Upload
others
View
1
Download
0
Embed Size (px)
Citation preview
Ultimate Software
Competitive Analysis – September 2008
Prepared for
2
Ultimate Software Competitive Analysis
Contents
Ultimate Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Company Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Sales Channel Mix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section A: Licensed Software Offering . . . . . . . . . . . . . . . . . . . 5
UltiPro Pricing Structure . . . . . . . . . . . . . . . . . . . . . . . . . 5
Software Core Product Implementation Fees . . . . . . . . . . . . . . 6
Pricing for What is Not Included in the Implementation 7
Services Included in Implementation Fees 7
Configuration Activities 7
History Data Loading by Ultimate 7
Pricing Structure for Software Support . . . . . . . . . . . . . . . . . 8
Discounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Managed Hosting Option . . . . . . . . . . . . . . . . . . . . . . . . . 8
Software Positioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Relative Competitive Strengths . . . . . . . . . . . . . . . . . . . . . . 9
Perceived Key Competition . . . . . . . . . . . . . . . . . . . . . . . 10
Section B: Subscription “SaaS” Offering . . . . . . . . . . . . . . . . . 11
Overall SaaS Pricing Model/Structure . . . . . . . . . . . . . . . . . 11
HR and Payroll 12
Minimum Contract Terms 12
Software Implementation Fees . . . . . . . . . . . . . . . . . . . . . 12
Install, Set-up, Configuration, and Customization Process 15
Implementation Pricing SaaS Products 17
What is Included/Not Included 17
Pricing for Items Not Included 17
Services Included in Implementation Fees 18
Configuration Activities 18
History Data Loading by Ultimate 19
Customer Support for Workplace / Intersourcing Product . . . . . . 19
Charging for the Addition of Employees 19
Frequency of Billing 19
Minimum Customer Size and/or Monthly Revenue 19
Discounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Ultimate Software Competitive Analysis
33
Typical SaaS Contract Terms . . . . . . . . . . . . . . . . . . . . . . 20
Termination Penalty 20
Access to Data Once SaaS Term Ends 20
Positioning of SaaS Software Products . . . . . . . . . . . . . . . . 20
Perceived Relative Competitive Strengths . . . . . . . . . . . . . . . 21
Section C: Other Product/Service/Price Information . . . . . . . . . . . 22
Mix of Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Customers using Licensed Software 22
Customers Using SaaS Software 22
Customers of Each Type and Size Being Sold To 22
Payroll Tax Management Service . . . . . . . . . . . . . . . . . . . . 23
Ultimate Software responsibilities 23
Customer’s responsibilities 24
Benefits Carrier Connection Service . . . . . . . . . . . . . . . . . . 24
Types of Software Support Services . . . . . . . . . . . . . . . . . . 25
Maintenance Support 25
Technical Support Representatives 25
Authorization for Calling In 25
Training Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section D: Company Information . . . . . . . . . . . . . . . . . . . . . 27
Markets Targeted . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Number of Customers . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4
Ultimate Software Competitive Analysis
Ultimate Software
Company Overview
Ultimate Software has been in business since 1990 and has been publicly traded for 10 years
(NASDAQ: ULTI) The company realized revenue of $151 million in 2007 and has approximately
850 employees
Ultimate provides strategic HR, payroll, and talent management solutions for organizations
of all sizes The company serves approximately 1,600 customers representing more than
3 million employees
The company feels it offers both the best software and support Among their proposed product
differentiators is the fact that Ultimate has joined all the product functions onto a single database,
while competing products typically have a database for each separate function, such as payroll, HR,
recruiting, performance management, succession planning, onboarding, salary planning, and time
and attendance
Ultimate feels it is very different from other organizations The President and CEO came from ADP in
1990 and designed the application to address ADP’s shortcomings Ultimate voluntarily compares
itself to ADP in pre-sales discussions The company continues to invest heavily in research &
development and customer service
This analysis will focus on Ultimate’s UltiPro solution, which is offered as both a software license and
an SaaS model, which the company refers to as Intersourcing Details of both these offerings are
contained in this analysis
Sales Channel Mix
Ultimate Software markets and sells its products and services primarily through its direct sales
force Currently, only Epicor is a reseller for software licensing Ultimate also has a few existing
OEM customers but no longer takes on new ones The CEO feels that using OEMs is “supporting
potential competitors ” In addition, Ultimate uses PEOs (Professional Employer Organizations) for
outsourcing workers’ compensation insurance and other items for its Intersourcing customers
Ultimate Software Competitive Analysis
5
Section A: Licensed Software Offering
UltiPro Pricing Structure
The core software licensed product includes the following functionality:
Payroll Administration•
Human Resources•
Benefits Administration•
Recruiting & Staffing•
Training Programs•
Standard Reports Library•
eAdministration•
eSystem Administration•
COBRA Compliance•
FMLA Tracking•
Performance Tracking•
Health & Wellness Tracking•
OSHA/Worker’s Compensation•
Enterprise Integration Tools•
eTime Entry•
eStandard Reports•
eEmployee Self-Service•
eManagement•
eBenefits Enrollment•
eTraining Schedules & Enrollment•
Compensation Management•
Training Management•
Rapid Pay•
Cognos Catalogue •
UltiPro is offered as a licensed purchase for larger organizations (typically >1,000ee) Software
license pricing for the core product is approximately $70,000 at the 500ee level, and $110,000 at
the 1,000ee level
*Pricing includes five UltiPro concurrent users and five Congnos Impromptu named users.
