Peoplefluent Gains Social Platform as Private Equity Firm, Bedford Funding, Invests in Socialtext

In a press release today, Bedford Funding – the private equity firm that owns Talent Management solutions provider Peoplefluent – announced a strategic investment in privately held Socialtext, a provider of enterprise social software based in Palo Alto, California. Terms of the deal were not disclosed.

Bedford Funding FamilyFounded in 2002, Socialtext provides enterprise social networking tools – including microblogging, wikis, profiles, social profile matching and other tools to connect employees and information – to more than 6500 mid-sized and large enterprises across the globe. Their customers include such recognized brands such as Getty Images, Symantec, Walgreens, Weight Watchers, Warner Bros. Entertainment, McGraw Hill and Rutgers University.

Bedford Funding is a private equity firm that has been solely focused on investments in the Human Capital Management technology marketplace. Peoplefluent was formed in July 2011, when Bedford combined its three previous acquisitions (Authoria in 2008, PeopleClick in 2009, and Aquire in 2011) into a consolidated offering for integrated talent management under the new Peoplefluent brand.

Socialtext is joining the Bedford Funding family, but will remain an independent entity and remain under the leadership of current CEO Eugene Lee. The strategic investment will infuse Socialtext with funding to drive expanded development and accelerate strategy execution. Operating as an independent entity, Socialtext will be positioned into Peoplefluent’s more than 5000 customers, while continuing to support and sell into customers utilizing other enterprise systems including ERP and Talent Management suites, as well as Microsoft SharePoint and IBM Lotus Connections.

Bedford’s strategic investment in Socialtext places a strong provider of enterprise social networking in the same family as Peoplefluent, and as such, plans are emerging that will integrate the two platforms to enhance employee collaboration and knowledge sharing.

Peoplefluent today provides recruiting, onboarding, performance, compensation, succession planning, workforce communications and business intelligence to more than five million users across 5000 customers in 214 countries and territories across the globe. While Peoplefluent has emerged as an innovative leader in mobile talent management, it has lagged in the emerging market of social talent management processes. Earlier this year, Peoplefluent announced its move into social learning with the acquisition of Strategia Communications, a small provider of Learning Management Solutions based out of Canada. Now, with the incorporation of Socialtext into Bedford Funding, the remaining social gaps can be bridged with integrations between the two platforms.

We look forward to being the growth engine in Silicon Valley for Peoplefluent to extend and enhance its Talent Management offering with Socialtext as its social layer”   – Eugene Lee, Socialtext CEO.

Integrating the Socialtext and Peoplefluent platforms is expected to drive significant growth into Peoplefluent as it benefits from competitive social capabilities delivered through close collaboration between two entities of Bedford Funding. But will integration be enough?

As I have written before, the question remains whether or not next generation experiential systems (as opposed to transactional systems or systems of engagement) can be assembled through integrations, or if they require the incorporation of social technologies into the core technology platform for more advanced business support and analytics. Vendors are taking their stand on either side of this “debate” and for now, the path forward for Peoplefluent appears to be one of integrated social technology. Many of their customers today are already using 3rd party social collaboration tools such as Yammer, Jive and Microsoft SharePoint, and so integrations with Socialtext should be straightforward and rapid. The unique opportunity facing Peoplefluent is the ability to leverage Socialtext to transform people processes with social; the question is whether or not transformation can come through integration.

My POV:

Bedford Funding has been very specific in their positioning of this transaction, citing that the investment is to enable accelerated development and leadership of the Socialtext platform and bring social collaboration into its Peoplefluent platform. The deal is clearly a ‘win’ for all involved:

  • Peoplefluent customers interested in Socialtext capabilities, as there will be greater emphasis on sales, integration and support between Peoplefluent and Socialtext solutions;
  • Socialtext customers, as the investment infuses Socialtext with the funding necessary to grow development and innovation;
  • Bedford Funding, which now has a comprehensive portfolio spanning human capital technologies including the social networking technology necessary for comprehensive collaboration and workplace transformation;
  • Other TM/HCM vendors adding social to their portfolio benefit as well, as this transaction continues to raise the visibility of social technologies in people processes. Most Human Capital Management and Talent Management vendors are currently adding social capabilities into their suites, either through integrations to social technologies (such as Socialtext, Yammer, Jive, Chatter and others) or by incorporating these capabilities into their technology platforms (Saba, Oracle Fusion, and literally tens of startups and niche providers in social performance, social goals and others). As the social enterprise emerges, HR and business leaders will find increased technological support for harnessing the power of collaboration and connectivity to improve how work gets done, everyday, across the enterprise.

