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IRIS splits as Leuw steps down

2nd Mar 2011
Head of Insight AccountingWEB
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The accountancy software wing of IRIS has separated from the rest of the software group to become an independent business unit in a shake-up that also saw the resignation of Martin Leuw as group chief executive.

In a public statement, Martin Leuw  said, “After 10 years leading IRIS through a period of exceptional growth, I felt it was time for me to pursue other business interests and entrepreneurial opportunities.” He will continue to be involved with the business as a non-executive director.

Previously an executive in the health software industry, Leuw joined the accountancy software specialist 10 years ago and transformed it into a cross-industry combine. Through a series of acquisitions and eventual merger with Vin Murria’s Computer Software Group in 2009, he built the firm’s turnover up to £120m - making it one of the UK’s fastest growing companies.

But the transformation of the IRIS Group has not been without its growing pains, particularly for long-term accountant customers who may have felt the accountancy wing was being used as a cash cow to fund a diversification drive that put their interests on the back burner. Starting with a botched migration of the PAYEmaster (formerly Freeway) to Microsoft's .NET architecture in 2005-6, Drummohr, PTP and IRIS users over the years have complained regularly on AccountingWEB that product quality dropped as IRIS increased its prices.

While IRIS now leads Sage in terms of market share in the UK accountancy software market, Software Satisfaction Awards surveys since 2005 suggest it has lost its position as the supplier with the most satisfied customers.

The IRIS board took the opportunity of Leuw’s departure to reorganise the group, concluding that it can achieve better customer focus by formally separating the business into two, with IRIS Accountancy Solutions being run independently from IRIS Software Group.

Phill Robinson has been promoted from managing director of IRIS Accountancy Practice Solutions to become CEO of the new company, IRIS Accountancy Solutions. IRIS’s successes in recent years meant the company had to manage a more complex business model. The new structure, “allows us to have greater focus on customer needs”, he told AccountingWEB.

Customers won’t see a lot of difference immediately, but there are plans in hand to accelerate investment in next generation prods. “We are already exposing software as a service developments and we will continue to accelerate that,” said Robinson, who joined IRIS from Cloud computing pioneer Salesforce.com in January 2009.

With 14,000 accountant customers, IRIS has roughly half of the UK’s practitioners as customers. “Inevitably there’s a range of views,” Robinson said. “But we want everybody to be happy and encourage them to have a dialogue with us. We do listen and want to improve the quality of service and quality of the products.”

Already, Robinson said he had addressed product issues by putting in place software quality intitiatives for IRIS suite as well as the PTP and Drummohr programs. “There weren’t as many functional additions to the latest [IRIS] release, but there were a great many process improvements,” he said.

As well as the software as a server, Robinson also identified good prospects for growth in the corporate market, where companies were coming to IRIS for systems to deal with iXBRL-based corporation tax and statutory accounts efiling.

But Martin Leuw’s shadow continues to hang over IRIS. His financial adventures during 2005-09 were backed by private equity groups Hellman & Friedman and HgCapital. This kind of investor usually looks for an exit route after 3-5 years, so the question has to be asked whether the new structure makes it easier to sell one or both of the entities.

“The capital structure remains unchanged and provides a lot of support for our ability to grow the business,” Robinson answered. “If you are an investor who wants to realise a return and can see the continued growth opportunities ahead of us, you would probably maintain that investment.”

The other new company, IRIS Software Group, contains all the other IRIS units, including IRIS Exchequer (mid-range accounting software) and a collection of payroll and HR interests. IRIS Group chief financial officer Neal Roberts will head this firm while the search takes place for a full-time appointee.

In another change, IRIS will appoint a new chairman: Nick Discombe, an advisor to a collection of private equity-backed businesses who has been a non-executive director of the company since 2007.

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Replies (9)

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By BryanS1958
03rd Mar 2011 12:19

High Iris fees

It's great to know that my fees have been hiked every year by Iris to pay for other ventures which are of no interest/benefit to me!

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By blueskies
03rd Mar 2011 12:31

Hmmmm....

The Iris products we use are payroll (was Paye Master), Accounts Preparation, P11D's and Business Tax and Drummhor.

Both PayeMaster and Drummhor product quality and service offering has dropped since they were taken into the Iris fold. Prices has risen but in reality if perceived value was important to them then their prices should have fallen.  The original Iris products we use seem to have been pretty stable; though prices remain high.

One thing that we just cannot understand is why Iris were trying to move us from Drummohr to their own (original) personal tax program but not offiering an electronic migration path.  Always saying it might come along in the future.

