Thoughts on the Peopleclick Authoria merger

On 5 January 2010 Authoria and Peopleclick combined to form the largest privately owned company in the Talent Management marketplace. The new company, Peopleclick Authoria, claims to serve almost 60% of the Fortune 100 organisations. The new CEO will be Charles S. Jones, Managing Partner of Bedford Funding, the private equity firm undertaking the deal.

Some of my initial thoughts:

  • The merger will form the largest privately owned company in the Talent Management marketplace.
  • Both existing solutions will continue to be sold for the foreseeable future, with the addition of a combine suite offering.
  • The newly formed company leverages the best attributes of both vendors, Peopleclick’s recruitment offering and Authoria’s deep talent management features.
  • Technically both solutions are similar and offered as multi-tenant SaaS solutions, although Authoria’s use of single tenant for select larger clients may cause some integration issues.
  • Update: There is some debate around if Peopleclick have moved fully from their .NET platform to J2EE

  • As separate organisations both appeared in the recent Gartner eRecruitment 2009 Magic Quadrant report, with Peopleclick placed in the leaders category.
  • The combined organisation has the potential to move further into the leaders quadrant to provide a challenge to Taleo as the market leader.

More information is available to Inspecht members.

ATC: James Elliott National Recruitment Director Deloitte

James Elliott took the stage after lunch to give us a run down on Deloitte’s (Update: to clarify this is only the Australian operation and does not reflect the US operations.) recruitment function, specifically their Sourcing function. James indicated he was a little concerned about presenting, mainly because of the real time feedback that would be on Twitter. Some of my notes from the presentation are below:

  • Globally 160,000 people with $27 billion in revenue!
  • They got into sourcing because while operational excellence had meant recruiter efficiencies were up 50%, vacancies where still going up, something had to change
  • In 2007 while 3rd party agencies as a source were low their costs were still very high
  • The Deloitte definition of sourcing is:
    1. Identifying and mapping passive talent for current and future roles
    2. Approaching passive talent
    3. Maintaining talent pipelines through a systemised CRM cycle
  • As part of the move to sourcing they had two key learnings:
    1. Wholesale changes to recruitment processes were needed as sourced candidates need to be treated differently
    2. They had to focus on planning & forecasting which was much harder than first through. Lots of change management, and recruiting team structure to make the transformation possible
  • In general Australian resume databases are extremely poor in quality
  • While they use Taleo as an ATS, it is not a CRM (they use SalesForce) which they needed to:
    • Map competitions
    • Track contacts
    • Segment contacts
    • Manage ongoing CRM through tasks, reminders and emarketing
  • Deloitte’s sends out 4,500 e Newsletter a quarter to people in the CRM
  • The sourcers at Deloitte’s get their prospects from:
    • People who withdraw from the rtecruitment process
    • People who did not get a job they applied for
    • Graduates
    • Phone lists
    • Conference & professional associations
    • Name generation workshops
    • New hire competitor intelligence
    • Web search
    • And dumpster diving
  • Social Recruiting is starting to be used to:
    • Enhance brand & position as an innovative professional services firm
    • Engage external talent by offering an authentic insight into working
    • Leverage employees networks
    • Search for talent directly
  • Deloitte YouTube channel has had 25,000 views
  • They use Twitter to connect applicants to other Deloitte Twitter users in similar areas
  • Built a custom Facebook application called Join Me @ Deloitte to facilitate referrals. The application had 90% of employees install, good number of hires have come through but less than 3 figures even with that James felt the ROI was very good as it was cheap to build
  • As a source 3rd party recruiters provide the worse quality of hire whereas referrals are the best
  •  

Social networking and recruitment

There are some major changes taking place within the recruitment software market at the moment. Changes that have the ability to remove vendors such as Taleo from being “top of the pops”.

What is it? Intelligent matching of jobs to social networks.

