Event Report: One Year Later, Ceridian Dayforce HCM Delivering on its Vision

Last year’s acquisition of Dayforce heralded Ceridian’s pivot from a payroll service bureau to an HCM vendor focused on technology and innovation. One year later, Ceridian demonstrates strong customer adoption of its new platform and continued HCM process transformation to enable HR organizations to create a more effective workforce.

 

Last month I attended Ceridian’s annual analyst forum, where members of the executive team shared their vision and strategies for the future. Ceridian HCM CEO David Ossip put an interesting spin on the role of HR in the future when he stated,

The value of HR isn’t in becoming a strategic partner. The goal of HR should be to help the company create the most effective workforce.”

This sentiment reflects the pragmatism of a team committed to innovation with tangible value; a focus on the processes, tools and information needed to create and maximize the value of the workforce.  Below are the highlights I took away from this most recent analyst briefing.

  • Ceridian continues its pivot from an HRO service provider to SaaS technology provider. With the advent of cloud services and the ability to centralize the skills and knowledge needed for optimized compliance and support, it only makes sense that businesses would look to the cloud for specialized support of processes such as Payroll and global HR. With Dayforce HCM, Ceridian is helping its customers move from former “lift and shift’” HR Outsourcing (HRO) deals to the advanced benefits of software in the cloud coupled with centralized specialization and compliance support. The platform itself includes capabilities for messaging, analytics, workforce activities, mobile access via native iOS and Android support, and other foundational items necessary for comprehensive HCM support, with collaboration advances underway as described further below.
  • Accelerating customer momentum validates the data-fueled platform. Available in the US and Canada, momentum is strong, with over 700 clients live on the Dayforce platform (of more than 1000 total clients), with roughly 30-50 clients going live each month. Approximately 15% of the live Dayforce HCM clients are those that have migrated from core Ceridian applications. One of the key benefits touted by the Dayforce clients is their ability to view and act on data BEFORE the time is worked, before payroll is processed, tackling potential problems before they happen. Other benefits include the ability to see fully burdened costs before the time is actually worked, and soon, to manage the rolling eligibility requirements of the PPACA (Patient Protection and Affordable Care Act), all through a real-time engine designed to support compliance and information needs proactively, not reactively. Batch processes or after-the-fact alerts will eventually become the purview of “legacy” vendors unable to keep pace with the demands for instant data analysis and decision support.
  • The unified, end-to-end HCM platform is emerging, but still a year or more away. Today the Dayforce HCM platform delivers core HR, Payroll, Workforce Management (Time & Labor, Absence, Leave Management) and Benefits functionality, targeted primarily to North American operations. Expanded global HR support is on the roadmap, but for global payroll, clients can immediately tap into payroll services across almost 60 countries via Ceridian’s international payroll solutions (IPS). Through this managed services offering, consolidated payroll results across global and local payroll providers can be fed back from the IPS aggregator to Dayforce payroll for global reporting.Support for more strategic talent management processes will begin with the launch of Dayforce Recruiting, targeted for Fall 2013. Ceridian today has a standalone recruiting offering, but that solution will be sunsetted as the next generation recruiting offering from Dayforce becomes available. The initial Dayforce recruiting solution will support managing the candidate’s status and progression through the recruiting lifecycle. (However, I also expect to see some innovations in scheduling and onboarding from this development team that demonstrates at every opportunity the advantages of a unified platform and real-time rules processing.) In 2012, the analyst community was advised that advanced compensation and performance management was slated for 2013, but recruiting has now taken top priority for the Dayforce HCM team. As a result, these and other investments in strategic talent management will be pushed out to 2014. There are no current plans for delivery of a learning offering (LMS) and we can expect partner solutions to fill this gap for the next few years.
  • The experiential platform takes center stage over transactional systems. The Dayforce HCM team introduced Engage, its new social platform due later this year that will become the new front-end User Interface (UI) for its applications. Ceridian clearly understands that social enablement is more than just conversations, it’s about getting real work done. In fact, collaboration is viewed as such a fundamental component to today’s workforce processes that Engage will be included in all Dayforce HCM offerings at no additional cost. Clients not yet ready for such collaboration in their core workforce can simply turn it off, accessing it in the future as desired.Continued investment will be needed before it achieves competitor status in this space, as the current focus is largely engagement via activity streams, but the initial offering of Engage will be a good first step toward both augmenting and transforming traditional work processes through social collaboration. While I agree with David Ossip that the “mobile” hype is giving way to broader considerations of “accessibility,” I do not agree that “social” is giving way to “activity streams.” The term “social” often has a conversational, non-work-related connotation; however the idea of purposeful social – social collaboration that is contextual and event-support driven – is an entirely intuitive and evolutionary approach to getting work done. Activity stream integration is important (and the initial Engage offering will include single sign-on (SSO) to facilitate this with Salesforce Chatter and Microsoft Yammer), but collaboration should also happen at the transaction itself; at the point of need.  It’s too early to know the depth of social support planned by the Dayforce team or how it will integrate more deeply with broader social enterprise networking tools.
  • Contextual content will increase in prominence. This is a continuing and interesting play for Ceridian: their EAP (employee assistance program) services via LifeWorks, acquired by Ceridian 1998. Usually we think about EAP services as a pool of resources available for employees to call when needed, or as a repository of research and information available through onsite and internet access. This market is transitioning, however, from SaaS-based solutions to a focus on more contextual content delivered to the end users (a push rather than a pull model). Ceridian has a vision to evolve its LifeWorks offering by embedding EAP content into talent-related events in the Dayforce platform, ensuring context-relevant information at the time of need. Such a move will begin to move Ceridian into the knowledge enablement space of vendors like Infor Enwisen and Peoplefluent (formerly Authoria), but they’ll have a network of EAP counselors driving much of that content development behind their offering. Ceridian’s social platform and context engine requires additional development to achieve its full potential. Regardless, it is good to hear that team thinking about enabling transactions with contextual content as they build out the future Dayforce HCM talent management offerings.
  • Continuing core investments demonstrate customer commitment. Mindful of not disenfranchising its core customer base, Ceridian continues to invest in its current applications and other service lines including international payroll, pay cards, tax filing and others. It should also be noted that Ceridian not requiring a forced migration to the Dayforce platform, allowing clients to move as appropriate for their needs.

