SaaS HR Solutions Market Landscape Intro

SaaS HR Solutions Market Landscape IntroductionSaaS HR Solutions Market Landscape Introduction

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SaaS is growing fast! SaaS is a $21B global market in 2012 (Gartner). 83% of all companies expect to adopt SaaS (IDC).

There is pent p demand for HR sol tions!

SaaS HR Market Landscape in 2012

There is pent-up demand for HR solutions! HR systems is a $10B worldwide market, growing at

CAGR 8% to 22% depending upon module (Forrester). Versus the USA, European organizations have much lower

adoption of HR solutions integrated with payroll and benefits administration (61% vs. 92% in US organizations via CedarCrestone).

While the market for big companies is saturated with executives debating the merits of adopting/upgrading to SaaS, the biggest market opportunity for SaaS is the small business(more than a million registered businesses) and the mid-market (100,000 companies). Beyond the initial on-demand and affordability benefits of SaaS, adoption is accelerated by the availability of access/try/use additional products and services much like an app store. Also driving SaaS HR adoption is the growth and demand for bundled (multi-process, multi-function) outsourced solutions such as Workforce Management (WFM) and Human Capital Management (HCM). These outsourcing solutions represent a large market due to limited overall penetration in the small & medium sized businesses (~50% of all business). In secondary and tertiary markets, enterprise providers with their “bundled” outsource service offerings are not present. With this unsatisfied demand, there is an opportunity for accelerated organic revenue growth (18%-22% per year).

For larger enterprises, there is a short-list of software providers depending on whether a company opts for an ERP (business management system for enterprise resource planning), a core HRMS including the TM suite (talent management), and then adds-on “point specific solutions” to fit their unique needs. While the market for larger enterprises, has consolidated to a few dozen major global players, the small and mid-

k t i hi hl f t d market is highly fragmented.

Using EPM (Employee Performance Management), which is greater than a $1B worldwide market, as an example to show that the HR technology market continues to grow, consolidate and evolve, consider that EPM started as a stand-alone application and is now readily available as part of an ERP, part of an HRMS, or as a single application. In 2005, Gartner recognized 27 Performance Management Vendors. In 2009, by Ephor’scount, there were 60 vendors with specialized industry solutions with active clients, but in 2011 there were only 17 remaining that had a significant number of clients. Between 2010 and 2012, there were more than 30 major acquisitions in the talent management software market alone and nearly every solution provider launched several new offerings Now starting in 2012 large corporations including SAP and Oracle are alone, and nearly every solution provider launched several new offerings. Now, starting in 2012, large corporations including SAP and Oracle are focused on HR SaaS. The market demand for HR solutions, coupled with the deployment economics and profitability of the SaaS model, has triggered an industry consolidation. Now, there are only a few large corporate leaders with impressive technology and client lists; on the other end of the spectrum, there are small business startups looking to emerge.

During 2012, emerging technology providers capitalizing on new client demands (social goals, mobile, etc.) will start to solve the small business and global market gap.

Companies that adopt HR solutions:1. Outperform the competition based on key

Why SaaS HR?

comparables and financial benchmarks.

2. Have more flexible, resource efficient costs structures. Average annual HR administration expenditures per employee is greater than $1k for SMBs without a unified HR system versus less

Why companies are buying: 1. Self-Service for employee and manger

“consumerism” (i.e. access to information and tools).

SMBs without a unified HR system versus less than half that for enterprises with an HRMS (human resource management system).

3. Organizations that choose an ERP with HRMS based talent management approach outperform

2. People dependant Business Process Improvements core to operations.

3. Talent Management Processes and Automation (for example: Job & Career Management, or R iti & O b di )based ta e t a age e t app oac outpe o

with as much as 48% greater sales per employee than those choosing a best-of-breed talent management approach.

Recruiting & Onboarding).

4. HR Systems Strategy (HR Analytics, Social, Global, Mobile).

5 Enterprise Portal and Transaction Cost 5. Enterprise Portal and Transaction Cost Reductions.

6. Workforce Optimization (Job Management, Contingent Labor, Labor Costs Management).

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7. Upgrade existing solution.

