Intuit’s focus for their “next chapter of growth” is on two strategic areas: To be the “operating system behind small business success” as well as to“do the nation’s taxes in the U.S. and Canada” (Intuit President and CEO Brad Smith, fourth-quarter fiscal 2013 conference call remarks). What exactly does that mean? Can Intuit actually pull this off?
The graphics shown in this article are taken (with permission) from the presentations at the Intuit VIP Accounting Professionals Summit made by Brad Smith, Jill Ward, Dan Wernikoff and Dan Maurer. Click on any image to see a larger version.
Taking Care of Business – the Intuit Business Operating System
On the business side of things (as opposed to consumer), Intuit provides more than just accounting software. They have payroll products, practice management products, professional
Intuit recognizes this as a problem, as well as an area for growth and expansion. They intend to resolve this by reworking many of their products to work together as a part of their “business operating system”, where the pieces all fit together and share information seamlessly.
On the left side of this diagram you have the business users and the areas that they are focused on: Manage the business, manage employees, grow the business. These are the key areas that Intuit focuses on. It’s not just accounting! A small business has to pay employees and keep in compliance with regulations. They also have to find ways to attract new customers and serve those that they already have.
On the right side you have the accounting professionals and the areas they are focused on: Manage the firm, manage their work, grow their clients. Practice
How does Intuit plan on making all of these pieces work together? It’s one thing to say that your goal is to do something in lofty, general terms. It is another to actually show how you will accomplish those goals. In Intuit’s case, the details of how they’ll do that aren’t entirely clear at this time, but we have some indications:
- Intuit has created the new “Harmony” version of QuickBooks Online (I think that they are trying to stop using the “Harmony” term, which is too bad). This created a new, cleaner, simpler user interface to QuickBooks Online, which is the accounting product that Intuit is emphasizing as their product for the future. You are going to see elements of this user interface replicated throughout many other Intuit products moving forward. We’ve even seen some of these elements being brought into QuickBooks Desktop, such as the left navigation bar (and the color shift to“Harmony Blue”) and similar graphical presentations such as the Income Tracker.
- Intuit has started releasing products that try to connect various Intuit products and services more seamlessly. Intuit Practice Management, for example, combines the client list from QuickBooks Desktop and Lacerte Tax. Another example, the new version of QuickBooks Online Accountant has an integration with Intuit Tax Online built in.
- Intuit is placing a strong emphasis on getting add-on developers to move to the QuickBooks API (what we used to call the IPP interface), trying to convince developers to abandon the older QuickBooks SDK in favor of the new interface, which should provide easier integration with Intuit cloud based products in the future. I believe (at least, I hope) that Intuit will be expanding the capabilities for add-on developers to work in the Intuit ecosystem.
As you can see in the center of this diagram, the focus is on QuickBooks Online(and QuickBooks Online Accountant). Intuit is clearly stating that their future is “in the cloud”. That isn’t a surprise, they’ve been saying that for several years now.
Virtual Office for Accountants
Focusing on the accounting professional, what is Intuit doing help us manage our firms and make us more efficient? Their answer is the Virtual Office (note, the names for this may change as the products are rolled out).
This is a suite of products that should work together, sharing data when needed, making it easy to navigate the Intuit world.
Most of these products are available now, but many still need work to create a uniform presentation of the products (the user interface) and to share data seamlessly.
We’ve seen some steps from Intuit in this direction already:
- QuickBooks Online Accountant provides you with a way to see your list of clients, to effortlessly open a client’s QBO file. You have additional processing capabilities that aren’t available to your client.
- Intuit Tax Online is more closely integrated with QuickBooks Online Accountant, so you can easily create a tax return for the client straight from QBOA.
- Earlier this year Intuit Practice Management was released – an early version of a product aimed at aiding accounting professionals manage their firms. One of the key features here is the concept of the “common client list”, where the program is trying to present you with a single client list that manages clients you have in both QuickBooks Online as well as Lacerte tax preparation.
One of these components (Homebase) isn’t publicly available yet, but we should be seeing more about this very soon. This product is being beta tested now.
As you can see from this screen shot from an early beta version, the user interface has the same general look and feel that was introduced with QuickBooks Online. In the left navigation bar you have links for accounting (should be QuickBooks Online Accountant), tax preparation products, practice management, and more.
Intuit’s Future is In The Cloud
Anyone who has been watching Intuit for the last few years knows that their emphasis is swinging towards the cloud. Go to the QuickBooks website, all you see is QuickBooks Online unless you dig in deeply. At every conference and major presentation, Intuit tells accounting professionals that they need to be looking at QuickBooks Online.
Here’s one slide that Intuit presented about how things are shifting towards the cloud for Intuit. At first, I was a bit confused by this, as it seems to be saying that the number of QuickBooks Desktop users is growing, which isn’t the case. However, what they are showing here is a measure of the number of clients that are connecting to the Intuit Cloud in some way. Obviously, QuickBooks Online users are connecting to the cloud, and that is an area of growth for Intuit. As for the QuickBooks Desktop component of this, what this is showing is that there is a growing number of QuickBooks Desktop users who are connecting to the Intuit Cloud. That is, desktop users who are using Sync Manager to push their data to the cloud so that other programs can access it, as well as (I’m guessing) users who are connecting with “connected services” such as Intuit PaymentNetwork.
As you can see in the information they have published in their fiscal year 13 fact sheet, Intuit is showing a steady decline in QB desktop units (Pro and Premier) sold over the period of 2011 through 2013, countered by an increase in companies using QuickBooks Online.
