Solving The Value Equation

WFM Industry Snapshot

 

The market for workforce management is most commonly provided in conjunction with either payroll, HRTech, ERP or industry software. The scope of WFM capabilities have grown far beyond time punch clocks, expense, & scheduling to include a number of workforce job & management features.  

The WFM software market continues to grow in the single digits overall with selective double digit growth for select industries as the minimum needs for the middle market have evolved beyond time to include labor/job management. And by 2020, more than a third of the workforce will be non-traditional workforce: fractional, contingent, SuperTemps, contractors, nearshore/offshore or outsourced which presents opportunities for the WFM industry. 

The State of Demand for WFM by the Middle Market 

Effectively targeting the middle market requires industry leadership configurations and partnering with established industry sector leaders.

The opportunity for a platform to consolidate sub-scaled assets to create a scaled organization includes:

• Industry Vertical Markets
• Contingent Workforce Markets
• Global Markets

The scaled platform value is dependent upon the following maturity factors:  

• Packaging & Services: what to bundle and how to maximize gross profit (multichannel and BPaaS) by industry, channel and by market
• Technology platform capabilities: data analytics, multichannel, and BPO: buy vs. license vs. build

The investments in the above factors determines whom scales to a market leadership position, and enjoys “platform” consolidation capability and capacity.

 

The WFM Market Landscape 

Beyond market consolidation opportunities, there is a significant opportunity to sell additional WFM products and services as the market beyond core time administration is being fueled by the wave of consumerism and analytics.

 

The WFM Market Partner Ecosystems

Formal partnership programs are in place for nearly every software company above $50M. These formal programs are commonly supported by an online app exchange as well as joint use cases.

Within the Payroll, HRTech, PSA, ERP and Healthcare software markets, more than 80% of applications have 2 or more signed agreements with either time, or expense, or scheduling software. They are often missing the full capabilities of WFM as companies have partnered with payroll and talent management providers, for time, expense, and scheduling without comprehensive WFM capabilities.    

 

A Brief History of WFM Milestone Events

2018 – Plug and play via APIs, apps, marketplaces, and mobile devices beyond integrations becomes a market requirement.

2017 – WFM goes mobile and wearable: breaking free from the time clock.

2016 – Workforce Analytics becomes mainstream to optimize job and labor optimization.

2015 – Advanced Labor Scheduling for regulated and skilled workforces becomes common. 

2015 – The WFM industry embraces Mobile, Social, Analytics, and Apps.

2012 – SaaS HR acquired by Kronos which becomes the small business Kronos Workforce Ready Now platform.

2010 – The rise of Workforce Planning and Workforce Management Initiatives: 71% market adoption with 55% market use for optimization & analytics forward planning versus administration.

2007 – Info acquires Workbrain to fill HCM portfolio gap in workforce management.

2006 – SmartTime acquired by Kronos for workforce management solution. 

 

WFM Market Summary

Value-Proposition: WFM (Workforce Management) goes beyond core administration services such as payroll and  includes Time/Job/Work management, Expense, Scheduling, Labor Analytics & Optimization, and integrates with HR, HCM, ERP and industry specific solutions. Workforce management may includes all the activities needed to maintain a productive workforce, such as field service management, human resource management, performance and training management, data collection, budgeting, forecasting, scheduling and analytics.

Market Size: North American WFM >$1B, CAGR single digits.

Valuations: While HRTech valuation multiples remain attractive (for scaled enterprises 2 to 10X revenue multiple and 6 to 12X EBITDA multiple, for service bureaus private company valuations range more greatly with revenue multiples of  0.5X to 2X and EBITDA 2X to 6X. For pure play WFM vendors 1.5X to 10X TTM Revenues.

 

See also:

• Sierra-Cedar HR Systems 20th Annual report

• HRTech Workforce Management Sector Market Landscape

• Field Service Management Market Overview

• HCM Workforce Management SlideShare presentations 

300 sessions, 300 brands at the Microsoft Envision Conference April 4-6 in New Orleans

Microsoft Envision 2016 Conference Recap 

About the Conference "Designed for CxOs and their senior department and functional leaders, Microsoft Envision provides an opportunity for attendees to hear from some of the most forward-thinking minds in business and technology, with each day featuring prominent industry visionaries and business experts who will share the latest ideas, trends and innovations. Participants can explore the latest solutions, and discover the strategies that will help them, their teams, and their business achieve more," the company said.

