Xero's logical partnering

by admin on August 28, 2008

in Cloud Computing/SaaS,General,Innovation

Wow – Xero’s on a tear. The latest announcement talks about a partnership with Acclipse, a New Zealand provider of software that includes practice management:

The partnership will see the seamless integration of Xero’s client accounting software with Acclipse’s web-based practice management and tax software, to provide a complete solution for accounting firms.

At least it is more than the usual form of marketing partnership I am used to seeing. This one has meat.

This is a no brainer in the online world. Linking client and professional software provides a way to ensure that friction between the client and professional office is reduced. It should also mean the elimination of data errors. This is made so much easier using online technologies than in the traditional on-premise world.

The real trick comes when the client side software can automatically take adjustments from the professional product. That way, they’re both in synch – or at least they should be. For this to work, the professional software needs a mechanism to suck in the year end data. In the client side online world, that may not be so straightforward. Clients enter data when they want to and not when professionals would like. Therefore a means of understanding the cut off is essential. It will be interesting to see how the two companies tackle this problem and with what degree of success.

Assuming they do solve the technical problems (there isn’t much that software cannot overcome these days) then it will be a relatively trivial matter for Xero to bring Acclipse to the UK market. Today, that is dominated by the likes of MYOB, IRIS and Sage but there is no logical reason why this combinatino cannot be made to work in the UK. However, it requires more than a partnership. It requires marketing. It requires that client and professional sides of the relationship work together to develop on ramping of clients and providing a compelling value proposition. That should not be too difficult. But it will require prfoessionals to get out of their comfort zone.

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