 Live from Washington D.C., if the Cube. Covering Inforum DC 2018, brought to you by Infor. Well good morning and welcome to day two here on the Cube at Inforum 2018. We are in the nation's capital, the Water Washington Convention Center. And thank goodness the sun's come out today. Everybody's got a big smile and cheery faces. It's good to see. Dave Vellante, John Wall's here. We're just on top of the show floor. You'll see a lot of activity a little bit later and it's a pleasure to welcome our first guest of the day, Billy Settlin, who's the CEO of Iron Road. Billy, good morning to you. Good morning. Thank you guys for having me on. How's it been? Great to see you. How's it been for you so far? It's been great. Yeah, it's been great. Outside of the fact that we got bumped from our hotel when we first showed up. So, nope, the show's been fantastic. Always great to network, learn what other folks have going on and it's been phenomenal. Tell us about Iron Road and what you do and why you're here. Yeah, yeah, so we're an HR outsourcing company and we've been doing HR and payroll since 1997. Company started really just with an idea and so as we have grown through the years, working with mostly small to medium sized businesses, we had an opportunity within four just a couple years ago to partner with them on the payroll side of things and so it's been a new opportunity for us, one that our team is incredibly excited about. I mean it's just a great opportunity to partner with some phenomenal software and so yeah, yeah, that's... So, services that you guys provide, so HR, payroll, you got a portal, onboarding, take us through that. Is it full suite of, full complement of services? It is, yeah. So we, our typical client is a small to medium sized employer and we'll go in and so many of the things that they've got to do internally that have nothing to do with why they got into business. They can outsource to us. So anything from the beginning to the end of an employee's life cycle is what we manage. So it's, you name it and we do it for them so that they can go and focus on what they do. So let me probe that a little bit. So if I have, let's say I have an HR issue with an employee, you know, maybe they're a little older and I'm concerned that I'm going through the right steps, giving that employee the right guidance. I don't want to expose my company to any of our lawsuits or whatever. Can I call you up and say, hey, give me some guidance on how I should handle this from an HR perspective? What do I have to document? You would help me with that? David, that's a perfect, I mean, it's a perfect example, right? And so the whole liability of being an employer is something that they can share with us, right? So somebody that focuses on HR and knows those laws and rules and regs, they pick up the phone, they call us, they say, hey, Billy, got an issue, can you come out? One of our folks would go out, consult with them, make sure that everything's documented, managed properly. And yeah, that's exactly what we would have. So in healthcare compliance, Obamacare, PTO policies, I'm a small company, I want to make sure that I'm not like killing my cash flow with, you know, balance sheet stuff. I mean, all that stuff you can help with. You got it, yeah, absolutely. You bring up healthcare, I don't know any employee, employer regardless of the size, that's not dealing with that, right? So the whole ACA compliance with Obamacare, has been a tremendous boom for our business because people are looking left and right. How do we deal with this? What do we do? It's so complex for them, you know, they're looking for experts to manage it. I mean, that's kind of the tip of the spear. I mean, that's why particularly small, mid-sized businesses, it's healthcare first, because it's so expensive and it's so important to the employees, right? It is, yeah. And I would say most folks that we deal with, it's number two line item right after payroll, right? I mean, they're dealing with healthcare and everybody's looking for answers. It's like, how do we do this? And the employees are asking the same question, right? And they're looking at the employer saying, give me a solution, there is no real solution. Outside of being able to maybe aggregate with some other smaller employers so we can go to the large healthcare companies that are out there and say, okay, I tell you what, we got about 5,000 people here now. What do we, what do you think about our buying power at this point? That it works. That's it, you just scale it, exactly right. Okay, 1997, well first of all, you Cincinnati based, I'm going to come back and talk about that, but 1997, just coming into the dot-com boom, the state of software was, back then, PeopleSoft was the gold standard. There was no cloud, really. You had these software companies doing, I forget what they even called it now, but it was like software as a service pre-sass. And kind of clunky software. And now you're fast forward to today. You're all cloud, you're agile, but so how'd you get started? Take us through kind of the technology progression. Yeah, so the start was an interesting one. I wish we could tell you we had a great idea, but it was a complete accident, right? We were trying to, I was trying to help out two different friends who were in two separate businesses. They both had done extremely well in their separate businesses. And so they started what is now Iron Road. And after about 12 months, both of them had done so well in their other businesses, they looked at each other and said, they each thought the other one was going to be pulling the wagon, right? And so neither one of them wanted to do it. So one of the guys came to me and said, hey, Billy, you want to buy 50% of this? And I said, well, what is it? And he explained it to me and I said, love this concept, a great idea. And so I said, how much? He said $8,000. It's been a good, like a lawn mower. It's been a good year. I bought half a lawn mower, right? So. So it was such a great idea. You sure do want to charge more? Yeah, it