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From: vio
Subject: Re: OMG AR/AP
Date: Tue, 12 Dec 2000 04:57:23 -0500

Todd Boyle wrote:

> ...
> If Netledger ever has open interfaces, they would begin to be my
> recommendation for the US market, right now.  Personally, I
> am not interested in any stinnkin' webledgers until they let
> me conduct business over the internet, by letting me submit
> orders, invoices and payments to other subscribers on the host,
> as a minimum starting point.  They will then have to show me
> a roadmap where you can conduct business over the open internet,
> with XML and without LOCK-IN!  NetLedger is totally lock-in, at
> this point, there is zerro options for exporting your data, and
> you can only do business with the other service providers that they
> choose.  NetLedger has lots of cool ways to IMPORT your data,
> and are being very cute by not letting you EXPORT your data, at
> this point.
> Interestingly NetLedger has this and informally,
> says they support openness and wants to support all independent
> BSPs such as web storefronts inventory, CRM, payrolls, project,
> time/billing, etc.  But everytime they choose a partner (OneCore
> cash management, Yahoo Stores, ADP Payroll, etc.) the partner
> charges an arm and a leg!  And two weeks later NetLedger comes out
> with their own banking solution, webstorefront, or payroll built
> into it.  So who are we kidding.
> I predict, NetLedger is really wanting to build a monolithic
> integrated webledger not an open interfaces webledger. Here,
> read my RANT about monolithic versus component ASPs.
> I'm growing more and more worried that *all* the major webledgers
> including NetLedger will turn into typical lock-in portals in
> coming months.  There is now a MAJOR webledger war brewing since
> both Intuit and Microsoft have released their webledger betas.
> They are good.  Now, we are realllly going to see the fur fly,
> as these ferocious animals fight to the death.  So don't hold
> your breath looking for open interfaces, which obviously enable
> you to switch to another webledger provider.

May I risk saying : Who cares !

I am saying this from the following perspective: accounting systems are the 
functional equivalent of filesystems. No more, no less. Consider this parallel:

On today's volatile computing hardware you need systems to make your data 
persistent. These systems are the filesystem (related chunks of data stored 
together, with related cataloging facility to make retrieval as easy/convenient 
as possible), or the database system (a more fine grained alternative, with 
more intelligent retrieval).
On today's volatile business environment you need systems to make your 
transactions persistent, by recording related relevant data (transactional 
data). This is your GL accounting system.

Just as we can argue that neither the filesystem and database technologies are 
the best way to store data, so we can argue whether GL accounting system is the 
best system around.

But I Would argue that for a manager, the accounting system is mostly a 
nuisance for doing his/her job - which is to create value for his/her 
customers. Granted, accounting is now using Buck Rogers technologies: the cheap 
PC, distributed systems (local networks - LANs, the global network - Internet). 
But in the great scheme of things, I see a ton of hype and hot air. So our 
accounting software can now squeeze itself into IP packets. How revolutionary.

NetLedger and Microsoft and Intuit are building proprietary accounting systems 
as other before them (and amongst them) have built proprietary filesystems. And 
again will spend enormous resources to fight eachother and to make business 
managers swallow the Bill (no pun intended). I agree with you that business 
managers should know better, as their main function, for which they are paid, 
is to make good sound decisions. But in this regard I may nevertheless risk in 
saying: in the end "who cares !".

I say this because from my point of view the fundamentally "shared" nature of 
transactional data (GLs are designed to handle) makes it incompatible with 
anything proprietary. All parties participating in a transaction need a common 
accounting system/standard/tool to record that transaction (just as any web 
enthousiast need to speak html/http, be it indirectly through the appropriate 
tools). Anything proprietary (read "not shared by all parties" participating in 
the transaction) is inherentry less efficient because of the translations 
required between incompatible systems, consequently will raise the overall cost 
of the transaction, ultimately making it comparatively less competitive, for 
which reason it will be frowned upon by business managers.

Proprietary accounting systems can only hope to prosper in these early stages, 
when managers don't have perceived serious and credible alternatives. 
Obviously, all these early birds are looking at the success Microsoft has had 
with its hegemonistic filesystems (Office, MSDOS, etc), upon which it managed 
to built an economic empire. But I would argue that accounting is perhaps 
different: while you can have isolated OSes humming ignorant of the surrounding 
world (at least in the 80s you could, when MS developped its dominance), but 
isolated proprietary accounting systems is almost a nonsense if you think about 
it (recording "common" events with "not common" tools). Sure, all these early 
birds seem to hope to develop enough momentum towards Windows-type hegemony. I 
personally believe this is wishful thinking, as both today's fiercer 
competition, and the intrinsic "cooperative" nature of accounting (and the US 
Justice department ??), won't allow that to happen. I believe it was JFK who 
said something like " you can fool all the people sometime, you can fool some 
people everytime, but you can not fool all people everytime".

> Open intercompany GL interactions will happen anyway, regardless of
> OMG or Netaccount or you or me, because in case anybody noticed, all
> GLs have got access to the internet now, and we can start exchanging
> transactions anytime we want.  There are going to be open GL interfaces,
> free code, an open XML GL schema.  The language is called double-entry
> accounting rows.  Duh.  and an assortment of supporting pieces like
> XML definition of your company, periods, COA etc so that you can pack
> up your GL and move, anytime you like.  This is not to say, webledgers
> will voluntarily go along with it but rather, they won't be able to
> say, "Geeee, we don't know HOW."

I would favor here a more precise use of terms. For example: Transactions are 
events in a business entity's life. GL is a tool to record relevant data 
regarding those events. Your point is that a shared distributed (web-enabled) 
implementation ot the GL (an "open XML GL schema") promisses competitive 
advantage against current non-distributed implementations, even against 
distributed but closed proprietary GL implementations.

> Obviously there will still be fools, who sign up for lock-in
> webledgers just as they sign up for AOL and Intuit and MSN today,
> to pay needlessly high fees for software, but are basically
> prisons for your data.

Like banks are prisons for your money ? Maybe in some instances, prisons make 
sense (banks provide more security than your mattress). But if it's more 
economical and sound to make without, who wouldn't ? Unlike individuals, 
managers don't have the luxury of making bad decisions (those who do have a 
short professional lifespan). They must constantly justify their decisions: to 
their employer (which is the business entity, usually personified by the board 
of directors), to their customers (by being more competitive than alternative 
offerings), to their shareholders (by "showing them the money"). For this 
reason I fail to see proprietary AOL-type of webledgers thriving against open 
non-proprietary alternatives. I do see them as pioneers, being constructive in 
tracing paths to working solutions. But then again,  pioneers get the arrows, 
settlers get the land.

Regards - Vio

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