Introduction

deverus, a leading SaaS company in the background check industry, is poised to usher in a new era of efficiency, security, and trust through the integration of blockchain technology into its cutting-edge background check platform. By embracing blockchain’s inherent capabilities, deverus aims to transform the way background checks are conducted, providing its customers with unparalleled advantages and ushering in a new standard of excellence in the industry.

Enhanced Data Security:

At the core of deverus’ blockchain integration lies the paramount priority of data security. By leveraging blockchain’s decentralized and immutable nature, deverus ensures that sensitive personal information is securely stored and protected against unauthorized access. The use of advanced encryption algorithms and distributed ledger technology ensures that data remains tamper-proof, reducing the risk of data breaches and safeguarding the privacy of individuals undergoing background checks.

Immutable and Verified Records:

deverus recognizes the importance of verified and reliable records in the background check process. Through the integration of blockchain, the platform establishes a tamper-proof record of verified credentials, including educational qualifications, employment history, and criminal records. This immutable record, stored on the blockchain, instills confidence in employers, applicants, and other stakeholders, as it ensures the authenticity and reliability of the information provided, reducing the need for time-consuming and costly verification processes.

Streamlined Processes and Increased Efficiency:

By leveraging blockchain’s decentralized and transparent nature, deverus streamlines the background check process, eliminating unnecessary intermediaries and reducing friction points. The integration of smart contracts automates various verification steps, enabling real-time data exchange among relevant parties. This automation significantly reduces the time and effort required for background checks, leading to faster turnaround times and increased operational efficiency for deverus’ customers.

Enhanced Trust and Accountability:

deverus understands that trust and accountability are fundamental in the background check industry. Blockchain’s decentralized and auditable nature enhances trust by providing an immutable record of every transaction and update made throughout the background check process. Employers and applicants can independently verify the authenticity of the results, fostering a higher level of confidence and ensuring accountability in the outcomes.

Future Opportunities and Advancements:

deverus remains committed to continuous innovation and anticipates leveraging blockchain technology to unlock further opportunities in the background check industry. The integration of blockchain can pave the way for advanced features such as self-sovereign identity, where individuals have greater control over their personal data, further enhancing privacy and security. Additionally, deverus recognizes the potential for interoperability with other industry stakeholders, creating a seamless and standardized background check ecosystem.

Conclusion

deverus’ integration of blockchain technology marks a significant milestone in the background check industry. By prioritizing data security, establishing immutable and verified records, streamlining processes, and enhancing trust and accountability, deverus empowers its customers with an advanced background check platform that sets new industry standards. As deverus continues to innovate and explore the potential of blockchain, the future of background checks is poised to be more efficient, secure, and reliable than ever before.

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In the employment screening and background check world, innovation is one of the most powerful drivers of growth. As the labor landscape changes and companies look to hire the best, the cutting edge of technology offers significant competitive advantages for early adopters. Growing your customer base through innovation isn’t always a straight-line process like marketing, but it’s a valuable investment to attract customers over time.

In a recent study by deverus, researchers discovered a significant impact of innovative new platforms on growth. Background check companies using the deverus platform outperformed the industry growth average by 100%. Firms on the cutting-edge platform saw year-over-year growth of 20% in their operations. Software improvements and cloud technology translate to faster and more reliable results for your customers, and those “wins” translate to faster and more sustainable growth.

One of the challenges for innovators in any industry is aiming at a target. Without a deep understanding of your customers’ (and their customers’) needs, it’s impossible to hit the mark with your research and development efforts. Most of the world’s executives, business owners, and managers are too far removed from customer-facing roles to keep a good handle on their needs. Effective communication between customers, front-line staff, developers, managers, and leaders can be time-consuming and cumbersome. It’s not something you can afford to ignore, however. The best companies in the world are the ones that listen to their customers and help them innovative with useful technology and improvements.

