SAGE PROCUREMENT STRATEGY
24/12/2019
Diego Gutiérrez
SAGE PROCUREMENT STRATEGY

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 es un 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 and 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

Recientemente adquirió Ocrex, fintech, compañía irlandesa fundada en 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 es una 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.

Las últimas dos acquisitions reflejan claramente la dirección que Sage está tratando de tomar y que se espera continúe en el futuro.

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