has stuck to CRM as core automation area for so long, that even analysts got nervous about how much runway the vendor can get from CRM (and yes platform and PaaS). Salesforce execs of course see no reason for concern when asked, but a few year back that seemed to have changed when Salesforce acquired rypple, put a very senior product leader with Tom Wookey in charge and seemed ready to go to re-invent Performance Management. As of last Dreamforce though, I was reassured the offering is now focused at improving existing users performance (in Marketing, Sales, Service) – which is a sensible positioning. And John Wookey had moved off to lead’s Industry efforts. 

So with some surprise – announced it is (re) entering the HCM market with ‘Salesforce for HR’. So let’s dissect the press release in our customary style:

SAN FRANCISCO—April 23, 2015—Salesforce [NYSE: CRM], the Customer Success Platform and world's #1 CRM company, today unveiled Salesforce for HR, the Employee Success Platform. Salesforce for HR transforms employee engagement by delivering personalized experiences to empower employees, and provides the data and insights organizations need to attract, manage and retain the best and brightest talent.

MyPOV – Obviously Salesforce is recycling a lot of CRM positioning – replace Customer in Customer Success Platform with Employee and here you have the Employee Success Platform. But are user experience and data / insights enough to manage people and their talent and retain them? Let’s keep reading:

Companies must recognize there has been a shift in employee expectations. Consumer technology has transformed the way employees connect to each other and consume information. Today, employees have come to expect that same level of engagement, service, convenience and instant access to the information and resources they need to be successful.

MyPOV – Good positioning by Salesforce, and yes – the Consumerization of IT has led to the point of employees enjoying better user experiences than ever before in the HCM space. User interfaces used to be ‘good’ to ‘good enough’ for 2-3 years, today the market leaders even admit that a 6 month old interface already shows its age. And the tag line to treat your employees like your customers would be great to live in practice – see more on that later.

“Companies are creating game-changing customer engagement by reimagining what's possible through the power of cloud, social, mobile and data science technologies,” said Alex Dayon, president of products, Salesforce. “With Salesforce, they can bring the same transformation to their own employees. Salesforce for HR will uniquely enable them to connect with their employees like never before.”

MyPOV – More on bringing what Salesforce has done with customers to what to do with employees.

Companies that provide employees with engaging tools like mobile apps not only reap positive employee outcomes, but also positive business and customer outcomes. According to a Forrester report[1], “The value of a great workforce experience is it leads to positive customer experiences. HR leaders have an opportunity to demonstrate this value by showing that positive workforce experiences create engaged and high performing employees that positively affect customer outcomes.”

MyPOV – True – happy employees perform better, which usually leads to better company results – including happier customers. So why do most companies not treat their employees as well as their customers? More below.

Introducing Salesforce for HR—the Employee Success Platform

Built on a foundation of cloud, social, mobile and data science technologies, Salesforce for HR harnesses the power of Salesforce’s Customer Success Platform for employee engagement. Salesforce for HR complements existing HCM and HRMS implementations by delivering a system of engagement that helps companies connect with their employees in a whole new way.

MyPOV – Salesforce is walking the fine line between saying a CRM platform is a good HCM platform, too. Bet some people at Salesforce wished the platform was not called the ‘Customer Success Platform’’ – but just the Salesforce platform. But product naming is flexible.

Now, employees are empowered to communicate, collaborate and connect with less friction in getting things done. Every HR leader now has the tools to transform the employee experience with 1:1 engagement, and every executive has the full power of analytics to drive more informed personnel decisions with:

MyPOV – Fair enough – but apart from Chatter capabilities it all depends on creating the interfaces that are needed to bring these functions alive. Traditionally CRM vendors need a lot of integration, too – so Salesforce has the tools and platform for tackling this, but will core HCM capabilities create enough value to justify the creation and maintenance of the integration?

· Employee Journeys: Guide employees on 1:1 journeys—from onboarding to ongoing development—deliver engaging experiences across channels and devices through every phase of the employee lifecycle.

MyPOV – It’s not clear if we talk platform or Salesforce capabilities. [Update by Salesforce: This is Marketing Cloud Journey Builder used to create employee journeys.] I suspect it is more platform than Salesforce having built an Onboarding product.

· Employee Communities: Create employee communities that connect colleagues and cultivate a culture of collaboration. Today’s employees expect greater collaboration with colleagues, subject matter experts and leadership across all facets of the company in order to accomplish their job.

MyPOV – This is basically Chatter – something Salesforce could have done and has done before for the HCM space. We know a few customers who have done the same. Moreover Chatter has been integrated with a number of HCM products, Infor and Workday being the most prominent one we can think of right now. [Update by Salesforce: Employee Communities also includes Community Page Builder for internal pages and Read-Only Knowledge for knowledge sharing.]

