07 Jan The life and times of HR application software (2012 in review)
Summary: From talent management, payroll, analytics, HRMS and other niche HR solutions, this year saw several cool innovations and emerging trends, plus a generous helping of M&A with a side order of IPO. Brian Sommer covers major issues, company highlights, and the year’s big misses.
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.
“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.
About Brian Sommer
Brian is currently CEO of TechVentive, a strategy consultancy serving technology providers and other firms. He is also a research analyst with Vital Analysis.