CoreX Makes Big ServiceNow SPM Play With InSource Acquisition

‘[The acquisition] continues to accelerate our trajectory. Our goal is to get to $200 million [in annual revenue] fairly quickly and be the number one boutique consultancy exclusively focused on ServiceNow. And I think we're well on our way to doing that. Things are moving in the right direction,’ says CoreX CEO Rick Wright.

CoreX, already an elite consulting and implementation ServiceNow partner, has added services and expertise around the ServiceNow Strategic Portfolio Management (SPM) platform, following its recent acquisition of the ServiceNow business unit of fellow solution provider InSource.

The InSource business unit is focused on implementation of ServiceNow SPM and the acquisition will make CoreX the leading provider of services around that business, said Rick Wright, CEO of Radnor, Pa.-based CoreX.

The acquisition, announced earlier this month, is helping make CoreX, backed by its private equity partner NewSpring Holdings, a primary go-to partner when it comes to ServiceNow, Wright told CRN.

“[InSource is] the world's number one implementer of SPM,” he said. “They are super connected with the ServiceNow mothership, the business units, the go-to-market teams. They get recommended over EY and Deloitte and everybody else in that space.”

That, combined with prior acquisitions, gives CoreX a well-rounded ServiceNow offering and confidence in calling the company one of ServiceNow’s top partners, Wright said.

“We bought ITS Partners to become the number one OT implementer,” he said. “We bought Volteo Digital because of their deep expertise in financial services and their center of excellence. And InSource, their secret sauce was SPM and their industry play.”

SPM is ServiceNow’s platform for connecting an organization’s business strategy with its execution, providing a range of capabilities including strategic planning, project and program management, financial management and resource management.

There’s a lot going on with CoreX and the ServiceNow partner ecosystem. To learn more, read CRN’s entire conversation with Wright, which has been lightly edited for clarity.

How do you define CoreX?

We define the company to our customers as an elite ServiceNow boutique, a global boutique, focused on helping customers drive value from the ServiceNow AI platform. And while we can cover the ITX [IT transformation] workflows, our secret sauce is that when we show up, we show up very deep from an industry perspective. We have people on the team who have worked in manufacturing, healthcare, and financial services who understand the operations of those organizations, as well as deep service expertise. A lot of the work we do is helping buying centers outside the IT organization understand how to drive value from ServiceNow, whether it's procurement, core operations, or manufacturing operations.

And does CoreX work with the entire ServiceNow platform?

We have capability across the platform. We primarily serve U.S. and Canada, Latin America, and Western Europe. We have local teams in each of those areas that work with our clients locally. That's all supported out of our Center of Excellence out of Guadalajara, Mexico.

CoreX just recently acquired InSource. Talk about the acquisition.

That’s our third acquisition of the last 12 months. InSource is over 10 years old. They've been a ServiceNow Elite Partner for a long time, based in the Philadelphia area. They serve the U.S. markets. We're focused on both an organic as well as inorganic growth plan. Every week, we're talking to potential customers and targets, and looking for the secret sauce they bring to the table. We don't just need more ITX people. We need people with some interesting domain and who are leaders in something.

And for us, InSource did that in a couple of different areas. First, they are the world's number one implementer of SPM. They are super connected with the ServiceNow mothership, the business units, the go-to-market teams. They get recommended over EY and Deloitte and everybody else in that space. That caught our interest. And that’s something that applies not only to IT organizations. They're doing a lot of SPM work in the federal [government] space around navy shipyards in managing the refurbishment of all these shipyards in their core business operations.

InSource also has great capabilities across ITX, especially in the ITOM [IT operations management] and CMDB [configuration management database] space and the security space, which connects a lot with what we do in the OT [operational technology] space. We're seeing a huge demand around operational technology for our clients across the globe. Their core capabilities in ITOM, in ITSM, and SecOps play into that world very well.

Anything else?

From a capability perspective, they have an HR PLA [product line achievement], a validated expertise. They're noted as having a validated HR practice, and they've achieved a level of accomplishment in the ServiceNow world where you get accreditations for having that practice. For us, we've been really strong in the finance, supply chain, and procurement spaces, one of ServiceNow’s go-to partners. We can now couple that with HR. ServiceNow has been coming out with a new workflow it calls its Global Business Services, which we call core business services. That is made up of two things, the finance and supply chain pieces and procurement and HR. By having that HR piece connected to capabilities, we think we're one of the leading partners to work with ServiceNow in their new area of core business services.

