Part One - Major Themes
2012 was an interesting one for Human Resources software. From Talent Management, Payroll, Analytics, HRMS and other niche HR solutions, there were a number of cool innovations, emerging trends and a lot of M&A with a side order of an IPO.
Let’s review the big themes:
You couldn’t swing a dead cat at the recent HR Technology show without hitting an HR sales rep hawking their firm’s HR analytics functionality. While most everyone claimed to have something, the depth of the solutions varied significantly. Most vendors’ offerings were very new extensions of their traditional reporting tools. If there was any ‘insight’ to be gained from these initial tools, it only happened because the vendor finally connected performance and compensation data together. The real stars in analytics were analytics only vendors like Visier, Evolv-OnDemand and Talent Analytics.
Relevancy maps of employees are scarce. And, vendors who really understand how to tap into the social and other Internet data sources well are scarcer still.
Likewise, it seemed like every vendor discovered social computing in 2012. There were some alliances (e.g., Ultimate and Yammer). There were some added collaboration capabilities. And, there were a lot of integrations of social media with recruiting applications. Nowadays, it’s hard to find a recruiting or talent management vendor without an alliance to LinkedIn, Facebook and Twitter.
But, for all the excitement around social, the implementation of social technology has only just begun. Relevancy maps of employees are scarce. And, vendors who really understand how to tap into the social and other Internet data sources well are scarcer still. Like analytics, social technology adoption is occurring but only at the infancy stage for now.
I also got the feeling that there’s a consultant going around the software vendor circuit this year telling everyone that they need to have “faceted search” on their online and mobile screens. That’s a capability traditionally found on e-commerce sites that has permeated HR product lines in less than a year. Scratch a modern HR product now and you’ll find faceted searches in there somewhere.
Talent management has become a global need and solution. Vendors have amped up the global ruggedness of their products to make workforces more visible across the entirety of their global customers. Yea! Now global firms can get a global perspective on their talent.
Speaking of global, payroll solutions keep getting more global. The numbers of alliances continues to grow with many talent management firms partnering with one or more global payroll solution providers. But, software buyers should note that while some products are sold as part of a vendor’s application suite, they may be private-label versions of someone else’s software. Payroll could be hot in 2013. Patersons, a global payroll solution provider, has re-branded itself as CloudPay and a new entrant has just scored a goodly venture financing round: ZenPayroll.
HR software buyers continue to grow in sophistication. They are more savvy and not just about cloud computing. They’re also demanding full HR/Talent Management suites. They also want pure suites, with one development and PaaS underneath. They don’t want a bunch of best of breed stuff stitched together with some integration technology.
Process changes are impacting HR software but, amazingly, few vendors see these or are doing much about it. HR vendors are building mobile apps but they seem to be blissfully unaware of the thousands of pre-existing mobile apps and databases that job seekers, employees and others are using. These new apps and data sources are like BYOD except that instead of devices it is apps from unknown vendors inserting themselves into most every HR process. In 2013, I hope more HR vendors become more aware and more cosmopolitan.
Video is one area that is seeing new players and increasing traction. Wowzer has lots of Fortune 500 customers. It also uses video for more than interviewing. It creates a client experience and helps a company extend its brand. HireVue is another key player in this space.
And, I’m still behind in getting briefed by Montage and Async. This space will likely get hotter in 2013.
“Curation” is now a hot buzz word in HR. What HR records will go with the worker vs. stay only with an employer? Curation is an area under much change now with even bigger changes coming soon. This is a result of a modern, mobile workforce that wants its personnel and work history portable – think portable health records. Why should a person’s work information remain in disjointed fragments in different employers’ databases? LinkedIn is becoming the resume and job history of record. In fact, LinkedIn as a source of current and reasonably accurate employment information (and recommendations, skills, etc.) may be better than any ATS. Cornerstone OnDemand/Sonar6 is working on the personal curating of work.
M&A was big this year. IBM snapped up Kenexa. Oracle closed their deal to buy Taleo. SAP closed their SuccessFactors acquisition this spring. But, it leaves the standalone survivors wondering who’s left to buy them? Answer: Not many other big, well-heeled buyers are out there. There were also several smaller deals and 2013 should be a good year for those.
2012 was the year that Mark Hurd became the spokesman of Oracle – even going so far as to keynote at TaleoWorld. In three consecutive shows (e.g., Oracle OpenWorld, HR Technology and TaleoWorld), I was offered interviews with him.
And, let’s not forget the big IPO of the year: Workday. (www.workday.com) It opened at $28 and instantly shot up to $48/share the first day. It’s closed Tuesday this week at above $51/share.
