Breakaway Strategies: Looking Beyond HCM Vendors for HCM Technology

breakaway

In the run up to this year’s annual HR Technology Conference, I’ve been meeting with HCM technology vendors large and small. As expected, almost every vendor articulates an interest in, if not full vision for, social enablement of its offering. Some offer social capabilities today, some are expanding beyond initial forays in recruiting or learning, and others point to future directions with social based on customer demand. The path to social is also varied, coming through native development, partnership or even acquisition.

The Social HCM market is nascent, with vendors evolving their strategies and customers wrestling with questions ranging from business applicability to internal ownership of “social” in the enterprise (should these initiatives be driven and owned by IT, Legal, HR, Marketing, or…?)

Applying a different lens to the definition of Social HCM – one focused on employee enablement, engagement, and knowledge acceleration – brings another class of vendors into view: social business software providers. These vendors deliver on the foundations of social learning and social talent management, and have been doing so for years. They’re just not top of mind for HR when shopping for those solutions because they don’t typically market to an HCM audience with an HCM messages.

Consider players like Atlassian, Jive, NewsGator, Socialtext, Telligent, IBM and the many others that serve the social business software market. By their very nature of being social collaboration tools, they support many foundational processes such as social learning and social talent, with companies routinely reporting measurable benefits across employee and business performance. Yet for various reasons – including the fact that HR is not usually a driver for social technologies – you don’t see these players at the HR Technology Conference. But you should, as they routinely deliver on these and many other social use cases that are of direct interest to HR leadership:

  • Social Onboarding: establishing and assigning new hires to communities and groups; ability to follow people/content; system-driven recommendations on who to follow, groups to join, content to review.
  • Social Performance: informal and social feedback via activity streams; badges or other recognition feedback and social rewards; granting “skills” or “expertise” levels to others in the social network; improved engagement through gamification.
  • Social Goals: broadcasting activities and goals (including status and completion); soliciting feedback on goals and projects; granting badges or other recognition; task management for shared goals and objectives and identifying related work of others.
  • Social Learning: creating, posting, sharing, rating, tagging and following content; informal learning through micro blogging and activity streams, often with embedded and actionable content; expertise identification; ideation and crowd sourcing innovation across the enterprise.

Looking at the list of Exhibitors at the HR Tech Conference, I found only two pure-play social networking providers exhibiting this year: NewsGator1 and Yammer1. (I say only two, as Socialtext is now part of Talent Management provider Peoplefluent, and other solutions like Saba and SuccessFactors are already broader talent management providers with embedded platforms. In fact, even Yammer is now part of the broader Microsoft stack and can no longer be considered “pure play.”)

NewsGator in particular is an interesting addition to the list of exhibitors this year. If you’re not familiar with them, NewsGator has been delivering social business applications for many years through their Social Sites offering. They also integrate directly into Microsoft SharePoint – a solution in use by an estimated 75% of organizations.

Recently, NewsGator launched a new offering called NewsGator Enrich, which goes beyond the core use cases above and focuses on specific learning use cases to power informal, social learning across the enterprise. This latest offering includes a socially driven knowledge base for collaborative knowledge development and exchange, and interactive video learning capability for complex learning scenarios. A few of the core tenets of the Enrich Knowledge Base (KB) are described below.

  • Create knowledge base (KB) items in context of business workflows. Conversations in the activity stream, or specific question and answer      activities are readily tagged and saved to the knowledge base. A bookmarklet enables any web page to be referenced to the KB with a single click, and documents of any type are quickly added as well. Content can also be created directly within the knowledge base, turning any employee into a contributor to organizational know-how.
  • Quickly access the right knowledge. In addition to filtering KB content based on the most recent, most viewed or other categories, user-added metadata such as titles, tags and descriptions facilitate searching, discovery, and categorization of the knowledge base content.
  • Turn unstructured Q&A into a powerful resource. Answers can be accumulated, with the “accepted” answer identified for clarity and consistency.
  • Drive engagement with embedded gamification. Award badges and provide recognition to users based on their contributions and activities.

The HCM technology market is undergoing a significant shift. As we move from systems of transactions to systems of engagement, traditional “HCM” processes will be redefined, and it is only natural that new solution providers emerge from outside the HCM space. The move by NewsGator to deliver on highly targeted social learning use cases is the latest case-in-point, as well as a broader signal to the market that HCM technologies can come from non-HCM vendors.

While you’re checking out the many vendors at this year’s HR Technology Conference, I encourage you to stop by the booths of “non-traditional HCM” vendors as well. The door is open for social technology vendors to expand beyond their social collaborative networking foundations and deliver next-generation approaches to traditional learning, talent management and other “people” processes. I expect we’ll see more from NewsGator and others like them in the future, as “HR Technology” gives way to more business outcomes focused “Work Management Technology.”

1(Disclosure: NewsGator and Yammer are both clients of Constellation Research.)

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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.

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