STRATEGIES

July 12, 2002

You've probably heard the story of the late Victor Kiam, who liked his Remington razor so much he bought the company. In a similar vein, San Francisco-based business process solutions company Exigen Group last month bought the professional services automation (PSA) business of Campbell, Calif-based ASP Portera. (See Portera Acquired by Exigen Group.)

Exigen Group At a Glance

Headquarters: San Francisco Clients: 200 major enterprise customers Main business activity: Business process optimization Target market: Insurance, banking and communications sectors Employees: 600 (includes 50 from Portera acquisition) Finances: Privately held

A key attraction of the PSA business (but not Portera's government contracting business, which was not acquired in the deal) is that Portera's ServicePort PSA software suite can be used to run Exigen's business process utilities — joint ventures Exigen sets up to perform business processes such as loan origination or DSL activation in the insurance, communication and financial services industries — Dave Jarrat, Exigen's director of marketing, told ASPnews. "ServicePort is ideal for running these utilities, because they involve people and projects that need to be managed. We can also use ServicePort to put a value on the savings that would result from setting up one of these utilities."

Why Not Just Subscribe Like Everyone Else?
If Exigen were just after the functionality of ServicePort, wouldn't it have been more straightforward to subscribe to the software the same way as any other ASP customer does? After all, the whole point of the ASP model is that you pay for the software as a monthly service, instead of buying and owning the software license outright. So if Exigen wanted to use the software, why did it go a step further and buy the whole company?

There are two answers to that question, according to Jarrat. The most obvious one is that Portera's ServicePort solution, which streamlines the activities of project-based service firms like management consultants and IT consultants, complements Exigen's efforts to streamline the activities of transaction-based companies in the financial and communications sectors. "Clearly there is synergy in that there are two different types of solutions, and by bringing them together we can offer a big suite of automations," Jarrat said. "In our existing markets there are bound to be some projects that could use PSA, and we will be able to offer it as a standalone offering."

More to the Story
But this is not the whole story. Exigen's existing streamlining activities are made up of three parts:

• a technology component
• process and best practice expertise in various vertical markets
• Exigen's shared risk/reward model.

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