This ISV’s all-in approach to developing a complete, modular-based WFM (workforce management) and human capital management solution was key to its 20-percent+ revenue growth in 2013.
When you consider the myriad of successful VARs, MSPs, and ISVs that have been featured in Business Solutions magazine over the past several years, it’s clear that there’s no single vertical market and no single technology that’s required to realize double-digit revenue growth. What the top performers all share in common, however, is being able to assess where their target market is heading, responding appropriately, and presenting customers with a solution that meets their most-important business challenges. Easier said than done, but that’s exactly what ISV Empower Software Solutions accomplished less than two years ago when Jim Hoefflin took the helm as president and CEO of the company. Coincidence? You decide.
Get Out Of The Point Solution Business
Shortly after Hoefflin joined the company, one of the strategic decisions he helped implement was the vertical market focus of Empower’s product offerings and expansion to cover an extended workforce management suite scope of products. “Rather than trying to address every vertical market at once, we focused on the vertical markets in which we could best compete and differentiate, where our products and personnel are uniquely qualified to deliver maximum value quickly — those of Fortune 500 grocers and retailers with extremely challenging workforce requirements and SMBs looking to leverage the sophistication of forecasting and scheduling into an expanded platform that includes applicant tracking, onboarding, time and attendance, and HR/payroll processing,” says Hoefflin. “We leveraged the unified and integrated technical platform in our products and combined our offering with a select group of strategic partners to make it simple to rapidly deploy multiple modules of our own suite along with third-party business applications.”
Today Empower Software’s WFM suite is being used in 40 companies within the Fortune 500, including many of the largest retailers and grocers and hundreds of SMBs looking to leverage some of the same technology used by those industry leaders. During the past two years, the ISV has seen an increased interest in human capital management among its customers, and the vast majority of its new customers are now using multiple modules within its human capital management suite. “Companies with 200 to 5,000 employees are more likely to purchase the full suite, whereas large corporations, which are typically in different life cycle phases in their IT product portfolio among their various divisions and departments, will only purchase one module at a time,” says Hoefflin. “Even if a customer only buys a couple of solutions initially, having additional products makes for good follow-up discussions and positions our company as experts within this discipline. And unlike many of our competitors, we are delivering these solutions on a single technology platform from small businesses to Fortune 50 customers.”
Do You Understand The Complexity Of Your Customers’ Needs?
Adding new products to your line card is one thing, but differentiating your solution among competitors is a whole other matter. One way that Empower Software achieved this was by developing its product with challenging labor environments in mind. Working with software developers that had years of experience in the grocery vertical was an important part of that mission. “Within the grocery environment, workers have very diverse job descriptions and skill requirements,” says Hoefflin. “For example, a deli manager has to be very knowledgeable and cognizant about handling fresh, perishable foods, whereas a butcher has an entirely different, but equally important, set of knowledge and skills. Then you have cashiers who have a whole other kind of skill set. By closely examining the job duties of the workers, we were able to leverage rolebased functionality that ensured that if a deli employee was unable to fulfill a shift, the scheduling manager would only fill the spot with someone qualified to work that job in that department. This is a key differentiator compared with other scheduling solutions that merely take into account hours of availability, which puts the burden on managers to have to manually override the system.”
Besides the various skills the ISV accounted for, labor agreements were another factor that played into their scheduling module. For example, union agreements commonly require workers with more seniority to be contacted for overtime opportunities before employees with less seniority. “One grocery customer we work with has 300 labor agreements in place, and our solution generates a fully compliant schedule in under four minutes,” says Hoefflin. “In other situations, a chain store may acquire a competitor and may apply certain ‘legacy’ work rules at the acquired store so as not to disrupt the work environment employees were used to. To address all these needs, we had to make our product highly configurable within the work environment while still enabling each store to roll up to a centralized database for corporate reporting capabilities.”
In addition to focusing on complex work environments, the ISV created two focus groups — one focused on human capital management (i.e. hiring, time and attendance, payroll processing, and tax) and a second group focused on WFM (i.e. workforce optimization, scheduling, forecasting). Each group combines experts within the technology focus area with experts in various complex work environments. Bringing in several industry veterans to lead the commercial and operations teams was also a priority.