said $8,000. But he had no clients, right? They had a little bit of software that they had purchased to be able to do the payroll. So that's really where we started. So, you know, kind of caveman, like you said, David. And so. What's your client base now? What do you have? So we're using the Infor cloud base. Yeah, the human capital management system. I mean, as far as the number of organizations that you're serving. Oh, pardon. How have you grown the business? Pardon, yeah. So, you know, really, it's just been, it's been good old fashioned hard work for us. It's been, we've not made any purchases, no acquisitions. And so we've got some amazing people that have a real passion about what we do. And we do it really well. The differentiator between us and some of the big guys that are out there really is our people. You hear people talk about that, but our people are really focused on it. And so, you know, and pretty soon that reputation begins to spread, right? You know, like you said, we're in Cincinnati, Ohio, and currently we're operating in 38 different states. And so a little bit at a time, year after year, we've been digging and digging and in regards to the question you asked, David, right? So we start with the lawnmower and here we end up sitting with you guys talking about Infor and this cloud-based suite that we've been able to manage and bring in. And so really exciting for somebody like us. So talk a little bit more about the cloud suite, you know, how you use it, how you use it to differentiate from the competition, you know, why it's maybe better than some of the other alternatives you see. That's a great question because most of our businesses, professional employer organization, most of the PEO softwares are fairly limited and what they can offer the employers that they're working with. And so we vetted, we had Uncle Calp, our CIO was vetting five different systems a couple of years ago. And in the midst of vetting those five different systems, we were introduced to Infor, right? And as we began to do with this software, we began to see what this software could do, we started getting really excited. You talk about a differentiator in the workplace, nobody else has it, right? And so we started learning more and more the human capital management system for us. We started thinking, man, if we can take this to employees or employers that have anywhere between 500 and 5,000 employees, this is a real differentiator for us, right? And so, like I said, nobody else in the PEO space has the software and so it's been a tremendous opportunity for us to take to the marketplace. So that's kind of your sweet spot, 500 to 5,000? So not under 100, right? SM, true SMB is kind of not your sweet spot. Well, we will actually, we'll go all the way down to 20 employees. And so, but the 20 employer companies, it's the resources that they have internally to be able to integrate the systems is a little more challenging. But we get it done. And so anywhere between 20 and probably 5,000 employees are the typical employer that we're working with. So what kind of integration items does a customer have to think about specifically? So by integration items. You said kind of small companies don't have the resources to do the integration. So what are the, what has to be done to do that integration? Yeah, so there's, it's a lot of lifting, right? I mean, there's lots of work to be able to establish the systems with the employers that we're taking, you know, the software too. And so just a lot of hands on between Iron Road and the companies that we're dealing with. So those smaller companies are really focused on, you know, going out and doing whatever it is, whether they're a contractor or a doctor's office. And so to be able to have a resource that can dedicate the time to be able to activate the system and make it do what they want it to do is somewhat challenging for the smaller employers. But wouldn't they have to do that with any outsourced HR provider? They would. They may not be able, they probably are not taking the software to the depth of its utilization or potential utilization. And so they're kind of doing without it. So the bigger guys getting more business value out of your offerings or something. There's no doubt about it. Or the smaller guys, it just takes a little bit longer to get them there. That's really the challenge. They both get the same value, it just takes a little bit longer. 21 years, you've been doing this. So you've obviously seen business change. Not that old. I don't know how that happened. Well, you start very young. Thank, I'm glad you said that. Must have been what? I wonder why they skipped me with the makeup. Thank you guys. Don't need it. We do. So you've been at 21 years. Yes. So you've seen business change. Yes. You've seen technology change, right? Night and day. So where now, you know, where are the pain points now? Because it seems like, well, we've solved all these problems, right? Automation, things are much easier. Well, there's always a yeah, but. Yeah. So what's the but now for your folks? Yeah, I think the biggest thing for us in our industry is getting the message out. You know, when we look at PEOs in Ohio, for example, about 2% of the workforce is working with the PEO. And so because there are so few of them out there doing it really well, getting that message out to the employer. Because once we get them, once they come in and they see, you know, you said they got to do this if they're outsourcing HR anyhow, once they become aware of what's available to them, they don't leave, right? They're paying still the same. Paying still the same. You're just trying to get out to let them know what you can, you can help. That's it. That's it. I think, I think that's probably our biggest pain point is how do you get this message out? And, you know, different parts of the country, obviously you've got, you've got different attitudes towards or people move at different paces. And in Ohio, there's still a, you know, I'm looking at David saying, what is PEO? I've never