The inaugural Envision event will take place on April 4-6 in New Orleans, La., replacing Convergence 2016, which had originally been planned for April 4-7. The old Convergence 2016 Web site now directs readers to the Envision 2016 site. Microsoft CEO Satya Nadella will deliver the opening Envision keynote.

Unlike Convergence, which was known for being Microsoft's stage to announce its Dynamics roadmaps and discuss new product features, Envision appears to be more focused on broader business topics. According to the Web site, Envision sessions will fall into three areas:

• Business trends and themes -- including Internet of Things (IoT), big data and analytics, cybersecurity, productivity, mobility, and more.
• Industry trends -- including Manufacturing, Retail, Financial Services, Public Sector, Consumer Packaged Goods, Hospitality and Travel, Professional Services, and more.
• Leadership growth in key business roles -- including sales, operations, IT, marketing, finance, customer service, and more.

Microsoft's major North America conference schedule for 2016 now stands as follows:

• Build: March 30-April 1
• Envision: April 4-6
• Worldwide Partner Conference: July 10-14
• Ignite: Sept. 26-30

 

Links & Sources:

https://rcpmag.com/articles/2016/01/13/microsoft-axes-convergence-for-envision.aspx

2016 Microsoft Conference Calendar

https://rcpmag.com/articles/2016/01/05/2016-microsoft-conference-calendar.aspx

HRTech HRMS Adoption Usage & Utility Market Landscape Update & Trends

In their latest annual report on HR technology software systems Cedar Crestone highlights deployment approaches, value, and metrics.

What’s driving HRMS spending & purchase decisions?

What is the breadth and depth of buyers adoption of HR / HRMS technology?

 

How satisfied are HRMS buyers?

How innovate are HR vendors / HR buyers?

The Bottom Line for HR Buyers:
Lack of business strategy and integration is why most organizations can’t produce data for decision making for managers!

The Bottom line for HRMS Vendors:
Provide easier to use integration tools!

 

Read more from the HRTech Conference here
or online at @HRTechConf

Cloud MSP Market Update 2013 from #WPC

During this week's Microsoft Worldwide Partner Conference, #WPC #WPC13 there was plenty of buzz about the growing market demand for cloud managed services. One of the most amazing stats shared during the presentations was that the spending for cloud services is equal to or greater than the spend for hardware and software. i.e. For every dollar spent on hardware and software there will be a dollar spent on services.

#WPC News & Highlights: 

• One in four of Microsoft’s enterprise customers has Office 365, and with an annual revenue run rate of >$1 billion Office 365 is on track to be one of the fastest growing businesses in Microsoft history.

• Microsoft has seen over 40% growth in enterprise cloud businesses. Windows Azure alone is outgrowing the overall cloud market by >150 points.

• Nearly 50 percent of employees indicated that using enterprise social tools has increased their productivity, and many employees stated they would pay for these technologies out of their own pockets!

• 89 percent of Microsoft's existing business customers are still not yet using any products in the Microsoft cloud (meaning primarily Office 365, Windows Azure, Windows Intune and Windows CRM). While about 30,000 of Microsoft's "managed"/largest customers across all geographies are currently annuity/subscription clients, the remaining 40,000 or so have no annuity relationship with Microsoft today, officials said.  LSP revenues grew in the double digits last year. Along with Microsoft's own salesforce, partners helped sell 11,000 new Enterprise Agreement volume-license deals last year, along with 8,400 volume renewals, officials told the LARs/LSPs today. http://www.zdnet.com/microsofts-top-eight-business-priorities-for-fiscal-2014-7000017844/

• CEO Steve Ballmer: "Cloud is the future of innovation. It’s the biggest growth opportunity for channel partners." Partners selling cloud-based solutions benefit from higher gross profit, at 1.6x percent; 2.4x new customers; 1.3x more revenue per employee; and 2.4x faster overall business growth.  Cloud OS Accelerate: Microsoft, with key partners Cisco, Dell, Hitachi Data Systems, HP and NetApp, will invest more than $100 million to accelerate the delivery of new privateand hybrid cloud solutions to customers. Effective Oct. 1, Microsoft will offer partners a 30% discount on Windows Intune. Microsoft cloud partner program changes looming

• Cloud MSP services is on pace to be 220B in 2014 and >500B by 2020 (Gartner).