Historically, the cost to implement, manage, and utilize a HR system based on a licensed software model has i hibit d th ti f th t Th

SaaS HR Buyer’s Guide

Criteria Feature/Factinhibited the routine use of these systems. These licensed software rollouts (non-SaaS systems) have additionally required mass customization and coding to fit workflow processes and end-user adoption has been limited due to expense. Today, there are a significant number of organizations that, due to performance

Criteria Feature/Fact1. Vendor Credibility

# of Customers Added Per Year with SaaSNotable ClientsNotable PartnersFinancial Stability

2. Client Fit

Verticals

Local Offices3. Technology Solution Fit

mandates and/or regulations, are now required to automate, standardize, document, and streamline processes and add support functions.

To date, the technology capabilities of these products have outpaced the adoption and use. In fact, the

gySaaS multitenant scalable platform with Workflow, Real-time Reporting, CRM. ConfigurabilityScalabilityEase of Interoperability (Integration)What vendors are integrated?Performance Management (see PM Feature Comparison)

Business Management ReportingGlobal CapabilitiesTalent ManagementERP (Enterprise Resource Planning)

SaaS Performance Management Application Providers

Provider A Provider B Provider C

HR Consulting Services Y - Enteprise Y - E & SMB Nothing beyond implementation support.

Performance Management Y - Enteprise Y - E & SMB Y - Enteprise

majority of implementations deployed have failed to fully utilize the entire suite of possibilities due to the complexity of both deployment and ongoing, routine use of these systems.

Today’s SaaS market leaders are known for: “The

ERP (Enterprise Resource Planning)4. Sizzle Features - What are the sizzle features? Compensation Planning, Baseball Card

WOW Sizzle Feature #1

WOW Sizzle Feature #25. Cost and Implementation Time/Resource Estimates - What is the ROI? What are the

Pricing ModelResults? How many projects do they start but not complete? Do they publish

S (S )?Methodology - What is the philosophy of the company? Does the process align ?Analytics and Reporting - What daily, weekly and monthly reports and metrics

ill i ? D i h 1 Cli k d hb d i bili i ?

Performance Management Y Enteprise Y E & SMB Y Enteprise

Goals Management Y - Enteprise Y - E & SMB Y - Enteprise

Collaboration Y - Enteprise Y - E & SMB Y - Enteprise

Automated Workflow Y - Enteprise Y - E & SMB Y - Enteprise

Employee Self Service Y - Enteprise Y - E & SMB Y - Enteprise

Manager Self Service Y - Enteprise Y - E & SMB Y - Enteprise

Best Practices Templates, Competencies Y - Enteprise Y - E & SMB N

T l t f M t i /D hb d Y E t i Y E & SMB Y E t iyBest Deployment and Service”, adoption by employees and constituents versus top-down roll-out; i.e. the need for a solution that works on-demand, and provides a series of add-on products and services to meet organizational workforce needs.

Cost-Benefit Analysis

Setup TimeImplementation Time to Implement Core

Training Time and CostsMonthly Average Cost

Total Cost Average Per Client for 3 YearsROI Expectations

Templates for Metrics/Dashboard Y - Enteprise Y - E & SMB Y - Enteprise

Learning Management System Y - Via Partners Y - E & SMB Y - Enteprise

Training Content Y - Via Partners Y - E & SMB N

Succession Y - Enteprise Y - E & SMB Y - Enteprise

Surveys Y - Enteprise Add-On Y - E & SMB Y - Enteprise

Communications Y - Enteprise Y - E & SMB Y - Enteprise

Org. Chart Y - Enteprise Y - E & SMB Y - Enteprise

© 2012 Ephor Group | 1 (800) 379-9330 | www.ephorgroup.com

Contact a professional to put together a specific ROI assessment for your organization.


Career Management N Y - E & SMB Y - Enteprise

Talent Management Y - Enteprise N Y - Enteprise

Strategies for Growth in 2012

© 2011 Ephor Group | 1 (800) 379-9330 | www.ephorgroup.com | 5353 W Alabama Suite 300 | Houston, TX 77056

Portfolio optimize everything! Lead sources channels product mix etc

Revenue Strategies for Growth in 2012

Portfolio optimize everything! Lead sources, channels, product mix, etc.