QuickBooks on Every Platform
Here’s a portion of one of the Intuit slides that caught my attention, when talking about the “business operating system”. This graphic represents the “platforms” that QuickBooks business customers will be using, supported by the Intuit Business Operating System.
This is a vision of the future of Intuit business products. All working with the cloud, supporting many different devices and environments. There are many pieces here. Where will we be using QuickBooks and the related business products? Intuit’s vision is: Everywhere!
There will be support for different kinds of of tablets and phones. That makes sense – Intuit firmly believes that “mobile” is a huge part of the future, and I have to agree. So they intend to bring their products to tablets and phones, however that can be worked out. I don’t expect, for example, to see a complete accounting product on a smart phone (well, not for me at least, my eyesight isn’t good enough for that small of a form factor), but certainly you should be able to manage key aspects of your business via a smart phone. Tablets are growing rapidly, and you have more real estate available on the screen to provide information. These won’t just be “browser based” – people expect “native apps” written specifically for their particular phone or tablet. When I want to use my iPad for some task, I always prefer to use a native app over a browser, for a much better experience.
Global is a key part here. Intuit is working on moving into the global market in a big way. Currently Intuit is making a strong push to grow QuickBooks Online in markets outside of the U.S., with an emphasis on India, the United Kingdom, Australia and Canada. Hey, maybe we will eventually get multiple currency support in QBO US?
Intuit Apps and Other Apps – clearly Intuit will continue to create their own apps that work with the Intuit business ecosystem, but it gladdens my heart to see continuing support for add-on developers in their plans. They need to do a better job in this area, in my opinion (more on that in future articles). They are saying the right things in a broad sense, the key question is if they can provide a real, effective, affordable way to integrate add-on applications. Intuit may want to provide every feature that a business would want, but they won’t be able to by themselves. I certainly have a bias here, as I develop add-on applications myself – I firmly believe that a major aspect of being successful in this market is being able to provide an easy way for outside developers to integrate their products into the “Intuit business operating system”.
Browsers – of course, an online product is going to be accessible via browsers. The more they work with, the merrier. Of course, they have to be “modern” browsers that provide nifty features that programmers can use.
Here’s the big one that caught my eye – Windows and Mac are included in this graphic, separate from “browser”. What does that mean? Does this mean that QuickBooks (desktop) and QuickBooks Mac will be brought into the new vision? We have the Sync Manager utility to bring QB Desktop data into the cloud, but we haven’t had anything like that for QB Mac. And, quite frankly, I really dislike Sync Manager. Well, I don’t think that is what they are saying here. Although they continue to support QuickBooks Desktop and QuickBooks Mac, and there is a way to push QuickBooks Desktop data into the Intuit Cloud, I think that Intuit has other plans for the Windows and Mac desktops. I buttonholed Dan Wernikoff (Intuit Senior V.P., Small Business Financial Solutions Group) in one of the Intuit VIP Summit meetings to get clarification on this. What it COULD mean, according to him, is a desktop “app” that runs natively on a Windows or Mac system that works with the QuickBooks Online cloud database. This is NOT the same as the current QuickBooks desktop products. These would be separate, new products.
Think of how a native iPad app works that is accessing cloud data. You have an app that is written for the specific device (the iPad), it takes advantages of all the great user interface features that the device provides. Processing is fast because you are using the power of the local processor. However, that app is accessing, as seamlessly as possible, company data that is stored in the cloud. This is very different than Sync Manager now. Sync Manager “replicates” and “synchronizes” the QuickBooks desktop data with a cloud database that has a completely different structure than the desktop database. It is clunky and a pain to deal with, in my opinion. And, this is only possible with QuickBooks on Windows, not on the Mac.
What I think that Intuit is proposing here is a “hybrid” system that combines the best of both worlds- online access to your data as well as the processing power of the desktop system, with a user interface that is native to the product (so you aren’t running everything just through a browser, perhaps). I like that approach.
Of course, people who want to stick with their desktop app still have the option for QuickBooks Desktop products. Intuit has said, clearly, repeatedly, that QuickBooks Desktop will not be dropped
It’s Not Just QuickBooks (Intuit Growth Strategy)
I tend to be very focused – I work with accounting solutions like QuickBooks, QuickBooks Enterprise, QuickBooks Online and Xero. I don’t do tax returns for clients, I don’t work with payroll. Intuit, however, has a very broad scope, which is important to remember.
As I said at the beginning of this article, Intuit’s focus for their “next chapter of growth” is on two strategic areas: To be the “operating system behind small business success” as well as to “do the nation’s taxes in the U.S. and Canada”
It isn’t just about small business accounting. Intuit has a broad strategy that covers not only the small business market, but also the consumer tax market. For companies competing in the online business accounting market, this is unique.
And, looking at this slide from Intuit, you can see that accountants play a pivotal role as the foundation for BOTH initiatives.
Can Intuit do this? It is a very ambitious and wide-ranging plan. There has been talk of investments in the industry, with additional capital. I’m not a
Can They Do It?
This is a very large, expansive vision for the future of the company. Can they do it? Intuit is big enough, they have the tools and the financing. They have a vision. They have the market presence. However, none of that guarantees success.
Intuit has to deliver what they are promising. They have to bring to market working products that help consumers, small businesses and accounting professionals. These products have to work together. Data has to be seamlessly shared. The user interface needs to be simple and as uniform as possible across the products. They have to find a way to broaden the online products (like QuickBooks Online) to make them more robust so that they fit a wide variety of business situations, both by expanding their own list of features as well as by making it easy for third party developers to build products that that integrate well with Intuit products. They also have to expand the capabilities of their business products so that there is a uniform core that is available worldwide, AND that supports the increasing need for international commerce.
Can they do it? We’ll all be watching and waiting…