Akken: Staffing in the Cloud

Date:   Monday , February 02, 2009

The world is a small place, so you surely have come across an entrepreneur who is in the staffing business. Perhaps you might even be one of them, owning a small staffing firm. These small businesses constitute the bulk of the staffing and recruiting market and all have high aspirations. On the path to success they need their front and back-end staffing operations to be cost-effective yet efficient. But enterprise solutions like SAP and Oracle prove to be too expensive for them.

So, these small businesses use Outlook to manage their resumes, Excel to keep record of contacts and candidates, and perhaps QuickBooks for accounting. The range of point solutions is quite disparate, and often, difficult to manage. For SMBs and SOHOs, this disparity and lack of integration translates into a big lapse in productivity.

That’s probably the reason why, in a span of just 18 months, Akken has managed to sign on over 330 customers.

An All-in-One Platform

For starters, Akken, founded in 2005, is a fast-growing company that provides on-demand, Software-as-a-Service (SaaS) solutions for staffing and recruiting companies. Forget the steep costs of implementing SAP and other monolithic software platforms, Akken’s solutions are affordable even for a company that employs 10 people and does not have an IT department, claims Giridhar Akkineni, its founder, president and CEO. The total cost of ownership of Akken’s integrated on demand software system starts at just $49 per user per month, which equals big value for its customers.
So what exactly does Akken do, and what is the market it addresses like?

Akken’s solution is what Giridhar calls “All-in-One”. Users can manage information related to CRM, applicant tracking, e-mail, vendor management, human resource management, business intelligence, and accounting, among others within one integrated application. Traditional solutions force staffing companies to use several different products to manage each component of their business, and as a result, create data silos that slow down efficiency and productivity.

Akken’s All-in-One model allows fewer people to do more. “Small and mid sized companies have smaller staffs, so they need a tool that allows them to address various front and back-end issues in one system. That’s where we come in. Akken is the only company that offers an integrated software suite of core business applications that enables SMBs to be efficient and build strong companies. Until now, this type of All-in-One system was only available to very large enterprises with big budgets and a large in-house IT department.

"Specifically, Akken’s SaaS solution is targeted at the staffing and recruiting industry, which is the third biggest market in the US. The staffing and recruiting industry globally is worth over $300 billion; in the US alone, it is worth around $91 billion. Giridhar says that given the market size, the opportunity of selling a solution like that of Akken is close to $1 billion, and 50% of that opportunity lies in the US. Since the Akken solution is delivered as a cloud service, it can easily be sold and consumed by customers anywhere in the world.

Akken’s advantages

Giridhar Akkineni took over seven years to build the Akken platform that exists today.
“I had time on my side and no pressure, since I had not raised any venture funding and had the support of family and friends. This gave me the opportunity to develop a robust and flexible platform,” he says.

Giridhar decided to use open source technology to build the Akken platform for two reasons. One, it would be affordable, and two, it would not make the final product dependant on a proprietary technology provider. Apart from this, open source is easier to use and modify.
This technology strategy has borne fruit. Since Akken acquired its first customer in 2007, the product has undergone more than 20 upgrades. The company itself has grown 4 times over since it was incorporated in 2005.

The fact that the solution would need to be cost effective was always a key driver in Giridhar’s mind. He recognized from the very beginning that the reason companies like SAP and Oracle had not yet addressed the SMB segment was because the cost of selling to small companies is very high. In this regard, the CEO of Akken says that the flexibility of the platform and the SaaS model is a big plus.
“I realized that if I were to put this on a CD and ship it, the company would never succeed,” he recalls. Another factor that has contributed to the low cost of Akken’s solution was the offshore model.

“We started really small, in a room with four team members, in Hyderabad. When we moved into our first office in the US, the basement of a friend’s home with computers bought off eBay, my friend was very happy,” recalls Giridhar. He smiles as he reminisces how the machines would heat the entire house, thus helping his friend save on electricity in a harsh winter.

The company now has a development center in Hyderabad, is headquartered in Nashua, NH, and partners with AT&T for its data center co-location. Akken has come a long way in a short amount of time.

Challenges, competition and collaboration
In 2006 when Akken began marketing its solution, the team was faced with a huge challenge. Customers were leery about the security and privacy of their data on a third party server, since at the time, the SaaS model had not yet been fully embraced by the staffing and recruiting industry. While the company had to initially overcome security concerns by early customers, says Tim Quirk, VP, marketing, what assured many was the success of ventures like salesforce.com. Customers started to trust third party servers with data, such that “in the last 12 months, not one customer has talked about data security,” notes Giridhar.

A recent challenge for Akken is ensuring that the solution is compatible with bigger rivals’ enterprise solutions. This has assumed all the more importance given the downturn in economies around the world. Even larger corporations, including those in staffing and recruiting, are looking to use Akken’s solutions in a bid to cut costs and improve efficiency in a tough economic climate.

Such companies typically implement enterprise software from vendors like SAP and Oracle. “We need to ensure that our system works with other enterprise systems smoothly,” says Giridhar. “This allows Akken to coexist with our customers’ legacy systems during the period of implementing our all-in-one solution, making it a smooth transition from old to new.”
In fact, the current economic conditions have opened a new window of opportunity for Akken. Quirk says that the downturn has reduced the sales cycle from 4-5 months to weeks. Prospective clients, pressed by the need to cut costs and be responsive, are evaluating and accepting services at an accelerated pace.

Currently, Akken is focused on the staffing and recruiting niche. However, there are plans to partner with ISVs that have domain expertise in other niche industries down the road.
“Our vision is to offer the platform and the partner will customize the offering to their niche vertical market,” says Giridhar.

Readying for the next wave

Broadband internet, now ubiquitous, has helped Akken reach customers in a cost-effective manner. The next wave, the company believes, is accessing business systems on mobile devices. Efforts to offer Akken’s solution on a mobile platform are already in development, but it will be launched at the “correct time”, says Giridhar.

“Had I launched Akken’s SaaS solution in 1999, when I was conducting research, it would have failed,” he says. “At that time, most Internet connections were dial-up and would not have been able to support a SaaS offering.”
It is important that a solid, flexible infrastructure for the solution you are offering exists; or else it will fail, quips Giridhar, before taking the argument a step further.

“After all, can you drive a Ferrari on a dirt road?”