Whether pandering to their voting blocks, politicians in this election cycle often say that most innovation takes place in small businesses. Indeed, how many times have we heard a statement to the effect of “The entrepreneurial spirit is a critical part of the global workforce and gross domestic product”? Yet small to medium business (SMB)-driven innovation often gets overlooked, as large companies have much more marketing muscle and public interest. The same holds in the enterprise software space, where Google, IBM, Oracle, Microsoft, salesforce.com, Facebook, NetSuite, etc., first come to mind as the major technology innovators.
Not many think of Intuit Inc., a leading provider of business and financial management solutions for small and midsized businesses, as a tireless innovator. Perhaps many folks think that good accounting (well beyond a pocket calculator and spreadsheets) is not that innovation intensive? Yet, over the last several years, Intuit has met the challenges of innovating in an increasingly social, mobile, and global world, as the Gen Y workforce is coming into the accounting world with similar expectations of consumer-like simplicity for business software users. Brand new Intuit customers don’t usually think of going to, say, Staples or Best Buy, and buying a CD of accounting software and uploading it onto their PC. They live their lives on their mobile phone, tablet, and the Internet. That is where business software customers of the future will be.
Also important, this strategy is expected to put Intuit in the position of winning big in a connected services economy. “Connected services” is Intuit’s strategic vision to meet the needs of customers in an increasingly connected world (see Intuit’s blog post on innovation in connected services). If Intuit thinks about the 4 million of its QuickBooks desktop customers, here’s their typical problem: a person is sitting at home after dinner after having successfully put the kids to bed, and is thinking about his/her small business—but anything he/she wants to know about it is locked up 20 miles away in a hard drive in the office. Wouldn’t this person like to know which customers are in the area he/she is going tomorrow, what money the company owes, or what you still need to deliver to them? Intuit has thus developed a cloud services solution that links a company’s hard drive to the cloud.
Intuit Needs No Introduction, Yet . . .
Intuit is a leading developer of software used to simplify the management of personal finances (Quicken), small business accounting and payroll processing (QuickBooks), and consumer tax preparation and filing (TurboTax). Hence, Intuit’s customers include consumers, accountants, and small businesses—the company claims more than 60 million users of its products and services. The company’s other software offerings include industry-specific accounting and management applications for construction, healthcare, and retail organizations, as well as consumers.
Intuit also provides payroll services, financial supplies, and software for professional tax preparation, as well as products and services designed for financial institutions including banks and credit unions. For example, ProSeries and Lacerte are Intuit’s leading tax preparation offerings for professional accountants. Intuit Financial Services help banks and credit unions grow by providing on-demand solutions and services that make it easier for consumers and businesses to manage their money. Founded in 1983, Intuit reported an annual revenue of $4.15 billion (USD) in fiscal year 2012. The company has approximately 8,000 employees, with major offices in the United States (US), Canada, the United Kingdom (UK), and India, among other locations.
QuickBooks Online Goes Global
Not sure how many of you know that the QuickBooks Online offering was launched way back when in 2001, well before the advent of mainstream cloud computing of today (see press release). Intuit currently has 360,000 paying QuickBooks Online subscribers and is seeing enormous growth in the space—a 28 percent annual growth in QuickBooks Online customers, while QuickBooks Mobile users tripled over the past year. Pricing ranges from $12.95/month for the Simple Start edition to $64/month when users integrate Payroll. Detailed pricing is outlined here. Some of the product’s competitors are Sage One, Intacct, and Xero.
During the recently held Dreamforce 2012 conference organized by salesforce.com, Intuit made a couple of major announcements. The first one spotlights a new, global version of QuickBooks Online whereby small businesses globally (from Austria to Zimbabwe) for the first time can create localized invoices, pay bills, and track expenses. With QuickBooks Online becoming available globally, Intuit can now help the 29 million small businesses in the US, as well as the more than 500 million small businesses worldwide to effectively manage their operations and achieve financial success. More than 360,000 small businesses are currently using QuickBooks Online. Since the beta rollout of the solution in July 2012, small businesses in 130 countries have started using the affordable cloud product.