Those are some of the bigger macro trends for HR software in 2013. Please continue to Part Two to get the micro/vendor level view for the year.
Part Two – The micro/vendor view of HR software in 2012
In the course of a year, I get to attend a number of vendor conferences, analyst briefings and even take in a few teleconferences, too. In these encounters, I learn a lot of details about the vendor’s product line, technical architecture, management and strategy.
Let’s review some of this year’s announcements, pluses, minuses, etc.:
Silkroad – Silkroad is based here in Chicago. They’ve got a fairly full talent management suite with a look and feel that is quite nice. Their advancements in social and other fronts are impressive, too. The company’s growth is positioning them to go public in the first half of 2013. If you haven’t seen it, get their report on social media (Social Media & Workforce Collaboration).
Workday - Workday (WDAY) went public in 2012 with a huge uptick in price. You should watch for Workday’s public focus to shift more towards their financials applications as these are now coming of age. That doesn’t mean they’ll be ignoring HR applications though. Workday has already announced it has a recruiting module under development that will go into a beta test in 2013. Also noteworthy is the sheer number of HR software firms that are partnering with Workday.
While many HR user conferences have a kumbaya/feel good vibe, the Workday event in Vegas a couple of months ago was a veritable love-in. There’s a chemistry between the company and the customers that can’t be found in a lot of their competitors events.
Kenexa – Rudy and the gang at Kenexa closed their M&A deal with IBM. The interesting thing about this deal (versus those re: Taleo and SuccessFactors) was how IBM is going to position Kenexa’s solutions. IBM is taking a more strategic, CEO-focused look at the modern interconnected workforce and will likely pitch Kenexa with IBM’s social products. The goal will be to drive greater productivity, etc. from workforces. Kenexa, in the interim, announced a new social LMS, lots of mobile development tool advances and a resurgence in their RPO business.
SumTotal – Many firms have tried to buy their way into a full product suite but never get around to re-platforming the product line. SumTotal did. They now have one product line with one underlying architecture. This is no simple feat and it should help them acquire new partners and new customers.
Talx – Talx is now embracing the Equifax name in its branding efforts although Equifax has owned the company for a bit now. Today, Talx is taking analytics, especially the marriage of Equifax data with Talx data, to whole new levels. This approach to analytics could be a real one to watch.
Northgate Arinso – Northgate Arinso has been expanding. The company is now into 111 countries for its euHReka solution. It has more mobile apps and is doing more in BPO with its PeopleSoft offerings.
Work.com – Salesforce.com re-branded and enhanced its Rypple acquisition this year. Its spiffed up product, work.com, was promoted heavily at the recent Dreamforce event.
Ultimate – Ultimate Software has gotten a lot more vocal and noticeable of late. The company’s alliances and private label deals make Ultimate’s revenue grow nicely while also keeping cost of sales respectable. The company has expanded functionality and embraced social technology via a deal with Yammer. Ultimate also added more mobile functionality to the product line with more technology advancements in the works.
Chequed. Com – Chequed.com is like many HR software firms - they like large employers with lots of turnover. Chequed does a solid e-reference check for a specific job. These checks could be used for internal or external hires. Their method identifies more negative feedback than a traditional phone reference check. Interestingly, their process can even turn the reference providers into passive job seekers.
Halogen – Halogen continued to experience more growth via more customers and in more countries. The company now has an HR friendly reporting portal marketed as an analytics tool.
iMomentous – Here’s a company that has put all kinds of thought as to how HR talent acquisition apps must be if done exclusively for mobile devices. iMomentous uses Linkedin content as the jobseeker’s resume (note: it can also use data from Evernote or Google Docs, too). The mobile first approach to their product points out some different process, content and other points that desktop first vendors might not get.
Entelo – I met twice with the founder of this new firm. They are in the business of predicting talent movement. They have an algorithm that spots when a person might be ready for a career move. If you’re an employer, you need this knowledge to retain the talent you have and to know exactly when to pounce on the best and brightest that others have on their payroll. Entelo sends its customers a daily email alert identifying top candidates who may be on the move. Entelo's algorithm looks at 70+ variables or leading indicators of an upcoming career change. While I’m not privy to their algorithm, I sense their software looks at factors like a person updating their LinkedIn profile, key changes in their life (via Facebook updates), etc. Entelo seems to be really dialed into the publications, shows, discussion groups, etc. that certain skill sets focus on. They pick up on chatter in non-employer sites and seek clues as to the unmet wants/desires/aspirations of top talent.