  Worldwide business spending on cloud, which will reach $98 billion by 2016, according to a  new IDC study (44% in the USA). 82% of net new commercial apps will be developed specifically for the cloud in 2013. IDC Study: Successful Cloud Partners
  

Related links:

Video recaps from #WPC 2013.

Microsoft Partner Awards List.

Cloud Optimize Your Business from #MMS20 13 Microsoft Management Solutions Conference

Cloud MSP Service Provider Market Landscape

Selling Small Business in 2013 Effectively

Why focus on selling small business?

For many companies that have historically focused on selling to only large enterprises, the advancement of technology solutions and business processes has expanded the market opportunity to include medium sized mid-market businesses with 50+ employees. These companies represent a significantly large market opportunity.

 

Small Business Forecast

Small businesses do not expect the economy to return to the boom times anytime soon and are tempering hiring while focusing on areas to increase revenue growth and profitability.

Today’s small business buyer is more resilient, agile, operationally competitive, and perseverant than ever before. And that is the good news because economic growth has averaged less than 3% since the recovery.

Small businesses are a driving force behind the American economy (95% of American businesses are small businesses with fewer than 50 employees), but they are being forced to work more creatively and more efficiently than ever before because of the rising costs and complexities of doing business.

Cost of Running a Business $ Compared to Business Employee Productivity Chart:

 

Revenue growth and profitability challenges coupled with an uncertain economic future have fundamentally shifted small business priorities. Plus, the cost of doing business has increased due to increased regulatory compliance, healthcare and administration costs.

Additionally, the hirable workforce has shifted with the majority of workers being Millennials and a third of workers being “no-collar” workers. “No-collar” workers include contingent workers, 1099 contractors, agents, supertemps, stay at home employees, consultants, and free agents.

 

The Future Selling Small Business

Small and medium business has weathered the recession and re-optimized their business models to support consumer demands. In order to create profitability, however, businesses have to provide extraordinary customer care more efficiently.

Selling small business is often be a shorter sales cycle, but more complex because of the economic limitations and demands of the buyers. All size of businesses today utilize a committee buying process to review the economic ROI of any major purchase, outsourcing, or partner decision.

When focusing on small business, in addition to selling the value-proposition and ROI, it is important to understand the buyer including their preferences, buying transaction history, and persona segment. What satisfies the SMB buyer is simplifying their life while making them feel good about it. Everyone has pain, so step #1 is identifying the prospects’ primary business goal and their corresponding pains and then providing the best solution. Penetrating the SMB market requires a personalized customer experience for each buyer.

 

To start effectively selling small business, identify your segments and personas.

Small Business Personas:	Attributes & Description
New Mover	Champion of best practices. Technology capable. Not a founder, but an enabler of growth. 12 to 36 month work assignment stints.
Lifestyle	Slow to adopt radical changes. Focus on the long-term. Technology late majority adopter.
Serial Entrepreneur	An entrepreneur who continuously comes up with new ideas and starts new businesses. Has lots of unique ideas. Technology leader.
VC Backed	Highly skilled, professionally pedigreed and credentialed. Technology early adopter.
The Expert	Highly focused skill set. Professionally certified. Technology first mover or early adopter.
Community Organizer	Business for a higher cause, noble purpose. Both a leader and team player for decision making. Technology agnostic.
Conservative Young President Officer	Leader in business and the community. Technology majority adopter.
HiPo Gen Y (high potential)	Millennial. Entrepreneurship driven by community values. Technology early adopter.
Boomer Owner	Highly capable, interested in succession plan. 40% of family owned small business market.
The “Innovator”	Highly talented, entrepreneurial spirit

­

SMB buyers know that the primary source of growth capital is their operations profitability. To prosper, small businesses have to be more operationally efficient than their larger counterparts and competitors.

Small businesses share many common workforce attributes due to similar pressures from the economy and employees; however, these commonalities may create the temptation to create a single sales and marketing strategy. However, this would be a mistake. Each small business buyer expect a customized approach that shows sensitivity to their needs and business requirements.