The Bottom Line

As I indicated in my write-up last year, Dayforce HCM is positioned to perform well in a market ready for process transformation.  It has delivered a large amount of functionality in the single year since the acquisition, and net-new customer uptake validates its market readiness. Strong leadership, an unwavering commitment to customer success for new and install base clients, and innovative approaches to traditional processes make Ceridian a viable and disruptive force to watch in the HCM market.

News Analysis: Infor Adds SaaS LMS with Acquisition of CERTPOINT

Proving it has not lost its appetite for acquisitions, on March 4th, 2013, Infor announced its planned acquisition of New York based CERTPOINT Systems, Inc., a SaaS provider of global learning management software (LMS) and learning content management software (LCMS).

CERTPOINT backgroundinforcertpoint

Founded in 1996, CERTPOINT (formerly Vuepoint) offers comprehensive learning solutions including LMS, LCMS, content authoring, competency management, integrated web conferencing, mobile access and social learning to more than 1300 clients across more than 80 countries.  Marquis customers include Toyota, Honda, Motorola, Ralph Lauren, LANCOME and Weightwatchers. Like Infor, it boasts a hybrid offering, delivering on-premises, hosted and SaaS-based offerings; the majority of its clients, however, utilize the SaaS applications, consistent with adoption trends in the human capital management (HCM) market.  CERTPOINT also provides consulting services including content development, implementation and strategic consulting.  It currently employs approximately 50 staff, most based in New York.

The acquisition expands two key areas for Infor:

  • With the CERTPOINT acquisition, the Infor Human Capital Management (HCM) suite delivers a comprehensive end-to-end offering. Tarik Taman, the GM of Infor HCM, noted that, “The acquisition of CERTPOINT will enable Infor to offer customers an end-to-end HCM solution, delivered to help maximize access and business insight and achieve breakthrough performance. In addition to complementary functionality, the acquisition of CERTPOINT sends the signal that Infor intends to be atop the leaderboard of SaaS Enterprise Human Capital Management solution providers.”
  • Point of View (POV): As Infor continues to move its HCM suite of products fully to the cloud (watch for their announcements in this area in the Summer of 2013), the acquisition of SaaS-based CERTPOINT completes the suite with solid LMS capabilities. And in today’s global, virtual and mobile work environments, CERTPOINT’s delivery of personalized electronic content to mobile devices is precisely the type of capability required for business performance.  Integration via Infor’s technology framework, Infor ION, will focus on the HCM products (Lawson HRM, Talent Management and Service Delivery), but will also extend to other Infor solutions to meet strategic opportunities. WebEx Communications is the current partner to CERTPOINT for delivering integrated web training and conferencing; Infor does not currently have a competing offering but I expect this to be an area of development for the Infor ION team in the future. From an end-to-end perspective, Infor is one of the few providers of HR Service Delivery (having acquired this from Lawson/Enwisen in 2011).  The Infor Enwisen platform has served as a unifying solution across all Infor Lawson HCM products, delivering portal, knowledgebase and multi-tiered support across the suite. Integration with Enwisen will bring rapid value-add to CERTPOINT customers.