Innovation isn’t a goal – it’s a continuous commitment to being better. It’s not enough to create slick, new software packages or a killer application. If you aren’t in touch with the needs of your customers, it’s all for nothing. Business success is the goal of any for-profit organization, and it’s key to push for innovation where it benefits the end-user. No one will care if you solve a problem that they don’t have.

One of the most powerful forces in the background check industry is “smartsourcing” or outsourcing key business processes to reduce costs AND push for innovation across business units and strategic partners. It’s no longer enough to move parts of your operation to low-cost providers. The best companies in the industry look for opportunities to innovate and improve, inside and out of their direct management control.

At deverus, we drive innovation to improve our customer’s ability to perform. We help our clients improve their results through better technology, better platform integration, and powerful back-end cloud computing. With faster performance and more reliable tools, our clients rely on us to remove any bottlenecks in their recruiting and HR management processes. With a cloud-based platform, we offer 99% uptime and fast turnaround to deliver the best possible background check solutions, all at a lower cost than our competitors.

One of the major challenges for an innovator is the interoperability of our platform with our clients’ software and IT systems. Any smart innovation will account for the limitations of existing platforms, so we work hard to develop our new technology with legacy support. Driving innovation in-house and beyond the walls of deverus is an important goal for our team, and our customers rely on us to help them grow through investments in their own IT infrastructure and training. We are all in this together, and the future is bright for background check companies that adopt innovation into their daily practice. At deverus, we are here to help you along that journey.

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Any HR manager will tell you that tracking your applicants and following them through the hiring process can be difficult at the best of times. If background checks, drug testing, or other employee verification tools are required, it becomes even harder.

When background check companies offer full integration, staying on top of the applicant process is much easier for HR managers and hiring directors.

Work within Existing Systems

Background checks are a key piece of the hiring puzzle, but can hold up the process if information isn’t delivered efficiently. As companies perform essential checks into the history of candidates, they use sophisticated software packages and tools to manage their workflow.

These Fortune 500 companies and other large companies rely on those processes to conduct background checks smoothly and efficiently. It is why, in order to win contracts from these top employers, you must be able to work within their existing systems.

It’s why deverus offers the Integration Manager, an integrations game changer. With the Integration Manager, you will be pre-integrated with some of the most used applicant tracking systems in the industry, making the time required to connect new clients a fraction of a new integration.

Get the Edge Over Competition

Applicant tracking systems offer a lot of functionality and organization when managing the hiring process for hundreds of people at a time, from resume submission all the way through to the onboarding exercises.

At some point during this lengthy process, HR managers often need to perform background checks and drug testing. If your bid for these services includes easy integration into their existing tracking systems, you’ll have a big leg up over the competition.

Invest in the future now so you aren’t left behind as other companies step in to provide the high level of service that clients demand.

How Integration Tools Help Your Bottom Line

Considering the pace of recruitment and the challenges of HR in a large organization, background check companies have a huge opportunity if they offer better service with more seamless integration.

By investing in integration tools, you offer a superior experience for your clients because they won’t have to input a significant volume of data upon onboarding. Background check companies that take the lead and look to the future of HR and recruitment will benefit from adopting an integrated approach before it becomes the industry standard.

Enterprise Integrations at your Fingertips

deverus introduces the Integration Manager (IM). It’s a revolution in integrations for background check companies. Our vision has always been to make integrations so easy you can do it. With IM, that vision is a reality.

Say hello to enterprise level technology simplified to help you create and manage integrations. (IM) is the industry’s only automated integration platform that allows everyday users the ability to point and click to create, configure, manage, monitor, and control integrations.

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With the new year just beginning, it is about time CRAs take a look forward and start making some goals for 2018. It’s time to be different or perish. With the job market thriving, new technology capabilities and potential for innovation, never before have CRAs had so much opportunities to set themselves on a growth trajectory to truly get ahead of the competition and realize your revenue dreams. That said, never has there been more competition, homogeny, commoditization, and pricing pressures. With that in mind, here are five goals that every CRA should have for 2018 to really set you apart.