Salary, Budgeting, Recruiting, Time and Attendance, and Onboarding are add-on modules Of
those, only Time and Attendance is licensed; Onboarding, Performance, and Recruiting must be
purchased as a hosted solution Software license pricing for the Time and Attendance module is
approximately $55,000 at 500ee and $85,000 at the 1,000ee level Software license pricing for the
Hosted Add-on modules are approximately $5ee as a one time set-up fee and $1ee monthly fee for
recruiting, performance and on-boarding
As clarification, Ultimate offers two different recruiting tools: Recruiting & Staffing, contained in the
core solution; and a Recruiting add-on module The big difference is functionality The recruiting
and performance section in the core product is just for tracking purposes For example, there is
no applicant interface Applicants can be tracked, but they have to be keyed into UltiPro core
The same is true with Performance Management The core solution is only able to track when a
performance was given and when the next one is due
6
Ultimate Software Competitive Analysis
However, with the add-on modules, a full package is delivered including full applicant tracking,
and an on-line application Key features of the Performance Management add-on module, include
360-degree peer review and on-line performance appraisals
With a software license sale, the contract terms typically include a license agreement for the
product, an annual maintenance agreement, per-day training rates, and hourly charges for
implementation Typical payment terms include a deposit at the time the contract is signed
and additional payments on specific payment dates designated in the contract Payment for
implementation and training services under the contract is typically made as such services
are provided
Ultimate offers a Time and Attendance add-on module through a strategic partnership with Infor
Corporation (formerly Workbrain Corporation) Ultimate has the right to market and distribute Infor’s
Time and Attendance product as part of the UltiPro solution Ultimate Software has rebranded Infor
Express as “UltiPro Time and Attendance ” Software license pricing for the Time and Attendance
module is approximately $55,000 at 500ee and $85,000 at the 1,000ee level
Time clocks are available for $680 to $2,600, per clock, depending on type Other talent
management modules such as Recruitment, Performance Management, and On-boarding are
offered as add-ons, but are only offered as a hosted solution These are each priced at $1 PEPM
(per employee per month), plus a one time set up fee of $5 per employee, per module Software
license pricing for the core product is approximately $70,000 at the 500ee level and $110,000 at
the 1,000ee level
Software Core Product Implementation Fees
Implementation costs are based on company profile Ultimate claims it needs to have a potential
customer complete a survey in order to provide accurate implementation pricing However, the
company provided general estimates of implementation pricing The implementation might be as
little as $30,000 or as much as $100,000 The variables would be the number of employees and the
amount of history
In terms of what exactly is included, Ultimate allows customers to decide what tasks they need help
with and what tasks they can do themselves or do not need Ultimate then works up a price based
on the exact needs of each customer There is no standard set of included (or not included) items
as everything is specific for each customer
Ultimate prefers not to use the Big Bang method of implementation (i e everything implemented
at once) Ultimate puts together a Project Plan based on what it feels will be needed for
implementations, but if along the way modifications are needed (e g the client doing the conversion
by itself), Ultimate is open to that The company prefers to use a phased approach that usually
takes three or four months Implementation begins with a kickoff meeting Customers fill out the
client analysis tool and Ultimate then spends several days digesting the information Ultimate says
it employs best practices and expertise derived from former payroll managers and consultants
Configuring the product properly from the ground up ensures that it works well out of the gate
Because of this, Ultimate claims that its customers are usually willing to serve as a reference on
the first day they run a payroll The product is configurable to meet customer requirements while
remaining in compliance
A standard implementation includes connecting the customer to its insurance and benefits carriers
through Ultimate’s Benefits Carrier Connection Service
Ultimate Software Competitive Analysis
7
Ultimate assumes there will be three to five benefit carriers it will need to connect to More than
likely, Ultimate will already have connected to those carriers in the past and will simply have to
modify the fields The 401(k) provider, benefits, and insurance providers are the most difficult ones,
but for the most part, Ultimate has already worked with them The bottom line is that the standard
implementation includes the interfaces to those providers
Pricing for What is Not Included in the Core Product ImplementationActivating employee and manager self-service is an additional cost As a side note, many clients
self-implement manager and employee self-service to lower their cost Time and Attendance is |very
unique, and is really dependent on how many pay policies and overtime rules that a customer may
have For up to about 500 employees, Time and Attendance implementation is estimated to be
approximately $40,000 Performance, Recruiting, and On-boarding implementation also depend
on the company’s specific requirements, and typically cost between $12,000 and $18,000 for
each module
Training is always a separate fee on top of implementation Ultimate does offer Web classes (some
fee-based and some free) It also has user conferences that have very detailed training But, on
average a customer will spend 12 to 18 days in training at a rate of $595 per day On the low end,
training costs are about $7,000 It is usually the Administrator that needs to be trained and he then
uses the “Train the Trainer” method to educate everyone else People that run reports may want to
also take a class directly from Ultimate
Any additional items would be priced at Ultimate’s hourly rate of $165 per hour
Services Included in Implementation FeesThe details of any implementation plan are fully discussed beforehand, but in general, functions
such as setting up employee benefit plans, attendance plans, and loading balances are all included
in a regular implementation The plan might include 80 hours or 600 hours, depending on how
much work the customer’s team will undertake Balances can then be imported from other
applications
Data can be imported and cleaned up Some organizations prefer to do that on their own to reduce
implementation time Ultimate can provide a turnkey implementation following a detailed analysis, or
rely on the customer for some aspects of the project
Configuration ActivitiesIn terms of matching the Ultimate configuration to a particular customer’s organizational set up,
Ultimate claims it can readily do this First, it maps the company’s organizational structure into
divisions, units, or whatever system the company uses Customers can then run reports on
divisions, units, or even a particular manager All of that is built into the UltiPro system Ultimate
claims it has yet to see a configuration that it could not manage
History Data Loading by UltimateLoading history data, which is included in standard implementations, is billed at the company’s
standard hourly rate of $165 per hour Ultimate will load as much history as the customer wants
Some customers have Ultimate load upwards of five or seven years history, which obviously requires
more hours of Ultimate’s time It is not so much a case of simply importing historical data, but rather
“getting rid of the garbage ” What customers reportedly love about Ultimate is that they start clean
and then build everything from there, as opposed to having to deal with the old inefficiencies from
their previous solution Ultimate points out that implementation may prove to be a great time to
change processes that the customer previously used
8
Ultimate Software Competitive Analysis
Pricing Structure for Software Support
The 20-percent maintenance fee for software licensing includes all updates, upgrades, and patches,
as well as customer support Pager support is available 24/7
Ultimate offers only a single support level However, there are “critical levels” that generate a faster