  • CERTPOINT fortifies Infor Healthcare solutions with critical learning capabilities. Certification and compliance training are mission critical activities in the healthcare industry.  Combined with the verticalized solution for Healthcare from Infor HCM, clients will be able to move beyond certification and compliance to the creation of high performing healthcare organizations.
  • Point of View (POV):  Infor gained a major presence in Healthcare with the acquisition of Lawson software in 2011, and so CERTPOINT’s Healthcare industry solution is a natural launch point for showcasing the combined offering. Infor has, in fact has already begun this push, as it positions richer capabilities for the Healthcare industry as well as increased thought leadership with the hiring of a Chief Medical Information Officer (CMIO) to oversee the Infor Healthcare suite. Other industries such as Automotive, Food & Hospitality and Manufacturing  will be early solution targets as well. One of Infor’s points of differentiation is its micro-vertical strategy: beyond the standard 21 or so industry vertical classifications, Infor recognizes the unique needs coming from more than 2000 micro-verticals within these broader industries. CERTPOINT clients will benefit over time from Infor’s micro-vertical focus as this specialized knowledge infuses and expands the capabilities of its nine current vertical offerings.

Bottom Line:  Infor Advances its Move to the Cloud

Today,  Infor is the third largest provider of enterprise applications and services, with a valuation of $16B and five consecutive quarters of double-digit license revenue growth. It doesn’t just compete with Oracle and SAP, however; it increasingly competes with the likes of Workday and Ultimate as clients look to the cloud for Enterprise HCM.  The acquisition of CERTPOINT not only completes the Infor HCM suite, it does so through a SaaS offering that enables rapid, low cost deployment and frequent innovations in a business-critical area.  Additionally, CERTPOINT provides support for the extended enterprise – training for partners, suppliers and customers – including eCommerce capabilities for companies that deliver training for profit. With Infor Ming.le, Infor’s social platform still in development, CERTPOINT’s social learning will also be a welcome and timely addition to the Infor HCM suite.

As always, the devil is in the details, but given that CERTPOINT today integrates with many HCM solutions (including its strategic partner, Ultimate Software), the initial phase of the Infor/CERTPOINT integration should come to market quickly, with more strategic points of leverage following in subsequent iterations.  Infor clients will benefit from this acquisition through the additional depth of learning capabilities; CERTPOINT clients will have a new, integrated path to consider as they evaluate the upgrade or replacement of their current HCM infrastructures.

Related posts:

Event Report: #InforSummit Reveals More Than a Redesigned Infor

Seven Ways Infor is Advancing HCM (Hint: Lawson is but One)

Cornerstone for Salesforce: Optimizing CRM Investment

Since 2009, a small, independently operated but wholly owned subsidiary of Cornerstone OnDemand has been developing and delivering cloud-based LMS capabilities built natively on the Force.com platform (Salesforce.com’s platform for building enterprise applications).  Operating under the name “CyberU”, the solution went live on the AppExchange in October 2010, and now claims more than 70 clients including Marketo, LinkedIn, Virgin America, Box, and Salesforce.com which itself uses CyberU to deliver and track training for all internal and external users (the “extended enterprise”) globally.

Today, Cornerstone OnDemand announced the availability of “Cornerstone for Salesforce”, effectively rebranding CyberU and reinforcing its commitment to bringing learning and training directly into the business applications used by employees, partners and customers every day.

Cornerstone for Salesforce – a different focus

Where Cornerstone OnDemand has been focusing on enriching the capabilities and value proposition its talent suite (spanning the Recruiting Cloud, Learning Cloud, Performance Cloud and Extended Enterprise Cloud), the Cornerstone for Salesforce solution focuses on enriching the daily interactions taking place within the Salesforce applications with embedded training and development.

