We had the chance to attend the NGA HR (NGA) analyst summit last week in New York. About two dozen analysts got briefed by NGA CEO Al-Saleh and his management team.
Here are my top 3 takeaways from the event:
Positioning challenges remain – NGA keeps operating under the ‘IP lead Services’ positioning, meaning that it invests into IP (Intellectual Property) offerings for its services offerings (e.g. the BPaaS products) but at the same time has veritable IP in its own products (e.g. ResourceLink and Preceda). The unique positioning here is that on the one side NGA operates a very successful BPO business for large, international enterprises, offering its services on top of the euHReka platform (that again leverages SAP as its backbone) – on the other side operates like a software vendor on the SMB side with products like ResourceLink and Preceda. And it means good news and challenges at the same time that NGA wants to grow both businesses. The good news is the significant growth potential NGA can tap into, the challenges are short term that it needs to fund R&D investment across multiple products and longer term it may get on a collision course with its partners (Workday, SuccessFactors to name two) – as they will target more the SMB space. But it may not have to be competitive as NGA’s successful partnership with Workday around SMB services in the US shows, but that is an easier positioning as both are complimentary. NGA does not have a SMB product offering for the US market (yet) and Workday is looking for services to make its push to SMB happen. The scenario would be outright competitive if Workday would target the SMB market in the UK. But then who says that partners cannot have complex co-opetitive (cooperative & competitive) relationships depending on the markets they operate and compete in.
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Payroll Exchange is the crown jewels – It looks like NGA has concluded its long R&D investment in making its different payrolls work together. The product tasked with this is the Payroll Exchange product that for now allows flexible pay across the euHReka, ResourceLink, and Preceda products, with HR Core data coming from the same three and additionally Workday and SuccessFactors. True to the positioning challenge mentioned before, NGA stresses that the Payroll Exchange (PEX) is not a product (or standalone offering), but IP that complements the NGA Gobal Payroll offering (not a product, either). Assuming PEX works, then NGA is missing out on a potential market opportunity to offer its PEX capabilities as a Software as a Service (SaaS). But then it is quite a leading offering by itself, being able to pay (with the help of partners) in 145 countries, the large majority of them being powered by NGA IP.
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More to come – investment happening – The good news is that it looks like NGA will be able to come up with even more product and IP investment going forward. The vendor has ambitious plans to free up resources and to invest in net new opportunities both on the product and the services side of is offerings. It is also good to see that NGA has addressed longer term challenges in its services infrastructure around its networking and phone infrastructure, an important investment from which customers should see immediate benefits.
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MyPOV
NGA is unique in the vendor landscape with having a sole focus on HR, but then NGA pretty much offers every possible service (except RPO) for their customers. From general strategy, over implementation, hosting, payroll services, BPO and Product IP, NGA plays and wants to keep playing in all these markets. It will be key to watch how NGA will be able to grow the base of such a vast and diverse portfolio. All these different areas need management attention and financial investment to get off the ground and keep flying – not an easy task for a mainly services oriented vendor. The next 12 months will show if NGA can grow the base and invest in this portfolio or if it will have to streamline the offering. Sometimes doing less is more for your customers, but you cannot fault NGA for trying.
In the meantime there is only very few to no alternative to NGA ,when a multinational company is looking at outsourcing its global payroll work to someone, a position the company should capitalize on in the near future.
My takeaways from the analyst briefing from a year ago can be found here.
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