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Sage Payroll and HR Software Review

 

Sage Group Company Viability Review

With 30+ years within the enterprise software industry, the Sage Group is a viable and stalwart competitor. A few quick facts attest to its current size and stability:

  • 6M customers with business software solutions that serve tens of millions of employees
  • a presence in 160+ countries • four global subsidiary units within the Sage Group: Sage North America, Sage North Europe, Sage South Europe and Sage AAMEA (Australia, Asia, the Middle East, and Africa).
  • member of the FTSE 100
  • 13,500 employees
  • the 4th largest ERP software company in the world
  • an roster of over 28,000 business partners
  • a revenue stream of just over $2 billion per annum

Sage HRMS is a product of Sage North America which is itself responsible for approximately 4000 employees, around half of the customers for the whole organization, 5000 business partners; and revenues approaching $1 billion – easily making it the top performing unit of the Sage Group.

However, certain factors have had a negative impact on Sage’s reputation and performance. The company’s sheer size is impressive but it is also something of a double-edged sword. Having achieved the above statistics via a strategy of acquisition rather than organic growth, Sage is seen by some as simply a software aggregator, collecting new solutions without an overall strategy as to their place in the portfolio. Thus, intentional or not, the years of assertive acquisition have in some respects limited the appeal of the Sage product line and some clients have gravitated towards those vendors that provide a stronger, simpler, and more cohesive offering, leaving Sage behind.

What’s more, the rising tide of SaaS deployment options in the payroll and HR software marketplace has to a large degree left Sage behind, losing ground to smaller but more innovative software vendors able to cater to this growing demographic. Then factor in the general economic downturn of the last few years that has hit the payroll/HR software business as hard as any other (with the possible exception of SaaS solutions) and it’s unsurprising that Sage is struggling to regain its pre-2009 levels of revenue and performance.

However, the company is rallying. Sage is investing in research and development, working on unifying the previously poorly-joined software products, and is beginning to hark back to the company's earliest stages of "organic growth," with a new set of clearly defined strategic priorities: improve organic growth, profit margins, web strategies, and re-engage opportunities. Ironically, the way forward into the cloud may well be more acquisitions (remember the CEO’s DNA comment). The business software market has changed in recent years but is now appears that Sage is finally on board with these paradigm shifts—a welcome transition even if they are a bit late to the game.

Next - Sage Payroll Strengths and Weaknesses >>

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