Earlier this week NetSuite announced that it has entered a definitive agreement to acquire TribeHR, the Canadian partner that prides themselves to be one of the first social HR vendors, having been founded in 2009 - in the midst of the social boom, thus building their product on a social foundation.
Did anyone mention HCM is hot?
We may be biased - but it definitively looks like companies really start paying attention at their largest expense - people... and as the the long labelled war for talent seems to be starting slowly but steady, that trend does not stop with the SMB companies.
Coincidentally SMB companies are even more dependent on their key talent than larger companies, but have in the past (usually) not been a part of the whole Talent Management hype. Now they realize that their employees are prone to the pitches of the larger enterprises and SMBs need to react with HCM strategy, practice and technology products.
So the need for talent acquisition and retention is coming to SMB, and with a force as we can see with the pivots that the SMB-Suite SaaS market leader is maneuvering through. In May it was a partner a let all flowers bloom strategy with many partners and offering customers choice (see here), that was complemented with the Oracle partnership in June (our take here) and now the acquisition of one of the more advanced partners from May - with TribeHR.
Why TribeHR?
We gave NetSuite good grades for the original partner strategy announced back at SuiteWorld - but raised the concern that offering multiple user interfaces is not a user - in this case you may want to say people - friendly situation. Many HCM functions happen so infrequently that plodding along a familiar user interface is a great win. And TribeHR addressed that more than some other partners with building code and product on the NetSuite platform...
And then TribeHR certainly was one of the larger and more mature vendors in the partnership portfolio - potentially only ecclipsed by Silkroad - but not sure if Silkroad was even open to an acquisition conversation... and certainly has a different path to HCM than TribeHR had.
And kudos go to TribeHR to have consistently leveraged social - as LinkedIn and Facebook capabilities permeate the product.
HCM @ NetSuite
So NetSuite now has a pretty good HCM suite and is definitively a contender in the big race we described here - it has good core HR functionality, a relatively new (but key) recruiting product and solid performance management. That completes well with NetSuite's existing (basic) time management and more as part of the the Employee Resource Management module (expenses, purchases, collaboration), Incentive Compensation and the Payroll Services option.
What's missing - and we will see how NetSuite will address this - is onboarding, learning and compensation - not all the way on the top for a SMB - but arguably with the rest of HCM automation being addressed - will get equally important - probably sooner than NetSuite thinks today - and we will see how quickly they will respond.
And of course Payroll remains a major pain point, especially for SMBs and while NetSuite covers the US well and partners further with e.g. Paychex on the international side, this is likewise an area to watch. And finally we think NetSuite needs to keep investing into recruiting - for the aforementioned reasons why HCM gets so relevant for SMBs - all about the acquisition and retention of talent.
Confusion in the ecosystem on HCM strategy?
The pivots that NetSuite has been doing with its HCM strategy - though the company will not call them like that - are substantial and the company needs to clarify messaging with both customer and partners. Our take in June was that the Oracle partnership addressed the global HR and talent needs the partners could not address - and while TribeHR is not an Oracle Fusion HCM - it certainly gives NetSuite more automation in that area.
And then NetSuite will have to stick to the strategy and execute - nothing creates confidence better with prospects, customers and partners to execute and deliver to a roadmap.
MyPOV
As mentioned - HCM is key for SMB, too. Kudos go to NetSuite to quickly and aggressively address that need and not be shy to pivot as needed. It is getting a good asset and a talented team with the TribeHR acquisition.
Now it will be time time execute, create a road map, address the remaining gaps in the HCM portfolio, clarify the partner go to market. Exciting times and ultimately good news for the NetSuite customers.