HR Technology Column

Taleo and SuccessFactors Go to War

When Talent Management started, we were all agape at the different application origins of the competing vendors. Five years ago, none seemed more separated than Taleo and SuccessFactors. But now they have clearly broken away from the pack -- and the greatest weapon they bring to their coming war is lots of new products announced in September.

Monday, September 21, 2009
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Who would have imagined it five years ago?

Back then, we had Taleo selling its single application for recruiting and constantly butting heads with BrassRing, Vurv, Peopleclick and others for the next big customer.

And there was SuccessFactors, selling only its multi-part application for performance management and duking it out with Halogen, Kenexa, Softscape and many others.

Suddenly, everyone decided to become a talent management suite vendor.

So now we have Taleo with a performance application that is reportedly thrilling its users, sold to 150 mostly large customers, with 20 percent buying it stand-alone without recruiting! Plus it recently purchased its small partner, World Wide Compensation, and will soon have a compensation app.

And SuccessFactors now also has nearly all the Talent Management applications and is making good progress on writing its own recruiting application from scratch with the goal of meeting the multinational needs (with 31 languages!) of its largest customer, Siemens.

Both companies have small- and mid-sized operations offering specially configured software for both performance and recruiting targeted at narrow market segments -- get your free trial! -- and have scooped up thousands of customers.

Sorry, no knock on any of their competitors who on any given day might still beat them head-to-head competing for a new customer, but Taleo and SuccessFactors have clearly pulled away from the pack. In terms of market share, market perception and customer satisfaction.

You'll hear Leighanne Levensaler tell you so the first morning of the HR Technology® Conference, Sept. 30 in Chicago. Also how much other customers like their own vendors, Halogen and

While Taleo and SuccessFactors are just beginning to see each other in vendor selections, I see them lining up to take the field at Agincourt. But let's be high-minded and focus on their new products rather than how many archers and catapults they bring to the field of battle.

In September, both made major multi-product announcements. Take SuccessFactors first.

For decades, HR software companies have dreamt about selling directly to the CEO. After all, who should care more about the company's employees than the person at the top?

Nearly every vendor has been disappointed to discover that the famous annual report quote -- "People are our most important asset" -- was often just an empty slogan. The CEOs were focused on sales and finance, their own direct reports, the board or investors, and could care less about their most important asset.

Now that attitude truly seems to be changing. To capitalize on it, SuccessFactors has rebranded itself as selling "Business Execution" software -- BizX software, for short -- and set an ambitious course to create people-related software that the CEO will see as important for the company and, more importantly, useful for its top jobs.

Believe it or not, I've always felt a little sorry for top executives at big companies -- certainly not for their salary, bonus, options and perks -- but for how blind and out of control they must feel in their roles. Think about how many layers of executives -- who only manage other executives who only manage others -- stand between them and the people who actually execute the company's real work. They rarely have their hands on the levers.

In a press statement, CEO Lars Dalgaard declared, "Traditional enterprise applications are about automating processes and transactions. Today, customers need applications that help knowledge workers get stuff done."

I couldn't agree more and always liked the word "stuff." While the company's new initiative doesn't yet forge the connection to an employee's daily work, the product roadmap includes analytics and C-level dashboards to give executives and managers a more comprehensive view into how the company and individuals are performing. Not much help yet for employees to "get stuff done," but at least the vital first step of discovering who's not.

As Josh Bersin wrote after the recent announcements: "The really hard part of business execution is not telling people what to do, but helping them succeed at doing it."

Have you been thinking "data warehouse" as you're reading along? It has always made HR a little nervous. Get over it. All the most innovative developments in HR are going to be impossible without one integrating financial and customer information with employee information.

SuccessFactor's new "stuff" is hardly revolutionary. Three new products were released this month. They are Metrics Navigator (access to key business insights), Business Execution Survey, and Business Execution Services, which is expanded consulting. SuccessIndicators has been enhanced with outside data.

SuccessFactors' plan needs connections to third-party data and applications. To that end, the company has launched SuccessCloud as a way to connect with enterprise systems from the likes of Conformity, Pervasive Software and NetSuite.

Google Apps, GeoLearning, SkillSoft and IBM Apps are already integration partners. Now that SuccessFactors has Employee Central for employee-recordkeeping, I'm sure the major HRMS vendors will stay off of that cloud.

But the name reveals how "Cloud" can be nothing more than water vapor. While some of these companies may integrate more easily through Web services, most will use APIs, the traditional way applications have been integrated for years. Calling it a "Cloud" doesn't make the application integration one man-hour faster.

Taleo has a Cloud, too. These days, Wall Street doesn't want to know a smaller software company's name if it doesn't, and their marketing departments are happy to deliver. Taleo calls it Talent Grid, first announced last year and now live. It is comprised of three online communities:

Knowledge Exchange is a straightforward social network (using Jive, the leading software) for customers to share ideas and solutions, ask questions and create discussions.

Solution Exchange is the equivalent of SuccessCloud with an important difference: Seventy solutions are already available because they are the smaller edge applications of recruiting. These include sourcing, assessment, background checking and others. Solution Exchange offers a nice ability to demo and compare competing products before buying. But again, except if the integration is pre-written, there's no integration advantage by buying it from the Cloud.

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Talent Exchange allows Taleo customers to exchange unhired candidates for those of others. Companies and candidates will both have to opt in, of course. Fees to search the candidate pool are based on how many candidates a company contributes to it.

Taleo says it has information on 175 million candidates. Having that volume in-house and hundreds of customers already wired to the company could make the difference in this experiment. This idea has already failed five times that I can remember and another one is going on right now. For years, applicant-tracking vendors have been telling customers: "Build your talent pool." Now the largest one says, "Barter it away"? It may make sense but the road is full of potholes.

At its September user conference TaleoWORLD in Las Vegas, the company debuted its anticipated new version of its enterprise recruiting product, long dubbed Monarch and now called Taleo 10, which runs on the same technical platform as the performance product. It also announced a new sub-module for Development Planning (part of Careers), My Taleo customizable home pages and Taleo Anywhere for mobile devices.

The benefits of fully integrated performance and recruiting, can be seen immediately in Taleo 10's new analytics, where performance data can clearly make a recruiter smarter or better. Or perhaps it can make the head of recruiting smarter because a demo from James Harvey, VP of Taleo's Innovation Lab, showed impressive power at uncovering what kind of people have been successful in a position -- but power nearly always means complexity. I'm not sure a recruiter will have the luxury to use it.

Not so with Taleo's new iPhone application, scheduled to be available in June, for sending and receiving alerts and messages to and from a particular company's career site. Eventually it could replace even going to the career site! And, again, because of performance integration, the application can show the candidate the typical career path upward from a particular job. On a computer or on the iPhone!

Every company wants candidates to refer friends for jobs. Obviously the iPhone's address book is available for that, but Harvey hopes to cut a deal with LinkedIn and Facebook so contacts from both those networks can also be notified. The only negative I saw was that a user had to download a free application for each company, rather than a general Taleo app. And that the BlackBerry app is still a ways off.

So new products abound from both sides of San Francisco Bay. Both companies are extending the boundaries of their applications and will shortly be reaching parity. Remember, Clausewitz famously said war was simply the extension of politics by another means. Today, he'd certainly include it as the extension of business, too.

HR Technology Columnist Bill Kutik is co-chairman of the 12th Annual HR Technology® Conference & Exposition in Chicago, Sept. 30 to Oct. 2. Online registration is available through Sept. 29 and then at the door. He is also host of The Bill Kutik Radio Show ®. He can be reached at .

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