Both Australian job referral vendors 2Vouch and Hoojano do this but not to the level that we are seeing from players such as JobVite and Appirio. Appirio has a US$25,000 annual fee and connects with SalesForce and Facebook. Once employees opt-in the system reviews their friends list in Facebook and match potential jobs to friends. JobVite works in a similar way but uses both Facebook and LinkedIn, then the person who had the job referred to them can also opt-in to receive future job notices from the company. ERE had a review of both Appirio and JobVite’s new features.

These features validate the use of social networks for recruiting and move them from being a passive part of the process to a key component.

If you are in the market for a recruitment solution the decision making process just got a little harder.

(Disclosure: 2Vouch is a client of mine.)

Workforce development in public and private sector

A couple of weeks ago Kate Carruthers spoke to me about workforce development programs, the results are an article she published on the NSW TAFE eZine web site, under the heading of “Workforce development: Case studies in private and public sector implementation“.

Workforce development is a key issue for both private and public sector businesses.  Previously a fragmented approach to the elements comprising workforce development led to lack of integration and inability to align the workforce to current and future business demands.

We spoke for about an hour on the move to strategic HR assessments, the Kirkpatrick model, that organisations should focus more on head content than on head count, recent Taleo research, the CedarCrestone HR Systems Survey and a global IBM survey all relating to Talent Management. Overall a great discussion and the resulting article is a good read.

Cloud/Grid/Utility Computing what is it & must you have it?

Today I want to discuss the latest hype in the HR technology space, Cloud/Grid/Utility Computing. Now the terms utility computing and grid computing have been around for a while now, however cloud computing is areasonable new term.

First up they are not the same thing! They can be related but they are not the same.

Let me start with utility computing. According to Wikipedia the first real reference of utility computing goes back to 1961!

If computers of the kind I have advocated become the computers of the future, then computing may someday be organized as a public utility just as the telephone system is a public utility… The computer utility could become the basis of a new and important industry. – John McCarthy, MIT Centennial in 1961

So utility computing is:
  • Pre-packaged resources
  • Low or no initial cost for hardware
  • Typically rented
  • Rapid growth of capacity
  • Always on like electricity or water

Grid computing on the other hand is completely different:

  • Applying the resources of many computers in a network to a single problem at the same time
  • A form of distributed computing
  • Usually based on open standards
  • High levels of reliability

Finally we get to cloud computing, again from Wikipedia we get this quote:

According to a 2008  paper published by IEEE Internet Computing “Cloud Computing is a paradigm in which information is permanently stored in servers on the Internet and cached temporarily on clients that include desktops, entertainment centers, table computers, notebooks, wall computers, handhelds, sensors, monitors, etc.”

So attributes of cloud computing are:

  • Customer do not own the infrastructure
  • Access is usually based on rental
  • Can be based on the utilitiy model
  • Delivered as a service with data stored in the cloud

Now this is very confusing as how do all these terms different from “Software as a Service” (SaaS) or Application Service Provider (ASP) models for software delivery?

I see things in a rather simple fashion. To some degree ASP has become SaaS with some addtional features, which is now moving towardds cloud computing but not always as there are other pieces to cloud computing. All can be done with a grid or utility model again not always. Now some technology architects will disagree with this simplified model but I feel it works.

Marketing folks will repackaging existing tools to use the new buzz words. For example Taleo back in September at Taleo World annouced “The Talent Grid, built on Taleo’s on-demand application platform, will deliver the infrastructure and resources to power organizations’ future talent needs”. Based on the press release it is not a grid computing model but using the name gives the average person the wrong sort of messages. They are certainly moving towards a cloud model but if they are not really doing grid are they really doing cloud or is it just marketing? To be honest I have not seen the details of all their products so I cannot answer the question.

I would suggest Taleo are not doing cloud 100%. Why? Review these 15 items by James Governor from MonkChips to get the general idea, some are a bit tongue in cheek but should give you a starting point.

If you peel back the label and its says “Grid” or “OGSA” underneath… its not a cloud.

If you need to send a 40 page requirements document to the vendor then… it is not cloud.

If you can’t buy it on your personal credit card… it is not a cloud

If they are trying to sell you hardware… its not a cloud.

If there is no API… its not a cloud.