For years, marketing and sales teams have been focused on multiple impressions and multiple points of contact, but this has never been as achievable as it is today. However, in the rush to find the next new thing, businesses cannot forget to capitalize on the successes of the past.

Over the past 20 years, few business processes have seen as much change as the outgoing sales process. For decades, the cold call was the first contact—often sent out from a call center in-house. Then, the nomenclature was changed to a customer contact center, but little actual change occurred.

The transition, throughout the sales process and in all interactions, has been to a greater focus on the solution. Who can provide the best care to the customer and how can that interaction be created? That is where the focus lies for the successful business. The next evolution for businesses selling in the SMB space will be as solution partners.

 

Managing revenues based on customer preferences using sales analytics is very trendy and topical in 2013. But the truth is that each “customer for life” will demand a personalized, quality experience that satisfies their needs. Cold calling is dead. Dialing for dollars is a legacy concept of the past and simply does not work in today’s Internet world. Pre-call research is a prerequisite to solution selling as customers want to buy and not be sold. A critical success factor is to know and understand the profile and preferences of your customers before the sales process initiates.  

Related: Sales Leadership Institute.org,  Creating a Customer Experience Driven Marketing & Sales Model Starts with Sales Analytics, Strategies for Growth Selling to SMB Buyers

2012 M&A Transactions Recap

We anticipate M&A activity to be quite robust during 2013.  Mergers and acquisitions in the software, information technology and BPO ... read more @ 2013 M&A Forecast & Landscape - The Value Equation -

2012 M&A Transactions Recap:

The Value Equation : CRM BPO Services 2012 YTD MA Transactions. Dec 2012 ... CRM BPO Services 2012 YTD M&A Transactions.

The Value Equation : 2012 YTD HR software MA transactions

Nov 2012 ... HR Software M&A Transactions 2012 YTD Recap The marketplace for workforce management software and related HCM (human capital services...

 

M&A eResources:

Baird M&A Market Analysis

Mergers & Acquisitions Trends (Tables) – CapTarget

EY Global Technology M&A Update

Grant Thornton M&A Update

Human Capital Services Report - Winter 2013

HydePark Capital

KPMG’s Sourcing Advisor Pulse

KPMG Merger Deal Stats by Region

M&A Industry Updates from Generation Equity Advisors

Merrill Corp. - M&A Insider (May 2012)

PE Breakdown - Q2 2012 (Merrill Corp.)
Peachtree Capital Advisors Blog

PEG M&A Updates

Software Equity Group SaaS M&A Transactions

Strategic M&A Analysis | M&A Sector Insights by Industry

StreetInsider M&A News

Thompson Reuters Global M&A Report - Q2 2012

Top Tech M&A Deals in 2012

VC Backed Investments and Exits - National Venture Capital Association

Venture Deal Alert Blog

Venture One Million Blog

Useful Growth Capital M&A Corporate Development

Are you seeking sales?

If you are in Houston on May 17th, join us for the upcoming TeXchange event with special focus on sales and marketing revenue growth tactics that are working in this slow growth economy.
(to attend email us and we’ll add you to the guest list)

Panelists will include:

• Mr. Colby Thames, a greater Houston native, whom has led and advised multiple software and service companies as is now the founder and managing partner Stryve Advisors. 
• Mr. Rich Barfield, clinical lab scientist by training, who works with healthcare and medical technology companies, national laboratories as well as hospitals across the nation.
• Mr. Austin Goings, Sales Director Upstream Group at GE Smart Signal with 20+ years of solution-based, enterprise software sales in both large established companies as well as smaller, start-up organizations.

Read more about TeXchange here.

 

At Ephor Group, we partner with our clients to accelerate growth and achieve best-in-class performance that results in better wealth creation for the founders and employees. 

There are many ways to grow, but which will ensure the business increases its profitability, sustainability, and value?

If you cannot attend TeXchange, then checkout our Video Series on Revenue Strategies for Growth in 2012.

