Competitive Update 2009

Transcription

1 Sage Abra HRMS Competitive Update 2009 Prepared for

2 Contents ADP Highlights of Rauch Market Research January Company Overview 4 Products 4 SaaS Pricing Model/Structure 5 Software Implementation Fees 6 Mix of Customers 6 Sales Process 6 Ascentis Highlights of Rauch Market Research November Company Overview 7 Targeted Markets 7 Standard Licensing Pricing Structure 8 SaaS Pricing Model/Structure 8 Software Implementation Fees 11 Ceridian Highlights of Rauch Market Research December Company Overview 12 Products 12 SaaS Pricing Model/Structure 12 Software Implementation Fees 13 SaaS Pricing Model/Structure 14 Key Capabilities 14 Mangrove Highlights of Rauch Market Research November Company Overview 15 Target Markets 16 Standard Licensing Pricing Structure 16 SaaS Pricing Model/Structure 17 Software Implementation Fees 18 2

3 Microsoft Great Plains Highlights of Rauch Market Research December Company Overview 19 Standard Licensing Pricing Structure 20 SaaS Pricing Model/Structure 20 Software Implementation Fees 20 People-Trak Highlights of Rauch Market Research November Company Overview 21 Targeted Markets 22 Standard Licensing Pricing Structure 22 SaaS Pricing Model/Structure 24 Software Implementation Fees 24 Spectrum Highlights of Rauch Market Research November Company Overview 25 Targeted Markets 26 Standard Licensing Pricing Structure 26 Software Implementation Fees 31 3

4 ADP Highlights of Rauch Market Research January 2009 Company Overview ADP positions itself as a global provider of integrated computing and business outsourcing solutions. The company has nearly $8 billion in revenues and approximately 585,000 clients. ADP offers a range of HR, payroll, tax, and benefits administration solutions, claiming that payroll makes up about 50% of revenues. The company is headquartered in Roseland, New Jersey. ADP is divided into two key divisions: Employer Services and GlobalView outsourced HR services. The Employer Services business unit is the oldest, largest and most profitable of ADP s divisions. It includes payroll processing, HR outsourcing, 401(k)/Retirement Services, Insurance Services, Professional Employer Organization (PEO), Time and Labor Management, Small Business Services (SBS),Tax and Compliance Management, Benefits Administration, Screening and Selection Services, and Administrative Service Offerings (ASO). ADP claims that currently, one in six Americans working in the private sector has paychecks processed by the company. Within Employee Services, the Major Accounts business unit addresses the employee (ee) U.S. market. HRMS Products The Major Accounts reps primarily sell HR Benefits (HRB), so that product will be the primary focus of this analysis. However, some basic pricing and comparative feature information was obtained for the HR expert offering as well. ADP s HR/Benefits Solution is advertised as a hosted, full-featured, web-based Human Resources and Benefits Administration system for companies with 100 to 1,000 employees, offered in a Basic and an Advanced version. 4

5 The following are some key features available in what ADP refers to as its Single Solution for HR and Benefits Administration: ADP Payroll Integration Effective Dating Open Enrollment Life and Work Events Invoices and Bill Reconciliation Carrier Connections Compliance Performance Management Leave Management Compensation Analysis Recruitment and Applicant Tracking Comprehensive Reporting Employee Self Service Manager Self Service Workflow Custom Fields ADP s Human Resource expert is a scaled down offering targeted to midsized companies of 50+. HR expert does not support: strong employee self-service, manager self-service, built-in workflow, the potential to have an HR onboard applicant tracking system, ties in with medical benefit carriers open enrollment, new hire enrollment, life event processing, or carrier feeds. SaaS Pricing Model/Structure ADP s primary pricing delivery model is Software as a Service (SaaS). ADP tells potential customers that one of the major benefits of its software as a service model is that training, ongoing service, maintenance, and upgrades are included. With regard to any competitive takeaway programs, ADP s position is that its model often yields better savings for the customer in terms of total cost of ownership. This is partly due to additional costs of upgrades that are necessary to keep traditional software current. ADP s strategy is to present this total cost of ownership concept to potential customers in competitive situations. 5