heard of it. I don't know if I trust you. And so overcoming that is probably our, you know, biggest obstacle. Billy, talk a little bit about Infor, it's products, if I understand it quickly, you're both a consumer and essentially a reseller of the services, which means you're running on the Amazon Cloud. So talk about your relationship there, why Infor, you know, why the product, how does it compare? Cause you probably evaluated everything. We did. Yeah, yeah, we did. And we, you know, for us, like I said, we've added five different companies that we were looking at. And when we had a chance to look at the Infor proposal, the differentiator for us, not only was the software from our perspective, far and above, better than anything else that we were looking at, they provided us with an opportunity since we were purchasing the software to be able to provide an intent solution for current clients that Infor has. So an Infor client that looks at the software and says, hey, I want this, and yet they're still outsourcing their payroll, now has the ability to buy the software and outsource the payroll Diane wrote. And so you're taking, you know, the best in class cloud suite services from a human capital management system to the marketplace and partnering with a company like Infor that, you know, really is a dream come true for us. So what makes it best in class? I mean, you know, Oracle's got good software, they got SAP out there, WorkDays, the hot company, why is Infor, you said better, why is it better? Yeah, I think, you know, for us, just the ease of the employer being able to utilize the system, you can have the best thing in the world and if people are done to people, or people, or people, or people, right? You know, they got to be able to get on there and use the stuff, you know? And so I think the ease of being able to, just the user friendly side of what Infor does, they certainly have every option you can imagine in regard to the capability of the software is as good, if not better than any, but the ability for people to pick it up quickly and be able to use it and make it real for their small business, to me, that's the key, right? Was the use of AWS Cloud a factor? Was that kind of transparent to you? Yeah, yeah, yeah, not really, yeah, yeah. Is there an aha moment when you're out there when you are pitching and when you look at people and the processes they go through and they've been doing it the same way for decades and then how do you, so when you break through, how do you know you've broken through? What is it that you use to break through? Yeah, yeah, yeah, and for them, once we're able to articulate what the system actually does, there is an aha moment and it's almost disbelief. It's because there's so many years of doing it, the old way, right? And then they look and see, it's kind of like me looking at the software that your company's created, it's phenomenal, right? They're looking at, come on, really? It really does that and it's, yeah, it really does that, we can do this different and you can go and sell more widgets, right? Yeah, thank you for the way we were showing Billy our search, video search software, so I appreciate that. Amazing, that is unbelievable. It is. Yeah, Star Trek. So, I want to ask you. Dave, myself. I want to ask you, what are all the same bugs? Easy spot. Go ask you about the resources that are required for you to do integration within for, actually, so outside funding other than the 8,000 that you put in, did you guys have you raise outside funding? David, that was a lot of money at the time, man. Yeah, no doubt. Yeah. A lot of money. And you could do a lot with 8,000, but you can't build a full software suite, so have you taken outside capital or? We haven't. Okay, so self-funded. Yeah, we're self-funded and, frankly, or fortunately, we've been able to manage through it. This partnership within for, for us, is a big, big step for us, right? And so, but at this point, we've been able to manage that without any funding outside, and so, yeah. Okay, so it's not like an intense engineering effort, right? You're turnkeying this stuff largely. So you put more of your effort on onboarding clients from what I understand, right? Right, and working with other in-four partners, Bales, for example, was our implementation manager, and so our folks working with Bales to make sure, because we've got hundreds of clients that we, in lots of different industries, that we've got to go out and enroll this implementation out into, right? And so it's a little different than the typical in-four arrangement, because there's so many different industries represented just through Iron Road. And you guys dog food this? They don't like when I say dog food. You drink your own champagne, so you're utilizing the in-four. Much better. You're utilizing the in-four software in-house, correct? We are, we are, yeah, yeah. So if, you know, from an implementation standpoint, it's easy to do that, right? I mean, you have somebody like Bales and Cyndian that has helped us and phenomenal at what they do, great partners for in-four. But then we've got to turn around and take that out to hundreds of different employers, and so scaling that is a bit of a challenge. And again, depending upon the amount of resources that the different clients have, which all changes depend upon their size. But it's been great. Yeah, so far so good. Thank you so much. Well, Billy, thanks for the time. We do appreciate it, and I assume at Cincinnati that you might be one of those long-suffering Bengals fans. Hey, time out! Hey, two and one. I know, I know. Two and one, Andy Dalton. We're not big Carolina fans right now. One or two here in New England, so that's it. Yeah, he's actually in trouble. Yeah, we'll see you after this week. The 40-something maybe hit big Tom. All right, that discussion to continue off the air. All right, Billy Sutherland, Iron Road CEO. Thank you guys so much. We enjoyed it. We'll continue. We are live here in Washington, D.C. at Inform 2018. Back with more on theCUBE in just a bit.