Whether you’re struggling with spreadsheets or having trouble working out who owes money and who doesn’t; it’s easy to see why accounting software like MYOB makes life easier for businesses all around the world. Throughout the new century, MYOB has managed to provide innovative solutions that meet the needs of businesses, regardless of how big or small they are.
However, it hasn’t always been smooth-sailing for MYOB.
According to the CEO of MYOB, Tim Reed, they had to wade their way through a tumultuous period of time before reaching where it is today. This period involved an increase in staff turnover, a variety of online failures and fierce online competition from Xero.
Tim Reed spoke with The Australian and told them that their initial product offerings for the online market were complete failures.
“It all started in 2001. Customers just weren’t very interested in our products” he said; stating that poor software development and a lack in infrastructure had contributed massively to this failure.
“We decided to step back and watch the online market to see what would happen” he said.
It was around this time that Xero came to be. The Wellington-born start-up pushed its way into the Australian market in 2011, taking the world by storm. This ultimately forced MYOB to revamp its products and become more innovative by utilising the cloud.
MYOB’s general manager of Small Business Solutions, James Scollay said that a business model pivot like this meant a heavy change in staff as well as strategy and business process management.
“It was vital for us to bring in the appropriate talent to quicken the change. I had a team of around 500 people across a 2 year period – 85 percent were either new or in brand new roles”, Mr Scollay told The Australian.
Just last week, MYOB became the largest tech float in ASX history, after finally coming to terms with the unstable industry with regards to subscription based products.
Previously, MYOB cost around $800, in contrast with MYOB essentials which costs almost $30 per month – and includes a free trial of the software.
“Our revenues now come later, rather than sooner, and we assume the risk of an unhappy client, versus the client assuming the risk that they’re not happy with what they’ve purchased,” Mr Reed said.
“That feeds back into that cultural change. If we see something that isn’t working or isn’t giving the client a smooth experience, we have to fix it immediately, because the financial risk now sits with us.”
The primary criticism of MYOB has been that they’re comparatively slow in releasing their products online, which can have a disasterous impact on retaining customers. Xero, on the other hand, releases products quickly and use 100% cloud-based technologies.
Reed added that although things were slow around 6 to 8 years ago, that MYOB is now gaining traction and looks set to pounce after significant improvement and increased usage over the last 2 to 3 years.
“We got there before the category penetration was at 5 per cent, and we will be able to be a part of the category as it grows and really rises, up to where I think it will be in 10 years’ time, which is probably 70-80 per cent penetration of small businesses.”
Mr Reed also points to his company’s narrow focus on Australia and New Zealand as a strategic advantage over Xero, which is pushing hard in markets like the US and Britain.
“There’s no doubt in my mind that being a market leader in Australia and New Zealand means you can get enough clients on to an accounting platform to be able to invest to stay ahead,” he said.
Either way, the future looks interesting and the MYOB vs. Xero battle will definitely be something to watch out for.