Create “Star Performer Targets” and manage to! If what gets measured gets improved; then what gets measured and discussed certainly gets i d f t E il h [ t] h f i d t bl improved faster. Email ephor[at]ephorgroup.com for industry comparables.

Forget everything you learned about traditional “feet on the street” sales models.

Create employee-centric solutions and focus on utility.

By definition, your sales prospects are online. Savvy online marketing must become the norm.

Create Fan communities. Don’t market or sell products or services. Sell


Create Fan communities. Don t market or sell products or services. Sell solutions that solve highly segmented, highly valuable client for life value propositions.


Garry Meier founded the Ephor Group in 2002 to apply the strategic and performance improvement

Ephor Group Overview

y p p pp y g p pmethodologies and shareholder value processes to emerging companies, which Garry and his associates developed over the past three decades, as a result of their strategic management careers.

We are an experienced, highly effective, and results-driven team that focuses exclusively on technology enabled outsourcing oriented business models specifically in the areas of Healthcare Business Services, e ab ed outsou c g o e ted bus ess ode s spec ca y t e a eas o ea t ca e us ess Se ces,BPO, Human Resource Outsourcing, IT Outsourcing, and Marketing Services Outsourcing

Our focus and approach, coupled with Ephor’s knowledge of the institutional investment arena, allows us to identify and develop organizations that enjoy value propositions which can satisfy future demand curves and investment returns that outperform the market.curves and investment returns that outperform the market.

Ephor Group creates wealth for our financial partners and operating companies by developing or transforming the existing business model into an emerging platform or sector impact participant. Often by increasing strategic and business model effectiveness; organizational efficiencies; developing brand equities; enhancing product and distribution venues; creating scalable service delivery constructs; all equities; enhancing product and distribution venues; creating scalable service delivery constructs; all combined with a measurement and metric centric management process.

Mission: Provide the skills, resources, and methodologies to enable emerging outsourcing businesses to achieve their growth objectives


Clients By Sector >2008• Business Process Outsourcing (BPO) Healthcare Business Services (HBS)Business Process Outsourcing (BPO)

Latin American Card Services (2003-current) Bradshaw Group (2011-current) US DataWorks (2012–current) Polus Group (2011–current) Perquest (2007-2010)

Healthcare Business Services (HBS) GeBBS (2012–current) HRAdvance (2008-2010) Healthcare Coding Resources (2007-2008) ADPI (2003-2008) Certus (2002-2007)Perquest (2007 2010)

Alsbridge (2009-2010) myCFOnetwork (2009–2010)

Human Resource Outsourcing (HRO) Bullseye (2011–current)

( )

Marketing Services (MSO) Canidium (2011-current) Novo (2011-current) HubSpot (2011–current)y ( )

Sentric (2011-current) Achilles (2007-current) Workstream Inc (2007-2011) HRAdvance (2008-2010) HRAmerica (2006-2008)

HubSpot (2011 current) JDM Marketing (2007-current) HRMarketer (2007-current)

IT Outsourcing (ITO)TalentTree (2005-2008) SmartTime (2003-2008)

Institutional Funds Glencoe Capital (2011-current)

A ti V t (2008 2010)

IT Outsourcing (ITO) Extreme Technologies (2009-current) Serenity (2008-2011) BluWare (2011) Broadleaf (2011)

Austin Ventures (2008-2010) CCGVP (2008-2010) Baird Capital Partners (2005-2009) Great Hill Partners (2008-2009) CapStreet Group (2002-2008)

Ephor Group is a strategic advisory firm which helps our clients (technology, VAR and outsourcing providers) create wealth by achieving their growth goals.

Ephor was created as an Benefits of our methodology approach Ephor was created as an alternative to traditional consulting. We put our own “skin in the game” and truly work in the company’s interest as part of our Perform Model

gy pp(as opposed to traditional consulting, coaching or iBanking) includesour Methodologies and our Perform Model.

Ephor Perform Business Process™ methodologies: FlightPlan™ for GoToMarket ensures effective/efficient revenue strategy. as part of our Perform Model

and we insource our Methodologies to our clients.

Ephor Group was founded as the “family office” for Garry E.