Participation-driven innovation is at the heart of the QuickBooks Online platform, which is built to be flexible so that customers can customize it to fit the needs of their businesses and their country. This allows nationals worldwide the opportunity to optimize QuickBooks Online with their home country’s currency, date, and number format as well as accounting scheme. Additionally, QuickBooks Online can handle sales taxes for any country, and includes a translation tool so that customers can use the solution in their home language. These capabilities should make QuickBooks Online truly specific to each country’s culture and way of doing business. Customer configuration, user-defined tax rates, and country-specific interactions should make a small business in say the Philippines feel like QuickBooks Online has been developed explicitly for their country.
Focused on the common needs of small businesses around the world, QuickBooks Online gives an intimate portrait of the business all in one place—allowing small businesses to focus on helping customers and growing their business. Through QuickBooks Online, small businesses can do the following:
The QuickBooks Online suite offers three different versions based on a small business’ needs: QuickBooks Simple Start, QuickBooks Essentials, and QuickBooks Plus. Costs start as affordable as $15 per month. The traditional QuickBooks Desktop release is also doing well—it retains more than 90 percent of the retail market share. While Intuit offers a range of QuickBooks products, including Enterprise Solutions, which is designed for larger small businesses, it generally focuses on companies with fewer than 100 employees. Customer relationship management (CRM) integration for the Desktop release is available through third-party developers (see the list). Salesforce.com integration for QuickBooks is built on the Intuit Partner Platform using Intuit Data Services, while the integration is using application programming interfaces (APIs) that are made available by salesforce.com.
Connected Services Add Tremendous Innovation and Value
Immediately before Dreamforce 2012, Intuit also announced an updated connected services strategy. Intuit’s commitment to harnessing the power of many, which is part of the company’s evolving connected services strategy, was outlined by Intuit chief executive officer (CEO) Brad Smith at the company’s annual Investor Day in mid-September 2012. Like virtually everyone else in the enterprise software world, Intuit has come to appreciate that it is operating in a world where no one alone can solve all of its customers’ problems. Thus, the vendor is finding new ways to open its products and platforms so that customers and third-party software developers can help it add value to its products around the clock.
Just 4 years ago, about 17 million people used products hosted on Intuit servers, contributing about half of the company’s revenue. Today, 45 million customers rely on Intuit’s connected services offerings, generating almost two-thirds of the company’s revenues. This should be a strong evidence of Intuit’s rapid and successful transformation into a leading provider of cloud-based services. Validating this strong position, Smith shared details of the strategy at Intuit’s annual Investor Day, which also included presentations from chief financial officer (CFO) Neil Williams and several business segment leaders. At the event, the company also reaffirmed its full-year and first-quarter guidance for fiscal 2013.
Intuit’s assets, ecosystem, and innovation engine position the company well to take advantage of emerging market trends—an increasingly borderless world, the increased prevalence of mobile devices, and the scalability of the cloud—to continue solving the unmet needs of small businesses and consumers. Intuit’s evolving growth strategy includes the following three-pronged approach:
1. Awesome Product Experiences
Intuit remains committed to its heritage of customer-driven innovation and creating an entrepreneurial environment where small teams innovate to delight customers, Smith said. Intuit estimates that more than $100 million (USD) revenue in fiscal 2012 came from products that didn’t exist 3 years ago—a 10-fold increase from 2 years ago. Awesome product experiences drive active use and positive word of mouth—the company’s No. 1 source of new customers. As part of this effort, Intuit plans to create more stand-alone mobile applications. Two current mobile innovations are as follows:
2. Enabling the Contributions of Others
The second strategic element includes tapping into the innovations and contributions of customers, partners, and third-party developers. The company looks to address new customer problems and personalize and localize customer experiences better and faster. Current and new examples include the following:
3. Using Data to Create Delight
The value of connected services is increasingly found in the data and connections it creates to deliver breakthrough benefits for customers. The third strategic element includes harnessing the collective data that flows through Intuit’s ecosystem. Building on this, Intuit aims to deliver data-driven insights that empower individuals and small businesses to save time and money and make meaningful changes in their financial lives. Examples include the following:
Intuit has vast opportunities to deliver targeted recommendations based on an individual’s financial behavior, and big data can become the great equalizer for the little guy. All of Intuit’s data-driven innovations are built on a strong foundation of privacy, security, and customer choice. Intuit has been implementing the safest and most secure ways to work with consumers’ intimate financial information for nearly 30 years.