customer support response time For example, payroll is considered a critical function, so if a
customer cannot run payroll, Ultimate will try to respond within 10 or 20 minutes Two hours is the
maximum response time for any call ticket
Discounting
The software license pricing provided above is what Ultimate considers to be “heavily discounted ”
For example, the standard list price for 1,000 employees using UltiPro is $149,750 The discounted
price is $110,000, which represents a 27 percent discount off of list price Ultimate considers this as
a “fairly lean” margin for the company, and it reminds customers that there have been times when
Ultimate has had to walk away from deals where the margins were too lean Heavier discounts
begin at the 5,000 employee level for software licensing
With regard to discounting for Time and Attendance, Ultimate states that it has to pay a royalty to
Infor (Workbrain) for each sale Therefore, the price does not go much below $85 per employee at
higher employee levels Ultimate does not typically sell Time and Attendance to companies under
the 500 employee level That is why the price per employee is so high at the lower levels: $283 per
employee for 150 employees, and $110 per employee for 500 employees
Ultimate salespeople are not afraid to take anything to their managers However, this only happens
when the customer is showing serious purchase interest At the end of fiscal quarters it becomes
a bit more competitive Ultimate does not have additional flexibility, though, when it comes to
additional modules, such as the dollar-per-employee, per month for Performance and Recruiting
Those are fairly firm prices
Ultimate feels it has an unbelievable service/support model The company will not compromise this
model simply to get a big-name customer In order to support all of this, discounts are capped
Managed Hosting Option
A second model, whereby a customer purchases the software and Ultimate hosts it, is also
available This method makes sense for customers wanting to make a capital purchase with the
possibility of eventually bringing the application in-house The pricing for this option is as follows:
Managed Hosting Option Pricing
Setup Fee $25/employee
Host Fee $2 50/PEPM
Implementation and Professional Services $165/hour
Education Services and End-User Training $595/person/day
The $2 50 PEPM charge is for Payroll and HR only Benefits, Self Service, Self Service Manager,
Time and Attendance, and so forth, would be additional
Ultimate Software Competitive Analysis
9
There are infrastructure costs (setup fees) associated with hosting Ultimate goes and buys the
hardware and tools itself, and then refreshes that hardware every two years In order to cover these
costs, hosting customers pay a one-time initial set up fee of $25 per employee for infrastructure
setup Were new employees to be added (say from 1,000 to 1,020), an invoice would be sent at the
end of the quarter for those new 20 employees being added to the baseline Customers do not pay
for replacement employees— except for when the total number of employees increases above the
baseline
Applications are hosted in Ultimate’s hosting centers in Atlanta and Miami, and both hosting centers
have strong redundancy backup
There is a two-year commitment on the hosting option at Ultimate No discounts are typically given
for longer contracts, but reps may be willing to take the issue to Ultimate management for further
discussion on a case-by-case basis Ultimate boasts a very high client retention rate of 98 percent,
so it is willing to go far to keep their clients happy
Software Positioning
Ultimate would find it difficult to be competitive at levels below 500 employees for software
licensing The sweet spot is at about 2,000 employees The company typically refers small
companies to its Intersourcing solution, which it calls its small business model
With regard to ADP and Ceridian, Ultimate feels they are great for small employers, but for any
company with more than 1,000 employees, cost issues start being encountered Additionally, the
issue of service enters the picture when dealing with ADP
Relative Competitive Strengths
Ultimate’s key differentiator is that everything is fully integrated The company claims that the extent
of this integration is unique Competitors speak of integration, but in reality only offer interfaces
Ultimate claims to be the only vendor with a truly integrated solution Ultimate’s data resides in a
single table If HR is touched, Payroll is automatically updated, and vice versa Multiple users can
work in the same database and record Anything saved is immediately made available to all other
users In other words, Ultimate claims that its application is “truly” integrated by offering real-time
information rather than serving as an interface that must be run after hours or every couple of hours
before updates can be made
In terms of other facets supposedly making it “unique,” Ultimate has the best of both worlds: a
great product with many awards and a superior service model The company has been voted the
number-one place to work among organizations with fewer than 1,000 employees Ultimate says
this is a statement of how well the company founder treats employees The company’s vision is that
if good employees take care of customers, the customers will remain and the company will prosper
The company has a 98 percent client retention rate and a 99 percent employee retention rate
Ultimate can easily find reference customers
Other competitive strengths include:
Reporting . • Customers can run real-time reports anytime or can schedule them to
automatically run and be delivered
Flexibility . • Customers have complete control of their data
Payroll . • UltiPro states it is the most powerful and flexible payroll engine on the market
10
Ultimate Software Competitive Analysis
Perceived Key Competition
Among the key competitors named by Ultimate Software staff are ADP, Paychex, Lawson,
SAP, and PeopleSoft/Oracle The company’s annual report also names Ceridian and Kronos
as primary competitors
About 60 percent of Ultimate’s 2007 business came from ADP The company also has success
against Ceridian Larger players such as PeopleSoft, Oracle, and SAP may beat Ultimate,
but only because they have international and financial capabilities Ultimate concentrates on
Payroll and HR in the United States and Canada
When faced with head–to-head competition, Ultimate invites customers to visit its hosting
center in Miami The company contends that customers that visit the Miami center are more
likely to purchase the product
Prospective customers are advised to listen to expert third-parties rather than salespeople
The company uses a 2006 Forrester report in its sales presentations to show potential
customers how Ultimate compares to competitors, such as ADP and Lawson
Ultimate Software Competitive Analysis
11
Section B: Subscription “SaaS” Offering
Overall SaaS Pricing Model/Structure
SaaS product is the same software as the licensed product There are two SaaS packages:
“Workplace” for 200-700ee and full “Intersourcing” for >1000ee
UltiPro Core Intersourcing includes the following functionality for a base list price of $12 PEPM:
UltiPro’s Business/Employee Portal•
Benefits Administration•
UltiPro Business Intelligence•
Payroll Processing•
Employee Self-Service •
Administration•
Tax Filing & Wage Garnishment Processing•
PC Timesheet Entry •
New Hire Reporting•
General Ledger Reporting•
Human Resource Management•
Standard and Ad-hoc Reports Library•
Cognos 8 Report Writer•
Unlimited Document Archiving•
W-2 Print Services•
Data Exchange Services for 4 File Transfers (Health &Welfare Benefit Carrier, 401k, •
Tax filing, and Direct Deposit )
The employee portal included in the core package allows employees to type in their own
information, upload photos, and fill out any required forms for insurance or Social Security Ultimate
explains that the portal is just a way for employees to get information Employees can choose their
preferred language, such as English, Spanish, or French, and that language will be displayed during
every session
Typical pricing for the core solutions Intersourcing monthly subscription is $11 at the 150 and 500ee
levels and $10 at the 1,000ee level
Add-ons to the UltiPro Core include the following:
Time and Labor Management .• $4 PEPM UltiPro Time and Attendance tracks time and
attendance labor metrics and supports a variety of time-capture mechanisms
Performance Management .• $1 PEPM With this component, users can have 360-degree
reviews, 180-reviews, and client-facing reviews Employees that work with clients are rated
