Posted on: Friday May 13th, 2016

Author: Kilimanjaro Consulting

Kilimanjaro Consulting have been a long-time implementer of MYOB Exo and MYOB Exo Payroll software. What you may not know is that we also implement MYOB’s latest cloud-based offering, MYOB Advanced.

Not sure what the difference is? We cover eight key differences which may help you understand which product would be best suited to your business requirements.

1. On Premise vs Software as a Service (SaaS)

MYOB Exo was designed as an “on-premise” software system. This means that you need your own server hardware as well as the underlying database – Microsoft SQL. Recent advances in hosting and data centres mean that MYOB Exo can now be hosted, removing the requirement of having your own server hardware.

Conversely, MYOB Advanced is a true software as a service (SaaS)  system. This means that you do not need any server hardware or software. The software requires a good internet connection to access the system via a web browser such as Internet Explorer, Chrome, Firefox or Safari.

2. Purchase of Licenses vs Subscription

For access to MYOB Exo, businesses are required to purchase user licenses upfront and pay an annual license fee (ALF).

With MYOB Advanced, a monthly subscription is paid based on three different license levels that provide different functionality.Your implementation partner will guide you as to which licenses would be required for your business needs.

In both cases, the cost is related to the number of users and the functionality used. For example, if your business uses the Job Costing module, you will be required to purchase an MYOB Exo Job Costing license. If you have three people using the Job Costing module, you will be required to purchase three licenses.

3. Complexity and separation of duties

As businesses grow they become more complex, and more differentiated from their competitors. One-size-fits-all software (like MYOB Essentials or Xero) is suitable for smaller companies with simple needs. If your business is growing and your needs become more complex, it is worth considering software solutions that can cater to your requirements.

MYOB Exo is a highly configurable system. It can cater for complexity and differentiation. It requires consulting services to implement, as the system itself is too complex for the average user to configure themselves. Once configured however, it is very user friendly. The benefit of configuration is that your business processes become embedded in your software. This forces users to follow defined processes. Most small companies do not run in this way. Often, they are family businesses with a high level of trust between team members. Enforcement of processes is not a requirement.

MYOB Advanced has a more refined segregation of duties. This refers to the concept that more than one person may be required to complete a given task. MYOB Advanced is more robust in managing segregation of duties, if this is something your organisation requires.

When selecting software, a decision must be made based on trust versus separation of duties. In a trust-based organisation, separation of duties will be seen as an unnecessary constraint and will add a layer of bureaucracy to simple processes. In larger, more complex organisations, separation of duties becomes a requirement. MYOB Advanced is more suited to companies that require separation of duties.

4.   Industry or vertical fit

Historically, MYOB Exo has found its place in businesses dealing with inventory. Importing, warehousing, distribution and some retailing businesses have experienced massive improvements in efficiency using MYOB Exo. It also has very strong Job Costing which can be used for project costing. Manufacturing is somewhat limited, with bill of materials (BOMs) being the most common way of managing simple manufacturing or kitting.

MYOB Advanced is an extremely good fit for organisations that are dependent on their General Ledger to track costs and revenue. This means professional services organisations, government, semi-government or quasi-government agencies, not-for-profits and corporates are all good candidates for MYOB Advanced.

While MYOB Advanced has good functionality for inventory-based businesses, care should be taken when deploying this in organisations where separation of duties is not required (see point 3 above). MYOB Advanced is extremely suited to companies trading in multiple countries and in multiple currencies.

5.   Access to database and upgrades

MYOB Exo uses Microsoft SQL as the underlying database. What makes MYOB Exo unique in the midmarket is that your implementing partner has direct access to the SQL database. This means that customisation can include extra fields, stored procedures and triggers. If this is done in a disciplined and structured way, there is no detrimental impact when upgrading to the latest version of the software. The flexibility afforded by direct access to the SQL database also makes integration with other systems possible.

MYOB Advanced uses MySQL as the underlying database. The architecture of the software interposes a configuration layer between the database and the software. Direct access to the database is not provided. Integration must be done using the Application Programming Interface (API) provided. Upgrades are done in the SaaS environment and configuration changes are preserved in the interposed layer.

6.   Software Life Cycle

Product Life Cycle Stages

MYOB Exo was developed in New Zealand by Exonet in the 1990’s. It was way ahead of its time and was the first ERP system to use Microsoft SQL and Delphi. The product benefited from investment by Solution 6 and later investment by MYOB. The product would currently be classified as a mature product. The benefit of a mature product is that with large numbers of users, most “bugs” have been dealt with. A mature product is stable and has broad and deep functionality. The advent of the web and connected services has given mature software a new lease of life and the decline/end of life phase is unlikely to be reached within the next 10 years.

MYOB Advanced is distributed under license to Acumatica and MYOB is represented on the Acumatica board. Acumatica is the fastest growing ERP software in the world, and is the first ERP system designed for the cloud. It is relatively new and is currently in the launch/growth phase. Typically, software in this phase will have gaps in functionality. MYOB Advanced has been localised for Australian/New Zealand business conditions. As the number of users grows, one can expect that the functionality gaps will be rapidly closed. One of the big benefits of SaaS is that bugs can be dealt with quickly, and often without users even knowing that they have been identified and fixed. MYOB Advanced allows other cloud software solutions to be embedded. End users will not be aware that they have switched from using one piece of software to another. For example: While MYOB Advanced may be the core financial system, something like JAMS may be the manufacturing solution. This is embedded within MYOB Advanced and to the end user, it looks and feels exactly the same.

7.   Internet connectivity

Where a suitable internet connection is not available or where an immediate response time is required, SaaS systems are not an option. Internet connectivity in Australia is not always consistent. This is a primary consideration before choosing an ERP system. MYOB Exo can be run locally. Although some services within MYOB Exo do require an internet connection (for example, geolocations), these services are peripheral to the core and the system will function well without an internet connection. Where MYOB Exo is hosted in a data centre, the internet connectivity requirements will be same as MYOB Advanced.

Because MYOB Advanced is SaaS, it is hosted centrally via Amazon Web Services in Australia. By its nature, SaaS requires a fast internet connection. As data is being uploaded and downloaded, a synchronous internet connection is preferred.

8.   Multi company and general ledger

While the MYOB Exo General Ledger allows extensive customisation, there is a single control account for each of the sub ledgers (debtors, creditors and stock). This means that while a Profit and Loss statement (P&L) can be produced for each branch or division, it is difficult to produce a Balance Sheet for each branch or division. If a Balance Sheet is required, branches or divisions can be dealt with as companies, but this then requires intercompany consolidaton.

MYOB Advanced has a very flexible General Ledger structure. Multiple divisions can be catered for with both P&Ls and Balance Sheets. Multiple companies are also well handled with a smooth consolidation process. MYOB Advanced can manage multiple countries, multiple currencies and multi company requirements.