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 ofadopting/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 productsand 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 alarge market due to limited overall penetration in the small & medium sized businesses (~50% of all business). In secondary and tertiarymarkets, enterprise providers with their “bundled” outsource service offerings are not present. With this unsatisfied demand, there is anopportunity 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 managementsystem 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 dUsing EPM (Employee Performance Management), which is greater than a $1B worldwide market, as an example to show that the HR technologymarket continues to grow, consolidate and evolve, consider that EPM started as a stand-alone application and is now readily available as part ofan 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 asignificant number of clients. Between 2010 and 2012, there were more than 30 major acquisitions in the talent management software marketalone,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, hastriggered an industry consolidation. Now, there are only a few large corporate leaders with impressive technology and client lists; on the otherend 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 businessand 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 traditionalour Methodologies and our Perform Model. consulting. We put our own “skin in the game” and trulyEphor 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 ourGrowthSTEP™ guides companies to their next plateau inclluding Methodologies to our clients.Alliances, Distribution and/or M&A Corporate Development. Ephor Group was founded asBoardwalk 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 provideRead 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 tiOutsource 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 researchOutsourcing Firms. surveys on utilization and best practices for technology and outsourcing buyers. We also, interview 400 businesses every year toMid-MarketMid 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 ExpertiseProcessing & 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
15. “In 2012 and beyond, wealth will be created for those uniquerevenue models, that are the most economically efficient,promote and excel at owing their communities, and Alternative Economic Efficientfocus 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.