Bringing business intelligence, social and transactional support into enterprise business applications (like CRM, Financials, Manufacturing and others) reflects the trend toward more “purposeful applications”; a focus on “getting work done” more intuitively and effectively. The capabilities of Cornerstone for Salesforce reflect common learning management requirements, but the design intent is to have the LMS enable training and learning at the point where it is needed – i.e., while supporting a customer or while managing a sales opportunity – instead of having the LMS be “place you need to go for learning’’.

The Cornerstone for Salesforce capabilities include:

  • eLearning, including instructor-led and virtual learning support;
  • Certification and compliance for sales teams, employees, partners and customers;
  • Individual and team development planning;
  • Just-in-time training (training recommendations triggered from actions within the Salesforce application, such as changes in opportunity status, or when a new product is assigned to a sales or services team member);
  • Individual and manager dashboard reporting and analytics;
  • Social learning via integration with Salesforce Chatter;
  • Embedded performance development and training through integration with Salesforce Work.com;
  • A unified user experience and common reporting and analytics engine across the Salesforce platform; and
  • Immediate integration with thousands of Salesforce AppExchange partners including hundreds offering support for eCommerce, surveys, assessments, and quizzes.

cornerstone for salesforce
In addition to the capabilities mentioned above, consider also the extensibility of the Cornerstone platform. Unlike the packaged service offerings of yesterday’s legacy software (where custom development is repurposed to other clients through a pre-packaged consulting engagements), SaaS providers like Cornerstone can develop custom code for clients – or provide the development platform for clients’ own use – and enable other clients to access these innovations through a downloadable library of solution extensions. SaaS by its nature accelerates the pace of innovation; an extensible platform amplifies that acceleration even more.  Not every SaaS vendor takes this approach today, but Cornerstone has been supporting this for years. Cornerstone for Salesforce  empowers its partners and customers with an extensible LMS platform.

My POV

The launch of Cornerstone for Salesforce  is an important move for Cornerstone as more and more organizations look to the AppExchange and natively developed Force.com applications to extend their Salesforce.com investment.

Today Cornerstone supports three distinct platform offerings:  Cornerstone OnDemand, Cornerstone for Salesforce, and CSB (formerly Sonar6).  Rather than being distractions, I expect each offering will inform the other with best practices and lessons learned.  (We’ve seen this already, as the innovative “helicopter review” from the CSB solution is making its way into the Cornerstone Performance Cloud; and the domain expertise from the Cornerstone Learning cloud heavily influenced initial Cornerstone for Salesforce capabilities).

The Cornerstone OnDemand suite and CSB solution will continue to be important options for buyers in the HCM marketplace.  For Salesforce.com customers, a new option has emerged.

Cornerstone for Salesforce is a market-tested solution, with large clients (such as Salesforce.com) relying upon it today for learning and training across their extended enterprise.  Cornerstone for Salesforce should be on the shortlist of any Salesforce customer seeking intuitive, contextual learning and development support for its employees, partners and customers.

Moving Payroll to the Cloud? Join the Crowd.

wordcloudIf you’re considering a move to the Cloud for your payroll technologies, you’re not alone.  In a recent survey by Constellation Research, Inc. partner Computer Economics, 40% of companies considering payroll technology investments reported such investments involved a move to the Cloud.

Why the mass migration?  In a recent webinar on the topic, I outlined six key benefits of Cloud-based Payroll.  In short, organizations moving their payroll to the cloud are doing so to reap the many benefits of SaaS while ensuring the core objectives of Payroll are met:

  1. Quality.  Innovations arrive faster and are adopted more rapidly in the Cloud than with traditional on-premises and hosted software.  With true, multi-tenant SaaS, clients are always on the latest release of the software, enabling organizations to move from periodic jumps to continuous innovation in user experience, workflows and capabilities. If you think this doesn’t matter to user experience, think again.  Organizations routinely report higher levels of  satisfaction with the usability of SaaS solutions over traditional offerings across all user roles (end users, managers and administrators).
  2. Cost optimization.  An immediate value to organizations – and a large factor behind the movement of technology buying from IT into the line of business – is how easily and quickly SaaS solutions can be deployed to solve immediate business needs.  SaaS solutions are implemented on average 82% faster than on-premises solutions and require only 22% of the resources in ongoing staff compared to on-premises shops, freeing up members of the payroll team to focus on more strategic initiatives. (Source: CedarCrestone 2012-13 HR Systems Survey, 15th ed.)
  3. Risk Mitigation. While many still cite security concerns as a top reason for keeping payroll technology in-house, the reality is that SaaS providers typically excel in security measures (including access controls, backup and recovery, and myriad other potential vulnerability points) due to the large volume of disparate clients continuously pushing their own systems audits and inquiries. SaaS Payroll providers also take on responsibility for ensuring all legal/regulatory changes are applied, tested and available.  With tens, hundreds or thousands of customers utilizing these services, it ensures many more eyeballs watching for and reporting any occasional “misses” from the provider and an accompanying rapid response to such issues.
  4. Control.  Managing payroll on premises does not guarantee that the payroll organization has the controls it desires over its technologies and processes. (If you’ve ever waited for your IT organization to apply an update or manage an enterprise upgrade, you know this all too well.)  Outsourcing payroll further reduces an organization’s span of control, especially with regard to timing of process flows and reporting/analytics. With SaaS, the payroll organization gets full control over process timing (data entry, audits, check runs, quality checks, adjustments, etc.); anytime access to data, analytics and reporting; and the assurance that the software is always at the latest release with the most recent changes in legs/regs applied and tested.
  5. Flexibility.  SaaS solutions, by design, support the dynamic nature of a business – the ability to rapidly scale hardware needs to support dramatic increases or decreases in resources are inherent to these solutions.  But flexibility in the payroll world also means the ability to quickly integrate to local payroll solutions across the globe, to respond to ever-changing time and pay regulations, and to meet the dynamic needs and priorities of the company.  SaaS-based payroll solutions leverage the emerging best-practices in cloud-based integrations, ensure the fastest time to readiness in response to changing regulations, and provide the foundation for business agility in global operations.
  6. Insight.  Multi-country payroll almost demands a SaaS solution, as it invariably requires integrations to local payroll providers in countries where a smaller number of employees reside or where major payroll providers have not yet standardized an offering.  Those myriad integrations frequently lead to delayed  visibility into the actual payroll costs across the globe, causing surprise ‘hits’ to financials. Just over 50% of global organizations today report having a global system of record, and hence are hampered by not having all the global data transparency necessary for timely, strategic decision making.  SaaS Payroll providers can rapidly integrate and manage a global view of the payroll activities of an organization, both minimizing financial risks while making available a broader base of data from which to glean additional insights.

Furthermore, when part of a broader global SaaS HRMS platform, SaaS Payroll moves from an administrative to a strategic play as it provides the ability for organizations of any size to dynamically scale operations and to securely plug into global capabilities, and thus engage and compete on a global scale.

Many other facets of SaaS Payroll are explored in this webinar, including a view into social enablement of payroll processes as well as how SaaS can future proof the career of today’s payroll leadership.

The question of SaaS for Payroll, or for any other HCM related initiative, has clearly moved from “Why” to “Why Not?”

Catch the webinar replay here:  The Changing Landscape of Payroll: Moving to the Cloud

Disclosure: this webinar was sponsored by Workday, a client of Constellation Research, Inc.

Disruptive or Enabling? Social Technologies in Talent Management

Bring up the subject of social tools to business leaders, and many will still take the position that these technologies have little to no real value in supporting daily workplace initiatives. But whether these leaders are ready for it or not, today’s workers are bringing expectations for social and mobile technologies into the workplace. Ever-connected, accustomed to instant access to information and people, social and mobile technologies are simply the way we live and work today.

cloud3In a few weeks I’ll be publishing the first in a series of reports detailing both the disruptive and enabling effects of social technologies on talent management practices and technologies. The first of these reports provides a comprehensive look across nine primary categories of talent management, highlighting the evolution and transformations taking place as a result of social, mobile and cloud technologies.

Preliminary findings from this research have already been published in the latest edition of Workforce Solutions Review, a publication of the International Association for Human Resource Information Management (IHRIM).  In that issue, I discuss a few of the emerging realities within the future of talent management:

  • Talent sourcing and acquisition has gone social;
  • Goals, initiatives and tasks are more immediate and transparent;
  • Identifying top talent benefits from richer insights;
  • The “system of record” becomes a portable, holistic profile; and
  • Concepts in customer analysis are informing HCM analytics.

The article also looks to the future and notes that social and mobile experiences
are impacting more than just processes; they’re also impacting how software is being developed, delivered and consumed.

For an early glimpse into the findings from this body of research, download the full article here.