To cap it all recently we were offered a price fix by Drummohr (Iris) to stay with them for three years but with no lock in!  We took them up on it.

Pecular / non-existing / mad (delete as appropriate) marketing strategy.

Will be interesting to see whether we are now sold further price increases on basis that service and product offerings will be better in future and therefore they deserve extra wonga now.

But in any event the thinking should be more joined up at their end.  But will they have the funds to make the necessary changes.  Ah that brings me neatly back to us paying more to get better. 

Funnily enough I used to have better, and cheaper, but that was before they all joined Iris! 

 

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By archie34
03rd Mar 2011 12:51

IRIS & PTP

As long as they continue with existing PTP tax return programs OK. The new PTP Accounts is a disaster - IRIS infuence ?

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By ROBB.CO.DNET.CO.UK
03rd Mar 2011 13:40

IRIS PTP

I was about to migrate to PTP Accounts production because of iXBRL.   Would Archie34 advise against this???????

Ken Robb

 

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By MarkAinley
03rd Mar 2011 13:48

Another above average IRIS price increase

I have just received my IRIS support invoice for the next 12 months. Yet another 6% increase. Last year was also 6%. I have queried this with them and they tell me that they have no discretion on the increase, citing iXBRL development costs as the primary reason for this. Does anybody else consider that the main iXBRL benefits are accruing to HMRC. I wonder how many other IRIS users are starting to reach the point where other products become attractive?

I have been with IRIS for 14 years and unfortunately have found that their customer support has become worse as their prices have increased above the general rate of inflation. I am also still using Payemaster. This year they wanted an 8.6% increase for the same product and support. 

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By BryanS1958
04th Mar 2011 10:12

IXBRL red herring - all software companies face the same changes

Iris are always blaming some change or other for the increase in prices - they have been doing it ever since I have subscribed! 

Of course there are costs involved with changes in legislation, but these should be more than covered by Iris's already hefty prices.  In reality many other competitors seem to be able to cope with the cost making the changes without feeling the need to pass on the cost by above inflation price rises.  Unfortunately, Iris users are having to pay the price of venture capitalist backing, the need to finance other ventures which are of no benefit to core accountancy users and the need to satisfy greedy shareholders.

Also, some Iris products such as Company Secretarial and Company Formations seem to be suffering from constant errors.  I should be benefiting from using a central database to quickly create and submit forms, but in many cases it is quicker and cheaper for me to just use an online formation companies or log directly on to Companies House and file forms there because the Iris programs crash or put incorrect data on the forms and I have to spend time making manual adjustments, etc.  Then I have to pay above inflation increases for the privilege!

 

 

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By MarkAinley
04th Mar 2011 10:38

Leaving IRIS

Hi BryanS1958,

Thank you for your post. Do I take it that you are now using a supplier other than IRIS? If so, how did you deal with all the historical data? Do you still have access to any of it and did IRIS provide some form of portal to access data without using their software for new work? Could you transfer the data to your new systems? I foresee some problems in this change.

Any suggestions you can make will be appreciated.

regards,

 

MarkAinley

 

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By markabacus
08th Mar 2011 18:19

Possible alternative

Hi

You could look at Absolute Accounting Software. Setup last yr by Tim Good & Co and based on Forbes system.

There are import tools available including PTP which I used as I migrated across from PTP. Not perfect but it did the bulk of the work, Accounts, SA, CT.

As for price, very competitive and currently running a 5 yr price fix.

http://www.absolutetax.co.uk/home.html

Mark

 

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By BryanS1958
09th Mar 2011 10:02

Iris service levels v price

I'm still with Iris, but I'm at a crossroads.  The product itself does the job most of the time, but it is just getting too expensive.  It also seems that the above inflation price increases are not being spent on improving reliability and service levels.  Yesterday I phoned support and had to wait 20 minutes in a queue, when the phone was eventually answered I was told that the delay was due to demand for support for IXBRL.  I would have thought that some of the above inflation increase could have been spent on more support staff!

There are also some issues on Company Secretarial e.g. having to manually amend dates before filing some forms and Company Formations crashing every time I try to file a new company, which have been around for quite a while and Iris do not seem to be in a rush to resolve.

I did try to change a few years ago to Digita, but that didn't work out because a) at the time Digita didn't even have an Income & Expenditure template and b) importing data from Iris was limited to standing data, not annual data and c) some of the functionality was not as good as anticipated.

Absolute looks as though it could be a contender, but not much feedback to say if other users who have switched from Iris are happy that they did so.

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