Intuit Partner Platform at the Core
Most recently, Weave, a free SMB productivity app from Intuit, is now available in the Apple App Store with a 4.5-star rating (see here). Weave is the latest example of Intuit using Lean Startup methodologies (see here) and mobile customer–driven innovation in product development. Over the past 2 years, the Weave team has worked closely with very small businesses to better understand the challenges they face—even if they were not quite ready for a full-fledged application such as QuickBooks Online.
Weave offers similar functionality to apps such as Evernote (i.e., the family of products helping individuals remember and act upon ideas, projects, and experiences across all the computers, phones, and tablets they use), with the added bonus of expense tracking. Intuit is targeting very small businesses that want to monitor workplace activities as well as consumers who want to stay on top of life events and tasks. The tie-in here is how Intuit has been focused on customers (very small businesses) from the beginning of the development process. It’s a process that’s core to the vendor’s connected services strategy. For reference, Weave lets users do the following:
Other Showcased Offerings
At Dreamforce 2012, Intuit also showcased GoPayment, a mobile point of sale (POS) system that allows small businesses to accept credit cards wherever they go. Users download the free app and plug the free card reader into an Apple iPhone, iPad, or Google Android device to start accepting credit cards. The key differentiators from Square and other mobile payment processors that Intuit cites for GoPayment (which was developed in-house at Intuit) include the following:
Intuit hasn’t been shy to occasionally acquire some offerings as a supplement to its internal development and connected services. In 2007, Intuit acquired Homestead Technologies to offer Web site creation and e-commerce solutions to small businesses. SMBs see that marketing is rapidly moving to digital domains. The classic YellowPages books have gone away, and many small businesses have no idea how to get an online presence. Intuit recently sold Homestead Technologies to Endurance International Group (mentioned in earnings press release). The rationale here is that Intuit continually makes adjustments to deploy its resources to the highest-impact initiatives, keeping lean and focused on the biggest growth opportunities. The emergence of social media and new competition is shifting how small businesses think about their Web presence, and Intuit believes its customers will be better served by a company whose core business is in these areas.
In May 2012, Intuit acquired the Demandforce online marketing and communication product to bolster offerings that help small businesses attract and retain customers. While not being a lead nurturing and qualification offering compared with Marketo, Pardot, or Eloqua, Demandforce is a Web-based system that lets service businesses (e.g., dentists) communicate with customers, automate appointment scheduling, and enhance online reputation by automating online reviews. While it’s still early innings for integration with Intuit’s entire portfolio, Demandforce has 100 million customers and 1.6 million consumer reviews.
Six month after the acquisition, Intuit announced the integration between Demandforce and QuickBooks in November 2012. By using IPP, Demandforce can now automatically pull key customer and transaction data from QuickBooks. This access to customer information lets small businesses target and customize their outreach efforts. After transactions are completed and an invoice has been created, Demandforce automatically sends a “thank you” e-mail to capture consumer reviews and satisfaction survey data.
References and Recommended Reading
Why Intuit Really Wanted Demandforce. May 2, 2012.
Sage Analyst Day 2011: Not your Older Brother’s Sage – Part 2. April 7, 2011.
Intuit Resource Pages
Intuit’s Corporate profile—Lists core products, how the company thinks about innovation, and its Connected Services strategy.
Spring Innovation Gallery Walk—Showcases highlights from Intuit’s most recent event geared at analysts and media, where the company displays on-the-market products as well as upcoming prototypes and innovations.
Intuit Network—Blog discussing customer success and Intuit innovation and growth.
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Meeting Intuit at Dreamforce 2012 » The TEC Blog…