1. Differentiate

Let’s face it. Today when it comes to differentiation 900 CRAs say the same thing after asking what sets them apart. (1) We have the best customer service, (2) We do compliance better than anyone, (3) We have the best technology, (4) Accuracy (5) Turnaround.

Really??!! Most of you are utilizing one of five third party platforms, you get information from the same wholesale company, and great customer service is getting back to someone ASAP about why something is late. HR hears the same thing from every CRA so how are you really any different?

To be different, you must truly offer something different. That’s where technology does play a big part. Being able to offer innovative solutions like mobile, voice, facial recognition and anything that looks different does help. This is where I plug deverus. Just go to www.deverus.com and look at what we are doing in the realm of mobile, voice and integrations. It’s real innovation that will set you apart!

2. Simplify

OMG! When we onboard new CRAs we are absolutely mystified by the amount of unique configurations, customizations, and packages, in short the complexity created to basically do the same thing the 900 other background check companies are doing. My advice, simplify your offering. Stop promising so much and focus on what matters to HR. Namely, you are a painful and costly checkbox. Make it easy for them to check the box. Take a page from Sterling’s playbook, offer fewer packages and offer it at an affordable price backed by innovative technology.

3. Improve Marketing

Basically, you guys are horrible at marketing. 900 background check companies all look the same, do the same thing, and look bad doing it. Only a few companies like Goodhire, Checkr, Accurate Background and Orange Tree look like credible companies offering something that HR wants to buy. Scaring HR by all the complexities with compliance and liability is only going to get you so far. Again, everyone is saying the same thing. To improve your marketing you need to position yourself as a technology company and offer cutting edge solutions that’s going to improve the candidate experience and offer solutions HR don’t even know they need yet. You can use the new media outlets like Twitter and Linkedin to demonstrate you are different. Become a thought leader in the candidate experience, automation, background artificial intelligence, not compliance. Compliance, although critical, is Yesterday’s topic where every other background check company is an expert. Get away from being a service company and position yourself as a cutting edge background check company launch new products and features quarterly to stay out in front of your competition.

4. Invest in Sales

When I ask almost every background check company, “What’s your sales process?” I’m amazed at the response. “We answer RFPs, we focus on ATS partnerships, we target certain segments.” then they ask, “ By the way do you know any good sales people in the industry?” Really??!! You want someone in this industry? Most of the sales people in the background check industry are the best at selling. They got lucky riding on a growth industry but don’t know how to probe and ask questions to come up with a solution that fits the client’s needs without creating complexity and competing on price to save their life. I recommend you find someone who’s sold to HR, knows Saas, and can do real solution selling. We have a customer growing at 30%, currently North of $40M and who does not sell on price and looks for salespeople outside of the industry but know how to sell to a C Suite by asking the right questions and getting meetings with the right people. That’s how you sell. But to do that, you must invest in top notch closers, not “has beens” in the background check industry. Lame.

5. Integrate

Oh yes. Integrate. The ATS invasion has been the achilleas hill of our industry. In the past 10 years they’ve disrupted your relationship with HR. They’ve inserted themselves between you and your customer by offering a slick interface and a lot more services. Why didn’t we think of that? Now to get any sizeable client you must integrate to an ATS and offer revenue share and still risk getting replaced if a better offer comes along. And it’s only going to get worse. Your best bet is to create close connections with these ungrateful partners and hope that you can bring them enough business they don’t feel the burning need to open their client base up to more customers. Good luck. So what are you going to do? Invest in relationships. Pay them to send you business. Invest in technology, (hint: deveru’s Integration Manager) that allows you to integrate quickly, manages those integrations and have transparency, analytics, and oversight into every applicant that runs through your integrations.

I wish the goals for CRAs for 2018 were a bit easier. But this is business, a competitive landscape, always the case where’s there’s profit to be had, and you need to think different, invest differently and execute differently if you are going to take advantage of the economic conditions as well as the new technology surfacing poised to disrupt the industry. We know we can help with the innovation and technology side, which is a huge part of the puzzle so give us a call

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Applicant tracking systems are the cornerstone of the modern recruiting process. A centralized and standardized hiring platform offers benefits to human resource and executive personnel who own the hiring decision. Most large CRAs have teams focused on created relationships with almost every ATS. If you want to survive in the next few years, you must have a successful strategy for creating lasting partnerships with applicant tracking systems.

