CRN Network, November 20, 2009, 1400
Many small and medium businesses in India are turning to software-as-a-service (SaaS) to fulfill their accounting needs. According to a study by US-based Access Markets International (AMI) Partners, these SMBs are set to spend $30 million on accounting software in 2009.
"On demand software or SaaS is a growing trend in the accounting software market and India. SMBs are choosing this option to weather the economic storm," said Priti Verma, Research Associate for Research and Consultancy at AMI-Partners, Bengaluru. "More medium businesses (companies with 100-999 employees) are adopting SaaS than their small business (SBs or companies with 1-99 employees) counterparts," added Verma.
The overall spend on accounting software in 2009 will also register a five percent increase to touch $30 million, the study states. Small businesses are generating a major portion of accounting software spending, contributing nearly 85 percent of the total. Advanced features and web support, combined with easing prices, have helped accounting software make significant strides, according to the AMI Partners report.
"Manufacturing leads in accounting software spending among India MB verticals whereas professional service firms lead the India SBs in this spending category," said Verma. "Most India SMBs are still using standalone accounting software, as opposed to using accounting software that is not part of a larger suite," she added.
According to Verma, businesses are no longer looking for plain vanilla financial accounting package and are instead keen on an overall solution for financial management. "We see companies which have been using standalone financial accounting systems are now migrating to the integrated solutions as they are realizing the limitations of standalone products," she said. Accounting software is now addressing more sophisticated issues such as supply chain, logistics, RFID, inventory and distribution.
The study identified the continuing evolution of system functionality and tools in accounting software to assist organizations with regulatory compliance as another interesting trend. “Though some organizations are now adopting new technologies, a large portion of India SMBs have not yet upgraded their accounting software thereby leaving a large market opportunity for software vendors to target,” the report concluded. |