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Kronos Launches Two New Consulting Practices
by Alex Woodie
Kronos last week announced it has launched two new consulting practices that will provide higher levels of on-site service than the company had previously offered. In addition to installing and integrating its time, labor, and attendance software, Kronos is now offering to manage larger portions of its customers' applications. The change comes about because of customer demand, Kronos says.
While many Kronos customers have asked the company for consulting services over the past 20 years, the chorus has grown louder over the past three years, as the complexity of IT infrastructures has increased, says Peter Broderick, director of field services at the Chelmsford, Massachusetts, company.
"It's become clearer, within the organization, that customers are looking for more assistance beyond installation and integration--more hand-holding, more consulting for their business needs--to achieve a greater return on their investment," he said. "We basically decided that the time was right to expand our Professional Services organization."
Kronos has divided its Professional Services umbrella into three components: Industry Consulting, Technology Services, and Productivity Services. Productivity Services was launched in June 2001 and is geared toward helping customers analyze their Kronos applications and data to maximize their effectiveness.
Technology Services goes a step beyond Productivity Services to provide generalized technology and application support for Kronos customers, including defining migration strategies to the company's newer Web-based software, deploying and administering databases and networks, and creating backup and disaster-recovery plans. The highest level of consulting expertise at Kronos will exist in Industry Consulting, where specialists trained in best practices in the healthcare, retail, and manufacturing industries will work with customers to create frontline labor-management strategies.
To date, Productivity Services has attracted about 75 customers in the seven months that it's been active. Technology Services has been active for about a month and has around 10 customers, while Industry Consulting, about a week younger, has two customers.
The consultants who work in Kronos' new practices will be a mix of in-house staff and independent contractors, Broderick said. To date, the company has about 100 consultants working in Productivity Services, about 35 consultants in Technology Services, and about five in Industry Consulting.
As Kronos moves into the market for payroll and human-resources software, which is the company's stated direction, more consultants will be added as needed, Broderick said. The company is in the "building block" phase of developing that business, he said.
Kronos has been steadily reaching new heights, while many application software vendors have leveled off or shrunk. Last month, Kronos bought the time and attendance software division of SimplexGrinnell, its largest competitor in the market for time, labor, and attendance software, giving it an estimated 50 percent share of the $700 million market. The company has three core application lines that run on OS/400, Windows, Unix, and NetWare server platforms, and offers a range of ancillary products and solutions for specific industries. As a result of the SimplexGrinnell acquisition, Kronos now has about 38,000 customers.
Broderick said a maturation process is underway at the company. "Kronos, getting to be the size that it is, is maturing a little bit," he said. "We're getting into an area where we're trying to model an Oracle or a PeopleSoft or an SAP portfolio."
Those portfolios have increasingly had a bigger services component over the past 18 months or so. As the economy has sputtered and the majority of hardware and software companies have seen profits erode, many of those companies have grown to rely more heavily on consulting and services revenue than software license fees or hardware revenue. Kronos is optimistic about the profitability projections for its new consulting practices, but the publicly traded company is governed by strict rules concerning forward-looking statements, and, therefore, it cannot selectively reveal projections. "We wouldn't get into this business if we didn't think we could make money," says Broderick, echoing the sentiments of most IT players in the hardware and software arenas that are looking for revenues and profits in services.
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