6 ADP Pricing per employee per month Employee Level HRB HR expert 150 $7.30 $ $7.04 $1.53 1,000 $6.60 $1.40 Software Implementation Fees Implementation prices range from $6,000 for the 150-employee quote to $10,000 for both 500- and 1,000-employee quotes for HRB or HR expert. Mix of Customers ADP states that the vast majority of its HR Benefits customers are of relatively large size 50 employees or higher that have some level of complexity in their HR department. As of mid-2008, there were about 2,800 customers using HR Benefits, which is only offered as a subscription service. All the white collar, healthcare, manufacturing, services, technology, and restaurants are places where ADP claims a very strong market share for its HR Benefits offerings. Weak areas include car dealerships and construction. Accounting clients are a major area as well. Sales Process With regard to the actual sales process and customer experience, ADP primarily sells directly, although it works very closely with a number of Benefits partners, who can resell the HRB offerings. The initial stage in the sales process is typically a face-to-face meeting in which the ADP account reps meet in person with the customer to understand at a high level the organization s business and learn what the customer is looking for, understanding the customer s process, and how a particular customer wants to work together with ADP. The next phase would be an analysis where ADP might look directly at what the customer is currently doing, then working with the customer in a collaborative effort to architect a solution that meets its needs. Once the customer s needs have been assessed, ADP presents the economics and technology and provides references, and more. Once ADP has been selected, the company follows the processes outlined in the Scope of Services documentation. 6

7 Ascentis Highlights of Rauch Market Research November 2008 Company Overview Ascentis has been providing HR and payroll services for close to 25 years. The company s offerings include the following: Ascentis HR Formerly known as HROffice Ascentis Payroll An outsourced payroll option that is fully integrated with Ascentis HR. Ascentis Employee Self-Service (ESS) Targeted Markets With regard to markets targeted by Ascentis, the company reports that it is essentially active in every industry. In addition to having many customers in the nonprofit arena, Ascentis states it serves quite a few customers in the following sectors: Technology, white collar/professional service, and manufacturing. Also, while there are many customers in the hotel industry, there are not many customers from the restaurant industry. Altogether, Ascentis reports it has approximately 1,500 customers. Payroll was only brought on last year, so there are fewer accounts with Payroll than those with HR. Many current customers are now getting Payroll, though, and Ascentis estimates a total of 400 to 500 customers now have Payroll. Meanwhile, 1,100 to 1,200 customers have HR only. Ascentis focuses on companies that have 100 to 2,500 employees. There are groups that have as many as 10,000 employees, but that is not a focus. The company s sweet spot is in the 400 to 500 employee range. 7

8 Standard Licensing Pricing Structure Ascentis HR is available either hosted or licensed. However, Ascentis Payroll is only available as service offering. Accordingly, standard licensing pricing is available only for Ascentis HR. Sample price quotes: HROffice Premier and Standard Annual Costs Employee Level - Package Software License Alerts 1 Carrier Connect 1 1st year 2nd year 1st year 2nd year 1st year 2nd year 150 Premier 150 Standard $14,160 $8,020 $2,350 $1,330 $2,770 $470 $2,680 $2, Premier 500 Standard $34,210 $19,370 $5,720 $3,240 $6,910 $1,150 $5,020 $5,020 1,000 Premier 1,000 Standard $50,220 $28,420 $8,370 $4,740 $10,580 $1,760 $8,190 $8,190 1 Optional HROffice Add-ons In addition to the above costs, implementation and training for HR Office is estimated at approximately $8,500 and is applicable to any of the employee levels. Advanced reporting is $3,500, which is for the data dictionary and eight hours of training. Ascentis explains that the above tiered pricing, based on the estimated number of active employees is structured around the following parameters: License is for active employees only No additional cost for inactive employees Unlimited multiusers and network installs Includes one year of support and maintenance SaaS Pricing Model/Structure Ascentis markets its software as a service offering as HROfficeASP. Fees for use of HROfficeASP consist of a one time setup fee, a recurring per employee per month fee, and a recurring user fee. Basic ASP setup is provided at a flat fee of $1,100 and includes ASP account creation, a two-hour online Introductory Training Course, and Payroll Connect Jumpstart. The Per Employee Per Month Fee (PEPM) is based on the number of active employees with a minimum of 50 employees, depending upon whether the Standard or Premier package is chosen, and includes support and maintenance. User access fees also apply to any user who accesses the HROfficeASP system. This recurring per user per month fee for access is $25 per user per month. 8

