Microsoft's next small business edition of Office will feature an enhanced version of Outlook 2003 with Business Contact Manager. The new suite, codenamed Magellan, also touts tight integration among applications.
Microsoft Monday announced the availability of the beta release of a new small business management edition of its Office suite, which is designed to offer a turnkey approach to handle finances, customers and general business productivity.
Microsoft has not released pricing information and the software won't be available until late in 2005, but when it does ship it will also feature familiar productivity applications (Word, Excel and so on) and an enhanced version of Outlook 2003 with Business Contact Manager and well as the all-new Small Business Accounting. The new suite, which is unnamed, also touts tight integration among applications.
Steve Guggenheimer, Microsoft's vice president for worldwide small business, said that the long beta test cycle will allow the company to continue to receive feedback from small businesses. In building the current beta release, Guggenheimer said, Microsoft collected feedback from more than 800 small business customers over a six-month period.
The overarching goal of new small business management software is to allow business owners to treat sales, marketing and financial processes as a whole rather than discreet applications. In industry jargon, it's called providing a 360-degree view of the customer. That is, whether you are writing a proposal letter, checking a customer's payment history or looking for his mobile phone number, you can do it all from one place. "It's an important balance to reach. Workflow is not specific to accounting," Guggenheimer said.
This type of integration is important to many small businesses, where the owner often plays a significant role in all facets of the operation. "The owner/manager is the key to a small business. They don't see themselves as using accounting software or CRM software it's a blend of everything," Guggenheimer said.
He added that the value of the software will be seen differently by different businesses. "Maybe it will mean being able to leave earlier in the day or maybe it's making sure that if an employee leaves the company, important data doesn't leave with him."
Keeping the Customer Satisfied
The more a business owner or salesperson knows about the customer, the better for everyone. With that in mind, Microsoft is aiming to help small businesses build stronger customer relationships and improve sales management. Taking advantage of the integration of Outlook and Business Contact Manager and security features that allow people in a small business to access only certain critical data a salesperson could, for example, see all pertinent data about a customer before placing a job order.
|Outlook 2003 with Business Contact Manager allows sales reps and owner/mangers to see a customer's business history.|
For example, he or she could see information such as the customer's current outstanding balance, year-to-date sales figure, date and nature of his last order, and so on. When the salesperson places the order, an alert can be sent to the office manager or business owner. From there application can update inventory, generate an invoice and add the new order to books, Guggenheimer said.
Or, if there is a credit problem, the sales rep can be instructed to inform that customer that the order can't be processed until payment is received.
The new software is also designed to offer a centralized view into the business, offering a portal that shows items such as daily reminders, cash flow status, payables due, overdue invoices and so on. The view can be customized to reflect a person primary interests and role with the business. That is, a salesperson would have a different look than the business owner.
Beyond Office Integration
In addition to the integration with Microsoft applications, Guggenheimer said that "hooks or connectors to other software" are also a key to the new edition of Office. The "ecosystem" surrounding the application includes value-added resellers (VARs), independent software vendors (ISVs) and other partners, he said. Those partners will have access to Microsoft's software development kits (SDK) to provide integration with third-party software and services.
That third-party activity will be important as businesses look to integrate things like an online storefront with their backoffice accounting. It will also be key if Microsoft hopes to chip away at QuickBooks, which already offers several industry-specific versions, a point-of-sales product and a package for accountants. Leading e-commerce providers also either offer or are developing integration with QuickBooks.
Microsoft's first partner for the new small business version of Office is payroll-processing giant ADP. Guggenheimer said businesses will have the choice of taking a self-service or a full-service approach to payroll. Businesses using the new Microsoft Office Edition can tap the capability to work with ADP's online service to generate signature-ready tax forms, integrate checks and other online forms, and offer direct deposit. Or, Guggenheimer said, a small business can choose to outsource everything to ADP. In that scenario, a business could continue to call in payroll to ADP, but then pull that information directly into the accounting application.
The integration with ADP is also aimed at competing with Intuit, who claims that 800,000 small business customers use its QuickBooks Payroll services.
Reality Check: Who Will Buy It?
Microsoft's best opportunity may come from small businesses that have yet to choose an accounting package, said Raymond Boggs, vice president of SMB research at IDC, a Framingham, Mass.-based research firm. "It's a challenge," Boggs said, referring to convincing QuickBooks users to move to another accounting product. "QuickBooks isn't exactly standing still and they certainly won't be for a year."
Another challenge is conveying the value of a one-stop integrated application to fast-moving small businesses. Buying one application suite that handles everything is the "natural and rational thing to do," Boggs said. But the reality, he said, is that small businesses don't often have the luxury of thinking that strategically. "In effect, most are coupling together different applications. The generous thing to say would be that they prefer an a la carte solution. The reality is that most are solving one problem at a time."
Marketing issues aside, Boggs said the new product looks impressive. "It really does offer small businesses big-business features."
Even if Microsoft can't get QuickBooks users to switch camps, there is certainly plenty of new opportunities out there. Boggs estimates that there about 100,000 new small businesses are formed each year.
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