Best Software Delivers More Insights To Its Partners (As Well As To The Market)

Event Summary

Even before recent outright consolidation bloodshed (see Frantic Merger-Mania Spiced Up With Vendettas Leaves Customers Anxious), many software powerhouses have long been engaged in calibrating their weapons and fortifying their kingdoms. At the beginning of June, somewhat coinciding with the onset of the PeopleSoft/J.D. Edwards and Oracle drama, Best Software, Inc., one of the leading incumbent providers of integrated accounting, business management, HR/payroll and fixed asset solutions for small and mid-sized companies in North America, and a subsidiary of UK-based The Sage Group plc (LSE: SGE.L), one of the leading providers of business management software for mid-sized companies worldwide, with annual sales of $870 million and 3.1 million customers worldwide, organized its first annual Insights 2003 conference for 2,000 business partners in Orlando, FL.

The conference's aim was to mark the company's strong progress in executing against its core strategic objectives of growth and profitability, customers for life and competitive strength, which were espoused last Fall (see Best Software To Hold Competition At Bay). To refresh our memory, Best Software then announced its strategy to enhance customer interaction and partner programs across its diverse, ever-expanding albeit well-crafted portfolio of business-management solutions for small-to-mid-sized organizations, including ACT!, Abra, CPASoftware, FAS, MAS 90, MAS 200, MAS 500, MIP, Peachtree and SalesLogix, among many others. Best Software, created through a series of both horizontal and vertical acquisitions (the company has invested over $900 million in six strategic acquisitions in four years, and intends to continue to explore related opportunities), announced several new programs designed to offer consistent support, and easy migration and integration among some of its widely used and recognized solutions. Key themes of Best Software's strategy outline included the following:

  • Keeping customers for life;
  • Providing one face to all customers and partners;
  • Espousing clear market and product strategy;
  • Ensuring new customer acquisition;
  • Attract, develop, and retain employees;
  • Consistently achieving positive results; and
  • Continuing targeted company acquisitions

While executing on the above aims, the company has also since announced several new partner- and customer-centric programs, products and technology initiatives designed to solidify its industry leadership in serving small to mid-sized organizations. The idea behind these initiatives has been to retain product, market and customer focus, to compete successfully against fierce competition, and to become more nimble in the process.

This is Part One of a five-part note.

Part Two will continue the Event Summary.

Parts Three and Four will analyze the Market Impact.

Part Five will detail the Challenges and make User Recommendations.

Partners Credited With Best's Continued Financial Success

Best Software's CEO, Ron Verni, during his keynote presentation lauded partner contributions to the company's first-half 2003 financial success. Namely, in May, Best Software announced that its UK-based parent company, the Sage Group plc, reported revenues of $448.2 million for the half-year ended March 31, 2003, an increase of 4% over the same prior year period (at constant currency exchange rates). Operating income for the period was $122.5 million, an increase of 13% over the prior year period, and the company added 115,000 new customers, bringing its total to 3.1 million customers worldwide.

More impressively, total revenue for the Sage Group's U.S. businesses (i.e., Best Software) for the half-year 2003, was $215.8 million, while operating income was $48.5 million, increases of 8% and 30%, respectively, over the same period of the prior year. The earning of 6c per share was a 14% increase as well. The company added 60,000 new U.S. customers during the period (excluding CRM). Its CRM solutions, ACT! and SalesLogix, drove revenue growth of 21%, while the entry-level accounting business also maintained strong growth, largely driven by the acquisition of 45,000 new Peachtree customers.

Up-selling initiatives into its substantial mid-market installed base also brought 22% of new license revenues, aided by the newly-operational Customer Migration Center. Reinforcing its "customer for life" commitment, Best Software's new migration center was designed to support customers as they consider new or different platforms for their businesses, and help them through the decision-making process and conversion decisions that face them. As a business grows, managing more employees, larger revenue bases and a growing business gets more complex, and Best Software continues to see an increase in its customer demand for their business management solutions. Thus, customers have been receiving a 20% discount off the purchase price when moving from Peachtree to MAS 90 or receiving 0% financing for three years for products and services.

Best Software's migration center opened in Atlanta in early 2003, and is comprised of employees focused only on helping customers migrate from one Best platform to another. Formerly handled out of multiple different organizations within Best Software (e.g., the Small Business Division then featuring the Peachtree, DacEasy and Timeslips product, and the Specialty Products Division then featuring FAS, Abra, Carpe Diem and TimeSheet Professional products , in addition to the other four) this centrally-located group will support Best customers as they consider new/different platforms for their business.

In related news, Best Software and its parent company are also developing a new application integration server, expected to be available next year, which should make multiple possible integrations between SalesLogix, MAS 90 and other solutions even quicker and easier, including vertical applications offered by business partners.