1. More efficient cost of customer acquisition than the competition.  Alternative Distribution including Alliance Partners, Joint Ventures, Channel Strategies, inside sales, and ecommerce.
2. Boost lead generation via Internet Marketing, Inbound Marketing, and Online Advertising and boost demand generation via market research and brand building campaigns.
3. Migration Expansion via distribution channel, geographic expansion, product expansion, or vertical segment expansion.
4. Useful capital strategies for growth capital expansion.
5. M&A Corporate Development.

For more information on TeXchange or revenue growth strategies contact Charles Bedard

Management Science Reporting: The Ultimate Business Analytics

Management Science Reporting bridges the gap between disparate systems and processes to connect data to actionable intelligence via automated dashboards, scorecards, and reporting via the cloud, web, or SaaS.

“Information is a competitive advantage in the Internet era.” – Tim O’Reilly

Information and databases that get richer as more people use them is a building block of management science reporting which is fundamental to connecting operating performance to financial performance via business analytics and intelligence.

“The process of laying out the right combination of meaningful numbers or business metrics …. requires an understanding of the business, knowledge of the application(s) which contain the numbers, a mastery of various number crunching and presentation mechanisms, and the acumen for creating something that people will not only use without impunity, but take action from.” via Chuck Vigeant from In Chuck’s Business Performance and Technology Corner

 

Read more here about reporting, metrics, and business analytics:

The Ultimate Tool for Business Analytics.

The benefits of synching CRM and Financial Management.

Video Case Studies

 

The Future of Management Science resources:

The future of business analytics and intelligence video

The future of business intelligence infographic

Cloud Financial Management

Maturity Model for Cloud Business Decision Matrix

Revenue Multiple Valuations: Company Valuation Resources for Solving the Value Equation.

Solving the Value Equation for B2B Technology, SaaS, Software, and Outsourcing Providers.

The primary valuation drivers for emerging fast growth B2B technology, SaaS, and outsourcing providers primarily include: a SWOT of the recurring revenues, operational & service delivery model KPIs (key performance indicators), and the assets and liabilities of the company. 

B2B BPO Outsourcing Market Landscape and Valuations:

The outsourcing industry sectors are highly fragmented across regions and industries, rich in opportunities for consolidation and therefore attracting both private equity investment and increasingly active corporate and strategic buyers. Transaction multiples are currently pegged around 4-8X times EBITDA (pretax profit) and 2-5X times revenue multiple for deals greater than $20 million for technology based firms and 1X to 4X revenues for smaller, growth oriented labor intensive firms (based on Ephor Group deal sources for private company transactions and public sources for public company transactions).

BPO Outsourcing Valuation Comparables:

 

SaaS Valuations by Industry Sector:

By 2014, $1 of every $5 that will be spent on software will be spent on cloud or SaaS solutions. 

 

Maximizing valuation and wealth creation “Yellow Brick Roadmap”:

2011 and 2012 saw a spike in revenue multiple valuations for SaaS and cloud software companies. In the future B2B technology, SaaS, and outsourcing companies that are growing aggressively with low customer acquisition costs and high retention rates with realize the highest revenue valuations.

 

Looking to increase your valuation? i.e. increase the value of your technology, SaaS, or outsourcing company?

For more information contact charles bedard at ephor [at] ephorgroup.com

The Future of Work

Driving Employee Engagement Practices via Social Performance Management Lunch and Learn.

Did you know that only 1 in 3 employees is engaged?

• Research studies have repeatedly shown that approximately 20% of the workforce is actively disengaged (i.e. spreading malcontent and malfeasance) and another 1/3 is disengaged meaning lower productivity and effort.

 

Advances in technology (think social collaboration and work communications) plus the rise of employee consumerism (meaning employees want access to the same online apps and self-service tools for business that they enjoy at home) means that companies must adopt new technology and processes or be left behind.

 

Learn more at an upcoming lunch and learn event hosted by BullseyeEvaluation titled Driving Workforce Productivity, Engagement, and Retention with today’s Technology & Tools. Case studies will be shared and executives will receive a "business case ROI calculator" to evaluate workforce initiatives impact on the P&L. Read more about the the future of work, the panelists and the lunch and learn event here: http://blog.bullseyeevaluation.com/

Register for the event via LinkedIn: http://linkd.in/HITVRE

 

Why Employee Engagement Matters:

Why Employee Engagement Matters: