2. SaaS HR Market Landscape in 2012
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 solutions!
pent-up sol tions!
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-
market i hi hl f
k t is highly fragmented.
t d
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’s
count, 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,
alone and nearly every solution provider launched several new offerings Now starting in 2012 large corporations including SAP and Oracle are
offerings. Now, 2012,
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.
8. Clients By Sector >2008
• Business Process Outsourcing (BPO) Healthcare Business Services (HBS)
Latin American Card Services (2003-current) GeBBS (2012–current)
Bradshaw Group (2011-current) HRAdvance (2008-2010)
US DataWorks (2012–current) Healthcare Coding Resources (2007-2008)
Polus Group (2011–current) ADPI (2003-2008)
Perquest (2007-2010)
(2007 2010) Certus (2002-2007)
( )
Alsbridge (2009-2010)
myCFOnetwork (2009–2010) Marketing Services (MSO)
Canidium (2011-current)
Human Resource Outsourcing (HRO) Novo (2011-current)
Bullseye (2011–current)
y ( ) HubSpot (2011–current)
(2011 current)
Sentric (2011-current) JDM Marketing (2007-current)
Achilles (2007-current) HRMarketer (2007-current)
Workstream Inc (2007-2011)
HRAdvance (2008-2010)
HRAmerica (2006-2008)
TalentTree (2005-2008)
IT Outsourcing (ITO)
SmartTime (2003-2008)
Extreme Technologies (2009-current)
Serenity (2008-2011)
BluWare (2011)
Institutional Funds Broadleaf (2011)
Glencoe Capital (2011-current)
Austin Ventures (2008-2010)
A ti V t (2008 2010)
CCGVP (2008-2010)
Baird Capital Partners (2005-2009)
Great Hill Partners (2008-2009)
CapStreet Group (2002-2008)
9. Ephor Group is a strategic advisory firm which helps our clients
(technology, VAR and outsourcing providers) create wealth by achieving their growth goals.
Benefits of our methodology approach
gy pp Ephor was created as an
(as opposed to traditional consulting, coaching or iBanking) includes alternative to traditional
our Methodologies and our Perform Model. consulting. We put our own
“skin in the game” and truly
Ephor Perform Business Process™ methodologies: work in the company’s interest
FlightPlan™ for GoToMarket ensures effective/efficient revenue strategy.
FlightPlan as part of our Perform Model
and we insource our
GrowthSTEP™ guides companies to their next plateau inclluding Methodologies to our clients.
Alliances, Distribution and/or M&A Corporate Development.
Ephor Group was founded as
Boardwalk Management Science™ provides Controls and Intelligence the “family office for Garry E.
family office”
and ensures optimum asset creation, monetization and value realization. Meier and other high net worth
individuals to provide
Read more about our methodologies online. advisory services to our
investments and portfolio of
clients.
Ephor Group’s approach is
Intelligence Controls Assets pragmatic, proven, and
•Market Research
•Landscape:
•Governance •Brand performance-oriented. Ephor
Boardwalk •Sources of Revenue
Competitive and
Buyers •Management
g •Insourcing approach
works with technology and
•Wealth Creation Science Reporting creates processes outsourcing providers. We have
Drivers •PayforPerformance
•Industry Comparables led, advised, and invested in
•Competitive
Intelligence
some of the most successful
•Pricing Intelligence business service companies
in the Americas.
10. Ephor Group Background
Garry E. Meier founded the Ephor Group in 2002 to apply the
performance methodologies and shareholder value processes
f th d l i d h h ld l
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
management and b
t d board l
d level expertise i our domain areas.
l ti in d i
Ephor Group focuses exclusively on technology enabled
outsourcing oriented business models specifically in the areas of
BPO, Human Resource Outsourcing, IT Outsourcing, Marketing
Services Outsourcing and Healthcare Business Services.
d lh
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.
11. Ephor Group Clients: A track record of results Solving the Value Equation.
Client engagements:
Brand Refresh and GoToMarket: Sentric (Workforce Management Technology)
Product Launch: ProBenchmark (SaaS) Polus Group (FAO) Bullseye (SaaS)
(SaaS), (FAO), Recent Client Accomplishments:
M&A Corporate Development: Serenity (IT MSP), Moderor (HRO)
Expansion: Bluware (Staffing), Novo (Call Center, Contact Center, BPO). • Grew provider from $1M to $9M in 18
months and then strategic investment
by Hewitt.
