HR Tech 2013 Key Takeaways - 2 Races, Recruiting and more
Vice President and Principal Analyst
Constellation Research
Holger Mueller is VP and Principal Analyst for Constellation Research for the fundamental enablers of the cloud, IaaS, PaaS and next generation Applications, with forays up the tech stack into BigData and Analytics, HR Tech, and sometimes SaaS. Holger provides strategy and counsel to key clients, including Chief Information Officers, Chief Technology Officers, Chief Product Officers, Chief HR Officers, investment analysts, venture capitalists, sell-side firms, and technology buyers.
Coverage Areas:
Future of Work
Tech Optimization & Innovation
Background:
Before joining Constellation Research, Mueller was VP of Products for NorthgateArinso, a KKR company. There, he led the transformation of products to the cloud and laid the foundation for new Business Process as a…...
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This year's HR Tech Conference in Las Vegas proved to be more than ever, that it is the key event of the HCM industry. With more vendors, more buyers and more buyers with imminent purchase needs - it was the largest event yet. And equally it was massive in terms of announcements, steps walked, parties etc.
So what are the key takeaways?
Why is HCM so hot?
Needless to say, that the economy is doing better and that helps the enterprise software industry overall. Compared to two years ago this was a very different HR Tech conference though, with more vendors, a larger show floor, definitively more buzz - and with that a noticeable increase in hype.
But we are also in the aftermath of two multiple billion acquisitions by SAP and Oracle that have transformed the marketplace, moreover Workday has risen from a contender status to the vendor to beat status and finally we are witnessing a renaissance in the recruitment space.
All that happens with ICBMS unfolding with full force - and with that we do not mean the missiles, but Intelligence, Cloud, BigData, Mobile and Social, and they transform the way enterprises work. The leading vendors are at the forefront enabling these transformations with their respective best practices. And at the same time they prove more than an opportunity to disrupt the vendor landscape - more about that later.
The quest to obsolete integration
Integration has been a key capability and challenge at the same time since companies decided to automate more than just financial systems. Very much like the different functions of an enterprise work together, the different areas of an enterprise system need to work together. And the question is, if as a buyer of enterprise systems you buy the integration from the vendor or you decide to build and create the integration yourself.
And the enterprise software industry goes through phases - phases where there is a lot of innovation and best of breed vendors entice enterprises to shoulder the integration challenge themselves. Contrast that with the other type of phase, when the larger vendors provide that integration. But integration is not free and comes with a price - so seldom integrated systems provide leading edge best practices, but more well proven practices, that in turn are integrated.
We are watching two races
What we see in the HCM market right now is two major races - the race for completion of the talent suites and the race for integrated talent and core HR systems.
In the first category are the traditional talent management vendors that are rushing to provide an end to end talent management system, in the second are the traditional ERP vendors (Oracle, SAP, Infor etc) and vendors like e.g. Ultimate, Workday and even talent vendors like e.g. SumTotal and SilkRoad as well as traditional payroll vendors like e.g. ADP and Ceridian. And maybe both races are actually coming together at one stage, as the prize for the winner of the pure talent management suite race could be questionable in regards of the overall integration race of talent and core HR. It will only be a prize if the pure talent management suite vendors manage to provide better best of breed practices that the vendors in the overall HCM integration race. The verdict of that is open and will remain open for a while.
In the meantime.... the recruiting race is on
And while the two larger, big ticket races are on the way, there is a separate race in the talent management space - around recruiting. Recruiting is unique inside the HCM automation space, as its users are uniquely competitive and at the same time the most performance scrutinized employees in the HR function. For an HR practitioner to get terminated for performance reasons is pretty unheard of - for recruiters it is happening every given day.
So not surprisingly in the arms race of recruiting talent, users are always looking for a leg up over the competition. And that fosters a flourishing ecosystems of vendors trying to pitch the next best way to give recruiters more success and with that ultimately give them better job security. This dynamic by itself gives the recruiting market a dynamic by itself that can only be compared with similar dynamics seen in the CRM market. And consequentially both markets show paralles in practices and vendor dynamics. It is not uncommon to see recruiters use separate systems from the rest of the HR department and the enterprise - even if these systems offer recruiting functionality - but if they are no longer deemed good enough to acquire the talent the enterprise wish to acquire – they won’t be used.
More than one vendor stated, that the key recruiting players Taleo and Kenexa having been respectively acquired by Oracle and IBM - are perceived to no longer innovate - a fact that is not true - but gives them hope to be able allow their investments into recruiting functionality to come more to fruition than say e.g. 2 years ago.
So not surprisingly innovations like video and chat are being explored by vendors like HireVue and others like Jobvite are taking CRM best practices to the talent acquisition game. And similarly a vendor like Work4Labs with its Facebook centric functionality may provide a key weapon in the race for talent to both recruiters and enterprises. And not to forget SmartRecruiters with their overall potential to disrupt the economics how recruiting systems are being sold and licensed.
Beware the false analytics - but welcome benchmarking
Not surprisingly the false analytics made their appearance in Las Vegas, too - and with that we refer to reporting, dashboarding et al clothed up as analytics. But real analytics are the ones that take a direct action or at least suggest one - and we didn't see much of that.
With that said, it’s good to see, that there is a general overhaul of getting reporting and dash boarding upgraded. HR professionals and all enterprise users deserve to know what is going on in their enterprise and in general vendors have not been doing the best job of making information transparent. We are still far away from making that actionable (another buzzword that has worn down before its real meaning came to fruition in enterprise software and its implementations) - but at least we are seeing movement to improve things. If that starts with better visualization and making reports available on mobile devices - so be it.
The welcome new change was, that more and more vendors are talking about benchmarking. Vendors that have the data to benchmark are using it (e.g. ADP) or plan to use it (e.g. Equifax) and vendors that do not have it - license it and use it (e.g. Workday from Bersin / Deloitte). And with the next generation of visualization getting ready, it means that users of HCM systems will be able to not only relate data to internal standards - but understand better how their enterprise is doing in regards of its peers in the marketplace.
And maybe something new...
An area that enterprises as well as vendors have been traditionally not paying attention to - is the dynamics of different personalities working with each other directly and even less how personality affects team productivity and success. So the foray of Halogen in combination with the CPP’s MyersBriggs is a good start to allow more of the well-established personal profile test results make it into HCM systems. Using such data in performance management, for team composition, succession etc. could be the start of something very valuable. Certainly it will be good to see more vendors understanding personality traits and incorporating them into HCM practices.
Furthermore it looks like there is some traction from a new angle in the LMS market. It seems like all the MOOCs are trying to get a piece of the enterprise learning market – only that they have not figured out how. In the meantime there are a number of vendors who try to entice users to publish and create course content, e.g. Brave New Talent (and others), the traditionally root cause crux of LMS.
And some vendors come out of unexpected corners, e.g. Glassdoor keeps building out its corporate services and is becoming a key player in the recruiting space. And Vizier is taking a more analytical approach to workforce management than the existing vendors have taken.
Finally on the everlasting struggle with providing a more contextual interaction with enterprise software - SumTotal has shown promising new functionality and user interface to address this challenging area of automation.
MyPOV
The HCM market is more dynamic than ever. There are two mega races on the way as well as an ongoing recruitment race. It is and will remain interesting to watch and analyze. And plenty of encouraging innovation to disrupt these races.
The good news is - it's all for the better of the HCM user, but vendor selection, technology and automation choices, execution and timing matter.
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