionally, the accounting software vendors are improving web integration
and accessibility from remote locations as well as on handhelds. Most of the
publishers who have been around since the 1990’s and before are really
investing in their products today in order to move them to the next generation.
The large vendors, such as SAP, Microsoft, Sage, Intuit and Exact are investing
in their mid-market software products, bringing more of the sophistication of
Enterprise systems down market. R&D budgets have been expanded for many
of these key players. Smaller competitors have found great efficiencies investing
in their development teams, and they are moving their products along very quickly.
Examples in this category include Open Systems, SYSPRO and CYMA. Open Systems
invests a higher percentage of revenue back into development than any other
vendor we are aware of in the accounting business.

Focusing on the Client. The client businesses that are doing the best in the
mid-market always focus on their clients. They are truly discovering where they
can add value as well as how to increase client satisfaction. Technical tools
like CRM, web self-service, Voice over IP (VoIP), and Computer Telephony Integration
are leading to better capability to serve the client. Surprisingly, a relatively
small percentage of mid-market companies have leveraged their resources by using
these tools, so the opportunity is large when client-facing technologies are
implemented.

Remote Access. One change that is occurring in the infrastructure is to give
more and better remote access in a secure fashion. This may be through an infrastructure
tool like Microsoft Terminal Server, Citrix Presentation Server or VMWare workstation
virtualization. SSL VPN, high-speed cellular data access, and WiFi hot spots
are all contributing to a more ubiquitous connection. Consider how to make your
team members and your clients able to work securely from more places. This is
not about getting more out of people. It is more about improving the quality
of life by bringing flexibility to people’s work.

Web 2.0. The way next-generation applications are being created involves more
server-to-server and server-to-intelligent workstation communication. The interactivity
of new applications will lead to solutions that just weren’t possible
in the past. We will come to expect high-speed applications via web browsers
with rich and previously impossible content. Good examples of this approach
include the following sites or applications: www.lazlosystems.com,
www.chicagocrime.com,
Writely or Google Earth. As common applications like e-mail, calendars, word
processing, spreadsheets and databases become hosted applications, any place
we have access to the Internet may become a place of productivity.

Virtualization. An evolving area of computing over the last five years has
been virtualization. When we first started demonstrating this technology in
the late 1990s, it was clear that what we had done on mainframes in the 1960s
and 1970s and repeated on the minicomputers in the 1970s and 1980s was about
to be repeated on the PC platform. With the recent release of VMWare as well
as the offerings from Microsoft, IBM and in the Linux community, we can expect
multiple images of machines running simultaneously on a single machine.

As Microsoft servers have proliferated and as vendors have demanded a dedicated
server for their application only, we have added one server after another. We
have done this for Exchange, firm applications from CCH or Creative Solutions,
CRM, Citrix and so on. It is possible today to have multiple server applications
running on the same physical hardware, reducing the number of servers required
to get the job done and more fully utilizing server power. The economics are
clear on this today for larger businesses, but for smaller businesses the technology
is not particularly affordable. Virtualization clearly shows promise from both
a convenience and maintenance perspective, not to mention reliability, upgradeability
and business continuity.

If you have become comfortable with your current technology approaches, you
can probably enjoy them for a few more years. However, I’m fairly sure
that all of the above technologies will be deployed and used by businesses of
all sizes as our technology continues to evolve. You may get by for a little
while using older strategies, but you will see these technologies enter your
business one by one over time. I’ll forecast that all of these technologies
will see widespread use this decade. Do you want to be on the leading edge of
these technologies or would you prefer to be a market follower?

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Mr. Johnston is executive vice president and partner of K2 Enterprises and
Network Management Group, Inc. He is a nationally recognized educator, consultant
and writer with over 30 years experience in strategic technology planning, systems
and network integration, accounting software selection, business development
and management, disaster recovery and contingency planning, and process engineering.

Technology