Board Advisory Clients:
Administrative & Transactional
Ad i i t ti T ti l Functional
F ti l • P j t oriented t
Projects i t d transactionall
ti
Outsource Int. (OSI) (HRO/PEO) Tandem/(OSI) (Recruiting & Staffing) business transitioned into recurring
Chairman/CEO 1998-2001 Chairman 1998-2001 solutions provider.
o Revenue: $480m Turnaround o Division Revenue from $180m to
o Exit: Divestiture of Brands $280m • Acquired add-on “book of business”
Strategic Buyer: TeamStaff o Exit: Financial Buyer: Cerberus which added additional revenues,
Strategic Buyer: Spherion
clients, and team members.
HR America (ASO) Talent Tree (Recruiting & Staffing)
Chairman 2002-2006 Chairman/CEO 2002-2005 • Received $2.56M in funding capital
o Revenue from $3m to $22m o Revenue from $90m to $145m
o Exit: Strategic Buyer: Gevity o Exit: Financial Buyer: Chrystal raise.
SmartTime Software (T&L Mgmt) HR Advance (Benefit Admin) • Rolled up $30M of p y service
p payroll
Chairman/Interim CEO 2004-2007 BOD Advisor 2008-2010 providers to create a national provider
o Revenue from $6m to $15m o Revenue from $9m – $19m
o Exit: Strategic Buyer: Kronos o Exit: Strategic Buyer: Hewitt/AON of “Workforce Management Solutions.”
Perquest (Payroll/WFM) Achilles (HRO) • Doubled staffing provider revenues
BOD Advisor 2007-2011 Chairman 2007-Current from $40M to $80M.
o Revenue from $4m to $19m o Revenue from $4m to $11m
o Exit: Strategic Buyer: ADP
E it St t i B o Exit: Current H ldi
E it C t Holdings
12. We Understand Technology and Since 2006, we conduct quarterly research
Outsourcing Firms. surveys on utilization and best practices for
technology and outsourcing buyers.
We also, interview 400 businesses every year to
Mid-Market
Mid Market Research Findings from 2011: determine the market landscape, forecast, and
opportunities.
landscape forecast
I. The demand drivers have shifted from license software to Defining the SME Middle-Market Buyer:
SaaS solutions, from cost savings to capability enabling The mid-market is significant as the table
solutions, and from functional specific to business-centric. illustrates the potential universe of SME & mid-
market employers with 50 to 10,000 full-time W-
p y ,
2 employees:
II. Utilization improving based on adaption of technology to
meet today’s work requirements (flattening span of control, TARGET Americas India & Asia Europe
(thousands) Middle East
global multi-location complexities, younger workforce,
Mid-market 100,000 10,000 25,000 100,000
mobile and contingent workforce).
What will satisfy the needs of the SME market is
III. Recurring oriented business models are the market leaders. simplifying the technology and functional
Portfolio and distribution key contributors to more efficient processes with a business-centric mindset.
model leaders.
The majority of businesses consider themselves
mid-market enterprises. They have multiple
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
approach coupled with industry vertical specific
h l d ith i d t ti l ifi
domain expertise.
By making the buying process easy, the long-
term profitability potential is great.
13. HRO Expertise
Processing & Administration
g Functional Support
pp
Payroll & Tax Recruiting & Staffing
Outsource International OSI/Tandem Staffing
Perquest Talent Tree
Work
Management:
Time & Labor
Labor, “Supporting the
Supporting Benefit Eli ibilit and
B fit Eligibility d
Productivity Mgmt. Needs of the Administration
Worker”
SmartTime Software
WorkPlace Solutions HRAdvance
Administrative Service Departmental HR
Organization (ASO) PEO Outsourcing
HRAmerica
HRA i Achilles
A hill
Synadyne
14. BPO Expertise
Processing & Administration
g Functional Expertise
p
SaaS Contact Center
ERP, Workforce Management Eligibility, Call Center
Administration
Point Solutions Platform Departmental Outsourcing
RPO, SPM, EPM
Financial, HR, Recruiting,
Marketingg
Administrative Services Advisory Services
Financial Administration
Payroll, AP, AR, Expense GoToMarket, M&A
Outsourced Billing and
Corporate Development,
Financial Reporting
Board Governance
15. “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 Alternative
Economic
Efficient
focus on key strategic initiatives (i e customer satisfaction) ”
(i.e. satisfaction). Distribution
Model
-Garry E. Meier, Ephor Group Founder
Star Performer
Calls to Action Capabilities
1. 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
revenues.
Getting started, we can discuss and share
insights regarding:
I. Star Performer Checklist to
Increasing Valuations for y
g your industry.
y
II. Revenue Growth and Expansion Plan.
III. Our Industry Investment Thesis for
your sector.