FlightPlan for GoToMarket ensures effective/efficient revenue strategy.

GrowthSTEP™ guides companies to their next plateau inclludingAlliances, Distribution and/or M&A Corporate Development.

Boardwalk Management Science™ provides Controls and Intelligence the family office for Garry E. Meier and other high net worth individuals to provide advisory services to our investments and portfolio of clients.

and ensures optimum asset creation, monetization and value realization.

Read more about our methodologies online.

Ephor Group’s approach is pragmatic, proven, and performance-oriented. Ephor works with technology and

Intelligence•Market Research•Landscape: Competitive and Buyers

Controls•Governance Boardwalk

•Management

Assets•Brand•Sources of Revenue•Insourcing approach

outsourcing providers. We have led, advised, and invested in some of the most successful business service companies in the Americas.

Buyers•Wealth Creation Drivers

•Industry Comparables•Competitive Intelligence

•Pricing Intelligence

gScience Reporting

•PayforPerformance

•Insourcing approach creates processes

Garry E. Meier founded the Ephor Group in 2002 to apply the f th d l i d h h ld l

Ephor Group Background

performance methodologies and shareholder value processes Garry and his associates developed over the past three decades.

We are an experienced, highly effective, and results-driven team that combines over 150 years of domain, functional, strategic

t d b d l l ti i d i management and board level expertise in our domain areas.

Ephor Group focuses exclusively on technology enabled outsourcing oriented business models specifically in the areas of BPO, Human Resource Outsourcing, IT Outsourcing, Marketing

d l hServices Outsourcing and Healthcare Business Services.

Our focus allows Ephor to identify and forecast unsatisfied outsourcing demand curves for the future. As a result, we identify organizations that provide value propositions that can satisfy the future demand curves.

Ephor Group creates wealth for our financial partners and operating companies by developing or transforming the existing business model into an emerging platform or sector impact participant. Often by increasing organizational effectiveness and efficiency, adding product and distribution venues, creating scalable service delivery constructs, all combined with a measurement and metric centric management process.

Ephor Group Clients: A track record of results Solving the Value Equation.

Recent Client Accomplishments:

Client engagements: Brand Refresh and GoToMarket: Sentric (Workforce Management Technology) Product Launch: ProBenchmark (SaaS) Polus Group (FAO) Bullseye (SaaS)

Ad i i t ti & T ti l F ti l

Recent Client Accomplishments:

• Grew provider from $1M to $9M in 18 months and then strategic investment by Hewitt.

P j t i t d t ti l

Product Launch: ProBenchmark (SaaS), Polus Group (FAO), Bullseye (SaaS) M&A Corporate Development: Serenity (IT MSP), Moderor (HRO) Expansion: Bluware (Staffing), Novo (Call Center, Contact Center, BPO).

Board Advisory Clients:

Administrative & Transactional FunctionalOutsource Int. (OSI) (HRO/PEO) Chairman/CEO 1998-2001

o Revenue: $480m Turnaroundo Exit: Divestiture of Brands

Strategic Buyer: TeamStaff Strategic Buyer: Spherion

Tandem/(OSI) (Recruiting & Staffing) Chairman 1998-2001

o Division Revenue from $180m to $280m

o Exit: Financial Buyer: Cerberus

• Projects oriented transactional business transitioned into recurring solutions provider.

• Acquired add-on “book of business” which added additional revenues,

Strategic Buyer: Spherion

HR America (ASO) Chairman 2002-2006

o Revenue from $3m to $22mo Exit: Strategic Buyer: Gevity

Talent Tree (Recruiting & Staffing) Chairman/CEO 2002-2005

o Revenue from $90m to $145mo Exit: Financial Buyer: Chrystal

SmartTime Software (T&L Mgmt) HR Advance (Benefit Admin)

clients, and team members.

• Received $2.56M in funding capital raise.

• Rolled up $30M of payroll service Chairman/Interim CEO 2004-2007

o Revenue from $6m to $15mo Exit: Strategic Buyer: Kronos

BOD Advisor 2008-2010o Revenue from $9m – $19mo Exit: Strategic Buyer: Hewitt/AON

Perquest (Payroll/WFM) BOD Advisor 2007-2011

o Revenue from $4m to $19mE it St t i B ADP

Achilles (HRO) Chairman 2007-Current

o Revenue from $4m to $11mE it C t H ldi

p p yproviders to create a national provider of “Workforce Management Solutions.”

