2. BPO Call Center, Contact Center 2011 Findings
The Scaled Assets, i.e. larger organizations that have
Based on our 2011 research findings, sophisticated professional management & are
Ephor Group is of the opinion that performing well are buyers not sellers The scaled
sellers.
consolidation will occur for industry providers have only been successful in getting
oriented providers such as healthcare “tactical” transactions done where founder liquidly
and financial services, as well as by both issues were prevalent. Financial reporting and
inbound and outbound contact centers. accuracy is a transaction difficulty.
These providers are also increasingly Healthcare Sector Assets have higher valuations and
expanding their offerings to include BPO technology & operational integration, issues will be
type offerings. prevalent.
Home based or “non-brick and mortar” assets &
Near-Shore Opportunities are more business models will require significant nurturing and
b i d l ill i i ifi t t i d
prevalent. development activities.
The subscale and low end scale providers has been
Entering at the BPO Services Level will saturated and distorted by false valuation
most probably be thru “subscale”
subscale expectations.
expectations Additionally the subscale population is
assets. “worn out” with calls from “buyside” firms call
programs. Additionally the professionals have overtly
stated when engaged with potential sellers it is
As the economy has shown some imperative to eliminate “poor trusted advisor
improvement, all providers contacted
p , p y
syndrome”. All have a customer concentration issue or have a
are illustrating 15% to <30% increase set of anchor accounts which the their business depends on.
“Non-Brick and Mortar” models enjoy gross profit margins in the
in YOY volumes. 35% range, while capex is in the 6%-8% revenue range.
3. Increasing Valuations Checklist
Recurring Revenue Model including Assets are created and monetized such
long term
long-term contracts, 85%+ client
85% as:
retention, multiple add-on products, Clients contracts
services. Technology,
Intellectual Property
Client acquisition model built on a
Patents Copyrights Trademarks
Patents, Copyrights,
portfolio approach and cost of sales
f l h d f l
lower than alternatives. Strategic Alliances, and
Brands.
Industry Vertical Concentrations ensures
better pricing model and margins
margins. Competencies are durable
durable.
KPIs (key performance indicators) Leadership development plan and
outperform alternatives. contracts validated for all key
employees.
p y
Growth is based on migration of assets
and competencies. Growth ensures
“Mass and Density” aka, market share
by region or community is achieved.
Client Lifecycle is proactively managed.
4. 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.
5. 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.
6. 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
7. We Understand Staffing, Technology Since 2006, we conduct quarterly research
and 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.
8. 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
9. 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
11. “In 2012 and beyond, wealth will be created for
those unique revenue models that are the most
models,
economically efficient, promote and excel at
owing their communities, and focus on key
strategic initiatives (i.e. customer satisfaction).”
-Garry E. Meier, Ephor Group Founder
> Download additional resources at: http://www.ephorgroup.com/resources.asp