by those clients, and users can align it with corporate goals to drive revenues For instance, a
plan could be put together to encourage an employee to read certain books The employee
could complete a journal on what is being done each day, week, month, or quarter The goal
would be to reward employees who are doing well and driving revenue to the organization
The employee grading scale is completely customizable
12
Ultimate Software Competitive Analysis
Recruitment Management .• $1 PEPM This option, also referred to occasionally as
eRecruitment, is essentially a job page If users enter information into Monster, Ultimate can set
up a link on Career Builder Users can click on it and it displays in their job page Career Builder
and Monster charge for resume management and it can be quite expensive This way, it is the
user’s data Ultimate states they might as well have it rather than storing it on Career Builder
Manager Self Service . • $1 PEPM This option gives managers access to employee
information As authorized through UltiPro’s roles-based security, managers can view and
change staff data independently Manager Self-Service must be included if the customer wants
a Time and Attendance system Customers must be able to view employee schedules If Time
and Attendance is not needed, Manager Self-Service would not be included
Benefits Enrollment . • $1 PEPM UltiPro Benefits Enrollment allows employees to review their
benefit choices and make selections on the Web Benefits administrators have tools to monitor
enrollment progress
Compensation Management (Salary Planning & Budgeting) .• $1 PEPM This often
replaces the Excel spreadsheets used to track employee raises The entire process is
automated Ultimate claims that HR and finance love the capability because it replaces
paperwork
Time Clocks . • One-time purchase cost varies based on type of clock Barcode, Proximity,
Fingerprint Scanner from $680 to $2,600 per clock
HR and PayrollHR and Payroll are both part of the core solution under the Intersourcing model These two modules
are not bundled together as a pair, but rather are bundled with other modules as part of the core
solution HR and Payroll are only available as part of the core solution for Intersourcing and cannot
be purchased separately
Minimum Contract TermsThe minimum contract term for Ultimate is 24 months Initial contracts are for two years 99 9 percent
of the time, but upon expiration, contracts renew for one year intervals No price breaks are available
for longer term contracts However, the company says it will renegotiate fees at each renewal
Software Implementation Fees
Install, Set-up, Configuration, and Customization ProcessUltimate claims to have a “unique” implementation process In terms of the general features
included in a SaaS implementation, Ultimate outlines the following:
The employee master file information is loaded into the system•
Employees are trained on their specific tasks•
Ultimate sets up a week-to-week chart that shows what Ultimate and the customer are •
expected to deliver Most customers prefer weekly meetings to review progress
The implementation staff has a limited workload and is paid according to the customer’s evaluation
All of the requested functionality is made available at the same time Ultimate prefers to get
everything up and running at one time so the implementation of the additional capabilities does not
extend for six or eight months
Ultimate Intersourcing implementations average between six and ten weeks, depending on the
amount of assistance the customer can provide Some implementations take as little as two weeks
As an example, if someone wanted to go live by the middle of December 2008 they would need to
make a decision by the end of September 2008
Ultimate Software Competitive Analysis
13
Ultimate’s implementation process is designed to allow customers to quickly begin use of UltiPro
core payroll, benefits, and human resources functionality The up-front implementation fee provides
one complete implementation phase Any subsequent phases are an additional cost on a time-and-
materials basis The implementation occurs virtually and is divided into seven phases Below is a list
of services, deliverables, and customer responsibilities associated with each phase of the process
The typical timeframe for each phase is indicated in parentheses Note that this timing is based on
a six-week implementation cycle from start to live date Individual customer live dates may impact
these timeframes The implementation process easily accommodates live dates at the start of
any month
Planning (Weeks 1 and 2)
Ultimate Software Services Deliverables Customer Responsibilities
Welcome call with •
customer project leader
Send implementation •
informational documents
Schedule UltiPro Basic •
Employee Administration and UltiPro Basic Payroll Processing training
Implementation overview •
with customer project team
Establish project •
milestone dates
Provision customer’s •
UltiPro environment
Implementation •
documentation * Intersourcing system
Services manual •
* Workplace training offering * Implementatiozn
Methodology and •
responsibilities
Project milestone •
dates chart
Customer’s UltiPro •
environment
Assign project leader and •
project team members
Participate in a welcome •
call (Project Leader)
Review implementation •
informational documents
Participate in •
implementation overview (project team)
Review project milestone •
dates
Analysis (Week 2)
Ultimate Software Services Deliverables Customer Responsibilities
Request and review analysis •
supporting documentation (interface layouts, sample checks, calculation rules, etc )
Facilitate analysis meeting(s) •
to survey and compile business rule requirements
Coordinate data conversion •
analysis meeting
Help customer assess •
reporting requirements
Participant in meetings with •
customer and third-party interface vendors to discuss interface setup & testing
Request for •
analysis supporting documents
Standard workplace •
project plan
Participate in analysis •
meeting(s)
Provide requested •
supporting documents
Work with Ultimate •
Software to assess reporting requirements
Initiate contact with third •
party interface vendors to determine and coordinate next steps for setup and testing
14
Ultimate Software Competitive Analysis
Configuration (Weeks 2 and 3; Security built in Week 4)
Ultimate Software Services Deliverables Customer Responsibilities
Configure core business •
rules in UltiPro
Provide customer •
guidance on setup of ancillary UltiPro tables (if applicable)
Setup interface •
templates and automation
Build UltiPro security •
(post-data conversion)
Configuration phase •
acceptance form completion and signoff
Business rules for core HR/•
payroll functionality
One of each of the •
following interface files, using standard UltiPro functionality: * 401(k) export * Health & Welfare export * General Ledger export * Time and Attendance import and Master File export * ACH/direct deposit export
Automation of the ACH/•
direct deposit interface via FTP with PGP encryption or SFTP
Customer access to UltiPro •
(post-data conversion)
Review and approve •
system configuration
Configure ancillary UltiPro •
tables (if applicable)
Create ad-hoc reports in •
Cognos Query Studio
Assign employee roles •
and qualifiers after UltiPro security is established
Additional portal •
configuration if applicable (creation of links, attach documents, and so forth)
Attend UltiPro Basic •
Employee Administration and UltiPro Basic Payroll Processing training
Configuration phase •
acceptance form signoff
Data Conversion (Week 3)
Ultimate Software Services Deliverables Customer Responsibilities
Create data mapping •
instructions
Convert master file (i e current •
employee setup information) and opening balance (i e summary year-to-date numbers by earning/deduction/tax code) data for active employees and current year terminations
Run tax reconciliation on •
opening balances
Convert final opening balances •
(just before live processing, after last payroll in current system is posted)
Master file data conversion •
acceptance form completion and sign-off
Opening balance data •
conversion acceptance form completion and sign-off
Converted master •
file data from one source file
Converted opening •
balance data from one source file, reconciled to source data
Issues and •
assumptions document for master file and opening balance data conversion
Customer access •
to UltiPro
Remit employee data in •
standard template format provided by Ultimate Software
Provide opening balance •
reports for reconciliation
