March 3, 2008
This morning I was invited to a presentation by Xero CEO Rod Drury, detailing some of the new developments just rolled out on their accounting package. The two main areas are in contacts and internal transactions.
Rod remarked (and correctly so) that the biggest barrier in the way of SMEs using CRM is the implementation hassles. Their customer/supplier data resides within their accounting package so a separate CRM package entails significant data transfer. Added to this is the fact that CRM tends to be over complex for the needs of SMEs.
In line with their view that the accounting package is the “beach-head application” for SMEs, Xero have increased the CRM functionality within their own system. Contact details now show receivables and payables for the contact, as well as recent activity and notes. Invoicing is also able to be actioned from within the contact window. Rod tells me there will soon be the ability to seamlessly utilise this information within a more fully featured SaaS CRM solution.
The “CRM Lite” window is shown below.
Xero to Xero transactions – the Network effect
Much of the benefit of a hosted software product is that it enables the vendor to do the “heavy lifting”. One good example of this in action is with Xero to Xero transactions. The example Rod gave was of a real estate agency. Traditionally their accounting system showed the commissions payable to, and charges receivable from, individual agents. This would then be transmitted to the particular agent in statement form.
With the new Xero functionality, users can generate a key that can be inserted into another user’s system. Once the key exists on both instances of the software, one party can easily “port” a transaction to the other. In the case of real estate agents for example, the agency could just key a particular sales commission to an agent, and the transaction would appear in the agents instance of Xero, all ready to be verified.
This feature is pretty exciting as it begins to showcase the network effects of an online application. Clearly in any vertical grouping there is increasing benefit to be gained as more members utilise a product, and from the vendor’s perspective there is much to be gained by achieving momentum in the vertical – the network effect takes over a significant part of your marketing work. The screen capture below is an example of the Xero to Xero transaction authentication in progress.
I’ve said many times in the past (and to Rod on a number of occasions) that no accounting software vendor can build a viable business utilising a SaaS/s strategy. Today’s roll outs go some of the way to providing Xero is a true SaaS/v player.
The final update Rod let me in on is embargoed for a little while – I’ll post about it ASAP.