Talent Management Technology: The Next Generation
After talking with several colleagues about the SAP/SuccessFactors acquisition news, I am not the only one who thinks this is the beginning of a new wave of consolidation.
I have heard that some people are calling it "the end of talent management." But I think it will just mark the beginning of The Next Generation.
The Old Generation
It is hard to believe I am calling it the old generation already. It seems like yesterday these products were on the cutting edge. They have done so much better than their predecessors (Resumix, ResTrac, Personic), it is a little sad to see them go. But just like the Baby Boomers I expect they will linger around for a long time to come.
SuccessFactors, Taleo, Kenexa, and several of the other Tier One vendors have a few things in common.
- They started out as single function product, an inch wide and a mile deep. Nimble, flexible, and better than the same module offered by the behemoth ERP/HRMS.
- As the vision for integrated talent management gained momentum, they expanded their scope.
- Organically growing functionality only got them so far. They realized that it would take many years to get the new modules to same maturity level as their flagship. They needed to increase speed to market.
- They made acquisitions to broaden their functionality, and in some cases take out competitors, or to buy customers.
- They have really big marquee accounts who place big demands on them for new features and functions.
- Their clients pay a premium and only use a small fraction of the product's capability, yet they still do not have everything they need.
- They try to be all things to all people, but at the same time dealing with multiple code bases, integration of company cultures, and an enhancement request list that would choke an elephant.
- Not to mention trying to transform from Application Service Provider to a true SaaS environment.
The Next Generation
Even during the horizontal expansion of the last six years there has been an emergence of a new best of breed. As the old generation attempted to incorporate Social and Mobile into their legacy systems, these new products come with web 2.0 built into the core.
But what about a Talent Management Suite?
Cornerstone is pretty well positioned, having stepped up as a top three Tier One contender. They are 100% organically grown and created some serious momentum with the ADP relationship and then fended off an acquisition by going public. Kind of like when Jean Luc Picard avoided being assimilated by the Borg....
But I think whoever takes the lead as a The Next Generation Talent Management Suite will need to offer a more open platform to create sustainability. Rather than try to be all things to all people, create a killer foundation and framework for each of the functional disciplines, and then open up the API's so developers can create everything from basic applications to highly sophisticated modules. Make it easy for a customer to only pay for the functionality they want, and get everything they need.
So this wave of consolidation is by no stretch the end of anything. It's really just the beginning.
Here's to you Jean Luc!