Perform dual maintenance •
of employee master file data in UltiPro and current system through last payroll prior to live date
Review converted data for •
accuracy
Master file data conversion •
acceptance form sign-off
Opening balance data •
conversion acceptance form sign-off
Ultimate Software Competitive Analysis
15
Testing (Weeks 4 and 5)
Ultimate Software Services Deliverables Customer Responsibilities
Run parallel test •
Work with customer •
to resolve testing/data discrepancies
Test interface content •
and structure
Test workflow and security •
Parallel testing acceptance •
form completion and sign-off
Tested and verified •
data
Tested and verified •
paychecks
Tested and verified •
interfaces
Tested and verified •
reports
Tested and verified •
workflow and security
Run parallel test •
Work with Ultimate •
Software to address testing/data discrepancies
Coordinate interface •
testing with vendors
Test workflow and security •
Attend applicable •
eLearning courses
Parallel testing •
acceptance form sign-off
Production (Week 6)
Ultimate Software Services Deliverables Customer Responsibilities
Initialize UltiPro for live •
processing
Support live processing •
Production processing •
acceptance form completion and sign-off
Checks and direct •
deposit advices
Customer-selected •
standard interfaces
Customer-selected •
standard reports
Process first live payroll •
Production processing •
acceptance form sign-off
Support Transition (Week 7)
Ultimate Software Services Deliverables Customer Responsibilities
Submit “Transition Package” to •
Support team
Coordinate formal transition call •
with Support team and client
Participate in support transition call •
Outstanding •
action items listParticipate in support •
transition call
16
Ultimate Software Competitive Analysis
The activation process for Recruitment is as follows:
Activation Process for Recruitment
Ultimate Software Services Deliverables Customer Responsibilities
Coordinate UltiPro •
recruitment site creation, which includes predefined setup for the following: * Candidate application dispositions * Candidate/Application Source o Interview types * Offer statuses * Expense categories * Work hours * Task priorities * Task statuses * Requisition Reason * Approval template 1 * Approval Template 2 * Contact types * Form letter Template * Assessments * Assessment detail
Configure recruitment roles •
in UltiPro
Welcome call with customer •
to discuss * Log on procedures * Training * Client analysis tool (CAT) to assist customer with implementation * System testing checklist * Data integration with core UltiPro and review of imported data * Support contact information
Performance management to •
UltiPro integration procedures
Review of imported data•
Support contact information•
Customer UltiPro •
recruitment environment
Implementation •
documentation * Recruitment training information * Client analysis tool (CAT) * System testing checklist
Support contact •
information
Participate in welcome call •
(Project Leader)
Review integrated data from •
UltiPro for accuracy
Attend recruitment training •
Complete client analysis tool •
(CAT) to aid in Recruitment configuration
Complete recruitment •
implementation process: * Complete customer- specific assessment information * Complete modifications of predefined tables (if applicable) * Create requisition templates * Coordinate job board cross-posting testing with vendors * Perform testing per system testing checklist * Open requisitions and post on job board * Initialize UltiPro recruitment for live processing
Live processing •
Ultimate Software Competitive Analysis
17
Implementation Pricing SaaS ProductsImplementation budgets—essentially one-time setup fees—are based on the number of
active employees at the time of implementation A typical range is between $50 and $100 per
employee Of that, the core is $50 Time and Attendance is $20, and the other add-ons are $5
per active employee Ultimate charges this flat fee regardless of the number of hours required to
complete the implementation Rather than billing according to the number of hours needed for
the implementation, Ultimate charges the flat fee and then works until the customer is satisfied
Although this is the company’s claim, there are clearly items that are not included in the core
implementation for which the customer must pay additional fees
What is Included/Not IncludedAs discussed in detail for software license implementation, the implementation of Ultimate’s
Intersourcing product includes planning, analysis, configuration, data conversion, testing,
production, and transition services The company maintains that the implementation fee includes
everything needed to get the job done and will work until the customer is satisfied, regardless of
the number of hours
However, the company did identify several tasks that customers must pay extra for:
Loading• employee history in excess of one year
Printing direct deposit advices (DDAs)•
Data conversions•
Creation of interfaces in excess of the four included•
Set-up for data exchange services with third parties•
Training in excess of first three occurrences•
Pricing for Items Not IncludedImplementation or other consulting services which are outside the scope of services outlined in
the purchase order are billed at the rate of $160 per hour for remote services Onsite services
are billed at the rate of $1,600 per day
With regard to training, Ultimate offers a Web-based, instructor-led training for no charge for the
first three occurrences of each training class Additional training above the three occurrences is
$295 per class eLearning courseware is available for unlimited use at no charge
One of each of the following four interface files is included at no extra charge (creation of
additional interfaces files is $2,000 per interface file format):
Standard 834 Health & Welfare•
401(k)•
General Ledger•
Time• and Attendance import/Master File data export
Ultimate offers data exchange services, essentially automated file transfers to third-party
vendors The price is $1,000 per file setup
Customers can opt to have Ultimate print the direct deposit advices (DDAs) at the rate of
$ 50/DDA
18
Ultimate Software Competitive Analysis
Ultimate estimates the following hours per task (charged at the rates mentioned on the previous
page) for data conversion activities:
Estimated Hours for Various Data Conversions
Date Type to Convert Hours (estimated)
Beneficiaries 2
Contacts 2
Dependents 5
Employee Status History 3
Job History (up to 7 years) 8
Job History (7 years and greater) 10
Review History 3
The above estimates are based on the following assumptions:
All data files will be provided in Ultimate Software’s standard load table format •
Hours are per conversion file (i e if more than one file is supplied for any type of data, •
hours should be applied to each file)
Customer will provide all code translations of source code to UltiPro code •
Any code in historical data not currently used (i e not in current UltiPro setup) will be •
provided and set up prior to conversion of data; missing codes will not display
For job history, one system generated record exists per employee in the Master File •
data that cannot be removed/replaced
All data converted “as is” without validation •
Services Included in Implementation FeesEach new customer at Ultimate is assigned a Project Manager Ultimate meets with the customer
to plan the entire process and works backward from the start date Each party’s responsibilities for
each week are agreed upon and meetings are conducted each week to discuss progress In short,
every step is planned to hit the deadline As Ultimate points out, any vendor can make promises,
but delivery is the tough part Ultimate claims it delivers better than anyone else in the marketplace
Configuration ActivitiesWith regard to configuration activities that need to be done to match the customer’s organizational/
division setup, at Ultimate the limit for organization levels is four, but there are breakdowns within
each level such as jobs, location, and so forth The application does not support more than four
organization levels; additional levels are not available, even for a fee However, any of the four
evels can be renamed as desired The company says that most organizations use two or three
main levels
Ultimate Software Competitive Analysis
19
History Data Loading by UltimateUltimate will load new customers’ history for one year as long as it is provided in a flat file of
information This is included in the core implementation fee Extra charges— estimated at $150 or
