Best Software Strategy
However,
as to address its go-to-market strategy to entice early prospective customers
and to keep infinitely content both its customers and partners, on October 1,
Best Software announced its strategy to enhance customer interaction and partner
programs across its diverse, ever-expanding 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 others. Best's
CEO Ron Verni addressed the company's evolving business plans at its first-ever
media event bringing together key corporate strategists from across the company.
Best Software, created through a series of both horizontal and vertical solutions
acquisitions, 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 include the following:
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Keeping customers for life;
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Providing one face to all customers and partners;
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Espousing clear market and product strategy;
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Ensuring new customer acquisition;
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Consistently achieving positive results; and
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Continuing targeted company acquisitions
Best Software, which markets its products via retail outlets, a national reseller network and a direct telesales force, reportedly added 47,000 new customers during the first half of this fiscal 2002 year (Oct. 2001 - March 2002), bringing its total to over 1.7 million U.S. customers. Its top objective is to encourage customers to stay with the company for the life of their business and, in support of this objective, Verni noted that the company also increased support contract penetration to 17% of its installed base during this period, and also increased revenue per support contract by 10%.
Consequently, on December 3, Best Software announced that its UK-based parent company, the Sage Group plc, reported revenues of $815 million for the fiscal year ended September 30, 2002, an increase of 14% over the prior fiscal year. Operating income for fiscal year 2002 was $212 million, an increase of 12% over the prior year, and earnings per share increased 11% over the prior year to $0.11. Total revenue for The Sage Group's US businesses, for the year ended September 30, 2002,0 was $409 million, and operating income was $85 million, increases of 22% and 29%, respectively, over the same period of the prior year. According to Verni, continued double-digit growth in both revenue and operating income in the US was a result of the company's increasing focus on product cross-selling via its nationwide network of 6,600 business partners to its substantial installed base. In particular, the emphasis on customer up-selling was supported by the ongoing success of Best's effort to migrate additional Peachtree customers to its MAS 90 product.
This
is Part Two of a four-part note on Best Software.
Part
One detailed recent announcements.
Part
Three will discuss the Market Impact.
Part
Four will cover the Challenges faced by Best Software and make User Recommendations.
Customer Migration Center
To augment the success of its installed base support programs, Best Software also announced plans to create a new center to facilitate migrating customers within its diverse product portfolio as their businesses grow. For example, Peachtree customers migrating to MAS 90, reportedly contributed 31% of its new units in the first half of the year, up from 8% three years ago. With these new strategies in place and the creation of its new customer migration center, Best believes customers will have even greater incentives to stay with Best Software as their businesses expand, and the company fully expects to continue to acquire businesses and organizations that complement its strategy.
Reinforcing its "customer for life" commitment, Best Software's new migration center is 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. Best Software continues to see an increase in its customer demand for their business management solutions. As part of the announcement, customers can receive a 20% discount off the purchase price when moving from Peachtree to MAS90 or receive 0% financing for three years for product and services.
Best
Software believes its portfolio of accounting to full-fledged ERP solutions
from Peachtree to MAS 500 should offer customers an opportunity to stay
with the single vendor as their businesses grow, as each year, Best Software
reportedly continues to see an increase in its migration customers. In the first
half of 2002, its Mid-Market Division reportedly witnessed
22 % of all new MAS 500 customers migrate from Peachtree. The company has also
seen early migration success with its Nonprofit and Government Division,
as 15% of new customers migrated from Peachtree to MIP. Finally, its CRM
Division recorded that 10% of all new SalesLogix customers have prior
ACT! experience.
The
Best Software migration center is planned to open in early 2003, and it will
be comprised of employees uniquely focused on helping customers migrate from
one Best platform to another. Currently handled out of multiple different organizations
with Best Software (i.e., Small Business Division featuring
Peachtree and Timeslips product, and Specialty Products
Division featuring FAS, Abra, Carpe Diem and TimeSheet
Professional products , in addition to the above three) this centrally-located
group will support Best customers as they consider new/different platforms for
their business.
Supporting the Resellers
Furthermore
on the same day, Best Software announced the formation of the Best
Software Partner Advantage program, which should provide an
array of benefits to Best's reselling business partners, including training,
financing, guaranteed lead-generation and alliances with resellers carrying
other Best Software products. Best Software has possibly the largest and most
successful reseller channel in the industry, with 6,600 partners. Available
in November, the new program could help Best Software partners compete even
more effectively by offering a number of key benefits:
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Training in solution selling, lead generation, demo skills, partnering with
non-reselling certified public accountants (CPAs), product implementation
and other mission-critical skills.
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Guaranteed lead-generation programs which promise a guaranteed number of qualified
leads to participants.
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Zero percent (0%) financing for three years for customers migrating between
Best Software product platforms. Offered in conjunction with American Express
since August, the program has already generated close to $1 million in approved
transactions.
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Alliance programs that will help partners increase their business by working
with Best Software partners who carry complementary Best Software products.
