It's a company that has survived two disruptive technology cycles, three ownership changes and assorted twists and turns since its inception in 1985. But even so, how can you call 20-year-old workforce management software purveyor SmartTime Software Inc. (Framingham, MA) a "company to watch"? It all comes down to its inordinate amount of perseverance, unrelenting aspirations for technology leadership and staunch devotion to the manufacturing space.

The company also believes the market for workforce management remains severely under appreciated, ripe for the picking. For instance, the proliferation of enterprise-wide applications -- which extend from financial planning and supply chain management into plant floor operations -- has missed a component critical to manufacturing success: labor efficiency. "The labor efficiency frontier is the least optimized of all areas at manufacturers," notes Garry Meier, SmartTime chairman, who in June assumed operational control of the privately-held company from long-time CEO Kevin Rhone.

Enter SmartTime's Java-based software, which helps manufacturers take a more proactive approach to labor management. Three modules -- time and labor management, workforce scheduling and decision support -- provide visibility into pending labor requirements to help manufacturers allocate resources to meet ever-changing business demands. It does this through an open architecture that enables manufacturers to marry demand signals from ERP applications and employee activity and availability data to optimize workforce scheduling, see productivity gaps and make just-in-time adjustments, which, in theory, can elevate returns on assets and boost the bottom line.

More importantly, the software requires minimal change in the way labor data is collected: Employees still punch in by normal means (e.g., swiping their badges). The difference comes with the granularity SmartTime provides in tracking the daily activities of employees: Workers enter how much time they spend on individual tasks, which is then rolled up across the organization and assessed within SmartTime or exported to standard business intelligence tools for further analysis.

SmartTime contends that manufacturers, regardless of industry, scale and scope, must find ways to transform the workforce from a cost constraint and productivity drag into a competitive advantage in order to thrive in the 21st century.

And it's not alone in this assessment. Judy Sweeney, a human capital management analyst at AMR Research Inc. (Boston), is seeing renewed interest in the segment amid simmering improvement of the domestic economy. Workforce scheduling and optimization software license revenue, for example, grew a respectable 10% to $56 million in 2004. Total revenue, including services, was $195 million last year and is projected to achieve 13% compounded annual growth over the next five years. "Companies thought they had a handle on productivity, but not until they actually capture [data] on a day-of- week/time-of-day manner do they see where productivity trails off," she says.

That's what happened at Vicor Corp., an electronics component manufacturer in Andover, MA, that sought a more comprehensive understanding of direct touch labor costs and productivity. It selected SmartTime over industry leader Kronos Inc. a few years ago in a competition that came down to a preference for SmartTime's project personnel and implementation skills, according to Joe Jeffery, Vicor's director of manufacturing systems. Vicor's choice was rewarded when its $250,000 project "came in on schedule within a week and was $20,000 under budget," he says, pointing to efficient use of hardware (e.g., database and application server consolidation) as one reason.

SmartTime is now able to quickly spot and redeploy under-utilized labor assets to more productive pursuits. Previously, the company had little warning of percolating productivity problems and relied on manager intuition, sans hard data, to reassign workers. Moreover, whenever a new position becomes available, the HR department first looks at who can be reassigned within the company before it hires outside employees, he reveals. "And, we have a lot of data to look at."

Data notwithstanding, Jeffery can't attribute all of Vicor's improved labor efficiency to SmartTime. The company has embarked on several improvement programs simultaneously, which blurs any causal analysis, he says. Since deploying SmartTime, however, Vicor's margins have soared from 28% to 39%, an indication that increased productivity -- whatever the reason -- is having an impact on the bottom line, he says.

Results like Vicor's reinforce SmartTime's potential to enable favorable business process change and augur well for its future. The still unprofitable company has an impressive array of blue-chip clients and crossed the $5 million revenue mark in fiscal 2005 (ended June 30), it's first full year as a born-again independent company. Revenue is expected to grow another 50% this fiscal year to $7.5 million. And Meier expects SmartTime, which has been capitalized to the tune of $10 million in its latest incarnation, to surpass the $14 million revenue mark in fiscal 2007.