Winning with ATS partnerships is a simple process. It’s all about building the right ecosystem to improve your hiring process. Finding the right candidates and onboarding them effectively is a key function of the human resource and executive teams. ATS systems with third-party integrations are a crucial piece of the hiring puzzle today. Each individual partner or integration can unlock new potential with a high degree of industry and situational specificity. Certain platforms and ATS integrations work better for some industries and different types of professionals. Each partnership offers different capabilities and strengths, allowing hiring managers to fine-tune the search, hire, and onboard processes.

Whether it’s simply billing contractors or end-to-end hiring solutions, ATS partnerships can greatly improve the effectiveness and efficiency of the hiring process. Many of the top software and HR technology firms offer ATS integrations, so it’s important to stay on top of the latest news for your platform. Small firms and Fortune 500 companies can benefit from the possibilities and new capabilities available from the leading ATS partnerships.

From hiring to interviewing to vetting to onboarding, there are ATS partnerships available for every company in every industry. To get the most out of a recruiting unit, there are workflow tools and ATS integrations to increase productivity. There are automated recruitment management tools to help with job boards postings, email hiring, and background checks. The sky’s the limit when it comes to ATS partnerships. From the back office to the front line, ATS partnerships make it easy to win the battle for the best candidates. Partner integrations and cross-functional ATS platforms help recruiters and candidates connect in the modern labor market. In a complex world, it takes an integrated approach to drive the best results for the recruiting channel. ATS partnerships make it easy to succeed in the battle for talent and career opportunities.

deverus’ new Integration Manager (IM) evens the playing field for small and mid-sized background check companies to quickly integrate to ATSs. Once integrated you have the transparency and oversight into the process. Call us today to see how the IM can help you create lasting partnerships with ATSs.

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CRAs are a key piece of the hiring process for many companies. Losing time to hardware outages or system crashes is unacceptable. People are waiting to get hired, and recruiting managers need constant support from their CRA to ensure the right person find the right job. Background checks are a crucial part of the hiring process, and no one can afford to wait for slow results or lost time due to poor IT infrastructure. AWS can improve the responsiveness and reliability of any CRA’s service offering.

Amazon is one of the largest web companies in the world, and it takes a lot of IT infrastructure to keep the lights on at the world’s biggest store. Amazon Web Services (AWS) is a cloud computing provider run by Amazon to earn an income from the tech giant’s idling resource pool. Sharing its computing power, storage, and other IT resources allows Amazon to serve some of the largest companies in the world. Amazon, Reddit, GE, and Unilever rely on AWS to provide immense technological resources including storage, processing power, networking, analytics, and a host of other IT services.

What does this all have to do with consumer reporting agents? AWS is an attractive resource for businesses that need on-demand services and reliable uptime to fulfill their obligations without breaking the bank. Overspending on hardware is a luxury few businesses can afford, but excess capacity is crucial during certain peaks, seasons, or events. Preserving precious resources without losing functionality is an important goal to stay competitive as a CRA.

Amazon is an experienced and innovative cloud computing provider, and AWS is the market leader when it comes to web services for corporations. Aside from scalable resources, Amazon also provides analytics, design help, security, and flexibility for IT directors and executives. Moving your CRA’s tech functions only is a smart move that ensures maximum security, continuity, and performance when you need it most. A scalable web service means you have what you need to get the job done without wasting precious resources on overbuilt IT infrastructure. On-demand web services from AWS are a great way to stretch your IT spending without losing capabilities or uptime.