Reorganization for Partners' Potential Benefits

Verni also stressed how partners will benefit from the vendor's April 24 strategic reorganization, which realigned the company from six former operating companies (i.e., the CRM Solutions, Mid-Market, Small Business, Non-Profit & Government, Accountants, and Specialty Products Divisions) to two divisions organized by market, customer size, and distribution channel. To that end, Doug Meyer will lead Best Software SB, Inc., the new Small Business Division, which includes ACT!, Timeslips, DacEasy and Peachtree, while Ron Verni will serve as acting president of the new Mid-Market Division, which includes Abra, CPASoftware, FAS, MAS 90, MIP, SalesLogix and many other core products.

Additionally, Dave Butler was named to a new role as executive VP of customer and channel operations for the Mid-Market Division, and will focus on supporting the company's 6,600 business partners nationwide. Butler is responsible for integrating and managing all partner and customer-facing programs and activities on behalf of the above-mentioned core mid-market offerings.

Best Software believes the reorganization will benefit both partners and customers due to the more streamlined structure that will leverage its entire collective knowledge and resources while retaining product line focus and effectively absorbing future investments and acquisitions. Taking the stage, Butler announced a variety of enhancements to the company's Partner Advantage Program, which was also first introduced in October 2002, and designed to drive business for multiple core mid-market products. The Partner Advantage Program was designed to provide loyal business partners with even more opportunities for training, financing, guaranteed lead-generation, and alliances with partners selling other Best Software products. The new enhancements include:

  • Best Select Partner, a company-wide offering designed to reward partners for their loyalty to Best Software products and services. Benefits include an increased percentage of co-operative marketing funds, additional margin on new customer sales, free product training and priority consideration for new, migration and referral leads.
  • The Best Referral Program, which offers additional benefits to Mid-Market partners referring prospects to Best Software products. Participating partners receive a percentage of net product revenue and tier credit. The Best Referral program builds on the success of the company's "customers for life" strategy, which this year has seen 30% of all new MAS 90 customers move up from Peachtree, and 10% of new SalesLogix customers from the ACT! installed base.

Additionally, to encourage business partners to offer additional products, Best Software will now provide discounts on sign-up fees, and offer renewal discounts to partners selling three or more Best Software products. To recognize the success of those business partners selling multiple Best Software products, the company is also introducing a Common Tier Recognition Program.

In addition to enhanced sales programs for Partner Advantage, Best Software also announced a variety of new marketing support programs for business partners, including:

  • an integrated co-operative marketing program for eligible partners;
  • a broad range of turnkey marketing programs;
  • the Business Partner Marketing Guide, which includes templates, budgets, and tips for successful marketing/public relations campaigns; and
  • a new channel marketing Web site.

In related news, Best Software also announced complementary programs in support of partners selling individual Mid-Market product lines. The Abra Certified Trainer Program, based on the successful MAS 90 Certified Trainer program, will initially offer Abra HR and Abra Payroll certifications, while additional Abra Suite module certifications will follow. Program participants will receive product instruction and classroom management skills. Best Software is also expanding its Authorized Training Center Program (ATC) to Abra. The ATC, which has been very successful for MAS 90 partners, enables partners to get their classroom facilities certified for use in end-user training. In order to maintain the certification, partners must meet physical facility requirements and have at least one certified trainer on staff. Partners can also elect to rent their classroom space to other certified trainers.

The Nonprofit Solutions unit launched the Master Developer Program, an official training and certification program allowing business partners to be recognized as highly proficient developers for the MIP Fund Accounting product line. By certifying qualified business partners as Master Developers, Best Software will further ensure customers they are obtaining the highest quality integrated solution for their business. The CRM Solutions unit has re-packaged the SalesLogix QuickStart Program, so partners can offer it to customers. Bundling CRM software, support, services, and training into one best-practices solution, SalesLogix QuickStart aims at enabling small businesses to implement a complete CRM system in 30 days for an upfront, fixed price, guaranteed.

The Best Software Accountants Network (BSAN), also introduced last October to support CPAs using or recommending Best Software products, has also helped drive partner business. The company has facilitated an increasing number of strategic alliances between member firms and Peachtree Certified Consultants to help close deals. The network enables Best Software to offer comprehensive business management resources and accounting practice solutions to its growing network of more than 40,000 accounting and bookkeeping firms whom already use and recommend its solutions to their own clients.

Designed to strengthen the relationship between technology and the accounting community, BSAN provides accounting professionals access to software, information and support to enable them to better manage their practice and serve their clients. As part of the Network, members have the opportunity to develop alliance relationships with Best Software's more than 6,600 business partners nationwide, providing accountants with local access to technology and business expertise within a broad range of industries.

This concludes Part One of a five-part note.

Part Two will continue the Event Summary.

Parts Three and Four will present the Market Impact.

Part Five will detail the Challenges, and make User Recommendations.

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