STRATEGIES

November 11, 2000

The ASP model is only part of what today's customer wants, says the management at financial applications provider FiNetrics Inc. They believe businesses want one complete solution comprised of the application and services together — a combination ASP and business service provider (BSP).

It's a message that received strong endorsement this week (Nov 9th) with the news that IBM Corp is to co-market and deliver FiNetrics' integrated accounting services to small and mid-sized businesses. The Chicago-based startup, founded in November 1999, is one of seventy providers worldwide that have been selected to join IBM's Service Provider for E-Business initiative.

IBM is not the only big name in the FiNetrics picture. Its online accounting application, available for $19.95 per user per month, is based on mySAP.com from software giant SAP ag. The outsourced accounting services that form the other major component of the offering are provided by 'big five' accountancy practice Arthur Andersen. Customers can choose to outsource accounts payable, accounts receivable and general ledger services to the Andersen professionals. A further option gives access to controller-level consulting services.

FiNetrics' target market is small to medium-size businesses with revenue of $100 million and below, with 20 to 500 employees. Today the company is selling directly to such businesses, but its ultimate plan is to sell indirectly through channels by offering to "round out" a partner's service offerings. The IBM deal is one of the first steps in developing that channel strategy.

Service integration

According to FiNetrics' CEO Ken Mueller, the company's market research has shown that small businesses don't want to go to many different sites to get their products or financial services on the Internet. They prefer to free up their time to concentrate on whatever their core business is.

Its message to potential partners is that the more products and services they can offer in one place, the more likely that customers will come to their site — and keep coming back. Offering accounting services on their website can help customers pull all the financial pieces of their business together, says Mueller. FiNetrics gives them a platform that can interconnect and integrate the service offerings on the site.

A suitable partner for FiNetrics might be a bank, an insurance company, a credit union, a franchiser or supplier — or any company looking for ways to keep their customers and add revenue to the bottom line. Take smaller banks, for example. Unlike the top twenty in the industry, such as CitiBank and Bank of America, they don't want to invest a great deal of money to develop financial services themselves. They've already invested in getting their checking and other products up and running on the Web, and they don't necessarily have the technology or money to do more. "Those are the targets that we want to go after, and we are talking to them today," said Mueller.

If a bank already offers checking and savings accounts and wire transfers online, FiNetrics allows them to add a number of accounting solutions such as payroll, purchasing, insurance, leasing, and business services. "We'll put those services on the bank's Website and the bank will market them to their existing business customers," he explained.

Once FiNetrics has placed its accounting solution on a partner's website, it shares revenues with that partner from customers that subscribe to the accounting solution.

The Arthur Andersen personnel can be located either on the partner's premises or in FiNetrics' shared customer services center in Chicago. FiNetrics has outsourced operation of its mySAP.com servers to SAP specialist ASP eOnline Inc.

Instant help

Technology from online customer support vendor eshare communications inc enables FiNetrics to offer instant online help. "If our customer has a problem and pushes the help button, we don't want them to feel like they're alone," said Mueller. "We provide a person who answers them, via live electronic chat, and helps them through the application."

If the customer has specific accounting queries, they can contact the Arthur Andersen advisers using online chat, email, or telephone contact. The service allows them a certain number of minutes per month. Practical bookkeeping issues such as whether they should record an entry are covered, as well as more strategic decisions such as whether to lease or buy a product.

"A lot of people use Quickbooks, but they are not accountants and they get stuck and have to call a CPA firm and pay by the hour. Our service simplifies their life because there's always someone from Arthur Andersen to answer their questions," said Mueller.

By combining ASP and BSP, Mueller believes he is offering clients value. He's betting that the international capabilities of SAP will soon come into play, because many companies want to go global. A launch of the service in Canada is planned before the end of the year.

The live service element of the FiNetrics solution is an important feature, added Mueller. "We believe this is going to expand how companies use the ASP model," he said. "Providing live online customer service will help switch people from using client-server to more of an ASP model, because they will not be alone in using it. We really help them through it, unlike some companies on the Internet that leave the customer to figure it out himself."

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