If you need to rearchitect your systems for it… Its not a cloud.

If it takes more than ten minutes to provision… its not a cloud.

If you can’t deprovision in less than ten minutes… its not a cloud.

If you know where the machines are… its not a cloud.

If there is a consultant in the room… its not a cloud.

If you need to specify the number of machines you want upfront… its not a cloud.

If it only runs one operating system… its not a cloud.

If you can’t connect to it from your own machine… its not a cloud.

If you need to install software to use it… its not a cloud.

If you own all the hardware… its not a cloud.

Am I wrong? Thoughts, comments?

Taleo announces restatement & stock down 21%

At the begining of last week Taleo announced a restatement of their 3Q results due to revenue recognition issues. At which point the stock dropped from US$12.01 on Friday November 7 to US$7.83 by close on Tuesday November 11.

“Our auditors have asked us to re-evaluate the timing of certain elements of our revenue recognition,” said Mike Gregoire, Chairman and CEO of Taleo. “This is a timing issue, and does not impact the total amount of revenue that Taleo has under contract. Taleo continues to accelerate along many vectors, as we develop innovative new products, penetrate new markets domestically and internationally, and build a platform and community that will define the future of Talent Management. In addition, our customers will continue to receive the same high level of software, services and support from Taleo that they have in the past.”

However things got even worse for them overnight with a class action lawsuit being filed by Johnson & Perkinson on behalf of investors resulting in another 21% drop during trading! Shares are now trading at US$6.05 down from a 52 week high of US$34.20. Not the sort of news the leading Talent Management vendor needs while still trying to digest it’s Vurv acquisition.  Interesting Taleo paid US$123 mil for Vurv and their market cap is now at US$190 mil.

 

HR Technology Best Practice

Over night I received the results from Cedar Crestone’s 2008-2009 HR Technology survey, while I am yet to digest the full report, a quick review of the document and the assocaited press release reveal some interesting facts. Oh, the statistics are mainly North American focused but if history has shown me anything they predict a general trend for Australian organisations.

Some of the interesting points:

  • Use of administrative applications are obiovusly mature, however the results are showing an initial movement from in?house to software?as-a?service (SaaS) solutions. Now is this driving vendors or are vendors driving this move, not sure.
  • Talent management applications are very important and that these applications are helping organisations deliver higher financial performance.
  • The Employee Self Service and Manager Self Service trend is still deliverying value and reducing the size of HR departments and improving transaction cycle times.
  • Web 2.0/Enterprise 2.0 is still the arena of early adopters, with the biggest area of usage being recruiting and branding. The survey shows that organisations using these tools had double the sales growth of organisations that did not. This reminds me I really need to push/define my Enterprise 2.0 services more.
  • A final theme change management is the one key differentiator towards achieving a successful HR technology project. Which is good news as this is another key services of Inspecht.

Some points emerged in the results that I want to cover further.

those taking an integrated talent management approach strongly outpace organizations with a best of breed approach on operating income growth nearly three times (13.1% vs. 4.8%)!

Now it is important to understand the definition of integrated; “If two or more of the talent management applications are from the same vendor as the underlying HR management system, they were designated as having an “integrated” talent management approach.”

This little nugget seems to go directly against previous research reports that we shoud be moving towards a Core HRIS vendor and a Core Talant Management vendor. Could it be ouch for folks like Taleo who are heavily pushing their Unified Talent Management approach? Or one could say the Cedar’s history as an ERP implementation consulting firm might bias the results? I don’t think so.

Why?

Today’s talent management tools from best of breed vendors tend to focus mainly of recruitment, preformance management and sometimes compensations management. What they miss is learning management, which is key for developing one’s internal talent pool. Could this missing link be the key to why organisations who have a fully integrated environment are returning greater financial results?

Another result showed that organisations with comptency management achieved significant sales growth. Comptencies form the core of being able to manage your employees, aka talent. With separate systems it is very hard to have a consistent comptency framework so most organisations either do it very poorly or not at all.

Some further reading and analysis of the full report is in order.