SuccessFactors, Inc

SuccessFactors wants to increase productivity inside of every company by building a bridge between employee performance and goals. It sells performance and talent management software in 156 countries and 18 languages. Companies use this for improving compensation planning, goals management, performance monitoring, employee surveys, individual development planning, and succession management. The company's Performance Management software suite includes Web-based applications for automating the performance review,goal management,compensation planning, analytics and planning and longer-term succession planning. Recruiting talent, identifying skill gaps and streamline on the job training are some of the other benefits of this software.

Performance Management helps in online review. Goal Management helps to streamline employee goals with company's objectives. Compensation planning ensures right rewards for the right performance. Analytics and Reporting gives a graphical metric of performance and talent management. Here is the sector wise list of its customers, Consumer, Goods industry, Energy and chemicals, Financial Services, Government and Higher Education, Health care, High tech, Life sciences, Manufacturing, Non- profit organisations, Services industry and Retail. It has more than 1300 individual customers. Its product, after continuous innovation, is standardized on the J2EE technology and the programming language used is Java. 

SuccessFactors faces intense competition form third party human resource software development vendors like Authoria, Inc., Cornerstone OnDemand, Inc., Halogen Software Inc., Kenexa Corporation, Oracle Corporation, Plateau Systems, Ltd., Salary.com, Inc., SAP AG, Softscape, Inc., StepStone Solutions GmbH, SumTotal Systems Inc., Taleo Corporation and Vurv Technology. As can be seen some of these companies are market Goliaths who have better resources and bigger distribution channels. Since the entire industry is price sensitive a small slash in the product pricing could harm SuccessFactors's revenues in the long term. At the same time SuccessFactors continued incomes depends on customer renewal of the license. This is the crucial stage for any company as a fickle customer could shift allegiance without remorse. SuccessFactors after sales support and customer friendly initiatives are on par with the best in the industry. The other chink in its armour though not significant at the moment is customisation, if large clients require customized features and functions, then SuccessFactors might falter a wee bit in terms of implementation. Any such delay will lead to substantial losses for their customers. Brand awareness will always be done on a shoe string budget which can be out done by any of the mega competitors. And lastly talent retention in SuccessFactors. Since they use in house software to monitor any lapses, all loop holes should be plugged!!

The company's operating expense is largely on research and development and sales and marketing. SuccessFactors is now shifting gears to induct more direct sales personnel. Sales and marketing expenses were 117 percent of their revenues until September 2007. Research and development was 47 percentage of the revenues. Its sales team is present in North America, Latin America, Europe and the Middle East. IBM is its reseller for the application suite.

Lately organizations feel the need to focus on talents of employees, and motivate them to increase the performance. Clear goals and objectives at all levels is being defined in all organisations to reward employees clearly, objectively and consistently, based on measurable results and on their engagement, future potential and ability to energize and lead their colleagues throughout the organization. Hence an investment in software as provided by SuccessFactors will always be in demand. The company just needs to capitalise this requirement.

SuccessFactors was founded in May 2001 by Lars Dalgaard who is also the current CEO. He worked in Unilever and Novartis before starting the company. Finances are taken care by Bruce C Felt, Jr. in his capacity as CFO for SuccessFactors.  

SuccessFactors is clear on the reasons for initiating this IPO. Brand awareness. Since the company will be under constant scrutiny, more customers will get attracted to its state of the art software solutions. The other reason, as always, is to clear the debt the company has in its books. The future of the company is very bright as organisations are moving towards achieving efficiency and reducing costs by deploying such work force management software. And since SuccessFactors is focused on constantly innovating, it need not fear about its guidance figures for the decade to come.