Vertical Product Focus
Addressing another must have' trend of future modern enterprise applications the delivery of vertical industry solutions Best's initial vertical product focus will include the areas of nonprofit, accounting, distribution and manufacturing. The company believes its recent acquisition of MIP should give it a stronghold in the nonprofit market segment, while the company also currently has over 150,000 customers in manufacturing and distribution using its Peachtree and MAS 90 products.
To
that end, during the event, Best Software announced Peachtree for Manufacturing
and Peachtree for Distribution, the first step in its campaign
to increase its presence in its key vertical markets. Scheduled for release
in 2003, the new entry-level products will complement the more powerful manufacturing
automation and distribution capabilities found in the company's MAS 90, MAS
200 and MAS 500 solutions, and create a logical upgrade for customers using
Peachtree Complete Accounting. The new Peachtree products will
include reports, content, on-line help and training courses all designed specifically
for the needs of small manufacturers and distributors, while industry-oriented
"How-To" guides will train customers on how to tailor the software for their
specific industry.
Early in its history, Best Software built a solid customer base on its manufacturing and distribution modules for MAS 90, and today, nearly 40% of MAS 90's customer base is made up of companies involved in manufacturing or distribution. Distribution and manufacturing suites were later developed for MAS 500, including additional functionality for mid-sized businesses with more complex needs, while over the past 18 months, the number of channel partners for the product line has doubled.
In
February , Best Software also added process manufacturing to its offerings with
the acquisition of BatchMasterPFW, a solution for the production
of formulated products, including paint and coatings, food, consumer packaged
goods, chemicals and pharmaceuticals, among others, while recently in October,
Best Software announced the availability of Platinum for Windows by
Best Version 5.1 (PFW), which was acquired last year
from Epicor Software, and which includes new feature and functionality
enhancements designed to meet the specific business management and accounting
solution needs of small to mid-sized enterprises with 20 to 500 employees, particularly
those that need to integrate data from work sites in multiple countries.
The new PFW enhancements mainly revolve around an increase in key field sizes, document number masking capabilities, auto-roll-back feature etc, all giving businesses greater flexibility in the way they organize their customer and inventory data, and allow them to continue using the product through longer periods of growth. Due to its ability to recognize and integrate currencies and local accounting rules and practices, PFW is particularly well suited for companies that operate with warehouses and work sites in multiple countries, as Version 5.1 now also offers a new "Country" table, which enables users to more easily maintain country-specific information.
Accountants Division
During
the event, Best Software also launched a new Accountants Division-
including the new Best Software Accountants Network (BSAN)
- to address the specific needs of the accounting community. The announcement,
which builds upon its recent acquisition of CPASoftware, should
enable Best Software to offer comprehensive business management resources and
accounting practice solutions to its growing network of more than 40,000 accountants
and bookkeeping firms whom already use and recommend its solutions to their
own clients.
Best
Software believes it has addressed the needs of accountants to continually update
their industry knowledge by creating a new Accountants Division and the BSAN.
In fact, focus groups and input from both accountants and business partners
have indeed contributed to the creation the division and the formation of an
Accountants Advisory Board that will help manage the Best Software
Accountants Division and related programs.
Best Software's new CPASoftware product line, which will continue to be managed by former president Mark Fenimore, represents the foundation of the new division. As one of its first major initiatives, Best Software will roll out the BSAN, unifying and expanding the company's existing accountant recommender programs into one formalized, company-wide program for the first time. Designed to strengthen the relationship between technology and the accounting community, BSAN should provide 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 should 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.
Project Accounting
Last
but not least, in September, Best Software announced that dozens of professional
services customers have embraced MAS 500 Project Accounting,
the company's project accounting solution, since Best released the product earlier
this year to catch up with its main competitors' head start in the professional
service automation (PSA) space. Offered as an integrated module for MAS 500,
Project Accounting is a PSA program used by mid-sized professional services
firms, including IT consultants, design and engineering firms and advertising
agencies that need a solution that connects project data with their accounting
and business management systems.
MAS 500 Project Accounting provides business management applications to mid-market enterprises with 20 to 1,000 employees. The more than 60 customers that have purchased the product since its introduction in December 2001 represent a broad range of industries, from metal fabrication and healthcare services to IT consulting and creative design. Designed for projects requiring teams of all sizes, MAS 500 Project Accounting gives deep, up-to-the-minute updates on actuals vs. estimates and forecasts in addition to a complete audit trail of all labor, expense and material costs for any given project. Project Accounting's tight integration with MAS 500 Purchase Order, Inventory Management, Inventory Replenishment and MRP modules lets users quickly access information on material purchases, transfers and demands through one turn-key application. The solution also provides remote time and expense entry, as well as project status inquiry and approval, from anywhere in the world via the Internet.
This
concludes Part Two of a four-part article on Best Software.
Part
One detailed recent announcements.
Part
Three will discuss the Market Impact.
Part
Four will cover the Challenges faced by Best Software and make User Recommendations.