RoundPegg - Here’s a new firm for me. RoundPegg is designed for evaluating recruits, new hires, teams, etc. as to how well they align with your firm’s culture. They review your as-is culture and look for success markers within your existing workforce, teams, etc. They are not there to change your company’s culture but to avoid mismatches. They even evaluate sub-cultures, too.
TalentBin – TalentBin is like a detective agency for talent. They search for where the best talent lies electronically and that means they’re not just looking at the same old job boards everyone else does. They sell lots of licenses to operational people not just to HR or recruiter professionals. For example, if you want a software engineer in the San Francisco Bay Area, they look at the bulletin boards, discussion groups, etc. that those people utilize. If you want talent that has a strong online brand, TalentBin finds the most visible, influential, etc. candidates in that space.
There were some other vendors I saw/was briefed on this year that stood out to me (although I need to do more follow-up on. These include:
TalentWise – These folks do applicant screening and more. Their focus is to take friction out of the entire recruit-to-hire process
Luceo – Luceo is owned by CareerBuilder. Luceo focuses on eliminating lost time in recruiting and on identifying the best sources of specific candidates to improve hiring and operational results.
Lynda.com – Lynda provides online training. They have lots of video that is used by 400 schools and many businesses. This is actually a well-established firm that’s grown quite large, but very quietly.
Montage – I’ve had a few conversations with Montage executives and will get a more detailed look at the solution when I’m next in Milwaukee. Montage has a newer video interviewing solution.
Manpower – I didn’t get a chance to check in with them in 2012. Like Montage, I will definitely do so when I’m in Milwaukee next.
Mercer – Bruce Lee at Mercer is probably torqued with me as I’ve been schedule conflicted out of the last three analyst briefings. This can happen but unfortunately for Mercer, I’ve unintentionally set a world record. I’d really like to see them this year if Bruce will have me back.
Please continue to Part Three - The Misses of 2012
Part Three - Misses for HR Software in 2012
Where are the women, minorities, youth, etc. in HR software leadership? I took this picture at Oracle Open World this year. With the red background, it looked too much like a Republican National Convention Panel than what I’d expect from a hip, cool, Californian HR vendor. While I suspect there was nothing intentional by Oracle of this, I do believe they need to address the issue before next year’s event.
Confusing Acquisitions with Innovation or Cloud Leadership – Okay, so a big ol’ on-premise software company went and bought a cloud HR product. Does that make the big on-premise vendor a cloud leader? I don’t think so.
You can give an on-premise vendor a blood transfusion but that doesn’t change its DNA. It’s an on-premise vendor with an acquired cloud application. It takes time for a tiger to change its stripes, if it even can.
Cloud-ignorant HR processes - As was alluded to in Part 1, all sorts of new cloud-based apps and data sources are impacting HR processes. I wrote about this phenomena months ago and even shared some graphics I developed with the consultancy Baker Tilly.
HR (and most every other business process) is being changed and traditional HR software vendors are NOT aware or caring about the changes. This is why LinkedIn is displacing ATS software. It's why third parties are creating the personal curation tools that are tied to workers (not employers). If HR vendors don't snap to, they'll find they're selling into one half of the HR software marketplace (for employers) and totally ignoring the other (for employees, job seekers and free-agents). The latter may become a bigger and bigger part of the picture.
Cloud Johnny Come Lately – Likewise, when an on-premise vendor has a track record of bashing cloud solutions, multi-tenancy and other potential threats to their kingdom and then, voila, suddenly reverses course, are we supposed to celebrate? I don’t think so.
How predictable are some vendors in their attacks on forward leaning technologies. First, they absolutely disparage the new technology. Then, they qualify their disdain to a portion of the new technology until they finally develop their own version of the technology. Only then is the technology an approved technology which, to hear them tell it, they supported all along.
Too much focus on “customer-driven” product direction – Whenever you hear this from a software vendor, run. This vendor is waiting on you, the customer, to tell them what to do. Apple anticipates and designs products you didn’t know you wanted or needed. Who needs a vendor with zero imagination and innovation to give you something you’re already seeing from other vendors and, worse still, give it to you years late?
One vendor executive told me that it would be “suicide” for them to craft a vision for their customers. Really?
Some focus on customer-driven product direction is appropriate but abdicating total direction to the customers that a vendor already has is a prescription for failure long-term.
Disclosure: Information for this year-end summary came from a variety of vendor interactions over the course of the year. Many were from telephone and internet briefings. Some occurred as a result of attending vendor or analyst events. For some of those, vendors may have reimbursed travel and/or lodging costs. Some did none of that. No vendors paid for my time in covering their events or announcements nor do I accept compensation for that. I do own a few shares of Workday stock.