Many accounting systems companies, such as Oracle and SAP, are developing Web-based applications which will extend their reach to managers, staff, customers and suppliers.
These Web extensions can be used over both the Internet and intranets, bringing powerful corporate accounting functionality to the desktops of people traditionally kept out of the loop.
Each of these Java or ActiveX applets can carry out a specific job or set of tasks. The finance department will still need to use its traditional client software for most of its existing functions, but can extend information locked in its systems to internal and external ?customers?.
Suppliers are also keen to give managers the facility to access the reporting functions of the accounting system. This would give them the information they need most in electronic format, wherever they are. It also means that accounting staff would not have to produce paper-based management information packs.
Oracle will soon be shipping three new Web extensions. They show the type of functionality which most vendors will be delivering in coming months. These three applets are the first tranche of 50 planned by the company. They can do the tasks which would otherwise have to be carried out over the telephone or by mail, both of which involve labour-intensive internal processing and data entry by sales office or accounts staff.
With the first product, Oracle Web Employees, administrative-intensive work is handed over from the accounts support staff to the employees themselves. It links into the core Oracle Financials and Human Resources systems and allows any employee to raise a purchase requisition or expense report. Managers then use Oracle?s groupware technology to authorise the order or expense report, which is then automatically entered into Oracle Financials.
Web Employees also provides job application processing. This circulates applicants? details to relevant managers and links into Oracle Human Resources. The real benefit is that the system automatically carries out these actions, which cuts down on time-consuming paperwork. Customers using the second product, Oracle Web Customers can, via the Internet, access the sales-order entry, inventory and accounts receivable modules of Oracle Financials.
This means that customers can check product availability and place an order from their own PC without worrying about paperwork. They can track the progress of the order online, and there?s a link which allows them to contact the carrier through their browser to check the progress of the order. Customers can also monitor their accounts with the company to ensure that invoices, credits and payments have been correctly entered.
Oracle Web Suppliers, the third applet, similarly allows suppliers to access purchase orders raised, check inventory levels of their own lines and monitor which payments have been made for their orders. Through links to Oracle?s Manufacturing module, Web Suppliers also allows them to check manufacturing schedules and view their supplier performance statistics.
SAP is working with Microsoft on a wide range of applets. In addition to the type of functionality which Oracle is planning, SAP is also developing applets to deal with electronic correspondence, bank-data transfer, just-in-time stock-level control, ad hoc financial reports, overhead allocation activity levels and basic tasks. As well as the accounting applets, there will be others for employment opportunities, providing plant maintenance information, product quality certificates, helpdesk calls, project progress and an employee directory.
Most other major vendors are developing the same type of functionality. Coda, for example, has recently bought an Icelandic company which specialises in Web technology, which it plans to integrate with Coda Financials.
But training large numbers of staff to use these Web extensions could be expensive. So the applets must be intuitive and easy to use. Vendors are confident that the browser interface is not only far more intuitive than traditional graphic front-ends, but that enough users will already be familiar with it to ensure they are productive with the applets from day one.
However, there are some pitfalls with Web extensions. For example, there can be problems using them to do transactions across a public Web server, because of the possibility of security breaches. So anyone thinking about such a system should consider using merchant server software, as well as Secure Sockets Layer and Secure Electronic Transaction protocols.
Currently, these types of Web extensions are not meant to provide the full functionality of traditional accounting applications. But the San Francisco Project (http://www.softmall.com/sf) hopes to provide this level of power in the medium to long term.
The project originated at IBM, but now involves more than 50 software vendors which are developing a common accounting framework with the Java language. Each vendor will use the framework as a foundation to which they can add functions to satisfy their own markets. The UK?s JBA Software is playing a leading role in this venture.
Using Web extensions can reduce costs in many businesses by allowing direct access to, or input of, data. This means that data input and customer-service staff can concentrate on non-menial, value-added jobs. With greater accessibility to information, organisations have the potential to improve customer service more cheaply.
Extending these core business applications to staff, managers, customers and suppliers will also allow companies to make major changes to their business processes. It is possible that the current style of business process re-engineering (BPR) projects will be made redundant because of these new Web extensions. They allow a degree of integration and co-operation with customers and suppliers which was not possible when BPR projects were originally conceived.
In its purest sense, BPR requires a complete and continual rethink of the way the organisation does business to gain a competitive advantage through breakthroughs in performance. Web extensions offer the potential to make exactly this kind of quantum leap, and promise to bring about fundamental changes in the way organisations work.
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