9 The following table summarizes the monthly fees for the Standard and Premier packages of HROfficeASP: HROfficeASP Package Pricing Number of Employees PEPM Packages Standard Premier Enrollment Form Maker Optional Add-ons Alerts Service Carrier Connect 50 to 100 $4.00 $5.80 $0.60 $1.60 $ to 150 $3.95 $5.75 $0.55 $1.50 $ to 200 $3.90 $5.60 $0.50 $1.40 $ to 300 $3.70 $5.50 $0.45 $1.30 $ to 400 $3.60 $5.40 $0.40 $1.20 $ to 500 $3.50 $5.30 $0.35 $1.15 $ to 1,000 $3.25 $5.00 $0.30 $0.90 $0.84 1,001 to 2,000 $3.15 $4.75 $0.25 $0.65 $0.68 Recurring User Fee of $25 per user per month applies HROfficeASP Standard package includes: HR & Benefits Management Payroll Connect Applicant Manager Employee Correspondence Wizard Attendance COBRA Compensation File Attachments Customization Reporting Organization Charting QuickStart Data Import HROfficeASP Premier package includes: All features and functionality provided in the HROfficeASP Standard package HROffice Self-Service with Online Open Enrollment My Paycheck (ability to view Ascentis payroll information in ESS) Additional setup and services fees are as follows: Form creation services are available for a fee of $750 per form The HROffice Alerts Service Setup fee is $5,000 and includes configuration of ten alerts from the current Alerts Library Additional alerts from the current Alerts Library are $300 each 9

10 As mentioned in the licensing section above, Ascentis Payroll is only available as a service. Ascentis states that pricing for payroll is more complicated than for HR. Factors that make this so include Federal IDs, the frequency of payrolls (for instance, bi-weekly, monthly), direct deposit, and others. The following sample quote is for Ascentis for Payroll (at 150, 500, and 1,000 employees with twice-monthly pay frequency). The monthly fees can be calculated by multiplying the per employee per pay cycle times the number of employees times the two pay periods per month. 10

11 Software Implementation Fees Regarding implementations, Ascentis offers remote and onsite versions. For HR, there is a five-day onsite implementation offering. With Payroll, the conversion process and running parallels usually make a phased-in approach spanning six weeks or so as necessary. If doing both Payroll and HR at once, different implementation approaches would be used. Implementation and training for HR Office is estimated at approximately $8,500, and is applicable to any of the employee levels. Advanced reporting is $3,500, which is for the data dictionary and eight hours of training to use Crystal Reports (not sold by Ascentis). 11

12 Ceridian Highlights of Rauch Market Research December 2008 Company Overview Ceridian Corporation markets itself as an information services company in the human resources, transportation and retail markets, serving businesses and employees in the USA, Canada, and Europe. It was a publicly traded company on the New York Stock Exchange until it was acquired in 2007 by Thomas H. Lee Partners and Fidelity National Financial. Ceridian began as part of IBM s Service Bureau Corporation (SBC), which then became Control Data before it eventually became Ceridian. Ceridian s managed HR solutions are designed to integrate the broadest spectrum of scalable solutions, from hire to retire. Targeted Markets Ceridian claims to have customers in every market, from small, midsized and large, to very large global enterprise companies. However, the company admits it is not strong in the retail market, including restaurants. Reps claim that the company s sweet spot is probably at the 500 and above employee mark, since Ceridian typically does much better with companies that have larger, complex needs. HRMS SaaS Pricing Model/Structure Ceridian offers its solution exclusively on a SaaS basis. 12

13 Estimated Implementation Costs, Ceridian HR/PR Solution Component Initial Project Additional Setup* HR/PR w/ Self-Service (joint Mgr. and Employee SS) $17,250 TBD Time and Attendance $17,250 TBD Recruiting Module $11,500 TBD Human Capital Mgmt Module $17,250 TBD Total $63,250 TBD Software Implementation Fees The setups range from 90 to 120 days from the time that an organization comes onboard with Ceridian, but overall charges depend on the level of complexity of their requirements. The fee is based on the number of employees, the customer s specific requirements, and the level of service needed. If customer will be using Payroll and other components of the company s management tools, that drives what the ultimate solution may be and the corresponding implementation time needed. Implementation includes training as well. More training is typically needed when there are updates and is offered on an ongoing basis to Ceridian clients at a separate charge. If done at the same time, Recruiting and Self Service Live would extend the implementation time, but that is not a recommended practice. Rather, the recommendation is to get HR/Payroll Web fully implemented and only thereafter start recruiting and self service. Self service is typically brought up 30 to 60 days after the full implementation of HR/Payroll Web. Depending on complexity, Recruiting can be implemented in another 30 to 60 days. The following table illustrates ongoing estimated annual costs for the Ceridian HR/PR Solution for 150 employees: Estimated Annual Costs, Ceridian HR/PR Solution 150 Employees Component Total Annual Cost PEPM HR/PR w/ Self-Service $17,700 $9.83 Time and Attendance $6,750 $3.75 Recruiting Module $11,250 $6.25 Human Capital Mgmt Module $5,700 $3.12 Total $41,400 $