Each client is different, and it’s important to match the needs of the job with the profitability expected from the investors or owners. Using IT infrastructure efficiently is an important piece of the puzzle. AWS can help CRAs manage their tech resources to limit expensive overhead without losing IT capabilities when they are needed. AWS offers a wide range of corporate services for CRAs including storage, processing power, database management, mobile application support, detailed analytics, developer tools, and many more.

As you add new services to your suite of CRA solutions, it’s important to set up the IT backbone to support your goals and meet the needs of your clients. With AWS, you can scale up and downsize your requirements as they evolve, minute-by-minute. Most of the service packages from Amazon’s web services division are set up to be “pay by usage.” It’s easy to match your revenues and expenses to ensure your profitability on each job, no matter what the requirements may be. Amazon offers a wide range of cloud computing solutions for CRA businesses – complete with admin support, security, risk management, analytics, and many other services.

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What is your mobile strategy? It is a simple question, but for many in the background check industry, it is a complex thing to answer. From fully engaged brands, to those who have yet to innovate their company to include mobile options, the answers in this industry are truly diverse. However, when it comes to mobile strategy, it can be a little tough to even get started Luckily for you, we have brought together five tips to help you build your mobile strategy to ensure long-term success of your brand and company within the background check industry.

1. Mobile is becoming dominant

How are you reading this list right now, is it on your phone? The truth of the matter is that 60% of you will respond yes to this. That is a staggering number, and for those in the background check industry, it is something that we have underutilised. Our customers are more mobile than they have ever been before, and with a background check solution that offers mobile solutions, you will be well on your way to finding some new customers.

2. Be Responsive

The mobile phone has changed the world, and we are not just talking about connectivity. Today’s clients want responses quickly, and mobile strategies should be built to coordinate communication between you and your customer in a meaningful way. Whether this is a communication plan based on quick e-mails, or simply an easy to use app, a responsible mobile strategy will simply turn leads into conversions.

3. Consider the customer first

The easiest part of building a mobile strategy is looking at on paper, the real test is when it is released to the public. A meaningful mobile strategy will consider the customer first, and how they will interact with your brand daily. A good place to start is to define the problem your mobile strategy will solve, once you find this answer, you will be able to build a mobile strategy with a purpose and a direction for your brand to rally behind.

4. Review your data

As an online company, the data you can access is what will empower your mobile strategy. You have access to cutting-edge analytics, and trends that will help guide your strategy, and with tools such as Google Analytics you will be able to craft a message and a direction for your brand. This kind of empowered mobile strategy will ensure that your customers are not only engaged but will yield greater interaction with your site, which will lead to increased revenue for you in the long run.

5. Compatibility is key

Although we seem to only think of cell phones, a true mobile strategy will ensure your site, or app is compatible with both cell phones and tablets. This will ensure that customers do not face issues if they are trying to access your site, nor will they have dreaded connection problems. The last thing that you want is for your entire strategy to be derailed by a simple iOS update. To avoid this, build in upgrades to your strategy, and ensure compliance with Android, Windows and of course Apple at least quarterly.

Mobile strategies are not a simple endeavor, but when done right, a business can truly flourish. These five tips are just a starting point, and for those in the background check business, it might be time to look at what your mobile strategy is, and see if it is about time that you updated it.

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CRAs rely heavily on technology and cross-platform integrations to provide maximum usability and cross-functionality for both internal employees and external clients. It’s crucial to integrate new applications and resources into your existing platforms and services, but it’s often difficult to manage any transitions or additions without proper planning. Setting up an integration plan is a good first step – ideally before you jump head-first into any large scale changes.

Agility is an important tool to stay relevant as a CRA or background check provider. The market moves quickly, and the clients’ demands are higher with every passing year.

Without the proper ATS integrations or cross-platform functions, your CRA services won’t stack up to the competitions’. Planning for the future is often difficult when you must rely on forecasting changes to technology, but it’s an important process. A proper integration plan will make life easier as your business evolves and adds new services to support your corporate goals. Whether it’s driven by clients, competitors, or internal forces, innovation in the CRA market is a constant threat to your success.

