Accounting Software in Japan
|
The corporate accounting segment in Japan was once considered a tough market for packaged software to penetrate. Corporate accounting was
dominated by customized software solutions, with each company captive to the particular custom-made accounting system imposed by its contracted accounting firm. But, as in other business processes, the dissemination of PCs and LAN/WAN technology have drastically reshaped the corporate
accounting landscape.
Noriko Takezaki Today, some 80 vendors of packaged accounting-specific software are competing in the Japanese accounting software arena, many of them foreign players. In addition, several ERP (enterprise resource planning) products have entered the market recently, helping to grow the market to \26 billion in 1997, according to a survey by the Japan Personal Computer Software Association (JPSA). "The corporate accounting software market has opened up, in large part because of the increasing use of PCs and network technology in Japanese offices," says the JPSA's chief of market research Hiroyuki Kase. "Packaged software products have been gaining market share. And their sales will continue to be favorable, particularly to small and midsize companies, because they are relatively low in price and easy to use. Meanwhile, ERP products are attracting the larger size corporate sector, and can be expected to further expand their share in this market. But since using ERP software requires a high level of skill, the key point for ERP's continued success will be whether vendors offer a sufficient level of support to their customers." Bilingual SunSystems solutions One of the most popular accounting-specific software products among foreign-affiliated companies in Japan is SunSystems, produced by UK-based Systems Union. The product consists of SunAccount, an accounting module, and SunBusiness, a sales/purchase/inventorymanagement module. Released in Japan in 1986, SunSystems is now used in 717 sites in Japan (as of June 1998). SunSystems offers fully bilingual (Japanese/English) accounting, with an onscreen menu that can be switched between the two languages. This makes it useful for creating financial reports and analyses in Japanese for a company's local office and in English for its overseas headquarters. The product also supports multi-currency processing. Optional modules for bank remittance, consumption tax, and monthly invoice processing are available to tailor the package to the Japanese accounts processing system. In addition to the focus on foreign-affiliated companies, Systems Union has recently started targeting Japanese companies. "Because of the Big Bang in the Japanese financial industry, many Japanese companies have realized that they can't stick to the conventional, closed Japanese way any more," says Minoru Shirai, president of Systems Union Japan. "If they do so, such as continuing to use a closed, custom-made accounting system, they recognize that they will fall behind the rest of the world." ERP adopted by midsize firms Offering tough competition to SunSystems are ERP solutions that integrate an accounting system with processes such as manufacturing, logistics, and engineering. Among the major ERP vendors expanding their share, particularly for accounting-related business, are Oracle (Oracle Applications), JD Edwards (OneWorld), and SAP (R/3). Baan has also been enhancing the financial modules of its Baan IVc, particularly for inventory and cost management in the manufacturing industry, and PeopleSoft has been enhancing the flexibility of its ERP financial module by offering a GUI-based application development tool. In addition to these "direct" ERP players - those who have their own sales channels in the Japanese market - there are "indirect" ERP players who rely on Japanese distributors. Such players include Glovia International (via Fujitsu), Marcam Solutions (via NEC), and Ross Systems (via Tonen System Plaza). According to a survey by DataQuest, a Gartner Group company, the major use of ERP software is for manufacturing and production control, 32%. But accounting ranks second, at 21%. DataQuest believes that ERP sales will continue on an upward trend, particularly among midsize corporations (up to \50 billion in annual sales); these are the corporations most likely to adopt Year 2000-compliant ERP software as a replacement for their existing non-compliant systems. This will lead the entire ERP market to reach the \170 billion within five years, predicts DataQuest. Nippon Motorola Ltd. is one such company using an ERP solution, having changed its financial software system to Oracle Applications (Oracle Financials and Oracle Payroll) earlier this year. The company's previous accounting system, a custom-made mainframe solution, was "inadequate, expensive, and not Y2K compatible," says Graham Chester, the Motorola project manager in charge of the financial software renewal. Chester says that although the ERP product is expensive and requires considerable training and skill to utilize it to full advantage, the company has found Oracle Application's functionality to integrate financials, order processing, and inventory management systems useful for control of the entire organization. JD Edwards gets bitten The ERP players acting in Japan have not always faced smooth sailing, however. JD Edwards, for example, experienced rough waters last year via a wave of customer dissatisfaction with its Japanese OneWorld client/server ERP release. A successor to the company's WorldSoftware accounting product, OneWorld attracted the attention of many, particularly those in corporate accounting sections, when it was announced in Japan in December 1996. But when OneWorld version 7.3.1.1 was shipped in June 1997, numerous bugs were quickly uncovered in its finance module and with the product's Japanese processing functionality. JD Edwards fielded numerous questions and complaints from customers - more than the company's short-staffed Japanese support services/systems could adequately handle. Now, JD Edwards is shipping a bug-fixed version 7.3.2.1. To enhance its still struggling customer support services, JD Edwards Japan president Nobuhiro Hara says the company will increase the number of its partners in Japan from 15 to 60 by year-end. He adds that the company has already doubled the size of its internal product quality control and support services staff within the past year. Other ERP companies also plan to increase the number of their partners to offer better customer service. SAP, for example, which holds a 70% share of the ERP product market, has tied up with some 80 companies for R/3 consulting (including Arthur Andersen Business Consulting, Itochu Techno-Science, Chuo Coopers & Lybrand, Ernst & Young Consulting Japan, and Price Waterhouse) and 12 companies for R/3 sales (such as Sumitomo Computer Systems and Otsuka Shokai). PC-based SOHO solutions prove popular Several new PC-based accounting software products are targeting the SOHO (Small Office/Home Office) market in Japan. One such product is QuickBooks - the Japanese version will soon be released by Intuit KK (the Japanese subsidiary of Intuit in the US). QuickBooks has an 80% share of the SOHO accounting software market in the US, and is now used at more than 2 million sites worldwide. Running on Windows 95/98, QuickBooks features easy operation; it will make a ledger automatically from the input of data for invoices, receipts, and money spent/received. In October, the Japanese version of QuickBooks will be available at a list price of \55,000, and Intuit KK hopes to sell 30,000 to 40,000 packages in the initial year. For the Japanese version of QuickBooks, Intuit KK has modified the original program to meet the particular needs of accounting in Japan, such as cash-based transactions and consumption tax calculation. In preparation for the upcoming release of the Japanese version, Intuit KK has carried out extensive market research and asked 300 users to test the beta product. "Not localization but culturization' is necessary for accounting software," says Wataru Tomii, product manager in charge of marketing at Intuit KK. "Culturization" is a key word of the corporate policy of Intuit KK, a joint venture of Intuit (US) and two Japanese accounting software makers, MilkyWay and Nihon Micon. "Until now, no [accounting] business software firm from outside Japan has ever set up a full-scale business in this country," claims Shigehito Suzuki, president of Intuit KK. "Reasons include differences in accounting systems, work environments, taxation laws, and other cultural factors. Simply converting software from English into Japanese isn't enough."
"That's why our products are created by Japanese staff for the Japanese market," continues Suzuki. "We are essentially combining US technology and marketing expertise with a thorough knowledge of local culture, customs, and business practices."
Another product targeting Japan's SOHO and mid-range corporate market is Happy Accounts by Canada-based Aico Arena International Corp. The product, to be released this fall, is a bilingual (Japanese/ English) accounting package designed to run on Windows 3.1/95. Supervised and supported by Japanese Certified Public Accountants Honjo Associates, Happy Accounts will be distributed in the Japanese market through Business Brains Tokyo. The list price is \400,000 and up, depending on the computer system environment at the user's site., and Business Brains Tokyo says it expects to ship between 50 and 100 packages in the initial year.
|