This transaction should light a fire under any HCM vendor sitting on the fence regarding whether or not to integrate or incorporate social with their offerings. For the enterprise buyer, it is further evidence that social networking is moving into the enterprise to create the social enterprise. If your organization has not yet established its strategies around use of social technologies, today’s news should serve as a rallying point for prioritizing those conversations.

For another important perspective on this acquisition, please review the post by my Constellation Research colleague, Alan Lepofsky.

M&A in Talent Management Continues: My POV on Strategia and Peoplefluent

StrategiaLogoPeoplefluent logo

On January 30, 2011, Peoplefluent, a leading provider of integrated talent management technology, announced that it was acquiring Canadian-based Strategia Communications. Financial details were not disclosed.

This is certainly important news for the marketplace, with yet another leading Strategic HCM vendor filling a gap in an otherwise well-developed talent management suite by making an acquisition. As Learning is, for the most part, considered a key element of any integrated talent management initiative, it is not surprising that Peoplefluent would make the jump to purchase their current partner, as ownership trumps partnership when you’re talking integrated suites.

Peoplefluent can now check all the boxes across the integrated suite, leaving vendors such as Cornerstone and Saba among the final few that have yet to complete their suites. (Both have announced planned releases in the near term to close on these very gaps.)

The Tweetosphere, which would normally be abuzz with conversation about this type of deal, has been relatively quiet.

Is this because of the anonymity of Strategia, or is it because of the paucity of press release information from the two companies themselves? Regardless of the reason, if the solution is indeed solid (as you would expect given customers like Yoplait, Ontario Ministry of Finance, Transport Canada and others), Peoplefluent should be congratulated on this strategic move.

While the market awaits additional information on Strategia, its solutions and planned integrations, I’ve provided my thoughts on the acquisition (with an overall positive or negative indicator) based on the available facts.

What we know about Strategia:

  • On the first day following the announcement, the only conversation I could find on LinkedIn started, “I haven’t come across Strategia…Anyone familiar?” The responses were not overwhelming. (-)
  • Strategia has been in operation since 1999. Their marquis customers are predominantly Canadian, and showcase Strategia’s industry strength in manufacturing, aerospace, public sector and others. The press release touts close customer relationships, one of which may be evidenced by the work between Strategia and their Compliance Management client Timco Aviation Services, back in 2008. Working closely with Timco to understand needs of the aviation and MRO (Maintenance Repair and Overhaul) industries, Strategia was able to design and launch a compliance dashboard aimed at the very complex requirements of validating worker certifications for job scheduling purposes. In an interview with Aircraft Magazine at the time of the launch, President and CEO Romain Gagnon said, “A single aircraft maintenance worker must be certified on multiple levels to perform even simple tasks. This complexity is becoming a challenge for MRO operators who are trying to maintain or increase their turn-times at the same time as accurately managing workers’ certification.” It is reassuring to know that Strategia has been meeting the highly complex needs of aerospace and other MRO customers since at least 2008. (+)
  • Their website, www.Strategia.ca/en, reports fewer than 50 employees (which is great from an agile M&A perspective), but contains no other personnel information (nothing on leadership, partners or others.) Likewise, there is limited product information: beyond text on screens, there are no product screen shots, demo videos, brochures or whitepapers. After 12 years in the industry, this lack of marketing collateral raises red flags for me. (-)
  • Peoplefluent positions Strategia as an existing learning partner, and so basic integration between the two platforms should already be understood and facilitate a rapid first drop on the unified roadmap. (+). Interestingly, I don’t see Strategia listed as a partner on their website. Perhaps they have been removed already?  (-)
  • Based on the available product descriptions, Strategia’s Learning Suite, Ed, would appear to have sufficient functionality to meet common learning use cases. The modules in Ed include the LMS (with instructor-led training, eLearning, virtual classrooms and blended learning), Content Management, Skills and Compliance Management (including an assessment engine), social learning, reporting and eCommerce. This latter component – eCommerce for commercial or for-profit learning – is a strategic differentiator against some LMS competitors, as it is not universally offered. (+)
  • Peoplefluent now has an offering in one of the hottest growth areas: Social Learning.(+)  As a vendor in social learning, why isn’t Strategia on Twitter? (-)
  • In September 2011, roughly three months before this acquisition announcement, a new SaaS application called “HR in the Cloud” was launched. HR in the Cloud was the result of the association of four HR vendors, their solutions unified through the creation of a common point of entry, to deliver end-to-end HCM functionality. Strategia was the LMS component of that offering. HR in the Cloud is as much or more of an unknown as Strategia. I am not sure if the affiliation is seeing any traction or will be seeking a new LMS to plug into their offering, but their engagement in this association is at least worthy of comment. (neutral)