14 The following table illustrates ongoing estimated annual costs for the Ceridian HR/PR Solution for 500 employees: Estimated Annual Costs, Ceridian HR/PR Solution 500 Employees Component Total Annual Cost PEPM HR/PR w/ Self-Service $58,500 Time and Attendance $22,500 Recruiting Module $15,000 Human Capital Mgmt Module $19,000 Total $115,000 $19.17 The following table illustrates ongoing estimated annual costs for the Ceridian HR/PR Solution for 1,000 employees: Estimated Annual Costs, Ceridian HR/PR Solution 1,000 Employees Component Total Annual Cost PEPM HR/PR w/ Self-Service $117,000 Time and Attendance $45,000 Recruiting Module $18,000 Human Capital Mgmt Module $38,000 Total $218,000 $18.17 Key Capabilities What customers get: Ceridian HR/Payroll provides a range of services, including payroll processing, collecting and retrieving funds for payroll taxes, filing applicable returns, furnishing employee payroll checks and direct deposit advices, talent acquisition and management, time and attendance, and other HR and payroll-related services. Ceridian has a scaleable solution that can effectively answer every employee need. And Ceridian s best-of-breed practices help small, medium, and large businesses efficiently and effectively manage their payroll and HR data and processes. 14

15 Mangrove Highlights of Rauch Market Research November 2008 Company Overview Tampa-based Mangrove Employer Services Inc. (Mangrove), a privately held company founded in 1994, provides fully integrated 100% web-based Human Resources, Payroll, Benefits Management, Applicant Tracking, and Self Service Solutions. The company s products are offered as a licensed, hosted (Software as a Service), or outsourced solution based on the purchaser s organizational requirements. The Mangrove System, touted by the company as the industry s most complete payroll, human resources, and benefits management software, includes the following integrated modules: Payroll Module Human Resources Module Employee/Manager Self-Service Module PODS Toolset Mangrove Online In January 2007, Mangrove purchased an employee benefit administration services company and changed its name from Mangrove Software to Mangrove Employer Services. Mangrove Employer Services describes its offering as a very feature-rich solution, an integrated solution with a single database source solution that everyone is trying to clamor towards. 15

16 Targeted Markets Mangrove caters primarily to small service bureaus and their customers and sells in the U.S. only. The company claims to have about 10,000 companies that are running the HR/Payroll using Mangrove software. A majority of these, however, are through the company s Service Bureau customers. Besides the Service Bureau customers, the company has about 400 hosted clients, and about 35 to 40 clients that are running Mangrove s software in-house. Mangrove typically aims for minimum 50 to 75 employees in the hosted and the sweet spot target goes up to 2,500 to 5,000 employees on the high end. The largest customer has in excess of 35,000 employees who are paid weekly. About 50% of the company s users have 100 to 500 employees. Another 35% to 40% of customers fall into the 500 to 1,000 employee category. Beyond that, it s a smaller percentage of customers in the 1,000 employee and up range that are looking for hosted services. Standard Licensing Pricing Structure Mangrove s HR and Payroll can both be web-based. With the hosted or outsourced solution it is 100% web-based. With the on-premise solution there is an option to run the application either on a web-based platform or a Windows client. Customers can actually deploy both versions, if desired. Following is sample pricing for the perpetual license version of the product. Mangrove License Pricing (in $U.S.) Perpetual Pricing Line Item 150 Employees 500 Employees 1,000 Employees PR HR SS PR HR SS PR HR SS License Fees, One Time Annual Support/ Maint 18% Implementation Estimate 15,400 15,400 10,550 21,700 21,700 15,100 29,700 29,700 21,600 2,772 2,772 1,899 3,906 3,906 2,718 5,346 5,346 3,888 Implementation Costs are typically initially estimated at 75% of license fees 16

