Head of Insight AccountingWEB
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Advanced consolidates around cloud financials

The acquisitive Advanced Group has re-emerged from a period of acquisition and product rationalisation with a two-prong cloud strategy to cater for its mid-market and enterprise accounting software users.

9th Oct 2019
Head of Insight AccountingWEB
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Cloud accounting goes mainstream
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Advanced grew out of from a mid-market consolidation project masterminded by software executive and financier Vin Murria during 2010-15. Founded in 2008 on the base of Cedar Open Accounts and Walker International (Elevon), Advanced grew through a series of acquisitions that brought Exchequer, Version One and numerous other finance, health, payroll and education systems into the fold.

At the time, executives said products like Exchequer and OpenAccounts positioned Advanced in a mid-market “sweet spot” above Sage, but below SAP and Oracle.

Since selling up to Vista Equity Partners in 2015, the company has realigned its structure and focused on unifying its product portfolio around “cloud-first” solutions. In August, Vista brought in a new minority investor, BC Partners, in a deal valuing the company at £2bn.

Advanced chief marketing officer Sally Scott called it the largest tech equity deal in 10 years and said it would help accelerate organic growth and further acquisitions. The company has launched 14 cloud solutions and completed six acquisitions in the past six months, she added.

While it continues to add to the portfolio, Advanced is now prioritising two cloud systems for finance customers, she explained. “CloudFinancials is for the upper-middle and enterprise market where it offers a path for OpenAccounts, e5 and eFinancials customers, particularly in local government and the NHS. Business Cloud Essentials sits alongside Exchequer in the lower mid-market,” said Scott.


CloudFinancials is based around the Cedar e5 financial management system and offers “huge enterprise-level functionality, delivered in a very simple way at a mid-market price”, according to Advanced product strategy director Amanda Grant. As well as public sector organisations, CloudFinancials can be adapted across multiple industry sectors including retail, distribution, and not-for-profit.

Business Cloud Essentials

The lower-level Business Cloud Essentials system has been developed from scratch as a proper cloud service product and is designed as a complete business management system covering finance, HR, sales management, purchasing, manufacturing, stock and distribution. Some of the sectors it covers include sports/leisure, transport and not-for-profits, said Mark Dewell, managing director of the company’s commercial/public sector ERP business.

“While we are famous for manufacturing, we’ve got a great opportunity to expand with a line of business solutions including ticketing, fundraising, and document management,” Dewell said. “Having real-time information with no silos and reducing the IT burden are all good messages for businesses looking to improve productivity without spending too much more.”

While Advanced is moving into cloud finance systems mainly with its new business prospects, product strategy director Amanda Grant emphasised that there was still a lot of demand for existing Advanced products like Exchequer. “Exchequer is a good product. We’re still investing in it and building cloud modules like MTD and Exchequer Mobile that complement it, so there’s a hybrid model developing around it. We’re taking [customers] on a journey to the cloud without the disruption of changing their core,” she said.

Responding to disruption

Where a software company like Advanced has built up a mixed portfolio of products through acquisition (see timeline below), it can maintain profitable revenue streams by supporting existing customers of legacy systems, but is less likely to challenge the market with exciting new developments.

It’s probably not a coincidence, for example, that Advanced was keen to tell us about its growing cloud portfolio after the news emerged that the original authors of Exchequer had come back on the scene with a mid-market cloud accounting system called iPlicit.

While the bookkeeping and small business accounting software market has been disrupted by cloud suppliers like Xero, data from AccountingWEB’s ongoing software survey shows that the mid-market for cloud accounting software has been a slow burn since the financial crisis.

The past couple of years saw steady growth for programs like AccountsIQ, ASage X3 and Oracle Netsuite. But this year’s survey turned up a larger number of older, desktop systems, hinting at the possibility that economic and political uncertainties have slowed investment in mid-market systems, as happened after the 2008 crash.

Mark Dewell said Advanced’s own estimates suggest the financial management software market was picking up, slightly more quickly in the lower end of his target market. “We’re working on the premise that the market will expand 7%, with perhaps the [upper] mid-market a bit back at 5%,” he said.

“Part of that growth is driven by cloud, but we’re not seeing a thump of tenders through the door saying, ‘We have to have cloud.’ The questions customers are asking are about agile delivery and ease of upgrades – how can they get an improved user experience quickly? Our answer is to offer cloud-based propositions for their organisation,” he said.

A gentle transition

Advanced is promising a “gentle” transition to the thousands of customers on its established financial systems. The product strategy is to focus on interoperability across product families, so that as one piece of functionality is created, it can be used on other systems.

“We’re not firing a gun and saying you need to move to cloud. We're giving choices to clients with the opportunity to plug and play with other cloud technologies before they graduate,” said Dewell.

“There’s a lot we can offer customers in all those markets. That makes us very resilient and able to cope with macroeconomic ups and downs.”

The Advanced software family tree

Nov 2001 - Elevon (formerly known as Walker International) acquires failed rival QSP's assets
Jan 2002 - Jon Moulton of Alchemy Partners mounts £4m rescue bid for ailing Cedar Group
Nov 2002 - Alchemy swoops for Elevon in £10m deal. Group renamed Arelon
Feb 2003 - Arelon and Cedar merged into Cedar Group
Jun 2004Cedar acquires OpenAccounts
Mar 2005 – Combined company renamed CedarOpenAccounts (COA)
Mar 2005IRIS acquires Exchequer
Jun 2007IRIS merges with Computer Services Group (subsequently rebranded as CSH)
Feb 2010COA acquired by Advanced
Mar 2013Advanced acquires CSH for £110m
Mar 2015Advanced acquired by Vista Partners, now valued at £725m
Aug 2019 – Vista Partners sells 40% of Advanced to BC Partners. Group valued at £2bn


Replies (1)

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By johnt27
10th Oct 2019 09:57

Interesting read. I have two clients using Advanced and they're looking to move away to alternate providers.

Both companies have struggled with recent upgrades being buggy which instead of being resolved adequately are being wrapped up in paid for upgrades. In the modern era of SAAS this is wholly inadequate.

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