“poorly performing employees cost u.s. employers more than $100 billion annually." – shl...

“Poorly performing employees cost U.S. employers more than $100 billion annually." – SHL Group as reported in Newsweek

Copyright neoPsy Systems 2006 All rights Reserved

Business Plan Overview

Business Capital LLCFebruary 14, 2007


Table of Contents

Management Team page 3 Investment Thesis page 4 Current Environment page 5 Employee Selection / Retention Study page 6 Job Seeker Value Proposition page 7Employer Value Proposition page 8Industry Dynamics – Market Size page 9 Competitive Segmentation page 10Channel Partners page 11Market Traction page 12Technology page 13Development Roadmap page 14


Management Team

NAME BIOGRAPHICAL SKETCH

Lauren Salamone, President

An advanced practice nurse, has worked in nursing administration and nursing research before switching to project management and development for large healthcare software company in next generation products. Over five years with a business psychology consulting firm both as consultant and COO.

James Thompson, Ph.D., Head of R&D

Worked as clinical psychologist in the military for 12 years before switching to business psychology 20 years ago; developed wide variety of instruments and surveys for understanding organizational culture and people before focusing on building selection and development methodologies to help company’s and individual find the right fit.

Lynn Webber, Head of ITWorked 20+ years for a variety of companies architecting complex solutions and overseeing the implementation before joining business psychology firm to web-enable selection and development tools.

Amanda Foster, Ph.D., Head of Account Management/Consulting

Among the first I/O psychologists to join ePredix during its early development efforts before joining business psychology firm to contribute to both R&D and client relationship management.

Kevin Somerville, Ph.D., Head of Business Development

After being trained as a Clinical Psychologist, joined largest business psychology firm in the world and built the largest office in the system before opening own firm 25 years ago. Instrumental in building network of clients that produces substantial new work each year.


Investment Thesis

1. Poorly performing employees cost U.S. employers more than $100 billion annually according to the SHL Group (as reported in Newsweek)

2. Existing industry model is focused on basic job board type services

• Resume posting, basic Q&A

• Little or no use of evaluation criteria based on the science of psychology

• Little or no benchmarking of successful incumbents in professional positions

3. Value proposition based on neoPsy Systems’ proprietary on-line evaluation method

• Benchmarks characteristics of successful employees

• Compares the candidate to successful benchmark

• Selects new employees that are much more likely to be successful

• Methods based on the science of psychology

4. Large enterprise customers are embracing Business Process Outsourcing (BPO) as a way to attract and retain “A” players, improve HR performance, cut costs, and optimize HR administration on a global basis

5. neoPsy Systems is positioned to attack and disrupt the market

• Proven Somerville Partners’ benchmarking and evaluation system adapted to an on-line plug and play product

• Distribution method focused on channel partners / resellers of the service allowing for lower unit cost and higher volume sales

• Very high interest level from preliminary discussions with key channel partners

neoPsy Systems’ ProStyle product will enable clients to increase revenue, reduce costs, and maximize human capital through an on-line, state-of-the-art scientific approach to employee selection


• Annual US job turnover rate 40.4% (BLS 2006); with a reported 83% of the workforce reports hunting for a new or better job (Weddles 2006)

• A shift from newspaper ad posting (annual decrease of 25-33%) to internet postings and social networking referrals

• 2M new jobs posted online per month (Weddles 2006) and online job boards are expanding to full service networks for employers and candidates

• By 2007, online job revenues will reach 1.9B in the US, 29% of total recruitment add revenues of 7.4B (Forrester, 2002)

• “Increasingly, over the next 5 years, corporations will focus on key data predictors. Online applications will be combined with online assessment tools, providing a more accurate method of identifying the right candidate and driving additional value.” (Yves Lermusi 2005)

Current Environment

A number of key market and industry trends provide the backdrop for a successful launch of neoPsy’s ProStyle product


A two year Cornell University study determined:

• Companies with good employee selection and retention practices outperformed those with less effective strategies by 39% when measured in financial terms

• Companies with good employee selection practices – defined as hiring based on organizational fit as well as job performance capability – saw revenue growth improve by 7.5 % and profit growth improve by 6.1%

• No less important, companies with such practices also saw employee turnover declined by 17.1% (Weddles 2006)

• Research slows that the single most important factor for top talent when they evaluate an employment opportunity is the prospective employers culture and values (Weddles 2006)

Employee Selection / Retention Study

A recent study of businesses by Cornell University revealed a very strong correlation between good employee selection / retention practices and company financial performance


Adding value to the Job Seeker

• Find positions in variety of industries and companies where your style closely matches that of the most successful people

• Streamline the process of getting up to speed in new position

• Start new position with boss and you having solid understanding of where you may need support

• Avoid accepting positions only to learn later that you just don’t fit in

• Enjoy the satisfaction of working in ways that come natural to you vs. struggling to work in ways that call on your weaknesses

• Enjoy working with others having very compatible work styles

Research companies with positions of interest

Search job boards within geographic region or within profession of interest

Electronically send resumes to prospective employers

Leverage personal network to find positions of interest

Use company research results to prepare for interviews and edit resume

Ask questions during employment interviews to gauge comfort with people

State of Art Today Solution

• Finding a position largely a hunt-and-peck process

• Position descriptions rarely reflect the actual work environment

• Employment interviews provide incomplete picture of what’s required to be successful

• Changing industries very difficult – easy to get pigeon-holed

• Often use only top performers while ignoring how top and bottom performers may be similar

• Job boards provide easy access to position openings

• Explore your motives and personality attributes to understand aspects of work environment that contribute to success and satisfaction

• Learn about the psychological success profiles for a variety of positions within many industries and companies

• Find those positions where you offer a good match with the profile of success

• Provide prospective employers in-depth insight into your style and work environment preferences before accepting position