17 SaaS Pricing Model/Structure The following SaaS quote is for the three product bundle offerings: (1) Payroll only, (2) Payroll with a Lite Version of HR, and (3) the full-blown Payroll/HR/Self-Service solution. Prices are per pay period for the number of employees stated. The payroll quotes assume one Tax ID number, only paying in one state. Mangrove SaaS Pricing (in $US) SaaS Pricing Line Item 150 Employees 500 Employees 1,000 Employees PR PR/ HRLite PR/HR Enterp PR PR/ HRLite PR/HR Enterp PR PR/ HRLite PR/HR Enterp Recurring Fees per Pay Pd: Subscription Fees PR Processing Fees , $ , , , , One-Time Fees: Conversion/ Setup ($10/emp) 1,500 1,500 1,500 5,000 5,000 5,000 10,000 10,000 10,000 Benefit Setup ($500/plan) Training 2,250 2,250 3,000 2,250 2,250 3,000 2,250 2,250 3,000 Initial Software License 1,500 1,500 1,500 5,000 5,000 5,000 10,000 10,000 10,000 The full version of the product (Enterprise) includes also Applicant Tracking, Manager Self-Service, Employee Self-Service, and other functions that are not incorporated into the HR lite option. Maintenance fees are all embedded in the recurring fees. Implementation fees and setup are separate and are dependent on which modules you re looking at implementing. You must have the payroll module for the HR module, but payroll may be purchased standalone. 17

18 Software Implementation Fees What will vary the most on implementation fees are the setup and conversion costs. Mangrove does charge a per employee cost for setup and conversion of the employee data. The training costs do not vary all that much, except by module. Thus, if someone is only implementing Payroll then they re only going to get charged for Payroll training. If they choose to add on the HR functionality, Mangrove will likely add on one additional day of training, just to remind them how to generate reports for all of the different data files that are there. But for the most part, HR is not a significant add-on expense. As mentioned in the above quote, implementation fees are estimated at 75% of the license fees. Professional services for implementation include: The installation of the software, project planning sessions, conversions, data setup, training on the software, parallel processing, go live sessions, and more. The only thing that is typically not included in the services estimate would be any customizations that are identified. Customizations are typically on an hourly basis. The hourly rate varies depending on the level of customization required, but the blended hourly rate is usually about $180/hour. 18

19 Microsoft Great Plains Highlights of Rauch Market Research December 2008 Company Overview Microsoft Dynamics GP is a mid-market business accounting software package that runs on top of a Microsoft SQL Server database. It is a part of the Microsoft Business Solutions family. The product was originally made by Great Plains Software, which was purchased by Microsoft in April 2001 for $1.1 in billion. Microsoft Dynamics GP 10.0 is the latest version and was released in June 2007; version 11.0 was slated for release sometime in Microsoft Dynamics GP is currently available in two editions: Business Essentials This edition addresses core financial management needs and includes essential features for integrated financial and business management. In most cases, Microsoft Dynamics GP Business Essentials customers average 15 or fewer users. It is streamlined for ease of installation, rapid user adoption, and affordability. Advanced Management This edition addresses the needs of organizations that are looking for a solution with an extensive set of advanced functionality. In general, Microsoft Dynamics GP Advanced Management customers range from 15 to over 1000 users. It should be noted that Microsoft GP Payroll and HR modules are in fact optional and separate à la carte modules, available for either Business Essentials or Advanced Management. Both have their own distinct employee counts when determining pricing. 19

20 Standard Licensing Pricing Structure The Payroll module is $4,000 at the 150 employee level. For 500 employees (fitting into the Microsoft GP 250 to 500 employee category) it is $5,000. For 1,000 employees (fitting into the Microsoft GP 500 to 1,000 employee category) it is $7,000. The HR module is $5,000 for 150 employees, $7,000 for 500 employees, and $10,000 for 1,000 employees. With regard to basic support supporting the software itself, providing free upgrades, and more customers have to pay Microsoft a yearly sum varying between 16% and 18% of the license fee. In addition, Microsoft assesses charges for actual User Support, for which users can either go through Microsoft or the reseller. User support is priced at a fixed $150 rate, be it for a five-minute question or something that takes several hours. At least one Microsoft GP reseller charges per 15 minute increment. SaaS Pricing Model/Structure Microsoft GP does not support a subscription-based model. However, there are several third-party companies doing it so, and the company indicates it could certainly offer referrals if that is what the customer wanted. This third-party company would provide the service; the actual customization and implementation is a separate package. Software Implementation Fees The rule of thumb for implementing Microsoft Dynamics GP software is for every dollar of software it is fairly standard to have a dollar worth of implementation. If customers find they have significant customization requirements, they can probably add anything from another 50 cents to $1.50 to that base amount. In very general terms, for $20,000 worth of licenses a customer could expect to have implementation costs of $15,000 on the low end and perhaps $40,000 on the high end. 20

