When it comes to services procurement, one of the only providers that can reasonably claim to have top-of-the-pack technology combined with strategic and administrative VMS services is IQNavigator. In the coming weeks on Spend Matters, we will profile IQNavigator in detail, looking at both their technology and services from a market and customer lens. This post represents the first in a multi-part series that will dig into IQNavigator's unique position in the market as well as its overall differentiators and strategic direction. In the following paragraphs, we'll first explore a bit of history around IQNavigator, its customers and its fit within the broader services procurement market. Later this week and next, we'll examine their solution capabilities in more detail as well as share some of the experiences that their customers have realized as users of IQNavigator's technology and services.
IQNavigator is no stranger to services procurement technology, having pioneered, along with Fieldglass, the concept of a flexible, software-as-a-service (SaaS) services procurement model in the early days of On Demand applications. But unlike Fieldglass, IQNavigator made the decision to focus on delivering technology and services (versus just software), a combination that 75% of its 70+ customers take them up on today. In fact, IQNavigator suggests this trend will continue to build on itself in the future, as even more of its potential customers look for an integrated solution approach.
IQNavigator's competitors often like to claim that the company's focus is in the middle market, but today, 90%+ of its customers are in the global 2000 and over 50% are in the Fortune 500. On a worldwide basis, IQNavigator has localized their solution in 20 regions, factoring into account local employment, work rules, labor and related tax law and regulations. The solution also supports multiple languages on a localized basis.
At this point, IQNavigator's headcount, 200 employees, makes them the largest VMS provider in the sector (though this is a bit of an unfair statement because many of their employees focus on the services-side of the business). Still, since much of the business is focused on software and they have what is arguably the second-strongest (or strongest, depending on who you talk to) platform in the market, the size and headcount is meaningful. As is their double-digit growth in revenue over the last year which has come on the heels of a 100% management buyout by private equity and technology investor GTCR.
Interestingly enough, for those who are geographically and spatially inclined -- and continuing on the Chicago-theme of services procurement providers that I talked about in a previous post discussing Click and Fieldglass -- GTCR is headquartered almost in the middle of a diagonal Southwest to Northeast line you could draw between Fieldglass and Click in downtown Chicago. It's a bit of an odd coincidence, wouldn't you say?
But more important than proximity to its investors and often its primary competition (at least in the form of Fieldglass as Click/Emptoris has not made its way into as many deals of late, at least until the recent acquisition), is the market that IQNavigator is serving. Today, some 40% of IQNavigator's volume represents services spend that is not time-based. And 35% of its volume is from outside the US. In other words, IQNavigator is succeeding in expanding the services procurement pie outside of just time-based contingent labor spend in the US.
Regardless of location or spend breakdown, most of IQNavigator's deals are based on a percentage of customer spend. This, IQNavigator claims, aligns their incentives with those of their customer's. But in some cases, customers prefer a subscription-based model so they know precisely what their monthly costs will be (still others are interested in a model that lets them capitalize and then depreciate software costs upfront and overtime, mimicking a more traditional enterprise licensing model)
Stay tuned for continuing coverage of IQNavigator later this week and next.