$160 per hour—do apply to working on and loading a customer’s historical data going back more
than one year
However, the typical amount of time required for this is small Even large organizations with up to 20
years history typically require only several hours work A new customer provides an Excel sheet and
Ultimate loads it and maps everything over It does not matter if there is one employee history or
35,000 employee histories; it is all part of the mapping process and uploading into the software
Customer Support for Workplace / Intersourcing Product
Support is included in the monthly subscription cost for Intersourcing customers There is no
additional charge for maintenance and no other fees associated with any other support types
Customer service is available 24/7 During regular business hours in any U S time zone, customers
can call their named service representative for immediate access to a support professional who
can help resolve issues For issues arising after regular business hours, customers can dial an after-
hours support paging system for quick response However, Ultimate claims that if a customer needs
to speak with the Director of Client Services at 2 a m on a Saturday, for example, that they’ll make
it happen to ensure that the customer is happy
Ultimate Software’s support services also include:
Web site to submit service requests, check the status of requests in progress, find product •
information, and access training
Direct access telephone support through the National Support Center•
Access to support representatives through an emergency after-hours pager•
Charging for the Addition of EmployeesNew employees are brought into the system as part of the new-hire process, and are added to the
HR, Payroll, and Time and Attendance systems No setup fees are incurred as new employees are
added New employees are added to the employee count for the next billing cycle
Frequency of BillingCustomers are billed quarterly for the number of employees on record for the most recent quarter
The purchase order specifically states: ”The Subscription Fees are due quarterly and invoiced 30
days in advance of the quarter based on the number of active employees during the month two
months prior to the start of the Quarter The amount due upon the effective date of the purchase
order is payment for the quarter commencing on the first live date ”
Minimum Customer Size and/or Monthly RevenueThe minimum number of employees, or minimum monthly investment to get started, is 200
employees On occasion, Ultimate will permit smaller companies that are indicating a strong
likelihood of solid growth to start at 150 employees
Although a new customer could conceivably start even at the one employee level, everything would
be at the 200 level pricing structure In fact, several current Ultimate customers have 130 employees
and are being billed for 200 employees As they add more employees, their costs per employee will
go down Those organizations pay a flat fee of, say, $2,200 per month
20
Ultimate Software Competitive Analysis
Discounting
Representatives indicate that they would rather be upfront and honest: here is the price and here is
what it is going to be for the future That being said, special discounts are often made at the end of
fiscal quarters One caveat is that Ultimate typically does not discount the setup costs or ongoing
processing costs
As shown previously, the list price for the core Intersourcing solution is $12 PEPM The company will
discount that slightly ($1) right off the bat, so most customers start at $11 PEPM The next tiered
discount does not come until the customer reaches 1,000 employees, at which point the price
drops to $10 PEPM (17% discount off list) While a Workplace sales representatives claimed that
companies who grow to 2,000, 3,000, or 5,000 employees are not offered an additional discount
(most likely because Workplace sales representatives do not sell to companies of that size),
enterprise sales representatives claim that the PEPM drops by about 50% at those levels
Typical SaaS Contract Terms
Termination PenaltyAccording to the Ultimate SaaS contract, customers cannot cancel the agreement during the initial
24-month contract term After the initial term, the customer may terminate the agreement by giving
Ultimate written notice at least 90 days prior to the next renewal period In the event of cancellation,
the customer must compensate Ultimate for any hours worked as well as outstanding expenses
The agreement does not require an additional penalty for termination
Access to Data Once SaaS Term EndsCustomers who do not renew their contract with Ultimate are able to obtain a report containing their
historical data This process includes creating a report—called an “end file”—containing all of the
employee master file information Ultimate creates this file for the customer, who then can import
it into a new system Generally, Ultimate includes just the last year of data based on this being all
the customer generally needs However, Ultimate can upload the customer’s entire history upon
request
Positioning of SaaS Software Products
Even though Ultimate’s Annual Report distinguishes between UltiPro Intersourcing and Workplace,
neither the company Web site nor Ultimate sales reps discuss these as being two separate
products offerings The difference is positioned more as two separate target markets for essentially
the same offering rather than two separate products
Ultimate positions its SaaS solution as a “total business solution ” In fact, the portal shows the close
integration between HR, payroll, benefits administration, and other HR activities UltiPro serves
as a company’s one-stop workplace portal—the center of company-related activities Ultimate
claims it gives customers total control over their payroll and HR processes, which is said to improve
efficiencies and reduce administrative costs In addition, roles-based security gives everyone in the
organization access to exactly what they need to get their jobs done
Ultimate uses a single integrated database and single sign-on This is the most commonly
presented positioning message Ultimate handles the entire backend in a single database, from the
time the prospective employee fills out an application through the end of the employee’s lifecycle
Data needs to be entered only one time In representative practical terms, this means that the user
can get HR and Time and Attendance reports with a single logon from a single system Moreover,
everything occurs in real time Applicants are in the database immediately and subject to reporting
Competing products require uploads that typically occur daily or weekly
Ultimate Software Competitive Analysis
21
Perceived Relative Competitive Strengths
In terms of relative strengths of Ultimate’s SaaS offering, the company first points to its integration
UltiPro is a single database solution, meaning there is no synchronizing It includes Payroll, HRIS,
Self Service, Recruiting, Benefits Administration, Performance Management, and Time and Labor
management
Secondly, Ultimate claims that its reporting is a key differentiator as it has the ability to run hundreds
of pre-authored reports or create new reports in seconds Ultimate claims its reporting is superior
to any competitor Instead of just being data, reporting can be strategic information useful in
decision-making for HR and payroll UltiPro’s report writer is built into the solution and reports off of
any of the fields in any of the areas mentioned above, with true point-in-time and historical reporting
UltiPro stores all of the customer’s historical data, pay history, online statements, W2s, job history,
and so forth, for as long as the customer is using the solution
The company also sees performance management as one of its major differentiators Employees
are able to list accomplishments in a journal throughout the year Managers can establish goals for
each employee that matche the corporate goals
Ultimate Software claims to be the only HR and payroll provider that dedicates all of its resources
to human resources and payroll research and development, because HR, payroll, and talent
management solutions are all that it sells It has the flexibility to process payroll and print checks
on-demand, according to the customer’s schedule
Ultimate also claims it is unique in the way that it handles terminated employees UltiPro does not
archive terminated employees and does not bill the customer to store them Ultimate leaves this
data there for as long as the customer needs it for full reporting
Ultimate received ISO 27001 certification which means that it cannot be hacked Only 60
