In order to better understand the current state of the accounting and financial software market and determine the major trends and issues organizations are experiencing with regards to accounting and financial applications, TEC recently conducted a poll, asking end-user respondents to answer five questions about their current accounting and financial software systems and the criteria that is important for them to consider when purchasing future systems.
We first enquired about the age of the accounting and financial software that our readers are currently using (Fig.1). What we found is a relatively even split between new, somewhat new, and older software systems, with one-third of respondents using software under 3 years old, one-third currently using technology that is 4–6 years old, and the remaining third with an accounting or financial software system that is 7 years old or more.
As the data shown in Figure 1 reveal, over 65 percent of respondents run accounting and financial software that is 4 years old or even older. One wonders if savvy vendors in the space might come up with a way to use the knowledge that the majority of respondents haven’t adopted the newest technology to their advantage.
As for the types of accounting and financial systems our respondents currently use (Fig.2), standalone on-premise accounting systems are still the most popular software among our respondents—40 percent run these types of systems. Another 28 percent of respondents use a module of on-premise ERP or other corporate-wide software—meaning that in total over two-thirds of respondents are using on-premise accounting and financial systems. As for the cloud-based systems, the great majority of the 28 percent of respondents using cloud-based financial and accounting solutions (85 percent) use a module of cloud-based ERP or other enterprise-wide system, while the remaining are with standalone cloud-based financial applications.
Fig.2 Usage of financial applications by type.
Certainly, we could not stay away from the hot topic of cloud-based software, especially in the area of accounting and financial software, and what sorts of issues still prevent mass acceptance of this deployment method, so the next question of the poll was created in view of that (Fig.3).
It is indicative of the general trend in computing towards cloud-based solutions that, despite multiple potential cloud-related fears and concerns, the majority of respondents do not mind considering cloud-based accounting and financial systems for the future—65 percent answered the question positively, while only 17 percent still do not feel comfortable with this mode of delivery. The same number of respondents did not answer definitively and obviously need more time and information to consider the advantages and disadvantages of cloud-based financial and accounting solutions.
Fig.3 Potential acceptance of cloud-based accounting software.
In reference to cloud accounting and financial application concerns (see Fig.4), according to the TEC poll’s respondents the most important barrier in adoption of such software is obviously security and access to information issues—22 percent of respondents have indicated this. Another issue that would prevent organizations from implementing cloud software is a need for customization to accommodate unique accounting processes, with 17 percent of respondents choosing this as the main barrier in selecting a cloud-based application. The third major potential issue regarding adoption of cloud-based financial applications is the company’s ownership of financial data—about 15 percent of respondents have concerns about allowing a third party to own their sensitive information. At the same time, 22 percent mentioned technical issues—hardware, bandwidth, and a necessity to transfer and process large amounts of data. Interesting to note is that financial issues are at the bottom of the list of concerns: only 4 percent of respondents consider the excessive cost of cloud applications over the long term to be an issue.
Fig.4 Major obstacles in cloud accounting and financial software adoption.
Finally, we asked readers about their general criteria for evaluating accounting and financial software, and what the most important factor is from their point of view (see Fig.5).
Fig.5 Accounting and financial system’s importance criteria.
What we found from respondents’ answers is that three major considerations are ahead of others—ease of use, a system’s flexibility and adaptability, and the capability for a seamless integration with other software applications. Obviously, users are quite tired of the complexity, inflexibility, and lack of integration capability of their existing systems. Data consolidation capabilities are critical for 13 percent of respondents, likely a representation of larger organizations’ need for this functionality. Finally, it is interesting to note that only 4 percent of respondents would select their accounting and financial software primarily based on delivery method—apparently users ultimately want an easy-to-use, flexible, and well-integrated software. How exactly it is delivered seems to be a secondary and rather technical question for them.
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