21 People-Trak Highlights of Rauch Market Research November 2008 Company Overview Southern California-based People-Trak has been in business since It offers what it terms a high-performance, fairly priced Human Resources Information System (HRIS). A universal database platform is used for the core solution People-Trak states it can offer Access -based solutions to small organizations and SQL Server-based solutions to large organizations. Three different applications and functionalities available, known as modules, are outlined below: Essentials People-Trak s HR Essentials is the core offering, providing the primary tools necessary for capturing, managing, and reporting everyday Human Resources tasks. Modules included in this package are Personnel Management, COBRA Administration, Safety Management, Training Administration, Position Control, and an integrated applicant tracking system. Other features include time and attendance, compensation management, and benefits administration. HR Essentials also provides a query-based report writer, intelligent performance appraisal tools, filtered security, unlimited users, and unlimited companies. Strategic People-Trak s Strategic HR is a complete Human Resources package that combines all the features of HR Essentials. In addition, Strategic HR introduces customization tools such as approvals, workflows, derived fields, and process triggers. Web Add-On People-Trak s HR Web Add On is an integrated package for managing complex HR assignments. It comes with Employee Self-Service (ESS), Manager Self-Service (MSS), and Candidate Self-Service (CSS). The Essentials, Strategic, and Web Components packages are available whenever the customers want them. Customers could start with Essentials, or they could go through the whole package and get everything. It depends on the level the customer is looking for. 21

22 Targeted Markets People-Trak is a PC-based Human Resources Management System for organizations with 50 to 5,000 employees. People-Trak s sweet spot customer has about 500 employees, although with the introduction of the company s strategic tools, customers are now tending to be larger, in the 1,000 employee level. The company started in the healthcare area predominantly but has branched out to all industries and has a good mix throughout any segment of the marketplace. The company has sold over 6,000 customers its product over the last 14 years and currently has about 1,500 on maintenance agreements. The majority of leads come from HR Magazine and referrals. The product is chosen for its ease of use, report writer, and functionality. Additionally, the support is touted as the most important critieria and that the company offers the best support in the industry. The strategic tools offering is driving a lot of business to People-Trak as well. Standard Licensing Pricing Structure The following table presents sample pricing for the sale and license of one copy of the full People- Trak HRIS software program (Essentials + Strategic + Web Components) at the 150-employee level. Note that the Essentials module alone (without adding on Strategic) would be $19.95 per active record rather than the $39.95 shown in each of the table below: License For People-Trak HRIS Software Program Item Description Qty Price Extended STRATEGIC HR Strategic 150 $39.95 $5, PTWEB DATA-INT-CUSOUT MAINTENANCE 3DESSWEB 2DSTRWEB IMPDOFF IMPD2OFF People-Trak Web Components Custom Export Interface (estimate) Maintenance Agreement 3-Day Essential Training On-Line Pt 1 2-Day Strategic Training On-Line Pt 2 Implementation Client Site Day 1 Implementation Client Site Day $19.95 $2, $3, $3, $2, $2, $2, $2, $1, $1, $3, $3, $2, $2, Shipping $25.00 Total $25,