· HR Help Desk: Deliver personalized service experiences to employees and empower them to help themselves anytime, anywhere with an HR Help Desk powered by Service Cloud. Provide HR teams with a unified, 360-degree employee view and the intelligence they need to solve employee inquiries quickly and accurately.

MyPOV – Salesforce already has Helpdesk capabilities, so employee and HCM content are only additional areas to add. Salesforce will have to address confidentiality and PII questions here, that work differently than in the CRM space.

· Salesforce HR Analytics: Enable ​leaders to make smarter ​talent ​decisions with increased visibility to key performance and productivity metrics. With a unified view of any data source, leaders can uncover new employee insights and proactively engage their teams from any device.​

MyPOV – Salesforce is using its Wave platform for this, which is a solid dashboard and visualization tool. Salesforce throws more confusion in the already confused area of ‘analytics’, but that is no surprise (for ‘true’ analytics read here – they take actions or make recommendations, something Wave does not (yet)).

· Engagement Apps: Build and deploy the mobile apps employees need to be successful, tying into the company’s business processes. Now, employees can be more productive with activities such as recruiting, onboarding, interviewing, training and more, from wherever they are. In addition, the Salesforce for HR ecosystem, including Appirio, Deloitte, Jobscience, Lumesse, and others, can leverage the Salesforce1 Platform to accelerate how companies transform employee engagement.

MyPOV – This is probably the most important part of the announcement – Salesforce complementing HCM vendors that have already made the decision to build HCM assets on the Salesforce1 platform. Notably these are mostly in the Recruiting space – as many CRM best practices lend themselves to Recruiting, too. It will be key to see integration, endorsement by these vendors of Salesforce for HR. [Update from Salesforce - Salesforce for HR works with all HCM vendors, not just those built on the platform. We have pre-built apps on AppExchange and we integrate with all the other HCM vendors.]

Comments on the News

· “St. Joseph Health is using Salesforce to increase engagement and improve productivity for employees at 14 facilities across two states,” said David Baker, VP of IT, St. Joseph Health. “Employees want the conveniences of consumer-inspired mobile and social technologies available to help them do their jobs better. With Salesforce, we can give that to them. It is helping us revolutionize the way we interact and solve problems as a team.”

· “You can't provide a great customer experience without happy, engaged and informed employees, so it's no surprise that Salesforce's Customer Success Platform has expanded to better serve the workforce,” said Chris Heineken, SVP of Field Operations, Appirio. “As a Salesforce partner and a company that spends a great deal of time helping HR organizations optimize their systems of engagement, we couldn't be more excited about Salesforce for HR.”

· “Our clients are seeking technologies to help provide a better user experience associated with HR services delivery,” said Marc Solow, director, Deloitte Consulting LLP and leader of Deloitte's HR shared services consulting practice. “Deloitte’s Fullforce Solution c*Link offering, that is based on Salesforce, is transforming how our clients are addressing the future of cloud-based HR services delivery.”

· “We are excited to deliver TalentObjects on the Salesforce1 Platform because we believe it can be the most powerful platform for workforce engagement in the industry,” said Thomas Volk, CEO, Lumesse. “Our vision for people-centric workforce optimization solutions formed through the eyes of more than 2,400 customers over the past fifteen years is being realized with the help of the most innovative company in the world.”

MyPOV – And here we go with the endorsements. Good to lead with a customer, unfortunately an IT Leader, a HR Leader would have been stronger. Also note that Appirio and Deloitte are more service than product partners, pointing that there will be a lot of integration work and revenues to realize in order to get Salesforce for HR to work. Lumesse just finished bringing their new Recruiting product to the Salesforce1 platform – so here is a great supporting quote by Lumesse CEO Thomas Volk.

Pricing and Availability

· Salesforce for HR solutions are generally available today and are built with technologies included across Sales Cloud, Service Cloud, Marketing Cloud, Community Cloud, Analytics Cloud and the Salesforce1 Platform.

MyPOV – Pricing will be key. Employee seats are cheaper than CRM user seats but Salesforce has shown in the past that it understands to make licensing costs not a showstopper.

Implications, Implications

Implications for Salesforce Customers

For the existing Salesforce customers this announcement means that Salesforce as a vendor and as platform has the opportunity to become more strategic in their enterprise, beyond the CRM space. Salesforce will need the help of their existing users to make it over to their HCM colleagues. Timing could be right as there is a general unhappiness in HR about poor user experience. On the flipside integration work is dreaded on the HR side, as many enterprises find themselves operating a hodge-podge of different solutions. But not having a key ‘tectonic’ HCM automation piece (HR Core, Payroll, Talent Management, Workforce Management and Benefits) makes that conversation tougher for Salesforce. But Salesforce can roll in partners that have recently built new offerings on the Salesforce1 platform.