• Doubled staffing provider revenues from $40M to $80M.

o Exit: Strategic Buyer: ADP o Exit: Current Holdings

We Understand Technology and Outsourcing Firms.

Mid Market Research Findings from 2011:

Since 2006, we conduct quarterly research surveys on utilization and best practices for technology and outsourcing buyers.

We also, interview 400 businesses every year to determine the market landscape forecast and Mid-Market Research Findings from 2011:

I. The demand drivers have shifted from license software to SaaS solutions, from cost savings to capability enabling solutions, and from functional specific to business-centric.

determine the market landscape, forecast, and opportunities.

Defining the SME Middle-Market Buyer:The mid-market is significant as the table illustrates the potential universe of SME & mid-market employers with 50 to 10,000 full-time W-

II. Utilization improving based on adaption of technology to meet today’s work requirements (flattening span of control, global multi-location complexities, younger workforce, mobile and contingent workforce).

p y ,2 employees:

What will satisfy the needs of the SME market is

TARGET (thousands)

Americas India & Middle East

Asia Europe

Mid-market 100,000 10,000 25,000 100,000

III. Recurring oriented business models are the market leaders. Portfolio and distribution key contributors to more efficient model leaders.

What will satisfy the needs of the SME market is simplifying the technology and functional processes with a business-centric mindset.

The majority of businesses consider themselves mid-market enterprises. They have multiple vendors complicated by changing business vendors complicated by changing business demands and evolving landscape, and lack efficient and effective processes and expertise to adequately fit their needs.

The ideal customer buys to simplify their business, while valuing the solutions based

h l d ith i d t ti l ifi approach coupled with industry vertical specific domain expertise.

By making the buying process easy, the long-term profitability potential is great.

HRO Expertise

Processing & Administration Functional Support

Recruiting & StaffingPayroll & Tax

g pp

Outsource International Perquest

Work Management:“Supporting the Time & Labor

OSI/Tandem Staffing Talent Tree

B fit Eli ibilit d Supporting the Needs of the

Worker”

Time & Labor, Productivity Mgmt.

SmartTime Software WorkPlace Solutions

Benefit Eligibility and Administration

HRAdvance

HRA i

Administrative Service Organization (ASO)

Departmental HR Outsourcing

A hill

PEO

HRAmerica Achilles Synadyne

BPO Expertise

Processing & Administration Functional Expertise

Contact CenterSaaS

g p

ERP, Workforce Management

Administration

Eligibility, Call Center

PlatformPoint Solutions

RPO, SPM, EPM

Departmental Outsourcing

Financial, HR, Recruiting, Marketing

Administrative Services

g

Advisory ServicesFinancial Administration

Payroll, AP, AR, Expense GoToMarket, M&A Corporate Development, Board Governance

Outsourced Billing and Financial Reporting

Economic Efficient Alternative

Distribution

“In 2012 and beyond, wealth will be created for those unique revenue models, that are the most economically efficient, promote and excel at owing their communities, and focus on key strategic initiatives (i e customer satisfaction) ” Model

Star Performer Capabilities

Distribution

Calls to Action

focus on key strategic initiatives (i.e. customer satisfaction). -Garry E. Meier, Ephor Group Founder

CapabilitiesCalls to Action1. Have a Market Validated Growth Strategy.

Focus on expansion via a portfolio of products and revenue sources.

2. Do Not Accept Mediocrity. Mediocrity Promotes Failure! Contact us, when you need interim help, from

a Chief Marketing Advisor or Chief Strategy Officer, as there are proven, pragmatic methods for expanding revenues pragmatic methods for expanding revenues.

Getting started, we can discuss and share insights regarding: I. Star Performer Checklist to Increasing Valuations for your industry. g y y

II. Revenue Growth and Expansion Plan.III. Our Industry Investment Thesis for your sector.

SaaS HR Solutions Market Landscape Intro

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Transcript of SaaS HR Solutions Market Landscape Intro