23 The following table presents sample pricing for the sale and license of one copy of the full People- Trak HRIS software program (Essentials + Strategic + Web Components) at the 500-employee level: License For People-Trak HRIS Software Program Item Description Qty Price Extended STRATEGIC HR Strategic 500 $39.95 $19, PTWEB DATA-INT-CUSOUT People-Trak Web Components Custom Export Interface (estimate) 500 $19.95 $9, $3, $3, MAINTENANCE Maintenance Agreement 1 $5, $5, DESSWEB 3-Day Essential Training On-Line Pt 1 1 $2, $2, DSTRWEB IMPDOFF IMPD2OFF 2-Day Strategic Training On-Line Pt 2 Implementation Client Site Day 1 Implementation Client Site Day 2 1 $1, $1, $3, $3, $2, $2, Shipping $25.00 Total $49, The following table presents sample pricing for the sale and license of one copy of the full People-Trak HRIS software program (Essentials + Strategic + Web Components) at the 1,000-employee level: License For People-Trak HRIS Software Program Item Description Qty Price Extended STRATEGIC HR Strategic 1,000 $39.95 $39, PTWEB DATA-INT-CUSOUT People-Trak Web Components Custom Export Interface (estimate) 1,000 $19.95 $19, $3, $3, MAINTENANCE Maintenance Agreement 1 $9, $9, DESSWEB 3-Day Essential Training On-Line Pt 1 1 $2, $2, DSTRWEB IMPDOFF IMPD2OFF 2-Day Strategic Training On-Line Pt 2 Implementation Client Site Day 1 Implementation Client Site Day 2 1 $1, $1, $3, $3, $2, $2, Shipping $25.00 Total $84, Maintenance is typically assessed as 15% of the license fee + a $395 flat setup fee. People-Trak is priced and sold in increments of 50 active employee records. 23

24 SaaS Pricing Model/Structure People-Trak does not offer a SaaS model. Software Implementation Fees For training, People-Trak can do remote implementation through the customer s tech support rep without any additional charge (included in the maintenance agreement). Once the product is purchased the assigned People-Trak rep will walk the customer through the install by phone. The Access version of the product, for example, takes about 20 minutes to install. For larger customers, who want on-site implementation, this is typically budgeted over two days, the first day of which includes travel/lodging charges. However 95% of customers do the implementation remotely, for which the charges are included in the maintenance agreement. People-Trak also offers all sorts of training, both onsite and over the web. If the customer decides it wants someone to come out and do the implementation, training could either be done onsite or remotely. The three-day Essentials training is $2,400, and the three-day Strategic online is $1,600. To do the Strategic training, it is necessary to do the Essentials training first. Onsite implementation generally takes two days, and pricing is included in the quotes above. Other services are also available, and the prices for data conversion and other services are also listed in the above quotes. 24

25 Spectrum Highlights of Rauch Market Research November 2008 Company Overview Spectrum Human Resource Systems Corporation was founded in The privately owned 125-employee company sells software that helps businesses manage their human resources tasks more effectively. The company offers one solution, having phased out its FoxPro-based HRVantage offering, originally introduced in 1995: ivantage This software is a Web-based human resources information system that automates administrative tasks, tracks workforce metrics, and allows employees and managers to access information. Spectrum launched ivantage in 1999, calling it the first fully web operational HRIS. Over the years, Spectrum s HR systems have been licensed to more than 5,000 public and private sector companies throughout the United States and internationally. Spectrum clients range from small start-up companies to Global 100 companies. In the fiscal year ending 2007, Spectrum had approximately $13 million in sales. The company maintains that a substantial number of Spectrum s employees are experienced HR, payroll, benefits, and HR system professionals. 25

26 Targeted Markets Spectrum says that it works with companies of all sizes and all different industries. The product is promoted as particularly good for training and development, certification, applicant tracking, and more. However, there is no specific niche that Spectrum goes after. As for the demographics of its client base, Spectrum says it has about 500 clients that are using the current version of ivantage software, which was developed in Spectrum has sold over 6,000 systems since About 40% of the company s clients are in the 500-1,000 employeecount range. Most of the company s clients are in these industries: Healthcare, Legal Services, Government, Technology, and Banking. For Spectrum, a small customer would be anything less than 200 employees. However, all different sizes of companies have been helped by Spectrum, including companies with thousands of employees. According to Spectrum, companies purchase the ivantage software over competitors solutions for the following major reasons: Functionality of the software is the number-one reason provided by new clients. Spectrum demonstrates this to prospective customers at the demo stage of its sales process. Spectrum has been offering HR solution since 1984 and has many happy client testimonials to share. Ninety-three percent of the company s current clients have told the company that they would purchase ivantage if given the chance to redo the buying process Many of Spectrum s employees are ex-hr managers and generalists, so the software really has been written from an HR view and not a developer view Cost vs. value. Spectrum s prices are usually cheaper than similar companies with the same functionality. Standard Licensing Pricing Structure The tables in the following section show pricing at the 200-employee level, which is the minimum price point. Software Quote, ivantage v Active Employee Records, 4 Named Users, 1 Power User Basic Employee/Org data Applicant Tracking Benefits Administration/FMLA Compensation Administration Absence Management Manager Self Service Performance Management Illness and Injury Government Compliance Four different Reporting Tools Additional Manager/HR Users ivantage Link for Payroll $15,275 $100 each One Way Interface Utility from ivantage to Payroll $3, Total $18,275

