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SAGE PROCUREMENT STRATEGY


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BY : Diego GutiérrezDecember Tue, 2019

Sage is the market leader in accounting, payroll and payment systems for business owners and entrepreneurs worldwide.

In 2019, it has acquired OCREX and CakeHR, operations that we analyse in the following lines.

GETTING TO KNOW SAGE

Sage is a a British multinational conglomerate dedicated to the design and implementation of various IT solutions for companies..

It is currently the third largest provider of enterprise resource planning software (ERP) after Oracle y SAP.

However, it is the market leader in the small and medium-sized business market, where it has more than 6 million customers.

Founded in 1981 by David Goldman, Paul Muller y Graham Wyliewas born as a result of the needs that the founders detected in the business world to automate accounting processes.

Since then, it has been offering solutions to facilitate the management of accounting, invoicing, human resources, payroll, payments, assets and other services to companies of all sizes and sectors.

It currently employs more than 13,000 people in 23 countries.

They provide their services to all types of companies, especially SMEs where they lead the sector.

SERVICES AND BUSINESS AREAS

The services offered by Sage are divided into five business areas:

  • Accounting and managementoffers cloud-based accounting software.

It allows you to easily create reports, consult financial information, calculate VAT or keep up to date with the latest regulations, as well as many other services to facilitate business management.

  • ERPEnterprise Resource Planning (ERP) system that connects many day-to-day business tasks such as inventory management, ordering or customer service.

In this way, it can optimise processes, facilitate access to information, make decisions more quickly or have greater control over processes.

  • LabourThe tool that offers the possibility of managing the entire working life cycle of the company's employees.

It ensures payroll accounting, compliance with social and tax regulations.

  • Treasurytreasury management programme.

It facilitates the company's cash control and the management of banking operations and the execution of payments and collections that depend on the business.

  • Fintech ServicesThe solution offers the possibility of accessing complementary financial services, streamlining processes and product integration.

LATEST RESULTS AND FORECASTS

It recently presented its quarterly results with a turnover of 2.000M€ and divided between North America (35%), Europe (53%) and South Africa and Australia (11%).

This turnover came mainly from software subscriptions, maintenance and customer support.

Notably, annual recurring revenues grew by 10.81GDP1T, continuing the strong performance of previous fiscal years.

This is expected to continue next year, with an expected growth of 8-9%.

PROCUREMENT STRATEGY

Despite the company's strong commitment to organic growth, it has not prevented it from carrying out two acquisitions in the current year 2019.

Both are in line with Sage's ongoing strategy of becoming a SaaS company with a strong focus on cloud offerings and a reshaping of its portfolio.

We analyse the British company's most recent operations.

OCREX

It recently acquired Ocrexfintech, an Irish company founded in 2011.

It uses artificial intelligence and facial recognition to automate the recording of invoices and payrolls, mainly, making the work of accountants easier..

With clients as important as Deloitte or BDO3 million in its latest financing round in 2017.

With this buySage expects to be able to integrate this technology into its offering and be able to provide a faster, more personalised service tailored to the current demands of its customers, while at the same time allowing them to continue to innovate.

The strategy of migrating to a SaaS company fits with this acquisition, as it allows them to apply artificial intelligence in an open ecosystem.

In this way, it strengthens its product and software offerings.

CAKEHR

CakeHR is a a British company dedicated to the development of cloud-based human resources software..

Essentially, it allows companies, especially smaller ones, to migrate core HR activities to a cloud-based platform.

In this way, Sage is strengthening its offering in this area and reinforcing its cloud-native solutions.

Similarly, this integration favours the simplification of services thanks to the new technology while producing important synergies due to the easy fit of both companies.

As I said Steve HareAccording to Sage's CEO, the company has made significant progress in its strategic execution.

It has done so especially in the development and deployment of the cloud offering and the reshaping of its portfolio to become a large SaaS company.

The last two acquisitions clearly reflect the direction Sage is trying to take and is expected to continue in the future.

Our diferentiation

Market Research Technology
Our team of market analysis specialists is continuously analyzing the investments of the most active markets in the industry in order to unceasingly contribute ideas of the current market situation and identify the most relevant trends for senior management. We integrate the most relevant sources of information which allows us to discover the most interesting companies for venture capital and similarly helps us to identify the investors with the highest probability of involvement in an M&A process to ensure the success of our sell-side operations.

The reports and deductions of our advisors provide a broad view of the sector, both geographically and from the complementary or adjacent markets perspective.
Technology Data Analytics
for M&A
Advanced data anlytics is a weapon". Intelfin is an artificial intelligence tool we use for investing and creating value in SMEs through competitive analytics and the enterprise environment.

IntelFin consists of a cognitive system, which, through the application of advanced analytical technologies, facilitates the automation of investment and financing decisions in the field of non-listed companies and especially SMEs in high-growth sectors.

The information related to these companies is characterized by their lack of transparency and heterogeneity; thus, it is necessary to develop an advanced analysis which is as much predictive as prescriptive and is developed in a natural language custom, suitable to obtain greater clarity and knowledge of the investment scope.

The IntelFin system focuses especially on analyzing the variables that define and influence the competitive environment of a sector and the positioning of a company, analyzing their influence on future value creation. Therefore, IntelFin supports strategic decision-making to senior management by resolving questions such as:

¿What are my competitors' priorities, strategies and expansion plans? Who's my competition? Which competitor is most likely to grow at a higher rate?
Which areas of activity/business models will receive the most investment? Which sectors are most attractive to investors?
Which companies are going to experience the most growth in the near future? Which companies are most likely to receive investment or be acquired?
Training Methodology
We have developed training programs in an innovative set-up which guarantees our teams the acquisition of technical competences both in the field of corporate finance and in the field of psychology, that is much needed when it comes to negotiation processes.

We have a culture of continuous improvement of our processes, closely related to the use of information systems that allow the enhancement of internal communication between our teams, as well as external communication with our customers. Hence, we extend best practices identified internally in an efficient and rapid manner among our members.

Are you one of those who prefer to be well informed when making decisions?

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