Market Shifts Toward High-End Time And Attendance Software
Due to increased payroll and increased pressure to track labor, more companies are looking for advanced time and attendance software features.
Time and attendance software is maturing much like payroll software has matured in the human resources industry, says Bill Hartman, vice president of marketing and sales at TimeTrak (Port Huron, MI). Consequently, Hartman sees lower-priced solutions with fewer features being pushed out of the industry. This means mid- to high-end solutions are where the money is for VARs. TimeTrak, a $20 million company with 25 employees, offers a variety of software and hardware solutions, including time and attendance, labor distribution and human resources.
End Users Are Learning More About Technology
"End users are demanding increased productivity, not just accuracy of time," says Hartman. "They need quicker access to information like editing and scheduling processes, review and recording processes and automated monitoring. These software features are doing tasks that used to be manual, and take advantage of computer speeds." Extra features drive up the value, and consequently the price, of time and attendance software. Hartman says customers have realized the value of good payroll software, and are willing to pay more for time and attendance software because the two work together. If an employer can't accurately track an employee's weekly hours, how can that person receive an accurate paycheck?
Labor Costs Are Rising
Scott Dunn is business unit manager for time and attendance at Northern Computers (Milwaukee, WI). He says end users know more about time and attendance software today because of the need to manage efficient operations. Northern Computers, a producer of card access and time and attendance software, is a $50 million company with 100 employees.
"Companies are forced to manage labor as effectively as possible to keep costs down," says Dunn. "These companies never considered spending money on time and attendance software five years ago. Now, they need to produce as much with fewer employees, so they are taking a second look. The software can save time and money through efficient operations."
"Smart VARs know they can't be a VAR for the entire industry," says Hartman. "It's in VARs' best interest to pick the market they want to serve," he explains. "Low-end software sales are price-driven, and can cost as little as $1,000 to $2,000 for a system. VARs selling these solutions must be careful because, oftentimes, their markup is not enough to provide sufficient support. It's not worth it for a VAR to spend time, energy and support on systems not adequately covered by the manufacturer. If that original support isn't there, that customer won't go back to the VAR. Even if VARs do everything in their power to provide exceptional service, they can't fix problems caused by manufacturers."
Mid- To High-End Solutions
Hartman recommends selling time and attendance solutions with more functions and features. "Manufacturers in this area have efficiency and productivity built into the product," he says.
Vendors can charge more for mid- to high-end, says Hartman, because the software offers increased productivity. As a result, VARs can increase their profit margins. "Larger end users are beginning to rely on VARs," he says. "Many high-end customers did their programming in-house and found that timesheets weren't efficient in terms of gathering business analysis information."
Dunn sees growth for VARs through companies of 100 to 500 employees. "These companies are small enough that they depend on VARs for on-site support instead of hiring full-time people," says Dunn. "Outsourcing is more popular now than ever. VARs providing total services in that marketplace will be successful."