Quick off the Mark: Intuit Inc Acquires KDK Softwares
Intuit Inc. is a software company that develops financial and tax preparation software and related services for small businesses, accountants and individuals. We spoke to Nikhil Arora, Vice President and Managing Director at Intuit India, on the landmark deal and the growing sense of optimism among Indian businesses.
The Indian economy is currently going through an exciting phase of growth and development, with Small and Medium Enterprises (SMEs) especially experiencing exponential growth over the last decade. According to the latest reports by the SMB Chamber of Commerce and the Ministry of Micro, Small and Medium Enterprises (MSME), India currently has more than 48 million SMEs and Indian SMEs who have grown at a stable pace of 4.5% in the last 5 years. These SMEs contribute to more than 45% of India’s industrial output, 40% of the country’s total exports and create 1.3 million jobs every year. What’s more encouraging is that technology is a key catalyst fueling the growth of small businesses in India today. Furthermore, progressive small businesses are investing more in technology-based solutions, view technology as a business enabler, and are much more likely to expect revenue growth. As for technology, cloud, mobile management and social media are key trends impacting small business growth.
All of the above reasons highlight why Intuit have decided to invest in India, and Intuit maintain an optimistic outlook on the region. “At Intuit we are thrilled to be in India offering cloud solutions to small businesses and accountants, and contributing towards accelerating their growth,” says Arora. “The number of small and midsize businesses heading toward cloud services is expected to climb 20 percent between 2012 and 2016, as the workforce drops in age and more Indian companies embrace technology.
“It is this prevailing sense of optimism in the Indian business community helped us finance our deal. There is increasing popularity of online businesses among the masses, as well as the now widespread use of smart phones, cloud computing and funding to ecommerce models. Furthermore, positive media coverage on the Indian start up space have made smaller Indian players open to the idea of partnering with global players.”
Intuit are a company who create business and financial management solutions that simplify the business of life for small businesses, consumers and accounting professionals. Its flagship products and services include QuickBooks®, Quicken® and TurboTax®, which make it easier to manage small businesses and payroll processing, personal finance, and tax preparation and filing. Other products include Mint.com, which provides a fresh, easy and intelligent way for people to manage their money, while Demandforce® offers marketing and communication tools for small businesses. Furthermore, ProSeries® and Lacerte® are Intuit's leading tax preparation offerings for professional accountants.
With all of these products and services combined, Intuit had a revenue of $4.5 billion in its fiscal year 2014. Since being founded in 1983, the company has grown to include approximately 8,000 employees, with major offices in the United States, Canada, the United Kingdom, India and other locations.
India are Intuit’s first venture in the Asia Pacific region, which Arora wants to create an even greater presence in that region. “We commenced operations in India in 2005,” says Arora. “Today, we currently have more than 900 employees across offices in Gurgaon, Bangalore, Mumbai and Jaipur. Our commitment and investment in India is three-fold: to be the ecosystem behind small business success, to invest in Indian employees, and to learn from the best in India.”
Evidence of Intuit’s track record of expansion can be found with their flagship product Quickbooks. This product started its journey 25 years ago as a desktop product and a decade ago they introduced QuickBooks Online the cloud product. Today, Intuit QuickBooks is sold globally in markets like the US, Canada, UK, Singapore, Australia and India. It is now the world’s No.1 cloud business and financial management software for small businesses and accountants, with 1.5 million users in over 124 countries are using the cloud product.
Intuit launched QuickBooks in India in 2012, where they have continued to add even more users to their flagship service. “Since the launch of Intuit QuickBooks in India, we’re seeing some exciting results as it’s helping small businesses effectively manage their business finances and helping accountants to better collaborate with their clients,” says Arora. “In 2013 we introduced the all-new reimagined QuickBooks,–as the global small business operating system, and the new redesigned QuickBooks was unveiled at the QuickBooks Conclave 2013. This next–generation QuickBooks, available in more than 100 countries, provides small businesses and accountants with an intuitive, easy-to-use design and access to a robust, open and scalable platform that works anytime, anywhere.”
As a service that is leading the way in terms of delivering cloud business and financial management software, Arora explained why they are different from their competitors. “We rebuilt QuickBooks from the ground up to deliver a simple, yet powerful platform that goes beyond accounting and offers small businesses an unprecedented business management solution. QuickBooks is built to take advantage of the cloud, which means that small businesses can access their key business information anytime, anywhere on the go, and it’s positioned to connect with other services that small businesses rely on around the globe. Our slogan is that Quickbooks ‘allows small businesses to organize all their business finances in one place’ – enabling them to take quick and informed decisions: anytime, anywhere. For accountants - QuickBooks allows accountants to grow their practice by enabling better collaboration with their clients.
“In terms of Quickbooks’ availability in India, it is unlike any other solution currently available for small businesses and accountants. No other company has the simplicity of its design, its open and integrated platform, as well as it being tailored to your life and that you can access it anywhere, anytime, and through any device. It is a web based, easy-to-use, and exclusively designed to help small businesses spend less time bookkeeping and more time growing their business.”