Cloud computing, mobile applications, web services, database management – it’s hard to predict the future of background checks and CRA business models. What will the future look like? While it’s impossible to predict exactly what changes will happen in the industry, it’s important to prepare as much as possible. Integration is a driving force in the background check space, as clients demand better functionality and premier services from their CRAs and other recruitment services. Those companies that plan for integration now will be better able to meet the needs of their clients in the future.

Integration can mean many different things, but the basic idea is a merger of applications, services, and platforms into one central resource or database. As managers and recruiters rely on IT infrastructure to match opportunities to applicants, there is a growing role for CRAs to integrate into existing (and yet-to-be-built) enterprise software packages. Making life easier for the clients, their applicants, and the wider corporate community is a noble goal for CRA firms. Integration will play an important role in the growth the CRA industry, and it’s time to plan for that future now.

An integration plan is a simple step that you can take today – start thinking about the future. What can you expect from your current hardware and software resources? Are you ready to meet the challenge of a demanding marketplace with the best IT infrastructure in place?

Integration inside and outside your organization will help you build the right tools and processes to ensure the best hiring and onboarding outcomes for everyone involved.

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Almost all CRAs now claim to have some sort of mobile solution that does everything from gather basic information, to drug screening scheduling and even allowing applicants to check status and see the results of their background check.

So it’s not enough anymore, to just have a mobile solution, you now need one that offers a variety of features and most of all that it works.

The new benchmark now is completion rate. In the overall market of mobile anything above 66.1% will put you in the top 10%.

The reason is the number of completions means the applicant has successfully gone through the process, entered the necessary personal information and initiated the background check without HR having to manually do the job. If mobile is not designed for completion, abandon rates soar, and it actually ends up slowing the process and increasing interaction with support and HR.

There’s a significant value to completions because it means HR is not spending time manually entering applicant data, which in turn improves accuracy as well as speeds up time to hire. It also provides a better applicant experience because they are able to enter data on the goal and have control of their information.

The Anatomy of a Completion Rate (CR)

The primary goal with every form is completion. Eight factors have a major impact on completion rates:

• Perception of complexity
  The first thing users do when they see a new form is estimate how much time is required to complete it. Users do this by scanning the form. Perception plays a crucial role in the process of estimation. The more complex a form looks, the more likely users will abandon the process.
• Interaction cost
  Interaction cost is the sum of efforts — both cognitive and physical — that the users put into interacting with an interface in order to reach their goal. Interaction cost has a direct connection with form usability. The more effort users have to make to complete a form, the less usable the form is. A high interaction cost could be the result of data that is difficult to input, an inability to understand the meaning of some questions, or confusion about error messages.
• Design for completion
  Less is better. Minimizing the amount of screens, speeds up the process and dramatically improves the possibility of completion. But to do this a lot of focus must be put into understanding who’s filling out the application, the position, what fields are needed, and what questions absolutely need to be answered and what can be excluded.
• Reduce complexity and number of fields
  When it comes to form design, the most important thing a designer can do is to minimize the need for typing. Reducing input effort is essential. Designers can achieve this goal by focusing on form field design.
• Minimize the total number of fields
  Every field you ask users to fill out requires some effort. The more effort is needed to fill out a form, the less likely users will complete the form. That’s why the foundational rule of form design is shorter is better — get rid of all inessential fields.
• Minimize Cognitive Load
  Cognitive load refers to the amount of brain power required to use the app. The human brain has a limited amount of processing power, and when an app provides too much information at once, it might overwhelm the user and make them abandon the task.
• Decluttering
  Cutting out the clutter is one of the major factors. Clutter is one of the worst enemies of good design. By cluttering your interface, you overload users with too much information: Every added button, image and icon makes the screen more complicated.
• Use familiar design and screens
  Familiar screens are screens that users see in many apps. Screens such as “Gettings started,” “Next” and “Results” results” have become de facto standards for mobile apps. They don’t require additional explanation because users are already familiar with them. This allows users to use prior experience to interact with the app, with no learning curve.