Ceridian Claims its Seat at the SaaS HCM Table

With its acquisition of Dayforce now complete, Ceridian becomes the latest entrant in the SaaS HCM marketplace. Timely execution of strategies and leveraging its differentiators to retain and eventually migrate Ceridian customers to the new platform will be critical factors of success in Ceridian’s transformation from a portfolio-based services bureau company to a leading provider of SaaS HCM.

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News Analysis: Further HCM Industry Consolidation as Oracle buys Talent Management Vendor Taleo for $1.9B

Following moves by rivals SAP and Salesforce.com, Oracle expands its offering in Cloud-based HCM with competitive acquisition of leading recruiting and talent management vendor Taleo.

Event: Today Oracle Corporation (NASDAQ: ORCL), the world’s second largest business applications maker, announced its intentions to acquire Taleo Corporation (NASDAQ: TLEO) for $46.00 per share, or an equivalent of $1.9B. This purchase price represents an 18% premium over prior closing price of $38.94, and values Taleo at almost 5 times its estimated sales for the year. (A sizeable premium, but not as high as SAP’s payment of almost 7.5 times SuccessFactors’ estimated annual sales). The deal is expected to close mid-2012. This latest acquisition brings the total to more than $40B that Oracle has spent across 70+ acquisitions.

Taleo, founded in 1999, is a leading provider of cloud-based talent management solutions to over 5000 enterprises worldwide. Its heritage solution is recruiting software, and today it is a clear leader in the talent acquisition market, managing 15% of all US hires and processing up 74M transactions per day. Over the years Taleo has expanded beyond its heritage to deliver a comprehensive talent management suite including performance and goal management, succession planning, compensation management (which it acquired in 2009 through Worldwide Compensation), and learning and development (also acquired in 2010 from Learn.com).

Analysis: This acquisition is the latest in a string of moves by major players, among the most significant in recent months being SAP’s announcement in December to acquire SuccessFactors for $3.4B and Salesforce.com’s announcement in December to create an HCM Business Unit headed by industry veteran John Wookey. In a market which, according to IDC, is expected to reach $8.1B by 2015, these moves make sense as players look to consolidate market share and capitalize on the shift in deployment preferences from on-premise to cloud-based services. An initial analysis of this transaction reveals:

“Taleo brings complimentary solutions to the Oracle Public Cloud.”

Point of View (POV): Taleo’s strength in recruiting and learning fills a significant gap in the Oracle HCM portfolio, which, despite investments over the years, has been unable to attain a market-leading position. Other areas of the Taleo suite face significant overlap with Oracle’s core and Fusion offerings. Taleo was already in the midst of consolidating its various platforms, and this acquisition only adds to the number of platforms under Oracle’s management. I expect Oracle will continue most planned investments in their on-premise solutions (across Oracle EBS, and Oracle PeopleSoft) while accelerating integration between Fusion and Taleo for a more complete cloud offering.

From a cloud perspective, we have witnessed Larry Ellison move from denouncing cloud computing as “nonsense” in 2010 to investing $1.5B in 2011 to acquire RightNow Technologies (cloud-based CRM solution aimed at combating Oracle rival Salesforce.com) and announcing Oracle’s Public Cloud. With this acquisition of Taleo, Oracle adds new and duplicative cloud-based HCM to its stack, and receives much needed expertise in the area of managing a cloud-based business. The image below demonstrates Oracle’s positioning of this acquisition.

With the acquisition, Oracle has a viable alternative to SaaS-based Workday, enabling it to deliver market-competitive SaaS solutions across the people management spectrum, and hopefully stemming the tide of PeopleSoft HCM customers moving to Workday or other SaaS vendors in lieu of a complex upgrade and Fusion integration.

“The Oracle/Taleo combination delivers powerful intelligence and a complete social experience.”

Point of View (POV): The combination of business intelligence from Taleo’s suite coupled with Oracle’s latest analytics functionality can make for a highly differentiated offering in the market. Additionally, Oracle’s Social Networking (and specifically Fusion Network at Work) capabilities can bring much needed social collaboration into the Taleo suite, filling its most pressing competitive gap across its talent management stack. Taleo’s product roadmap prioritized investments in social technologies at the platform level and in turn at the product level to transform traditional processes into highly collaborative solutions focused on end-users. With this acquisition, I expect these investments will cease or at least take a back seat to the integration of Oracle’s social technologies with the Taleo stack. Oracle’s challenge will be to deliver integration that enables innovation beyond simple connectivity between the two technologies.

