Acquisitive software group IRIS is getting ready to reveal its cloud integration platform and recently added to its growing collection of applications with the acquisition of Practice Engine.
Catering for mid-size, sophisticated practices, Practice Engine is a pioneering cloud-based practice management application with good reporting and API features.
After making a big splash with its 2018 acquisition of Taxfiler, IRIS took a much quieter approach to Practice Engine when it completed the deal in mid-March. Since then, the company has been running pretty much as before, but overseen by IRIS Software Group’s main board directors.
The value of the transaction was not revealed, and the latest full exemption accounts filed after the acquisition do not include turnover figures. The three departing directors took home dividends for the year to 30 September 2018 totalling £625,000, just over twice their annual remuneration. Their total reward package was roughly four times the previous year’s total.
According to its accounts, Practice Engine is engaged in “the design of electronic control and management systems for accountancy practices” and sees itself at the cutting edge of innovation in professional relationship management systems, investing substantial resources in research and development.
Practice Engine also has a subsidiary in the USA, opening a potential new front should IRIS seek to expand its footprint among international accountancy groups.
“Practice Engine is a feature-rich, large firm solution that will add value to our customers in that sector,” said IRIS Software Group chief marketing officer Nick Gregory.
Work has been progressing since the acquisition to connect Practice Engine to IRIS’s emerging web integration platform, codenamed Project Darwin. Invitations are now circulating among IRIS users to a launch event in London next month.
Project Darwin evolves
“Project Darwin will be the next generation IRIS cloud solution for practices,” explained Gregory. “This will give Practice Engine the ability to interoperate with the rest of the IRIS Accountancy Suite, so desktop practices can benefit from it too.”
The Practice Engine acquisition fits into IRIS’s two-prong growth strategy. While Taxfiler has captured a large share of smaller firms moving onto cloud-based compliance tools during the past year, IRIS has also been adding to its collection of applications more suited to larger practices including Star Computers (payroll) and Cascade HR, along with Hosted Accountants and several smaller developers producing apps for academies and schools.
As the founder of Cynare, Mark Ryan works as consultant integrating different tools for mid-size and large accountancy firms and has been watching the evolution of IRIS’s acquisition strategy over the past year or two.
“The shares were sold, but not much else happened,” said Ryan when asked about the latest deal. “IRIS is not interfering and the Practice Engine users I work with are relaxed about the situation. Some of them see Practice Engine as the best product and are confident IRIS won’t break it, while others have been saying the acquisition is a good thing. Everybody likes a small, family business, but established accountancy firms prefer the security and longevity that comes with a larger organisation.”
According to Ryan, the IRIS strategy is beginning to take shape. “While all the other major vendors are rewriting their suites for the cloud, IRIS is trying something different. They’ve bought some good, fully-featured products that slot into their cloud integration platform. That will give them a massive leg-up into the larger firm market. I respect the fact they’re trying something different.”
Project Darwin holds the key to this shift and fits into the latest wave of technology disruption within the profession, he added: “It’s not about accountancy any more. It’s all about providing a platform. Software companies that are sticking with the 1990s paradigm and moving that business model onto the cloud are part of the problem.”