Again, it’s easy to say you have a mobile solution. It’s harder to build one that actually gets high completion rates. After processing more than 100,000 applicants with our mobile Swifthire, deverus has a completion an average completion rate of more than 74%, some weeks it gets to 76%. Our goal is 80%. But think about even 70%. That means 70% of the time, applicants are doing the work for HR, and getting the information faster and more accurately than ever before. The value is incredible because it actually gives HR more time to focus on the things that matter and not simple data entry. Contact to deverus to see how we can improve your completion rate, provide better value to HR, and improve the overall hiring experience.

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deverus is a third party technology and platform provider for background check companies (CRAs). At a minimum, CRAs use technology to drive fundamental parts of their business. I would argue that it plays a fundamental role in everything they do. Regardless, no one would argue that it’s not a critical part of surviving and for sure thriving to grow and get ahead of the competition. And being one of the four major companies providing technology to over three quarters of the industry, deverus has a unique perspective on the technology trends driving this industry.

One not so obvious but prevailing trend is that the industry as a whole is rapidly being divided into two categories: high growth CRAs doing double digits and thriving to the top, and the rest, those in the single digits, or with flat growth on an endurance race to the bottom.

Rise to The Top

It’s undeniable that high growth CRAs have made significant investments in technology and innovation. It is THE driving force behind their growth. They’ve made these investments principally to keep up with: (1) the new demands of user experience brought on by newcomers and advancements in expectations on ease-of-use, (2) the out of control ATS referral madness through integrations, (3) the mobility of the workforce, and (4) complex, cloud based, infrastructure requirements for scalability. But most of all, they’ve made these investments to keep up with the other thriving CRAs and to take market share away from the rest.

Most of these high growth CRAs chose to build and maintain their own platform. They own their own roadmap. They have capable teams who develop new products and required features, make the necessary system configurations for new client onboarding, while still meeting enterprise client custom workflow expectations. These capabilities are born from the fact that again they own the roadmap, the code, and thus their own destiny.

Unlike the rest of the CRAs who didn’t choose this route and went on a third party platform, the high growth CRAs are not beholden to a platform with legacy code, competing roadmap items, disparate client needs, and a lack of innovation DNA or an unwillingness to make R&D investments. These high growth CRAs understand that technology is an investment to achieve their aggressive growth goals. Some analysts believe that a technology company, and I submit that a CRA meets the criteria of a technology company, should be spending at least 15% on research and development of new products and services alone. Remember this number is above what it costs just to operate and maintain their technology. The high growth CRAs get the cost of operating a platform and the need for R&D. They see it as a competitive advantage, make the investments, and as a result, are pulling away from the competition. Good for them. They will continue to see tremendous growth as they take the lion’s share of valuable customers from the other declining CRAs who do not invest in technology.

The Race to the Bottom

The race to the bottom, on the other hand, actually contains those CRAs who have not made significant investments in technology. They are mostly on one of the four major third party platforms like deverus. Combined we have over over 700 out of 900 total CRAs on our platforms! That’s a huge number of CRAs and businesses using third party based platform technology.

The Third Party Platform Conundrum

Third party platforms have been around since 1996. deverus started in 1997. In the beginning, platforms were successful in allowing smaller CRAs and startups to get up and going with very little upfront and ongoing costs. After all, it is a pay as you go model. We all say, “Use what you need, We do everything for you”. It worked great for a long time. So good that now over 700 companies are using third party platforms! We helped all of these small companies service millions of businesses that otherwise didn’t have the resources or wherewithal to develop and maintain the technology that drives their businesses.

Fast forward to today. The huge problem now is that in most cases, the platforms are buried in legacy code, with disparate custom workflows, competing client needs and an overwhelming amount of customization requests, not to mention the pressure of managing numerous small and unsophisticated customers who drain support time from the larger ones.