As market leaders in various different countries, it is their acquisition of KDK Softwares that sets the stage for them to become the ecosystem behind small business success in India. KDK Softwares Private Limited are a market leader in providing professional tax solutions, and is a fast-growing company committed to providing reliable and cost-effective software solutions to Tax Professionals and small businesses throughout India. KDK Softwares, now part of Intuit India, has a customer base of over 20,000 accountants, which now means Intuit represent 1 in 5 registered practicing chartered accountants in India.
“We are excited to have gained the KDK Software management and team, whose experience and strong domain knowledge will enhance our capabilities,” says Arora. “Through this acquisition we are expanding our ecosystem of offerings by providing a simplified tax filing process for accountants, bookkeepers and their small business clients. We have witnessed that fifty percent of accountants’ time is spent doing taxes, with this acquisition and its integration with the popular QuickBooks, Intuit will be able to offer an end-to-end solution for accounting, tax computation and e-filing, thus saving valuable time. This will provide a seamless and collaborative tax filing solution for bookkeepers and accountants and their small business clients.
“The addition of KDK Softwares builds on Intuit’s QuickBooks small business ecosystem offering in India, providing a seamless and collaborative tax filing solution for bookkeepers, accountants and their small business clients. Furthermore, KDK Softwares brings the benefits of working with a partner with software skills, networking expertise, project management experience and domain knowledge in every aspect of statutory compliance.
“With this acquisition Intuit is today serving 1 in 5 practising chartered accountants in India. We have acquired 60 channel partners, who have presence across Tier 1 and Tier 2 cities in India. With the integration of tax e-filing with QuickBooks, we’ll be able to offer our users in India with a robust product portfolio that takes us one step closer to becoming the small business ecosystem service provider.”
The deal process involved exploring who the industry leaders were and the finalization of the target of both firms. Among the other commitments were preliminary discussions and signing of LOI, due diligence and valuation by a leading accounting firm, negotiations, signing of share purchase agreement, fulfilment of closing conditions and integration planning.
With such a landmark deal being done, a meticulous level of preparation and detail were adhered to throughout the entire process. “Our focus from Day 1 was on planning and ensuring a smooth on-boarding and early employee experience,” says Aurora. “This involved ensuring that the best practices in employee benefits were implemented, that the team moved to a new upgraded facility, and that employee engagement events are conducted in a mix of Hindi and English for emotional connections. The key objective was minimum disruption to existing business and winning hearts and minds of the target’s team, which is why a dedicated full time integration manager was hired for integration planning.
“As a global company, we have many function leaders based in company headquarters in Mountain View, California, USA. The deal required close coordination between Intuit’s India and US offices as well as with external legal advisors. We faced the typical challenges you would expect when a global company with 8000 employees acquires a regional player with 120 employees - differences in speed in decision making, multiple stakeholders, consensus building, cultural and geographic barriers.”
Looking towards the future, Arora’s vision is to build Intuit’s presence in India even further. “By 2020 we want 1 in 4 small businesses to be using Intuit products and services. We have invested a lot of time to learn and understand environment in which our customers operate. Moreover, we have brought our passion for innovation and solving customers’ challenges to India and are optimistic about the collaboration and new ideas generated within the country today.
“We are leveraging our proven methods for innovation through the follow me homes, where we observe customers at home or at work, and try to understand the behaviours, wants and needs of Indian small businesses. With our Quickbooks service, accountants are favourably recommending the product to their clients, as well as using it. We are seeing a 49% month over month growth rate in the product adoption by accountants. As a result, we are working on creating offerings to help address crucial pain points of India’s millions of small businesses which include: managing their business, get paid and pay others, and to find and retain customers.”
Alongside this acquisition, another important development for Intuit includes a strategic partnership with Paybooks, one of the premier and fast growing cloud based payroll providers in India, who will offer a comprehensive payroll platform for small business owners and accountants. “The reinvented Intuit QuickBooks will help users manage end-to-end payroll, benefits and compliances. With the payroll integration, Intuit QuickBooks will have a unique and fully integrated cloud based financial management solution with payroll capabilities focused on small businesses.
“At Intuit we are committed to solving challenges faced by small businesses and accountants in India by providing awareness, availability and affordability of technology to small businesses. As the market leader in cloud based financial solutions, we want to be at the forefront of the development of small business ecosystem. The company, with its global legacy, has institutionalized the process of propelling innovation internally and is creating platforms to bring the ecosystem together externally towards becoming a true partner for small businesses in India.
“Today we are providing financial management, professional tax and payroll solutions to small businesses and accountants. In the future we would be introducing inventory management, grow your business and payments software solutions in India. “
Company: Intuit Software Solutions Private Limited
Name: Nikhil Arora
Web Address: www.intuit.in
Address: Intuit India Software Solutions Pvt Ltd
Executive Center, 18th Floor, One Horizon Center, DLF City V, Sector 43, Gurgaon – 122003