Real time trend in cloud
Abacus promotes itself as being the first real time expense solution for businesses. Its architecture is born-in-the-cloud but it is not the only expense company with a cloud only solution. Others are also claiming real time solutions though Qari seemed to doubt the success through retrofitting. Qari does not see Abacus as ground breaking in terms of real time solutions but more an evolution.
“Real Time is not unique to expense management borrowing from other industries. If you look at the way CRM is evolving. If you look at what Salesforce are doing with Real time analytics, If you look at the way Accounting is evolving – Looking at players like Xero and others that are allowing companies to track things in real time and keep their books continuously in sync. All of this is coming about as a result of management teams that are increasingly pressing for real time information to help make more informed decisions. I think the fact that we are now bringing this to expense management is simply the logical conclusion to this same trend.”
The big question for Abacus is whether their solution maintains an advantage over its competitors. There is some clever functionality with Abacus but whether it delivers more functionality than its competitors for the same price is another matter.
Abacus in 2016 and beyond
So what does 2016 hold for Qari and Abacus? We asked him what three key things he hopes to deliver in 2016.
- “Scaling our customer experience team. Right now we are aggressively expanding our sales effort and pushing up market so a lot of our early team members are getting ramped up. Making sure that the customer experience never falters as a result of bringing on all these new people onto the team, maintaining the high quality that is always on my mind.”
- “We want to make it so that its even easier for more complex use cases for Abacus.”
- “More advanced analytics. Right now we have an Analytics engine that will track and create a snapshot at any given point in time. We would like companies to be able to track their spending trends over time overlaid on top of each other to compare different periods more easily.”
Qari explained this further. Abacus already supports multiple bank accounts and expense policies. However, some companies have multiple legal entities and Qari wants users to have a single login to access these multiple entities so that they can match expenses against the appropriate policy/company. At the moment this can be achieved by using multiple accounts and this enhancement should be delivered in 2016.
Expansion for start-ups is never easy. Maintaining the culture and quality/friendliness of services can be difficult and it is right that Qari lists this as a key challenge. Having acknowledged that maintaining the quality could be an issue he has a good chance of maintaining it. Abacus currently have their analytics engine built in-house.
One has to question this up to a point where they may be better served using a third party analytics engine. For the moment this may be the correct choice as it keeps the costs down for customers who don’t have an analytics solution. However as more and more companies start to use third party analytics such as Tableau or Power BI the questions about this approach will start to be raised.
Abacus announced an integration to NetSuite at the end of last year and we asked if there would be more in 2016. Qari’s response was elusive as he replied: “We do intend to do another integration and will be announcing it soon.” He mentioned Intuit and Xero during the conversation and it will be interesting to see which ERP/Finance/HRM solutions they integrate with in 2016 as he also inferred that there would be more to follow. Expensify, a competitor, already integrate with Intuit and their pricing starts at $5. It could be a tough year ahead for Abacus and their choice of vendor integration will be interesting
2016 is also the year where Abacus starts its internationalisation process. Qari explains where they are: “We don’t yet support companies based internationally and the main reason for that is because it is important for us to manage that payment flow. We do fully support companies based in the US that travel internationally.
“Our main focus has thus far being nailing the experience in the US. Then we will start taking a country by country approach to our expansion. We haven’t yet decided what the order will be you could imagine we would start with Canada, the UK expanding into Europe and go from there.”
The challenge for them in doing this is that internationalising such as product is expensive, both in terms of development costs but also sales and marketing. Workday made a strategic decision late last year to partner with ADP for payroll functionality, thus avoiding the necessity to internationalise their own payroll solution further. Companies such as Concur (now part of SAP ) and KDS already have international options and while they may not yet be “real time”, this may not be as difficult a bridge to gap for them as Abacus hope.
Looking into the far future Qari shared his theory around the evolution of ERP, one that we do not subscribe to.
“The next generation of ERPs will actually not look like the existing generation. They will look like a very distributed collection of services that because of their integrated APIs play very nicely with each other and so if you are a company that is growing quickly you may take your Zen plus Zenefits, Abacus plus Zen Payroll plus Intuit or NetSuite and combine them together into this ERP in a way that in the past you used to have to be part of one of those companies in order to be one of their integrated ERP solutions.”
This future seems unlikely, it involves a federation of start-ups banding together to fight off the larger companies. Having said that Phil Wilmington has a similar but very different theory of five application clouds, where CRM, Industry, Administration, Collaboration and the internal organisation. As Cloud solutions gain market share it will be interesting to see what evolves. It does seem likely that no one vendor will provide everything to every company but there is still a lot of transformation in the industry to occur.
Conclusion
While Qari is insistent on the end game for Abacus being to grow a “Giant company” one cannot help think that an acquisition is more likely in the medium term. There are several options from Finance and ERP to HRM software companies looking to extend their functionality that might be attracted to Abacus. However Abacus will need to grow their user base in 2016 and extend their functionality probably to include at least some international operations.
Abacus are a start-up on the cusp of an explosion of growth. There are some rich opportunities out there for them but it seems likely that they will need to raised funding in order to increase their sales and marketing efforts to a level that more businesses pay attention to what they are doing. Integration into existing financial, ERP and HRM solutions, especially considering the candidate payment solution could see them expand rapidly and successfully. It is a market that is potentially untapped.