One additional benefit that resulted from the focus groups was a tighter integration between the ISV’s scheduling module and its forecasting module. “Many scheduling solutions only look at average sales per week to generate store labor requirements and end up missing what really happens within the store,” says Hoefflin. “For example, a home improvement retailer should have a different method of forecasting the labor required in the paint department on Friday evening than the contract lumber department because that’s when the DIY [do it yourself] crowd comes in for weekend painting projects. Being able to help retailers identify and optimize the labor needs for specific departments is what creates a real differentiator among the myriad of WFM solutions on the market. Creating an optimized, multidepartment schedule and generating that schedule in less than two minutes has also been an important part of our differentiator.”
Why Your Customers Really Want WFM, Human Capital Management
As important as it is for VARs and ISVs to sell and implement solutions with all the functionality mentioned earlier, it’s equally important to recognize the fact that if a customer can’t translate that functionality to tangible business benefits, your solution won’t likely yield the double-digit revenue growth and profitability you want. “Where most customers report the greatest return on their investment is being able to get managers out of the back rooms working on schedules and finding new people to fill out shifts due to unplanned absences and onto the store floor training/coaching workers and/or interacting with customers,” says Hoefflin. “In fact, we’ve had customers in large stores with multiple departments tell us that they’ve reduced management scheduling hours from 24 hours to 30 minutes per week.”
Future WFM Revenue Growth Depends On The Channel
Partnerships are an important part of Empower Software’s growth strategy moving forward, and Hoefflin strongly believes that resellers play a critical role in the overall growth of the WFM industry. The ISV has chosen to build its product on only Accu-Time Systems’ hardware and firmware (see sidebar for more information about this partnership), and over the past six months it has actively been looking to recruit IT consultants and VARs. In fact, earlier this year, the ISV hired a VP who’s focused solely on developing reseller partnerships. Hoefflin admits, however, that Empower Software’s solution is so broad that it’s necessary to remain flexible with partner agreements. “Some resellers refer us to their clients, and others that have more IT expertise resell the solution and perform the implementations themselves,” he says. “For the foreseeable future, we’ll need to remain nimble enough to work with reseller partners in a way that best fits their needs and the needs of the client.”
Mobility And The Cloud: Where The WFM Market Is Headed Next
Like its track record suggests, Empower Software’s real differentiator is being able to stay one step ahead of its target markets’ business needs. Mobility is one area in which the ISV is seeing a lot of growth potential. According to research firm MarketsandMarkets, the BYOD (Bring Your Own Device) and enterprise mobility market is growing at a 15 percent CAGR (compound annual growth rate) and will reach $181 billion by 2017. Empower Software anticipated this trend a couple of years ago, and 12 months ago it released an employee selfservice (ESS) module for all the major mobile platforms (i.e. Android, iOS, and Windows 8). “Organizations are looking for ways to give employees more access to WFM systems in order to give them more control and reduce the time required by store management to service requests like schedule changes and time off requests,” says Hoefflin. “Many progressive manufacturers and retailers are using ESS features to enable employees to submit time off/vacation requests and/or swap shifts with other employees via their smartphones. This functionality has enormous potential to increase employee morale and reduce the burden on managers. Mobile apps can even be used to allow employees to see their paystubs on their smartphones, and there’s even the potential to deliver corporate communications via ESS apps.”
Unlike some of the other features within the WFM and human capital management realm that deliver a tangible return on investment, Hoefflin cites much of the benefits of the mobile apps being the improved communication and collaboration with employees. “We believe there’s no single bigger trend that can reshape employer/employee morale,” he says. “Prior to offering a mobile ESS app, we offered only a browser-based ESS. Since offering the mobile app, we’ve seen a growing interest in this product from our customers.” Although challenges do exist with developing mobile apps, such as supporting a variety of mobile operating systems and mobile security, Hoefflin believes these challenges are all manageable and don’t pose a serious threat to the continued growth and adoption of mobile ESS. “This is definitely one of the most significant trends shaping the future of the WFM market,” he says. “Mobile solutions represent an opportunity for organizations not only to create efficiency in their organizations, but also to help create deeper levels of engagement with their employees.”
In addition to mobility, Empower Software is also investing in cloud-based delivery of all of its solutions. “SaaS human resources and payroll is an accepted and rapidly growing trend,” says Hoefflin. “But access to more advanced forecasting and scheduling, and the associated services, haven’t shifted to the cloud as quickly. There are perceptions around cloud security that still linger, and it’s a major change in thinking for many organizations. However, there is no doubt it is a growing trend across every area of our business.”