So for us, that was super impressive. And then from an industry perspective, where we're always looking to expand into industries, InSource is a go-to partner for ServiceNow in the SLED space: state and local government and higher education. They do a lot of work with very large education communities or systems. That is a new area to us and accretive to the business as we grow it.

Is CoreX acquiring all of InSource?

We bought their ServiceNow business. InSource started 15 or 20 years ago as a staffing company. So they technically had two businesses. They still run a traditional non-ServiceNow staffing company if somebody needs a .Net developer or something. We did not buy that piece. We bought their ServiceNow business, which was 90 percent of their business.

How many people are coming over with the acquisition?

We added about 75 people, all [in] the US. That more than doubled our U.S. staff, which is awesome. We're seeing a huge uptick in demand in the US. And the other great thing is, we have our center of excellence in Guadalajara [Mexico], with over 100 people. All those people now can be serving and working with the InSource team as they sell and deliver their projects as well.

Who reached out to who on this acquisition?

It was probably mutual. I’ve known Mark Lafond, who is the CEO and owner of InSource, for a long time. He heard about what we were doing. He started with [former ServiceNow elite partner later acquired by CoreX] ITS Partners more than a year ago. Around that time, he reached out and said, ‘Hey, Rick, let's connect. I think you're doing something special in the market. I believe in your vision of how to go build a great ServiceNow consultancy.’ We talked for six or eight months, and then late last summer came to terms with an LOI [letter of interest] and moved forward. We closed the deal officially in December. The teams are already coming together and will be together at our sales kickoff. We've already gone after customers jointly. So the integration is going really well.

Did the two companies compete at all prior to getting together?

Not really. If I look at their client list and our clients, we don't have one client that we both served in the past. So that was interesting. From a customer standpoint, it was new areas, new industries, new clients. But from a capability standpoint, there was a little bit of overlap. Our teams and their teams came together to fill gaps that we had. I am highly confident that now we're at the top of the top from a U.S. boutique perspective. We can compete with anybody out there. There's not too many that are bigger than us in the US now from a boutique perspective. So I think we're really well positioned for growth and success in the U.S. market.

CoreX has a private equity backer, right? Was that a factor in closing the acquisition?

Yeah, that was part of it. We've been backed by NewSpring capital for 18 months now. They've been with us through all these acquisitions. Their typical growth plan for a company like us is seven to ten acquisitions, call it over a five-year period. We did three in the first year, which is a lot. I’m not sure I'd recommend to your readers that they do three acquisitions in one year. But, yeah, this will be a normal part of our growth, both organic and inorganic.

I have to ask: How much did CoreX pay for InSource?

You always ask, and I always say we did not disclose the finances.

You said InSource is number one in the SPM space, strategic portfolio management. How did they become number one in that space, and what does it mean to be number one? Back up your contention that it's number one in this space.

Yeah, I don't know if there's an official number one. I can tell you why I believe they're number one. They're extremely well connected to ServiceNow's business unit that creates the SPM technology. They were a very early adopter of the technology. They use all of the SPM technology to run their business, and we're going to run CoreX on it as well. They've been there since the product launch. They were one of the launch partners, and they've grown a really sizable business focusing on the SPM product.

And I think if you were to ask almost anybody in ServiceNow who's the one partner they would go to from an SPM perspective, InSource would be on the list of the top three for sure, and typically at the number one spot. The big GSIs [global systems integrators] do a lot of strategic portfolio management. But InSource, if you think about the number of marketing and other events they get invited to, and they are at the top of the list of people that ServiceNow tells customers they should consider if they're going to go implement SPM.

I guess that now makes CoreX the largest SPM partner?

That's our strategy here. We bought ITS Partners to become the number one OT implementer. We bought Volteo Digital because of their deep expertise in financial services and their center of excellence. And InSource, their secret sauce was SPM and their industry play. It’s our strategy.

What is InSource President Mark Lafond’s role at CoreX going forward?

There were two people that really ran InSource: Mark Lafond (pictured) and Mike Garber, their chief operating officer, who focused on sales and delivery and reported up to Mark. Moving forward, Mark is our client director covering the Mid-Atlantic region, given the great relationships he has with those customers. He will also be leading our push into the federal business. And Mike is our global head of delivery. So it's been a good integration of talent as we move forward.

Anything else we need to know about the acquisition?

It continues to accelerate our trajectory. Our goal is to get to $200 million [in annual revenue] fairly quickly and be the number one boutique consultancy exclusively focused on ServiceNow. And I think we're well on our way to doing that. Things are moving in the right direction.

How close are you to that $200 million goal?

We're about 25 percent of the way there.