Using the Internet as a vehicle for initiating transactions that flow into accounting systems involves a paradigm shift — a change of mind-set that can greatly extend the reach of accounting information from a decision-support perspective.
Despite Internet accounting being in its infancy, many client/server accounting vendors have already recognized its potential for transforming consumer-to-business and business-to-business transaction processing and for improving decision support. As a result, vendors are releasing Internet-related products at an astounding pace.
That client/server vendors are entering cyberspace isn't surprising considering that Internet accounting is essentially just another extension of client/server accounting. This is because the Internet products take further advantage of the functional granularity of client/server accounting applications and their tiered design that allows distributed deployment of the application components across clients and servers connected by a network.
For users, the proliferation of Internet products is good news — Internet accounting has some clear advantages over conventional client/server accounting. It does not require every user of the accounting system to purchase, install and manage a complete accounting module, such as a general ledger, or a suite of modules on their desktop client. Instead, Internet accounting allows accounting and non-accounting users to make use of pieces of application functionality, called applets, from within any Internet browser software such as Netscape Navigator or Microsoft's Internet Explorer. These applets can be run from anywhere at anytime by any user, subject to the availability of an Internet connection and the appropriate application security permissions. Furthermore, the browser software may be running on Microsoft Windows PCs, Apple Macintoshes, UNIX or OS/2 workstations — Internet accounting offers platform-independent delivery of functionality.
Internet accounting product releases are accelerating as the development technologies used to build them, such as SunSoft's Java and tools from OneWave Inc., become more robust and sophisticated. Some vendors, such as Great Plains Software, are once again nailing their flag to Microsoft's mast, opting to focus their Internet accounting offerings around Microsoft's ever-growing Internet tools portfolio that currently includes: FrontPage, Internet Explorer and ActiveX on the client side, plus the Internet Information Server and the forthcoming Merchant Server. In the sections that follow, I'll outline some of the processes that Internet accounting is transforming and the products leading the way.
Initiating Transactions Across the Internet
The Internet provides an ideal way to initiate transactions that flow into accounting systems. Such transactions include sales orders, purchase requisitions, T&E expenses and budget forecasts. The transaction is initiated by completing a form displayed in the Internet browser software. The data is transferred across the Internet to a Web or intranet server that in turn passes it to the accounting system's application or database server. The transaction is then validated, and the user can be kept informed via e-mail of the status of the transaction as it passes through its life cycle. The upshot of this approach is that internal requisitions or consumer-to-business sales orders, for example, can be processed electronically without significant human intervention — other than to manage exception events such as requisitions for unusual goods or services or orders for out-of-stock items.
Dun & Bradstreet Software was quick to market with an applet that enables users of its SmartStream Procurement module to requisition items over the Internet. Internet Requisitioning, shows the applet as it would appear in a Netscape browser. Users can create new requisitions, open and edit existing requisitions and submit requisitions for approval. Requisitions submitted via this Internet applet are treated the same as requisitions entered through the standard SmartStream client software and are subject to the same security, business rules and workflows. SmartStream is an example of a client/server application that has exceptional functional granularity and a powerful workflow engine, both of which are ideal characteristics for Internet accounting applications.
Self-service, in information processing terms, is fundamentally about letting the user take ownership of their data. For example, instead of calling an AP clerk to find out if a check has been paid, you can inquire your customer's AP module directly and find out yourself. Self-service transfers responsibility from the internal staff maintaining the accounting system to the external users who own the data. Up to now, self-service has been associated mainly with HR systems that provide telephonic or kiosk-based access to HR information to allow employees to manage their own benefit plans, for example.
However, the Internet has the potential to facilitate self-service from any accounting, supply chain or manufacturing module. Software 2000 has recognized this potential and is delivering WebAR, the first of its self-service accounting applets, for its Infinium: Financials client/server accounting suite. WebAR provides self-service for the Infinium accounts receivable module. As you can see in Self-Service Receivables, WebAR allows customers direct access to their own data stored in the receivables module. They can quickly find their current balance and account history and view or change their address or shipping data. This makes the customer a genuine data owner and improves service as a result because the customer can ensure that their information is up-to-date or take corrective steps to improve their credit standing. Self-service AP, purchasing and inventory applications are also sure to become popular in the future.
Many accounting applications can already publish reports or the results of queries in formats that can be viewed using an Internet browser. Popular accounting report writers such as FRx and Crystal Reports, for example, have HTML output as a standard option. But being able to view information in static mode, on a report-by-report basis is just the simplest level of decision support being delivered by Internet accounting applications. The next level of sophistication is to provide a decision-support information console, which is viewed through an Internet browser. The information console gathers together information from source applications to present a meaningful view of the business — literally an Internet executive information system (EIS).
This is the intention of Hyperion Software's Spider-Man applet, which takes advantage of Hyperion's Common Data Access layer as a single application entry point in order to dynamically extract information from Hyperion's suite of analysis, accounting, consolidation and budgeting modules. The data may then be displayed in an Internet browser as text, tables, or charts and can also be combined with information from external sources, such as news or stock ticker feeds if required. An Internet Information Console, shows what the Spider-Man applet looks like using one of the information console templates that Hyperion supplies for deploying Spider-Man in an Internet browser. It's easy to see how useful this type of information console could be in delivering direct access to data from across the range of modules in an accounting suite. Once the console can accept alerts and messages generated by the accounting system's notification engine, then it becomes nothing less than a real-time, big picture information management console — a status that has eluded traditional EIS systems in the past.
From Web-Enabled to CyberApps
As more and more accounting systems are web-enabled, it is becoming clear that the Internet is acting as catalyst to transform all business applications into what might be termed CyberApps. The CyberApp is the next generation of business application that is designed around these real-world considerations:
- Business users only touch applications in specific places, and few users make use of all the functionality in an application, so functionality must be deliverable as applets or combinations of applets.
- Business users are mobile and may be accessing applications from different environments, such as desktop clients or Internet browsers, so application delivery (i.e., screens and business logic) must be varied to suit the connecting user.
- Business processes may include people outside of the company, so data security must be highly specific and more sophisticated.
- Business processes can be complex and extended and involve a wide range of human and system participants, so sophisticated workflow management is required.
- Business data must be delivered automatically, rapidly and securely without users having to consider any of these aspects of the data delivery.
- Business interfaces should reflect the fact that business is task-driven and message-oriented, and not at all concerned with programs or files.
There are a number of challenges in moving to the CyberApp. A couple have surfaced already, namely the security of the Internet and the availability of sufficient bandwidth to cope with the increased transaction volume introduced by corporate intranets. Other challenges include the need for industry standards in some key areas such as: how to define and deploy business object components; the definition of a business-to-business transaction exchange format to replace the outdated EDI standards; workflow management across the Internet; and the need for a more task-centric user interface. Accounting software functionality in particular will be held back or be thrust forward by the slow or rapid introduction of these standards.
CyberApps are still some way off. But if you are using or thinking of using a client/server accounting system, take some time to think about how you can leverage Internet accounting in your organization. Internet accounting is what is called a paradigm shift in computer industry jargon, and it is already showing great potential to add value to the accounting process. Getting your mind around the potential of a paradigm shift early means that you could gain the competitive benefits faster. It's also a good way to demonstrate that your accounting department is ready and able to leverage new technology as quickly as any other leading-edge function within your organization.