Softworks
Rostering shifts during the Covid pandemic is tricky for hospital managers. The issue has been a boon for Andrew Ferguson, writes Nick Mulcahy
Rostering work shifts during a pandemic is a challenge, which in turn is a boon for Andrew Ferguson’s software company
The founders of Softworks, a software company established in Bray in 1990, likely had little idea that the company would grow one day to a €10m plus turnover company. If they had, perhaps they might have hung on. Or maybe not. The first founder left in 1996, the year after Andrew Ferguson was hired by the firm. The other two founders were bought out in 2007 by Ferguson, who is now the sole owner. The Softworks CEO had to put his house on the line to effect the MBO, and he hasn’t looked back since.
Softworks is a B2B vendor that has proved very successful in Ireland and the UK, and is the sort of firm that state agencies might be more proactive about in terms of developing indigenous champions. Not that Ferguson (54) is clamouring for their assistance. He derives great satisfaction from the fact that Softworks is a world-beater, and he’s very content to plough his rewarding furrow.
Ferguson has Norma Smurfit to thank for where he is now. In the 1990s, venture capital was a novelty in Ireland and, prompted by his wife, Michael Smurfit threw a few bob at providing funding for SMEs. The three Softworks founders were DCU computer grads who, according to Ferguson, established their business as a lifestyle venture, doing programming work based on how much they wanted to earn that week.
The Softworks trio devised a clever piece of software that would sit on top of time-and-attendance software packages to produce reports from the underlying data. “They were ahead of their time insofar as what they were about was analytics and data mining, which nobody was talking about at the time,” says Ferguson.
The purpose of the Softworks analytics was to track patterns relating to, for example, particular days of the week when attendance deviated from the norm, or age and sex analysis relating to work attendance patterns. They sold their product through third parties as an add-on, and with the Smurfit grant, Softworks hired Ferguson to boost sales.
“I was the fifth employee and I was employed because I was involved in selling a time-and-attendance product,” he recalls. “The Smurfit Venture Fund’s investment criteria centred on employee growth rather than performance. We were their second investment – the first one failed – and they did well out of Softworks when we bought them out.”
In his first year in the job, Ferguson decided that the Softworks add-on product didn’t have a future. “The problem was rubbish in, rubbish out. If the underlying system was incorrect, then our system was producing statistics, trends, and graphs etc that were all wrong.”
Ferguson argued the case for Softworks developing its own timeand-attendance software product and faced resistance from the founders. To prove his point, he sourced white label software in the space, added Softworks analytics, slapped Softworks’ branding on it, and proved the market demand by generating some sales.
The Softworks mission pivoted to developing a proper time-andattendance product of its own. Ferguson says the build took 18 months to two years, and from 1998, it was onwards and upwards. “It was a massive growth phase, with sales doubling every year,” says Ferguson.
When one of the founders left after some wrangling with colleagues, Ferguson became a director of the company. Progress stalled for a while around the dot.com crash in 2000, though as things worked out, the economic reversal was good for Softworks’ long-term future.
“At the time most of our customers were in manufacturing and a lot of that suddenly dried up. I looked around to see who was still spending, so we turned our attention to healthcare, public sector and
government departments. And that opened up a whole new avenue for the business.”
Though Softworks has its origins in enabling managers to monitor staff clocking in and clocking out, the company has evolved into developing much more sophisticated products favoured by HR managers. Softworks’ solutions now extend to rostering and shift management, and arranging flexible and remote working.
For instance, rostering for retailers has different requirements than factory settings. Company schedulers need to be able to calculate the staff rostering cost against the likely turnover on a particular day. They also need a system that ensures an individual isn’t always working earlies, or always working lates, and so on.
“Most of our research and development in the past five years has gone into building out our healthcare rostering capability,” says Ferguson. “How do you schedule the right people in the right place at the right time with the right skills? Then you build this fabulous roster and someone calls in sick, so what do you do then? Fairness is also important. Our technology automatically looks back on shift patterns over the last 12 months to make sure of the even distribution of unfavourable shifts going forward. There’s some very clever stuff there.”
Software to manage flexible working hours has been another lucrative income stream for Softworks, which operates off a gross margin of 29%. The company’s software is used by many Irish government departments and agencies such as the Revenue Commissioners, as well as the Scottish Parliament.
Managing remote and flexible working due to the pandemic seems to have benefited Softworks too. The holding company booked turnover of €7.9m in the year to June 2019 and pushed that up by c.16% the following year. In the current year out to June 2021, Ferguson expects further revenue growth of 30%. “Then we’re going to top that again, despite everything that’s going on,” he adds.
Softworks is resilient because its target market is companies and organisations with 500 to 10,000 employees, often with complex working environments such as hospitals. The revenue split is roughly half and half between Ireland and the UK, though there are some customers in mainland Europe too. Ferguson concedes that two efforts to grab a toehold in the US have flopped – the first coincided with 9/11 – but he hasn’t given up on a renewed assault.
In the States, the Irish minnow comes up against the might of Ultimate Kronos Group (UKG), a private equity-funded behemoth in the workforce management sector. “We compete with these guys and we beat them virtually every time we come up against them in a like-forlike environment,” says Ferguson. “Where we lose is if you’re dealing with a large multinational that has operations around the world.”
The Americans may decide to snuff out Softworks at some stage by making Ferguson an offer he can’t refuse. That would be a pity, because Softworks has the potential to scale globally too. State agencies like Enterprise Ireland don’t see it as their role to help that happen, choosing instead to disburse chickenfeed up and down Ireland’s boreens to please their parochial political masters.
Ferguson could reach out to private equity for expansion capital if he wanted, though at the moment he’s not inclined. And who can blame him? “We’re seeing staggering successes right now and this is the most exciting time in the history of the company for me and for the business itself,” he remarks.
“We may not be the biggest in our space but I’m happy if we’re recognised as the best workforce management provider in terms of the product, implementation and aftersales support. I get a huge kick all the time from the fact that here’s this Irish company sitting out in Bray, competing in the premier league. I’m very proud of the team and what we’ve actually done. And when we win those big names on the world stage, you have a quiet smile to yourself.”