27 Annual Maintenance (Covers Upgrades and Unlimited Phone/ Support) ivantage $3,350 Manager Self-Service $0 ivantage Link $540 Total $3,890 Optional Software ivantage Connect Module Employee Self Service $3,600 ivantage Position Control and Budgeting Module $2,800 ivantage Succession Planning Module $2,800 ivantage Training and Development Module $2,300 ivantage Timesheet Module $2,300 OrgPublisher Module $2,066 Optional Annual Maintenance First Year Maintenance and Product Support ivantage Connect $648 ivantage Position Control $504 ivantage Succession Planning $504 ivantage Training and Development $414 ivantage Timesheet $414 OrgPublisher $372 The tables in the following section show pricing at the 500-employee level: Software Quote, ivantage v Active Employee Records, 10 Named Users, 2 Power Users Basic Employee/Org data Applicant Tracking Benefits Administration/FMLA Compensation Administration Absence Management $25,025 Manager Self Service Performance Management Illness and Injury Government Compliance Four different Reporting Tools Additional Manager/HR Users $100 each ivantage Link for Payroll One-Way Interface Utility from ivantage to Payroll $3,000 Total $28,025 27

28 Annual Maintenance (Covers Upgrades and Unlimited Phone/ Support) ivantage $3,695 Manager Self-Service $0 ivantage Link $540 Total $4,505 Optional Software ivantage Connect Module Employee Self Service $9,000 ivantage Position Control and Budgeting Module $4,000 ivantage Succession Planning Module $4,000 ivantage Training and Development Module $3,200 ivantage Timesheet Module $3,200 OrgPublisher Module $3,304 Optional Annual Maintenance First Year Maintenance and Product Support ivantage Connect $1,620 ivantage Position Control $720 ivantage Succession Planning $720 ivantage Training and Development $576 ivantage Timesheet $576 OrgPublisher $595 The tables in the following section show pricing at the 1,000 employee level: Software Quote, ivantage v 4.2 1,000 Active Employee Records, 20 Named Users, 3 Power Users Basic Employee/Org data Applicant Tracking Benefits Administration/FMLA Compensation Administration Absence Management $40,275 Manager Self Service Performance Management Illness and Injury Government Compliance Four different Reporting Tools Additional Manager/HR Users $100 each ivantage Link for Payroll One Way Interface Utility from ivantage to Payroll $3,000 Total $43,275 28

29 Annual Maintenance (Covers Upgrades and Unlimited Phone/ Support) ivantage $6,440 Manager Self-Service $0 ivantage Link $540 Total $6,980 Optional Software ivantage Connect Module Employee Self Service $18,000 ivantage Position Control and Budgeting Module $6,000 ivantage Succession Planning Module $6,000 ivantage Training and Development Module $4,700 ivantage Timesheet Module $4,700 OrgPublisher Module $5,367 Optional Annual Maintenance First Year Maintenance and Product Support ivantage Connect $3,240 ivantage Position Control $1,080 ivantage Succession Planning $1,080 ivantage Training and Development $846 ivantage Timesheet $846 OrgPublisher $966 Spectrum offers a managed hosting option for customers who purchase the ivantage license. The price is $1.75 PEPM with a three-year minimum contract. 29

30 Monthly Subscription Pricing Model (PEPM) The following pricing model is based on a monthly charge per active employee in the system. There is a tiered structure for this model so that the first few months are discounted. 150 Employees: 500 Employees: 30

31 1,000 Employees: Software Implementation Fees Spectrum is a full service implementation company. It believes in coming on-site, doing a business analysis, sitting down with the customer for a few days, and more. A firm quote would require going through all these steps. What Spectrum can offer before then is a range (such as, average, high end ). Estimated Implementation Services are typically offered at about $185/hour normal cost is 1 to 1.5 times the software costs and includes: Project management and planning General implementation assistance Benefits implementation setup assistance 31

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