Exact scales back UK operation
Following a strategic review of its activities, Dutch software house Exact has decided to pull back from the UK.
News of the decision reached AccountingWEB via a message to third party developers that explained, “Last week we announced a refocus of our business strategy in some markets and this will also impact our approach in the UK.
“Here, we will focus on mid-sized firms and strategic accounts and de-emphasise our efforts at the low end of the SME market with our cloud products. With this in mind we remain focused on delivering our solutions to the UK, but this will be done via a select number of strategic accounts in the accountancy and reseller markets. Exact will stay present in the UK market and local support will be available for our customers.”
It is understood that there will be significant redundancies in the Exact UK operation and that marketing and technical support functions will be centralised at the company’s headquarters in Delft.
“If you look at the customer journey, nothing will change. The website is still there, the wizard to order a subscription is there,” said Exact international sales manager Oliver Constant.
“If a customer needs to know something about one of our industry solutions or services or needs some guidance or training or some consultancy services, our partners will provide them, so in a practical way nothing is changing. We have already been providing central support for the UK for many months, a year or two and this won’t change. This is provided in English and our customers won't see any differences. We continue working in the same way. It is fully transparent for the customer.”
It may not be a coincidence that the strategic review emerged two months after former IRIS chairman and CEO Phill Robinson took over as chief executive at Exact.
Feet on the street is less important with cloud software, and experience has shown that accounting software developers such as Sage, Intuit and Xero have been very successful at recruiting users through their networks of affiliated accountants and advisers. Robinson will have excellent contacts from his IRIS days through the network of mid-market firms with the clients and skills to support the more comprehensive Exact Online solution.
Exact Online is a serious bit of accounting software. It achieved a respectable Net Promoter Score of 63 in the 2017 Software Excellence Awards Enterprise category, where it came second to SAP Business One. And it was one of the few suppliers that crossed over from the small business (sub £1m turnover) bracket into the mid-market and enterprise category.
The other two applications that showed the same trait were Sage 50 and Xero, the two titans now fighting for the top spot in UK accountancy software.
Robinson will no doubt be aware of the scale and long-term costs of breaking through in the UK. While the cloud revolution has swept through the lower end of the accounting software market thanks to Making Tax Digital, the Software Excellence Awards showed that it has largely bypassed the mid-market.
The number of respondents in the enterprise category was a quarter of the small business turnout; where the count of Xero and Sage 50 survey respondents was in the hundreds, there were just a few score Exact users.
Firms like Wilkins Kennedy and MHA MacIntyre Hudson and other software resellers in the UK channel will now have to carry responsibility of broadening the Exact user base.
“It’s a brave move - they might have shot themselves in the foot by doing it,” said Wilkins Kennedy head of cloud and accounting software Simon Woodhams on Twitter. “It will be a wait and see how it works out.”
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