IRIS has acquired the payroll software Star Computers, which serves over 50% of the top 100 accounting firms.
The Star Computers acquisition enables IRIS to reach one million more UK employees, bolstering the Datchet-based software’s payroll and HR portfolio which already delivers 2,500,000 payslips every month.
IRIS CEO Kevin Dady proclaimed the deal as being an opportunity for IRIS to expand its Human Capital Management (HCM) portfolio and extends the company’s “ability to service every business in the UK”.
This deal takes IRIS a step in this direction as the Star Payroll Professional software is currently used by over 50% of the top 100 accounting firms and serves more than 75,000 organisations.
The long standing conversation between the two matured as the payroll software became more of a compelling complementary asset to IRIS’ broad portfolio of business software.
The first being the 2016 acquisition of Octopus HR where Star provides a good integration and common clients, but for accountants, Star complements IRIS payroll professional and offers another IRIS solution for those running more than 100 company bureaus.
“Star is the leader in that market,” IRIS CEO Human Capital Management Oliver Shaw told AccountingWEB. “It makes sense for us to combine the two together, which over time will allow us to create more efficiency and more value for those people running bureaus and payroll because we will have a real specialisation in that place.”
Star has built a varied customer base since it was developed in the 1970s and 1980s by David Blechner and Jack Schumann, focussing primarily on payroll bureaux, as well as commercial entities, financial institutions, public sector and not-for-profit bodies and education organisations.
IRIS has been building a footprint in the education space, specifically academies, with the acquisitions of PS Financials. It is this functionality around public sector pay that appealed to IRIS, and the ability to sell to that market.
This recent acquisition follows IRIS’ trend of supporting organic growth through snapping up UK business software, which over the years has included Kashflow, Keytime and forecasting software Gearshift (which IRIS rebranded last year as IRIS Insights).
IRIS’ spring acquisition spree picked up last month when the software house added parental engagement and truancy management software Contact group to its education portfolio which includes PS Financials, Result Squared and Parent engagement.
What was interesting about the PS Financial acquisition was how IRIS plans on repurposing the technology behind the education software. In October last year at IRISWorld, Sion Lewis, the CEO of the software company’s accountancy division, teased future plans of using PS Financial’s big data analytics for its accounting tools.
Like PS Financials, Star functionality will likely be combined into IRIS payroll professional, which serves organisations with one to 10,000 employees.
Shaw explained, for example, that both IRIS and Star are developing “module generic” tools that improve efficiency for a running a bureau, such as an automatic payroll feed that removes rekeying and handles reconciliation and reporting tools.
Although the long term plan is to likely bring Star within the IRIS stable and with that may come brand changes, Star users shouldn’t see any changes, as the payroll will continue to be run from its Brighton base
Shaw, who served as IRIS M&A director between 2013-2016, said the opportunity to increase quality solutions and solve customer problems continues to drive the software company’s acquisition penchant.
“We see there is a real benefit for our wider portfolio in acquiring either functionality or customers or some consolidation,” he said.
“If you take this transaction, I've now got 1000 customers through Octopus HR, and only 300 of those have payroll, I now have an ability to offer them a very integrated payroll tomorrow, which yesterday I couldn't do.”
Read more about the Star acquisition on IRIS’ Industry Insights page.
About Richard Hattersley
Richard is AccountingWEB's practice correspondent. If you have any comments or suggestions for us get in touch.