The Human Capitalist

The Breakout of SaaS

According to Nick Carr of "IT doesn't matter" infamy, McKinsey is set to release a study suggesting widespread and robust adoption of SaaS, even at Global 2000 companies.

"Large companies appear to be jumping en masse onto the software-as-a-service bandwagon, according to a new survey of CIOs by management consultants McKinsey & Company. The survey found that 61% of North American companies with sales over $1 billion plan to adopt one or more SaaS applications over the next year, a dramatic increase from the 38% who were planning to install SaaS apps in 2005."

Talent management,  a subset of human capital management (HCM), is already experience such robustness.  According to a study we did earlier this year, we estimated that over 65% of new talent management deployments in 2005 occurred in a SaaS model. 

The Past, Present and Future of My Research

This has been a quite exciting year for our research.  We have been active participants on the discussion and debates of talent management, HR outsourcing, workplace trends and, most importantly,  what companies can do to extend and build a competitive advantage in human capital through technology and outsourcing.  This past year we have published 11 research reports and notes on themes such as performance-driven compensation, recruitment process outsourcing, and the mobile workforce.  We have also continued to define key trends and market dynamics shaping the HCM, talent management and HRO markets.  This is, of course, in addition to the 200+ blog post here providing commentary on the respective markets.  Lastly, I just published a research note analyzing the recent Workday launch (and their respective product and technology approach) and have a research note on the state of HRO planned for December.

Looking into 2007, my research agenda will continue to focus on many of these same themes and building more expertise and actionable research on RPO, HRO, HCM and talent management.  We are looking to expand some of our coverage into areas such as workforce design, planning and analytics (although recent research suggests we have a long way to go here). 

Over the past 3 months, we have completed in-depth interviews with over 50 CHROs, VPs of HR, Directors of HRIT and Directors of Talent Acquisition.  The interviews have been enlightening, encouraging, scary in some instances, but more specifically, have given us a good view in terms of key issues, challenges, and priorities in the HR suite, and the decision-making process and focus for HR executives.  Some of this primary research will be published but most of the output from the interviews will help shape our upcoming research.  We have also started to work on some exciting "pet" projects including a study on what work will look like in 2020.  Some of the initial findings suggest the "talent shortage" debate should be not be feared but embraced. 

Thanks for your kind words and continued support.  As always,  I am always open to hear areas where we can expand and improve our research. 

Vendor Mudslinging Reaches All-time Lows

I recently heard a story where one of the larger vendors in the talent management space sent a prospective client a complete slide deck regarding the weaknesses of one of their top competitors including a statement saying the vendor was due to get acquired any day.  FUD (Fear, Uncertainty and Doubt) in its greatest sense. With the increased pace of M&A in the space, some may consider this a brilliant move.  I think it downright stinks! 

I personally think all of the verbal bashing like this (and that done between SAP and Oracle) does a tremendous disservice to the industry.  Not only does it create doubt in comparable products, but it ultimately damages all participates in the market in some form and fashion.  I understand "business is business" but where have individual and corporate ethics gone?  The fact of the matter today is that, like politicians, the negativity does resonate.  The problem, though, is it damages everyone in between good, bad, or indifferent.  Why do you think most Americans despise politicians?  Don't you think if Oracle complimented competitors, and promoted healthy competition, the market would respond favorable?

I make it a practice to say nice things about my colleagues at competing firms like Jim Holincheck (Gartner) and Lisa Rowan (IDC).   I may disagree with them sometimes but that doesn't give me the right to tell them their research & analysis stinks.  Hopefully, it does a service to the industry and shows the market how we can all provide value in our own unique way.

Bring back the good old days of true...fair competition.  The company with a better fit and principled execution wins.

Taleo Announces Performance Management; SuccessFactors Releases Recruiting Management

Last week, Taleo announced they are building a "performance management suite".  After shopping for a performance acquisition over the past year (and coming close to at least one deal) they have finally made the decision to build.  My initial thoughts is that Taleo may be arriving a little late to the party.  I admire their diligence and think they have made the right decision, but based on their announcement of a first version release in  Fall 2007, it will now be over 2 years from intent to market presence of performance management capabilities.  Yes...the market is still in its infancy (I estimate it is only 20-25% penetrated), but  some vendors are beginning to extent themselves in the market.  Example...SuccessFactors currently has a client acquisition rate of 100 new clients quarter-over-quarter and should reach a total of 1,000 customers by the end of the year.