companies in the United States have received that particular ISO certification In addition, the
company hires organizations to attempt to hack into the system The bottom line is that all the
information is secure Ultimate takes security very seriously and strives to make the information
100 percent secure
Finally, Ultimate touts its customer service The company boasts a 99 percent client retention rate
Customers have access to dedicated support specialists who are Certified Payroll Professionals
(CPPs), certified for quality customer service from the Service & Support Professionals Association,
and have an average of 11 years industry experience In terms of pricing, the company offers
PEPM pricing with no hidden charges
22
Ultimate Software Competitive Analysis
Section C: Other Product/Service/Price Information
Mix of Customers
Customers Using Licensed SoftwareUltimate reports that 30 percent of its 1,600 customers (480 customers) use its licensed software
According to customer size, the following percentages apply to licensed software:
None of the company’s small customers use licensed software•
15 percent of midsized companies use licensed software•
52 percent of large customers use licensed software •
Ultimate’s client/server application is rarely sold to organizations with fewer than 1,000 employees
Customers are increasingly moving toward the Web-based application to avoid hardware and IT
management expenses Certain customers want to avoid application support and management
as much as possible and prefer to reduce IT costs Some customers find that the hosted model is
somewhat more cost-effective than an in-house implementation
Customers Using SaaS Software The majority (70 percent or 1,120 customers) of Ultimate’s customers use
Intersourcing Virtually all of Ultimate’s customers with fewer than 1,000 employees purchase the
software as a service, with a few noted exceptions Most larger customers are moving to the Web-
based application as well A few customers prefer to retain control, but according to Ultimate,
nearly all are comfortable with software as a service A major reason for this is security, which was
addressed above in the section concerning relative competitive strengths According to customer
size, the following percentages apply to SaaS:
100 percent of small customers use Intersourcing•
85 percent of midsized companies use Intersourcing•
48 percent of large customers use Intersourcing•
Customers of Each Type and Size Being Sold ToUltimate claims that 85 percent of all new customers choose Intersourcing, compared to 80 percent
in 2007 As shown above, customers who choose the software license model tend to be larger
companies, and to a lesser extent, midsized companies
Ultimate has recently developed a separate sales force targeting companies with 200 to 700
employees The company has set goals of increasing its 2008 annual recurring revenues by 30
percent over 2007 and by another 30 percent in 2009 Based on December 2007 market data from
Dun & Bradstreet, Ultimate Software estimates that its approximate market share to be 3 percent of
the 15,000-and-larger employee space; 6 percent in the 700 to 15,000 employee space; and less
than 2 percent in the 200 to 700 employee space
Ultimate Software Competitive Analysis
23
Payroll Tax Management Service
UltiPro includes tax management to deliver federal, state, and local tax updates automatically every
quarter as part of the core Intersourcing solution This means that Ultimate pushes the federal and
state taxes to the government It then has the responsibility to follow up on any inquiries from the
government
Ultimate Software Responsibilities
Prepare, deposit, and file customer’s payroll taxes for those federal, state, and local •
jurisdictions listed by customer on the company profile report (provided with the standard
company set up package) and any updates provided to Ultimate Software by the customer
Prepare a quarterly tax statement for each Federal Employer Identification Number (FEIN) This •
statement will include a summary of tax liabilities reported throughout the quarter, account
reconciliation and printed returns filed at quarter end
Provide customer with a named tax representative •
Answer tax agency correspondence for tax deposits and returns filed by Ultimate Software •
File amended returns as required for returns processed by UltiPro Tax Filing Services •
Provide W2 agency filings •
Ultimate has the obligation to pay customer’s tax liabilities and Wage Attachments (to the •
extent that customer has deposited funds with Ultimate Software)
Ultimate will prepare and deposit customer’s wage attachment liabilities for those federal, state, •
and local payment processing units and any individual third party to which an employee of the
customer owes a debt and has agreed or is compelled by appropriate governmental authority
to resolve by attachment of employee’s wages Ultimate Software will make available a report
of wage attachment activity to the customer summarizing funds collection and disbursement
transactions completed Ultimate Software is not obligated to commence providing payment
services until it has received all information necessary to disburse wage attachment liabilities
Ultimate is not responsible for providing additional administrative services, including, but •
not limited to: agency research, account reconciliation, wage attachment data input, and
adjustments The customer is solely responsible for the setup for the wage attachments in the
UltiPro Software in accordance with the user manuals
Ultimate Software is not responsible for any preexisting errors or similar matters arising prior to •
commencement of these services by Ultimate Software or for any errors that may occur in the
event that Ultimate Software is not provided with the necessary or accurate information by the
customer;
Ultimate Software will print checks, and if the option pursuant to the agreement is selected, •
direct deposit advices for customer based on the information from each completed payroll
as set forth in the data remittance section below Ultimate Software is not responsible for the
shipping of the checks and optional direct deposit advices to the customer
24
Ultimate Software Competitive Analysis
Customer’s Responsibilities
Data remittance The customer will complete its payroll before 12:00 noon (customer’s local •
time), no less than two days prior to the applicable check date
Funds collection One business day prior to the payroll check date for tax liabilities not requiring •
a “next day” payment date, Ultimate Software will ACH Debit the designated bank account for
the total tax liabilities and wage attachments associated with the given pay period For any tax
liability within a given pay period requiring a “next day” payment, Ultimate Software will reverse-
wire the designated bank account for the total tax liabilities associated with the payroll Ultimate
Software will collect funds to cover the total payroll tax liability by the customer
Record of tax disbursement and wage attachments Ultimate Software will not be liable for any •
invalidity or inaccuracy unless the customer notifies Ultimate Software within twenty-four hours
Upon Ultimate Software making available to customer any and all records of tax disbursements
prepared and wage attachments by Ultimate Software pursuant to this agreement, customer
will examine them for their validity and accuracy according to customer’s records The
customer will immediately notify Ultimate Software of any inaccuracies
Payroll tax service is included in the core Intersourcing package at no additional charge
Although the payroll tax service was done years ago through Ceridian, these services are now
provided in-house
Currently, the payroll tax management service is available only to Intersourcing customers and a
select group of software license customers Ultimate launched an internal tax filing department in
February 2008 The department, which currently has 60 customers and concentrates solely on
tax filing and garnishments, is growing slowly The internal tax filing is made available to a limited
number of customers with manageable operations, i e , not those operating in 40 different states
with many federal IDs The typical customer operates in perhaps 15 states with two federal IDs
Benefits Carrier Connection Service
Ultimate’s core product includes a link to its client’s health and welfare carrier and actually transmits
employee enrollment data from UltiPro directly to the benefits carrier Ultimate can setup a
