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HR Technology Column

The Shape of Things to Come!

In HR technology, everyone always wants to know what's coming down the pike in one, two or five years. Happily, both new and experienced industry analysts just published reports last week on this subject. They give me air cover and some validation for what I've been noodling about.

Monday, July 25, 2011
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The column title comes from a 1933 H.G. Wells novel, which he personally adapted for the 1936 science fiction movie, Things to Come, involving many famous British film people of the time: director Alexander Korda and actors Raymond Massey, Ralph Richardson and Sir Cedric Hardwicke.

As a twisted youth in the early '60s, it was one of my favorite movies for showing an apocalyptic war destroying the earth, civilization rebuilding itself as a shadow of itself and then unexpected danger or redemption by an outside power. In short, an early example of the film genre popularized by The Terminator. Many film-makers have since substituted a horrific natural disaster for an apocalyptic war, and that works, too.

Anyway, read the wonderful plot summary on Wikipedia, remember that H.G. Wells actually wrote it, and then find and watch it at your peril. Really old movies rarely hold up, except for the original King Kong, of course.

So what is the shape of things to come in HR technology, where there are certainly battles but no apocalyptic wars? Three analysts are proposing new ways -- new frameworks, really -- for helping you figure that out. And you should do that because your systems are, as experts say, "an investment," and like stock, you want to know which ones are going up and down.

Gartner's Jim Holincheck (our closing keynoter at HR Technology® in two months, in case you've been AWOL for awhile) and his colleague Thomas Otter think software is going to split (and largely already has) into three categories: Systems of Record, Differentiation and Innovation.

All of this comes from their oddly named report Applying Gartner's Pace Layer Model to Human Capital Management, published on July 21, and generally available only to paid subscribers. So listen up, this is a free taste!

They point out that since 2004, HR departments have shifted their focus away from systems of record (think HRMS) to systems of differentiation to support your unique processes (best example, talent management systems).

And starting last year, HR departments have begun to focus more on new solutions that include both HRMS and talent management.

Their Innovation category includes applications to support new business activities, usually built (and sometimes discarded) quickly to meet new opportunities.

Their major suggestion to you is to deconstruct all the systems you own and identify what is truly differentiating and innovative, and then make sure you have a balance appropriate to your company. And also give your System of Record the hairy eyeball.

They offer tons of guidance on how to think and do all of this should you decide to buy a copy of the report, which I think Gartner will sell on a one-off basis. But in the end, "it all depends" on your situation, as all consultants will tell you.

Surprise: Their point about unified HRMS and talent management systems becoming the next big thing is the same conclusion Amy Wilson came to in her report, People Management Technology, which she prepared for clients only two days earlier than Gartner's report.

A little necessary background on Amy. She started as a munchkin at the former Andersen Consulting (as did Jim, only earlier), then joined PeopleSoft in product strategy. She stayed with Oracle after the acquisition in 2004 as many did, and for five years ran the creation of the Fusion HCM talent management applications, especially the now deservedly copied "Talent Review" module.

Less than a year ago, Amy gave up her steady paycheck to become an independent analyst (and blogger as "Shiny & Useful") at Wilson Insight. She joined the very high-profile analyst consortium Constellation Research Group, headed by R "Ray" Wang, voted the best IT analyst in the world for several year. She is a VP and principal analyst there, and Naomi Lee Bloom is more loosely affiliated.

Amy's report is both broader and narrower than Gartner's, but comes to the same conclusion: talent management suites will be subsumed into and extended to foundational platforms (like the HRMS).

On her current appearance on The Bill Kutik Radio Show®, Amy is even bolder, saying that talent management has peaked and the vendors may disappear unless they morph into something more. Gee, even before they reach majority adoption? Feels like infanticide!

Moving forward, she says, there will only be two kinds of vendors: "platform" and "innovation." And only those providing one or the other, firmly linked to business results not to HR efficiency, will survive.

Well in the software industry, this is called discovering a trend! Ideally, it's finding three geographically separated start-ups working on the exact same idea without a clue about the other two. That's rare, but it happens more than you'd think.

Three analysts coming to the same conclusion may not be nearly so impressive. But a trend, nevertheless.

Especially when you add the redoubtable Naomi Lee Bloom (already girding her loins for the Great Technology Debate at the HR Technology® Conference), who was naturally even earlier, with a white paper two years ago describing talent management and the HR system of record being inextricably intertwined and predicting the same convergence.

Even I've been noodling about the exact same thing for two years..

Let's assume that -- except for the largest companies that want to customize their software so it does exactly what they want down to the smallest details -- SaaS will indeed become the dominant software-delivery method moving forward, replacing installed systems.

So who are the SaaS vendors offering the unified systems Gartner talks about, and the platform systems, Amy mentions.

Obviously, the first is Workday. I'm spending the day with them July 26, so will give you the latest in the (gasp!) print edition of HRE distributed at the conference and also on HREOnlineTM.

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Then there's SuccessFactors, with the "big if" of whipping their core HR module Employee Central into good enough shape to handle the needs of large companies. I believe that's still a future, but I'll know more after meeting with them on July 27.

Of course, Ultimate Software has been competing with Workday for years, as the only other true SaaS HCM, but mostly at the lower end of company size and only when payroll is part of the deal.

The entrant that may surprise you is SumTotal, historically our largest learning management system vendor. But with Softscape already in its stable and the recent acquisition of Cyborg/Accero, for payroll and benefits, and CyberShift for workforce management applications, Sum Total has all the piece parts to be a unified, platform provider.

And the HR piece is coming not from Cyborg, but from Softscape, which invented the term "talent management," built all the applications itself, and sold about 20 integrated HR modules before being acquired.

But putting them together will be a major challenge. What constitutes "integration" has always been in the eye of the beholder. And lately, more and more vendors have told me that it doesn't necessarily mean completely rewriting an acquired application for their current platform or technology stack.

For its part, SumTotal talks about data, process and user interface integration as being enough. Not database integration, thought to be required for reporting unless you have a data warehouse. The company intends to create an integration layer that will orchestrate and translate the date and process feeds between applications.

SumTotal is not alone. Lumesse (still necessary to say the former StepStone, I think) is maintaining some of its applications separately (though "integrated"), as is Taleo with their acquisition, Learn.com.

CEO John Borgerding of SumTotal wants to join the big fray and go head to head with Workday and SuccessFactors, but not try to take HCM customers away from Oracle and SAP, which is clearly Workday's mission in life.

So how do those big ERPs fit into the Gartner/Wilson future? Naturally, they both survive and both are working on their next generation applications -- Oracle Fusion, thanks in part to Amy -- and SAP Career OnDemand for its installed base, which you'll be able to see for the very first time, guess where? Also SAP Business ByDesign as a brand new system.

Let me close with an apology to Jim, Thomas and Amy for presenting such a narrow, shallow and sensationalized view of their work. But they knew I was a journalist when they gave them to me, so what did they expect?

HR Technology Columnist Bill Kutik is co-chairman of the 14th Annual HR Technology® Conference & Exposition, October 3-5, 2011 in Las Vegas. Many registration discounts expire in days on August 1. You can comment on this column at the Conference LinkedIn Group , which does not require prior or future conference attendance to join. He is also host of The Bill Kutik Radio Show®. He can be reached at bkutik@earthlink.net .  

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