Ironically, in the same week, SuccessFactors has announced the availability of Recruiting Management.   Although it is not what I would consider a full-scale ATS (which is not necessarily a bad thing), they have built some solid first version functionality in rather short order (about 6 months).  As with compensation and succession planning, SuccessFactors has taken an incremental build approach, centered around performance management, and continue to deliver consistent and on-going functionality on a frequent basis. 

More discussion to come...

Sharing Time Off

I stumbled on a heart-wrenching story yesterday in the Boston Globe regarding a local company, MedAptus, that changed their PTO policy to accommodate a family's need to tend to a sick child.  Seems many companies are now adopting simpler PTO initiatives, and these new initiatives are actually inspiring more donation programs.

As someone with an 11-month old son, I know about the unconditional love one has with their children. Kudos to MedAptus and more companies that are establishing these programs.

From "Transformation" and "Innovation" to "Industrialization"

Over the past 2 years, the buzzwords of the day have been "transformation" and "innovation" (examples... "process transformation", "business model innovation", etc.)  Fast-forward 24 months, and it seems the new buzzword of the day is "industrialization".

So what is "industrialization" you ask?  As one of the largest service providers recently stated, its make  business, and its respective processes, "measurable, repeatable, and predictable". 

What's old is new again!

Product Demos on YouTube

Jeff Nolan, fellow Irregulars and CEO of Teqlo, has started to launch screencast demos on YouTube.  Pretty cool idea...

Salary.com Files for IPO

Salary.com has filed to go public.  Most people know Salary.com as a consumer-facing tool that allows individuals to find out what they are worth.  What many people don't know is that Salary.com has a significant business focused on selling talent management solutions, specifically performance and compensation management, to enterprise customers. 

Salary.com has recently relaunched its website, re-positioning and messaging the company as an on-demand  talent management vendor with an end-user and enterprise focus.  One of Salary.com key differentiators is its library of over 3,400 job codes and related compensation data (that has been normalized over a number of years), that enables companies to better align pay with individual performance and business outcomes.

The company had $15 million in revenue for 2006 with a net loss of $3 million.  The good news is that the IPO will provide significant capital resources for the company in a market with increasing consolidation and concerns over long-term vendor viability.  Many talent management vendors will be watching this very closely as I will be very interested to see shareholders interest.  The market has established $50 million in revenue and profitability as the benchmarks for companies seeking public market dollars in this space.  Salary.com is significantly below both bogeys.

In a sidenote, according the Salary.com my pay range is $103K-$240K.  In comparison, Payscale says I am worth $110K-$130K with an average base salary of $112K.  Anyone willing to offer me a base salary of $240K should contact me as soon as possible.

SumTotal Systems Acquires Mindsolve

SumTotal Systems announced the acquisition of Mindsolve Technologies this morning for approximately $12 million in cash and stock.  My quick take...this is a good move.  SumTotal has been partnering with SuccessFactors for a few years that has been a fruitful relationship for both companies.  SumTotal has realized, though, that performance management needs to be a core component of their solution that can no longer be satisfied in a partnership.  SumTotal has been on the hunt for a performance management solutions for a while now and have landed on a solid solution with Mindsolve.  SumTotal is playing a little bit of catchup though.  It's 3 largest competitors, Saba, Plateau and Cornerstone OnDemand, have been offering combined performance and learning management for nearly 2 years.  The consolidation of talent management continues...

My Analogy of Workday and On-Demand

I own a 1999 Audi A4.  It has been a great car.  The car has over 130K miles and has traveled from the Bay Area to Boston with ease. 

I put the roof-racks on the car when I need it.  I stopped using the CD-changer when I purchased an iTrip.  I've changed the tires a few times, replaced the front fender after a friend of mine backed into me, and take it in for maintenance and a wash every-so-often.

The problem is...I don't drive the car that much anymore.  Not that I've outgrown it...just doesn't meet my needs anymore.  Going through downtown Boston, and the Big Dig everyday, is a nightmare.  Gas, of course, is expensive.   But more-so, I have taken a liking to riding the train.  Efficient (actually faster than driving), cost-effective ($4.50 each way), and it's got almost everything I need (wireless connection would be nice but I would expect that in a future upgrade).  In addition, I don't have to worry about patches....errr....repairs nor do I have to worry about maintaining and servicing the expensive equipment.   Yeah...it may be late every-so-often but I am cool with that.  I won't be replacing the trusty Audi anytime soon but have changed my habits in how I use it.

I hope, by now, you are getting my analogy.  Things grow old.  Needs change.  Changing environments affect decisions.  But most importantly, people...errr...customers must adapt to what makes sense for them now and in the future.