What we can surmise about product impacts:

  • Learning is a fundamental requirement for integrated talent management, both augmenting and benefitting from each of the modules within a comprehensive suite. With Ed, Peoplefluent ostensibly will have the breadth of technologies to:
    • Achieve excellence in the new hire experience both before and after Day 1 with development programs and collaboration integrated with Peoplefluent onboarding processes (including the onboarding of contractors through Peoplefluent’s Vendor Management System);
    • Foster the creation and sharing of knowledge across the enterprise for better outcomes with Strategia Social Learning;
    • Close on skill and competency gaps (take action within an integrated system) identified during performance or succession planning;
    • Plan and execute leadership development programs for high potential and high performing employees as identified during the talent calibration process;
    • Enhance and link assessments to the recruiting process and close gaps after hire;
    • The list of opportunities continues at length from here.
    • (+)
  • Will current Peoplefluent customers that are using another LMS consider switching to a relative unknown in exchange for the benefits of an integrated offering? Research shows that almost one out of every three companies are willing to forgo functionality in exchange for an integrated suite, but will Strategia’s functionality be enough for Peoplefluent’s diverse customer base? (-)
  • Will this acquisition play out in the global market? Are Strategia’s solutions applicable globally? Are they translated, and if so into which languages? Do they support EMEA data privacy requirements and the unique regulations of different regions? I expect gaps in this area of global capability. (-)
  • The press release talks about “new synergies across the uniquely differentiating components of…Workforce Analytics, Workforce Compliance and Diversity, and Vendor Management System“. It’s the last point that really intrigues me. Peoplefluent’s Vendor Management System (VMS), which is already a differentiator for them, helps organizations streamline and manage processes around sourcing and managing contract labor. The VMS has capabilities spanning services procurement, contingent management, compliance & risk management, and reporting and analytics. Ed could advance Peoplefluent’s assessment capabilities, accelerate contractor onboarding, facilitate content creation and new levels of collaboration between contractors and staff, and more. Ultimately, only the roadmap will tell; I look forward to seeing it soon. (+)

Should the market be buzzing? Yes. We just need more data.

While there are many plusses and minuses based on what we know and can anticipate, on balance, this acquisition can only be perceived as a very positive move for Peoplefluent and its customers.

Many technology vendors come to market with v1 solutions that perhaps meet only certain use cases, or bring “good enough” capabilities for the time being. I do not know at this point how Strategia’s solutions will fare in the analysis: good enough for some, market competitive, or even market leading in certain areas. What I do know is that upon completion, Peoplefluent will lay claim to an end-to-end talent management suite; it will have a learning platform from which to grow; and that learning platform will force the consideration of new process flows and new thinking across the rest of the solution portfolio.

Sounds like a win in my book.

Congratulations, Peoplefluent. Now, when can you share the details?

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