• Know what your development challenges will be before accepting position

Problem Benefits


Adding value to the Employer

• ROI achieved in a few months

• New hires integrated faster and with less turnover

• Less money spent on training new hires

• Management time freed to manage the business

• Easily integrated into current employment process

• More efficient tracking of hiring

• Overall employee performance improved

• Integrated coaching and integration tools and support

• New system installation within 30-60 days

• Revalidation a regular intervals to keep up with changing work environment

Skills & Knowledge Testing using instruments constructed to measure identified skills and competencies

Broad-based personality tests measuring 5 factors of personality

State of Art Today Solution

• Labor intensive and expensive to set up and maintain

• Knowledge & skills tests have a short shelf life – redo every few years

• Personality Tests typically measure too few and too broad of attributes to differentiate among top and bottom performers within specific positions

• Use only content validity – rarely demonstrate predictive validity

• Often use only top performers while ignoring how top and bottom performers may be similar

• Either too generic or too customized

• Too generic – fail to discriminate

• Too customized – to expensive

• Use comprehensive personality instrument measuring dozens of attributes underlying work place behavior

• Provide web-based administration and reporting

• Provide customers tools to manage the entire process

• Use concurrent and predictive validity wherever possible

Level of customization can be tailored to client needs

Problem Benefits


Industry Dynamics – Market Size

Forrester Research predicts that the online recruitment industry will grow to $1.9 billion in revenue by 2008, with a 2003 – 2008 CAGR of 18%


neoPsy Systems has an opportunity to clearly differentiate its offering from existing competitors

BusinessModel

Target Market:Large Organizations

neoPsy’s ProStyle Formula• Target distributors rather than

large organizations• Utilize an empirical

methodology that allows for seamless “Plug and Play” profile creation

• Develop one main instrument to predict success allowing for a much more robust and comprehensive database to compare positions and organizations

• Provide a completely empirical method to build selection profiles, ensuring legal defensibility and enabling a seamless fit with a distributor organization

• Creation of an extensive, highly lucrative database about psychological characteristics of high performance A players by position

Competitive Segmentation

Hogan Assessments

PreVisor

Gallup

PSI

DDI

SHL

neoPsy Systems

Target Market:Distributors


Channel Partners

Channel partners can be broken out into three main categories: job boards; niche internet sites; and BPO providers. The ProStyle product is tailored to the specific end-user needs for a given channel partner within each category.

Type of Channel Partner Example Product Focus

Niche Job Board HealtheCareers

On Target Jobs

ProStyle

Corporate and Internet sites

Salesforce.com

NAS Recruitment Communications

Social Network

ProStyle

Business Process Outsourcing (BPO)

Partner

Accenture

IBM

ProStyle


Market Traction

• neoPsy Systems recently reached an agreement and is currently in a beta development phase with On Target Jobs and the healtheCareers Network (www.healthecareers.com) regarding revenue sharing for neoPsy Systems’ Pro Style product and integration of the product into the healtheCareers website. On Target Jobs is an integrated international network of prestigious professional association job boards providing online recruiting resources for thousands of employers and millions of candidates.

• neoPsy Systems also recently reached an agreement with NAS Recruitment Communications (www.nasrecruitment.com) regarding revenue sharing for the Pro Style product and integration with NAS Recruitment as a channel partner. NAS Recruitment is a recognized leader in the field of human resource communications with global, national and local expertise. NAS provides customized talent management solutions and recruitment strategies.

• neoPsy Systems is currently negotiating an agreement with On Target Jobs and the hcareers network (hcareers.com) regarding revenue sharing for the ProStyle product integration into their niche job board for Hotels and Hospitality Industry.

neoPsy Systems has engaged two channel partners and is in preliminary discussions with other groups. The channel partners expressed very strong interest in neoPsy Systems’ ProStyle product. Below is a summary of the discussions to date.


Technology

• Component based – all software built as independent components that can be customized for specific implementation or operate “off the shelf”

– Communication using industry standard methods (SOAP, XML-RPC)

– Input / Output uses XML data for ease of integration

– Built on strict layered object model

– Full cross platform support (Linux, Windows, Mac)

– All data stored in SQL database (can support any SQL compliant DB)

• Product Suites and current build status

Product Suite Build Status

Testing Mature – in production

Scoring Mature – in production

Reporting Mature – in production

Accounting In development

Research In development

Client/Participant Management Future (will utilize internal system as base)

Below is an overview of the neoPsy Systems technology platform


Information Technology Projections (Roadmap)assuming Outside Investment

Year Clients People Products1 HEC Architect

1 – Sr Developer (new)

Contract

Testing/Scoring/Reporting (in production) (Base)

Research, Accounting (in development)

Participant and Client Management

Enhanced Web Site

2 HEC

Client #2+

Architect, Sr Developer

1 – Jr Developer (new)

Contract

(From above – multilingual enhancements)

Aggregate Data Offerings

Customized Offerings

3 HEC

Clients 3-10

Architect, Sr Developer, Jr Developer

1 – Network Mgr (new)

Contract

(From Above – ongoing enhancements)

Component re-design and deployment

Enhance Internal network (data center to local facility)

Web site re-design.

4 10+ Architect, Sr Developer, Jr Developer, Net Mgr

1 – System Mgr (new)

(From Above – ongoing enhancements)

Multi-year trending, Commercially printed offerings

5 10+ (no additional resources from above)

(From Above – ongoing refinements and enhancements)

TBD – Based on Market

Development Roadmap

“poorly performing employees cost u.s. employers more than $100 billion annually." – shl...

Documents

global basisneopsy systems

development roadmappage

development tools

development methodologies

building selection

evaluation system

successful methods

head of rdworked