Softline VIP (VIP) has experienced phenomenal growth over the past 10 years to become the largest player in the SA payroll market and has launched a range of new products and services that may increase its growth even more.
In 1994 VIP had about 2 000 users; today there are more than 15 000. But the company is not sitting down to admire the view; after identifying market segmentation as the way forward, it recently launched four payroll products, each to suit businesses with varying degrees of complexity.
Initial feedback from the market has been excellent.
VIP has also made an aggressive entry into new markets - such as outsourcing and personnel placements - taking advantage of its critical mass. It has already enjoyed huge success in these areas, too.
Now it has plans for further organic expansion, having already identified a number of potential markets that fit with its core business. These include tax advice, labour advisory services, salary surveys and performance evaluation systems. But MD Anton van Heerden says the company's strong focus has been one of the biggest contributors to its success.
"Over the past 10 years, we have focused solely on the payroll industry, which has enabled us to maintain a high growth rate.
"Many of our competitors have dabbled in other businesses, and this has hurt them," he says.
Today he is confident that VIP's critical mass will enable it to expand the company's range of services into new markets and the expansion will not be detrimental.
"If we still had only 2 000 users, then it would probably not be viable. But these opportunities are intertwined with what we do."
Van Heerden says that when VIP decides to enter a new market or offer a new service, it does so vigorously. When it undertook the outsourcing and placement drives, it identified the opportunities, researched them, placed substantial resources into developing solutions and then marketed them aggressively.
Apart from its strong focus, there are a number of other factors he believes have contributed to the company's success, they include:
- Providing comprehensive support services - Van Heerden says this has been the company's core differentiator;
- Financial stability, which enables it to provide resources for growth and to invest in the business when necessary; and
- Its culture and values - the company has a flat structure and is fairly informal. All employees are of a high calibre and creativity and responsibility are encouraged, while red tape is discouraged.
Many companies have identified value-added services as today's new growth area and are struggling to adapt appropriately to exploit this opportunity. VIP already moved into this arena 10 years ago. Today 75% of turnover comes from services; its software sales and stationery supplies (mainly the pay slips themselves) make up the other quarter.
"We are predominantly a services business," says Van Heerden.
"About 10 years ago, we identified the opportunity to add value through services. By getting involved in the payroll office of our customers, we take it much further than mere implementation of our software."
Some of the services VIP offers are:
- Compulsory training courses for customers using the systems;
- Seminars on trends and developments in the labour market - customers are encouraged to attend these; and
- A state-of-the-art call centre that forms the basis of the company's support services. A customer will get connected to the first available consultant, no matter where the consultant is located in SA. Consultants are well trained and have instant access to client information.
"We have invested a good deal to ensure we offer the best service," Van Heerden says.
"We hire only BCom graduates as consultants - they implement the software, give call centre support and provide training. Graduates attend a four-month training course that covers all legislation affecting payroll systems, as well as practical knowledge of all VIP software applications and how to run a payroll office.
"If they don't pass, they don't make it - we are strict on that, there are no second chances."
Furthermore, the company invests a substantial amount in regular training for its consultants. This includes a taxation course developed specifically for VIP by tax expert Keith Jordaan.
The quality of the software has never been neglected, though the service ethos has served the company well.
"We invest a huge amount in quality assurance. We have a department of nine people who test the software all day."
Sales director Sandra Swanepoel identifies two other reasons for VIP's success. "When we go out and sell, there are generally two groups of people," she says. "One group has never used a payroll system before and their focus is on the product. They want it because of usability and because it is integrated - information from all the company's systems can be accessed on the database."
The second group consists of users of other payroll systems.
Swanepoel says: "If they go the VIP route, in 80% of the cases it is because of the support. Our call centre, with immediate access and highly trained staff, has a fantastic reputation and this has made a huge difference."
Though many products may do the job, it is impossible to duplicate the support VIP offers.
The company has invested heavily and refined its support over a number of years, she says.