Implications for Salesforce Partners

Salesforce has attracted a number of HCM vendors to build products in the Salesforce1 platform. Many noted and quoted above. Salesforce was only able to attract these vendors with making the ‘we have no interest to move into HCM’ statement – that now could be challenged. But it looks like that Salesforce has done a good job keeping partners briefed, and for now it seems partners think that they get additional marketing firepower from Salesforce. But certainly they will be watching Salesforce’s HCM plans a little more carefully and likely more nervously.

On the architecture side though it will be interesting to see how well the Salesforce1 platform, built with CRM in mind, can deal with HCM requirements like effective dating, PII Data, data residency rules and more.

Implications for Salesforce

Salesforce is pivoting the 3rd time on HCM (In with rypple, out with a performance focus on CRM users only, back in now) which shows how key HCM is as a growth area. For now it looks like Salesforce is trying to get more users on its Salesforce1 platform and Chatter which is always a legitimate move for any platform vendor. But getting serious in a new enterprise automation space beyond CRM needs more than platform, collaboration and partners – an argument certainly Salesforce would do themselves if it came to CRM (not HCM). In some way Salesforce has now maneuvered itself in a tricky positioning – as it cannot announce major automation without conflicting with the partners it tried to attract as a platform vendor in the first place. One area that is carte blanche is the Employee Call Center space – so I would not be surprised if Salesforce will focus on this area first and foremost.

Implications for Competitors

For CRM competitors – We don’t’ see this announcement having any effect. Hoping for a Salesforce distraction with HCM will likely not materialize as Salesforce has deep enough pockets to run on full steam on both playing fields.

For HCM competitors – Salesforce is not competing with the traditional HCM vendors (yet?). As such the Salesforce for HR offering is only doing something existing HCM players know is important – user experience needs to improve, content management is important, collaboration is important – really nothing new. If Salesforce would start offering key ‘tectonic’ HCM automation pieces (as it could have started in Performance Management with rypple) again – then it would certainly be taken serious as a market player in HCM.

Overall MyPOV

A good move by Salesforce to bring more user to its content agnostic technology – Salesforce1, Chatter, Wave etc. It all looks to me like a deja-vu on what Siebel did 10+ or so years ago with Employee Relationship Management (ERM). Same tag line – treat employees like customers. And it worked well with Siebel, if memory does not fool me – Siebel ERM had well over 2000 customers on ERM. But it was not enough automation to make a dent into HCM markets and not enough overall to give Siebel new avenues of growth. It will be interesting to see if Salesforce is in a similar strategic situation as Siebel was back then. The notable difference is that Salesforce is much more of a platform offering, with 3rd party ISVs building on top of Salesforce1 – none of that happened with Siebel. On the flipside Siebel offered notable content partnerships, which Salesforce has not tapped into yet.

There is a lot of merit to treat employees as well (or even better) as customers, and a lot of room to apply best practices from CRM to people management. The Recruiting space with ‘CRM’ (C for Candidate, not Customer) is a prime example. But at the end the ‘Customer is King’ is valid for all enterprises. Employees are hired to create value for and serve customers, but ultimately are cost when it comes to the balance sheet. Customers are revenue that pays for employees. And with such seat prices for CRM professionals are higher than for HCM professionals and employees. Always good to follow the money.

And lastly, Salesforce could launch similar offerings in other key automation areas. Finance, Manufacturing, Purchasing employees need to collaborate, too, want better reporting and dashboard, get a better user experience, have support needs (that an HR call center will not cover) – but HCM is the most attractive of these markets.

But for now a good move by Salesforce and it looks (for now) that it has not rocked the relationships with existing HCM ISVs that are building on the Salesforce1 platform. We will be watching if it stays like this and how well ‘Salesforce for HR’ will see adoption.

More on Salesforce:
  • Event Report - Salesforce Dreamforce - A Customer Succes Platform, Analytics and Lightning - but really Salesforce is re-platforming - read here
  • Constellation Research Summary of Salesforce Dreamforce 2014 - read here
  • Research Summary - An in depth look at Salesforce1 - Better packaging or new offerng? Read here.
  • Dreamforce 2013 Platform Takeaways - All about the mobile platform - or more? Read here
  • Platform ecosystems are hard - Salesforce grows it - FinancialForce shrinks it - read here.
  • Our take on Identity Connect - from three angles - Identity, CRM and PaaS - read here.
  • Takeaways from the Salesforce and Workday Strategic Partnership - read here.
  • Act II - The Cloud changes everything - Oracle and - read here.
  • How many Pivots make a Pirouette? Salesforce's last Pivot - read here.
Find more coverage on the Constellation Research website here and checkout my magazine on Flipboard.