From the September 1996 issue of Controller Magazine

The Multinational Accounting Market

Traditionally, multinational accounting has been associated with enterprise-level accounting packages targeted at Fortune 1000 organizations. Costly to buy and implement, these packages were out of reach of most businesses with revenues under $250 million. Because of this cost, may companies were forced to manage multinational accounting outside the core accounting GL, AR, and AP modules by using spreadsheets and other tools. However, much has changed in the past 10 years, and this section will provide an overview to bring you up to date on the multinational accounting market.

The Euro-Pioneers

Out of necessity, European vendors have focused on multinational accounting far longer than U.S. vendors have. To sell pan-European systems required multinational functionality, and vendors based in single European countries did not have the vast domestic accounting systems market open to U.S. vendors. That's why vendors such as Systems Union in London introduced multicurrency functions into its financial packages more than a decade ago. These European vendors often have sophisticated sales and support networks for distributing their products outside the U.S., thousands of installations spread throughout many countries, and strong reseller channels in their home markets.

Enterprise Accounting

While U.S. enterprise accounting software vendors such as Dun & Bradstreet Software, Systems Software Associates, J.D. Edwards, Computer Associates, and Oracle Corp. have long offered some form of multicurrency functionality in their accounting systems, they have also focused on delivering broad and deep enterprise-level multinational functionality (e.g., allocations, consolidations, treasury management, and intercompany accounting). This functional breadth and depth comes at a price: higher software acquisition costs and ratios of software dollar cost to implementation dollar cost of up to $1 to $5, or even higher. Typically, these vendors also offer broad and deep sales and support for their systems in various key overseas market areas including Europe, the Pacific Rim, and South America.

Middle-Market Newcomers

Only in the past few years have popular U.S. middle market vendors such as Great Plains Software, Platinum Software, and Solomon Software begun to deliver multicurrency and other limited multinational functionality to their accounting software. In many cases, this functionality is delivered only in their new Client-Server accounting suites and then, initially, it is often restricted to the accounts receivable and accounts payable modules. Apart from the relative immaturity of this functionality, the other issues these newcomers face is the lack of multinational expertise in their domestic reseller channels and the relatively shallow breadth and depth of their overseas sales and support facilities.

Delivering Multinational Solutions

Multinational application functionality is only one part of a multinational accounting solution. An equally important part is the distribution, implementation, and support services provided by the vendor or its partners to deliver the solution. When you evaluate a multinational accounting package, you should examine the following aspects of a vendor's offering closely, especially when evaluating a multisite solution for deployment outside the U.S. For distribution, which affects how the software is sold:

• Is the software sold through the U.S. office on a central buying contract, through offices in a specific country or region, or is it sold by local VARs?
• Can volume discounts be negotiated worldwide for the whole sale or only by country or region for parts of the sale?
• Does the vendor manage the account through a single sales contact or through multiple sales contacts in different countries?

For implementation, which affects how the software is deployed and brought into use:

• Can the vendor provide specialized "train the trainer" training for corporate "swat" teams responsible for product rollouts worldwide?
• Can the vendor provide a local consulting resource or must this resource be flown in, adding significant T&E cost to the overall system cost?
• Is there a choice of available local resources such as vendor consultants, Big Six accounting firms, or systems integration consultants?
• How easy is the software to deploy and how robust is it in use? This question is especially important in remote sites, in technologically unsophisticated markets, or in low-staffed subsidiaries.
• Even if multilingual software is not available, are translated manuals and other training materials available in the local language?

For support, which affects how the software is maintained:

• Is the nearest vendor help desk support located in a convenient time zone or can the vendor provide around-the-clock support worldwide
• Are help desk staff available that understand local accounting issues and that speak the language of the local accounting staff?
• Can software updates be automatically downloaded from sources such as bulletin boards, Lotus Notes, or the Internet?
• Can problems be tracked through a user-accessible help desk and problem resolution systems based on bulletin boards, the Internet, or Lotus Notes?
• Does the vendor have a published problem escalation policy for handling tough-to-solve problems?
• Does the vendor provide annual user forums in countries outside the U.S. to provide a forum for discussion with overseas users?
  

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