“The Oracle/Taleo merger improves the employee experience…simplifies on boarding and quickly aligns employees to company goals, and empowers employees with access to learning and career management tools.”

Point of View (POV): The resulting end-user experience will, for the foreseeable future, be a combination of the Taleo and Oracle capabilities, and as such will depend upon integration. Core data integration (HR data with Taleo’s talent data) is straightforward. What will really improve the employee experience will be a unified user experience (common look & feel, integrated and seamless process flows). Oracle does not have a good history in this area, electing to keep its HCM acquisitions largely silod and relying instead upon emerging Fusion applications to provide that unification layer.

For its part, Taleo comes into the acquisition with its own series of disparate solutions. The Learn.com platform is not yet fully incorporated into the Taleo platform, and other solutions aimed at different recruiting markets continue to run essentially in silos. Clearly, there is a tremendous amount of work ahead for the Oracle/Taleo teams, not only in defining an innovative and market leading roadmap, but also in rationalizing a now broader collection of technologies.

Bottom Line for Customers and Prospects: Proceed with Caution.

According to the press release, “Oracle is currently reviewing the existing Taleo product roadmap and will be providing guidance to customers in accordance with Oracle’s standard product communication policies. Any resulting features and timing of release of such features as determined by Oracle’s review of Taleo’s product roadmap are at the sole discretion of Oracle.” As a result, customers and prospects should consider the following:

  • Taleo will continue to operate as an independent vendor until the transaction closes. Current Taleo customers are advised to lock in maintenance and subscription rates as far out as possible, and ensure they are not reliant upon future functionality promises to deliver on business imperatives, as the future pace of innovation on this stack is currently unclear.
  • Following the closure of the acquisition, Oracle will be that single “throat to choke” with regard to product, service and integration issues.  Joint Oracle and Taleo customers should apply pressure appropriately to ensure that seamless interoperability is high priority in the future roadmap.
  • For current Oracle customers, this acquisition brings market leading recruiting functionality and robust learning capabilities to the Oracle stack, as well as comprehensive SaaS-based talent management suite. Oracle customers, especially those PeopleSoft customers considering upgrading to latest releases of PeopleSoft or implementing Fusion, will soon have a viable alternative to moving to a 3rd party solution. However achieving a fully unified HCM/TM solution in the cloud is likely years away, compared to the pure-play Saas vendors like Workday and Ultimate, which are building this combined functionality natively rather than through acquisition and subsequent integration. Weigh your needs for integration, functionality and a simplified technology stack in light of the new risks and opportunities from this acquisition.

Bottom line for the HCM Market: Talent Management as a category is disappearing

The HCM market is shifting away from a feature/functionality focus to integrated HCM, with the remaining talent management vendors competing for a shrinking opportunity in light of the moving market. While Oracle (like SAP) lost HCM revenues to best of breed talent management suites in previous years, an increasing number of customers are looking back to their core ERP vendors to re-evaluate their options for an integrated suite. Over time, acquiring Taleo will give Oracle the best of both worlds – market leading functionality delivered in an integrated environment, delivered from a single vendor.

We’ve now heard from market leaders SAP and Oracle. Infor (the #3 ERP vendor) made its move last year to acquire Lawson, including its market leading HCM technology. SuccessFactors has announced its move into the HCM marketplace. Workday continues its drum beat of increasing momentum, and others such as Ultimate and ADP continue to add pressure around SaaS HCM. We can expect further consolidation in this space, perhaps from organizations such as IBM or Salesforce.com making additional acquisitions. Who are the likely targets? Certainly the few remaining publicly-traded companies offering cloud-based solutions, such as Saba, Kenexa, Cornerstone OnDemand and Ultimate. Other privately-held vendors are also potential targets, including an emerging breed of players focused on helping organizations “get work done” every day through SaaS-based productivity tools.

Today’s Oracle/Taleo announcement may herald the end of talent management as a separate category of HCM technology, but on its heels may be emerging a new category of vendor, launching again the cycle of innovation, growth and consolidation.

Your POV:

This acquisition has been rumored for some time. Are you surprised by it? Are you a Taleo customer? What is your reaction? Will you embrace Fusion to achieve advanced workforce analytics or social capabilities? Oracle customers: will you move to Taleo’s recruiting solutions, and how might this impact your adoption of Fusion technologies?

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