connection to the customer’s insurance carrier for any benefits changes Ultimate then automatically
sends a file to the employee’s insurance carrier with new-hire information The feed can be setup for
short-term or long-term disability The data can be imported back into the general ledger As long as
the application is no older than 20 years, it will be accepted for import The data does not have to
be reentered and automatically flows into the general ledger
Ultimate provides one free connection to a health and welfare carrier (medical) If an additional
connection is needed for dental or disability, there is an extra $2,000 charge for each new
connection Ultimate says that the medical connection is sufficient for most organization, but if
customers need to add dental and vision, they be easily added
The benefits carrier connection service is provided directly by Ultimate The only caveat is
that the insurance carrier must be able to accept the transmitted file, and Ultimate claims that
99 percent do
The benefits carrier service is the same regardless of whether the customer chooses the license
or SaaS model
Ultimate Software Competitive Analysis
25
Types of Software Support Services
Maintenance SupportUltimate claims to be a recognized customer support leader, with its Support Services having
been certified by the Support Center Practices (SCP) since 1999 Ultimate is committed to helping
customers on a day-to-day basis in a timely manner The company does not want customers to
have to wait two or three days for assistance
As discussed previously, support for the Intersourcing model is included with the subscription price
and is available 24/7 It also includes a named representative, Web site to submit service requests,
direct access telephone and emergency after-hours pager support
Support for the software license option is available at 20 percent of the license cost The following
are key features of maintenance and support for software licensing:
Toll-free product & technical support help desk•
New software features and product updates•
HR & payroll legislative revisions and updates•
Federal, state, & local tax law regulatory compliance•
Access and use of Ultimate Software’s client support Web site•
Single-point of contact to handle client support needs•
In addition, Ultimate includes a customer feedback component with its software license support
The company performs regular client satisfaction surveys and maintains contact with its UltiPro
customer advisory board members Support staff participates in regional user group meetings
Ultimate’s support services include a customer support center on the Web, Web-based support
self-service, a toll-free customer support line, and continuous access to support representatives
through an emergency after-hours pager Customers have 24/7 access to professionals who are
experienced in using UltiPro’s Web-based payroll and workforce management solutions
Technical Support RepresentativesIt is estimated that Ultimate currently has approximately 90 customer service representatives,
with each representative handling no more than 25 customers Ultimate compares this ratio to its
competitors, such as ADP and Paychex, where customers must call in to a queue-based CSR pool
Ultimate claims that ADP and Paychex have CSR to customer ratios of about 370 to one Ultimate’s
customer service representatives are experts—certified as payroll professionals and as human
resources professionals
Authorization for Calling In Ultimate customers typically have a system administrator who serves as the company liaison
for support issues Usually, another HR and PR person are also authorized to call While these
employees are typically identified as the main contact person for the company, any customer or
employee can log a support ticket Additionally, Ultimate can give mangers access to unlimited,
delivered reports
26
Ultimate Software Competitive Analysis
Training Services
Ultimate maintains that UltiPro Intersourcing is easy to implement, and many customers choose to
attend the full implementation training program and take an active role in their implementation, thus
reducing their overall implementation costs Training is designed to prepare clients to implement the
UltiPro solution, perform daily operating tasks, and maintain UltiPro Class schedules are arranged
to correspond to the phases of implementation
Depending on the course topics, customers have their choice of training environments: training
centers located through out the United States, mobile facilities, or eLearning With in-classroom
training, class sizes are limited to between 10 and 15 students
The eLearning curriculum uses both instructor-led Web conferences and self-paced courseware
Ultimate Software’s training curriculum is designed to establish a foundation for those who will be
using UltiPro solutions, both during the initial activation period and for ongoing processing The live,
Web-based courses require students to fully participate and demonstrate mastery of key concepts
and skills before advancing to more complex topics The instructional team includes APA, ASTD,
STC, and SHRM members
Web-based, instructor led training for Intersourcing customers is free for the first three classes
Additional training is $295 per course, per participant eLearning courses are available for unlimited
use at no charge Software license customers must pay an additional charge for training, which
averages 12 to 18 hours at $595 per person, per day, resulting in an average training fee of almost
$9,000
Ultimate Software Competitive Analysis
27
Section D: Company Information
Markets Targeted
As discussed previously, Ultimate has a separate sales force for companies between 200 and 700
employees This is where the focus has been for the past 18 months These customers are sold
the Intersourcing solution, and software licensing is not an option for these sales reps According
to Ultimate, the Intersourcing offering is designed to provide an appealing pricing structure to
customers who prefer to minimize the initial cash outlay associated with typical capital expenditures
Ultimate originally focused on larger companies with at least 1,000 employees, and these
customers were sold the software licensing model
While small companies (200 to 700 employees) have little option but to purchase the Intersourcing
model, larger organizations are given more of a choice The trend is clear in that larger organizations
are more likely to choose the software license model; however, Ultimate leaves the door open for
large companies to go with an Intersourcing solution as well
According to the Ultimate 2007 Annual Report, the Intersourcing offering is primarily offered to two
main groups of customers based on their relative sizes Companies with over 700 employees are
sold the full Intersourcing offering solution, which contains all available functionality of UltiPro Core
Companies with 200 to 700 employees receive Workplace, which provides limited functionality
of UltiPro Core and is designed to give customers a high degree of convenience since Ultimate
Software handles system setup, business rules, and other situations for customers “behind the
scenes ” However, Intersourcing sales reps claim that Workplace and Intersourcing are one in the
same, with the difference being purely semantics
The target markets are defined more by size than industry Ultimate sells to a wide variety of
industries, and the industry does not seem to be much of a factor in terms of which Ultimate
product is most appropriate For example, Ultimate has customers from oil and gas, medical and
nonprofits, as well as Playboy and Hooters A more complete list of vertical industries is provided in
the next section of this analysis
Number of Customers
Ultimate has approximately 1,600 customers representing 9,000 unique EINs (some customers
have upwards of 40-50 EINs) No customer accounted for more than 10 percent of total revenues in
2007, 2006, or 2005 There does not seem to be a predominance of any particular vertical industry
Ultimate’s customers operate in a wide variety of industries including:
Manufacturing•
Food services•
Sports•
Technology•
Finance•
Insurance•
Retail•
Real estate•
Transportation•
Communications•
Healthcare•
©2009 Sage Software, Inc. All rights reserved. Sage, the Sage logos, and the Sage product and service names mentioned herein are registered trademarks or trademarks of Sage Software, Inc., or its affiliated entities. All other trademarks are the property of their respective owners. 05/09 09-51270
888 Executive Center Dr West, Suite 100St Petersburg, FL 33702Telephone: 800-424-9392www sageabra com