The difference between high growth and platform CRAs is that while the former understands the costs of technology investment, the majority of the 700 platform CRAs truly believe that paying click fees is an investment in technology. They are more focused on driving down the cost of those clicks than investing in technology. The critical fallacy committed is that a platform click fee to operate the software is not an investment in technology, it is merely paying for the cost to operate it! But many platform CRAS have a, “how much can I get for as little as possible” mentality while not understanding the long term consequences. The vast majority don’t see us as a technology investment, nor allow us the margins to create better technology. On the contrary, they see us as a click fee that must be driven down. This is at their own peril. The growth companies should appreciate this point because that means an overwhelming number of CRAs clearly do not have a growth mindset, thus the race to the bottom.

That said, there are 5 to 10 companies on platforms, with revenue over $30M, growing at a fast clip. Unfortunately for them, time, resources and the essence of the platform business model are against. These CRAs have worked hard for market share using the right sales, service and market penetration strategies but are now plagued with being on a third party platform stifling their growth. Indeed, the platform they chose is now actually keeping them from growing by being: (1) on 20 year legacy code, (2) treated like any other customer and waiting in a queue for even simple support and changes to the system, (3) by not having the architecture and infrastructure capabilities to truly help them scale, (4) limited integration capabilities and prioritization discipline, and finally, (5) the simple fact that they look like at least 250 other CRAs.

The trap is that once a platform is chosen, it’s very difficult to impossible to switch. What’s more, what’s the true sense in switching if all the platforms have the same problems with no possibility of owning their own roadmap much less their own destiny.

Finally, one huge elephant in the room is that at the end of the day, they don’t own the code or a license to the software. We do. This means they don’t control their own roadmap, but more importantly they don’t control their own destiny. Ask any PE firm, when platform CRAs look to sell, they will take a humongous ding on their valuation for not owning their own technology. Don’t let anyone tell you different.

The Way Forward

If you decided early on to build a home-grown system and own your roadmap and destiny, good for you. You understand the costs of technology and obligingly make the investments necessary to grow and scale. By most accounts, you made the right decision! You are growing faster than the rest and stand poised to win even more market share. And when you are ready to sell, you are going to maximize your valuation.

If you are a CRA on one of the four third party platforms, you really need to ask yourselves some hard questions: Will I survive? Does this platform have the ability, means, road map and desire to separate me from the rest, and help me scale to my goals? Am I willing to make the true technology investments that will help me grow my business? How can I get out of this box? Is there a 3rd party platform strategy that meets my long term goals and objectives?

deverus is the Exception

deverus has seen first hand the limitations of being on a third party platform. We know the good, bad, and ugly. That said, our mission from day one has been to help CRAs grow and reach their full potential. But over the last 20 years, we’ve found there’s definitely a resource limitation on who we can truly help grow and those CRAs who truly want to take the risks and make the investments to grow. That’s why we currently have only 50 CRAs on our platform while our nearest competitors’ have more than two hundred and fifty. We decline most CRAs looking at our platform because they do not understand what investments are truly necessary to compete. They don’t have true growth strategies. They are looking for the lowest cost solution. They are cost cutting their way to the bottom.

In the past 2 years, deverus has invested more than $2 million in bringing our select clients onto Amazon Web Services’ latest cloud based infrastructure. We spend an estimated $1 million annually to maintain and expand on it. In the same amount of time, we invested over $2.5 million on integration technology and $2 million on mobile, and millions annually maintaining them. We continue to invest heavily on research and development for the “what’s next?” to make sure we stay out in front for our clients. We understand technology costs and we are willing to make the investments and we look for partners who can appreciate our value and who are also willing to make the investments.

Yes we are still a platform and we own the source code and the roadmap. We have some of the same challenges as the other third party platforms, but we have worked tremendously hard to innovate, to scale, to stabilize, all while creating a whole new model to help these larger companies scale, take control of their own destiny, own their own roadmap and own license to the source code with managed services to maximize their valuations.

If you find yourself in the position of being a high growth CRA, but limited by your current platform, give us a call and let us talk about a model that fits your growth plans.

The post The Race to The Bottom: Perspective from a Third Party Platform Provider appeared first on Deverus.