One of the most interesting sessions at the HR Technology Conference this year was the 2007 HCM “battle” – or “shootout” – among Lawson, Oracle, and Workday. As I watched the vendors all flawlessly perform their well-scripted demos, I was impressed with how well all three met and exceeded the requirements Bill Kutik laid before them. When you think back to the fact that Oracle’s takeover of PeopleSoft was just three years ago and that Workday’s inception was a little over two years ago, you have to be in awe at how quickly and how far along the vendors have come – particularly Workday! To be able to effectively compete on stage, feature-function by feature-function, with vendors who have been around for decades, definitely says something about the architecture and toolset of the Workday product. The object-oriented database, the “no code” development platform, the service-oriented architecture (SOA), and the software-as-a-service (SaaS) delivery model of the Workday application are clearly changing the game for software development – indeed every vendor on the market today is talking about SOA and SaaS (of course, the “no code” platform and the OO database is not something so easily adopted within legacy architectures).

What’s great about these sorts for “battles” or “shootouts” is that the vendors get to showcase their products before a large audience. However, I have to say that what troubles me about this sort of approach is that it fails to address what I consider the most crucial aspects of any vendor selection process – that is, the vision and cultural fit between the vendor and the client. Selecting the right vendor should not be centered on feature-function analysis – an excruciating comparison feature-by-feature, function-by-function – because, frankly, most of the top tier vendors these days can meet most client requirements. Some vendors will meet some requirements better (or just differently) than others, while they may fall short in other areas. In the end, there will always be trade-offs. As HCM technology vendors continue to evolve, we’re seeing a clear convergence of functionality. For example, most vendors now provide pay-for-performance, goals linked to compensation and rewards, full on-boarding processes, self-service and configurable workflows and approvals – functionality that was not universally available three to five years ago.

When selecting a vendor for your enterprise HCM architecture, it’s important to keep in mind that you are most likely selecting a vendor who will be with you for the next 10-15 years. Therefore, your focus HAS TO BE on vision and cultural fit if you want the relationship to be truly successful:

Is the vendor’s vision for the future, and hence product direction – both technology vision and business process vision – in line with yours?

• How does the vendor’s product roadmap align with your own HR strategy and HR technology roadmap?
• Does the vendor’s approach to business process management meet your own approach and business process orientation?

What is the cultural fit between your leadership and the vendor’s leadership?

• Is there a focus on customer service, product innovation, and/or operational efficiency? (a reference to Michael Treacy and Fred Wiersema’s fantastic 1992 HBR article, “Customer Intimacy and Other Value Disciplines,” and 1997 book, The Discipline of Market Leaders).
• Is there a sense of partnership between your leaders and the vendor’s leaders? How well do they communicate and feel they can work together?

To me, these are the crucial questions to be answered in evaluating vendors and their applications.

I believe that “battles” and “shootouts” – along with the antiquated RFI/RFP (request for information/proposal) process – are artifacts of the past. Vendor / product selection is like a marriage – it should be made with the expectation that you will live with this partner, working side-by-side for the next 10-15 years. With real partnership, everything can be worked out.

Walking around the floor of the HR Technology Conference in Chicago this week, it is clear that one of the biggest challenges in understanding and evaluating Talent Management software is the sheer number of vendors offering solutions – all wrapped in considerable hype about being the “latest-and-greatest, most-comprehensive, state-of-the-art solution” on the market.

The fact is there is no silver bullet – there is no single vendor that provides all of the functionality now being grouped under the umbrella of Talent Management: Recruiting, Performance, Succession, Compensation, Learning, Career Development, and Workforce Planning.

To help companies sort through it all and make sense of the Talent Management market, following are few excellent resources you should look into:

Gartner Group just completed their 2007 Talent Management Market Scope which provides an excellent review of 30-some vendors and how they stack up against one another.

Bersin and Associates recently completed a survey of another 28 Talent Management vendors and evaluated the degree of functionality of each vendor across the different Talent Management domains.

CedarCrestone just released their 10th annual HR Systems Survey on HR service delivery and technology adoption in the industry.

These surveys cover the top 30-40 vendors, and there are literally hundreds more niche players, each with different strengths and weaknesses. One thing is clear: the market is quite fragmented, and consolidation is inevitable. You have only to look at the Recruiting industry – and most recently the Business Intelligence industry – to see examples of consolidation underway.

If you’re in the market for a new piece of talent management software, I would encourage you to not only look at your current situation, but also to focus on your future needs and how well those match with the future development plans of the vendors you’re considering. Too often we focus on fixing our current pain points, rather than, in the words of Wayne Gretzky, “skate to where the puck is going to be.” If you focus only on your current pain points, you’ll constantly be behind – by the time you’ve fixed those, everything will have changed and you’ll still be playing catch up.

This ability to address both current and future needs is what distinguishes a “great” solution from just a good one.

As I talk to companies about their frustrations around the inability to make progress with their Talent Management initiatives, the reasons center mostly around lack of data, tools, and infrastructure to provide the information they need. When I hear these types of frustrations, I think about The Hackett Group survey results that show quite clearly: best-in-class companies invest 28% more in their HR technology and infrastructure than average companies. One of Hackett’s latest press releases claims that companies can improve earnings nearly 15% by improving their talent management function.

With studies like these, how do we think can we improve our talent management function without investing in the technology to support the effort? We need metrics and tools to support the business case that investing in people enhances business performance.
In exchanging emails with my colleague John Macy about this, he says

“a) The tools are available for executives to use and progress from workforce analytics to predictive modeling. However, the tools need to be populated with the right information and relevant metrics. Too many use the tools to provide useless information.

b) Money needs to be invested in data integrity so there is a higher level of confidence in the information. The HRMS transactional stuff to collect data has been overlooked and processes are not in place to capture information as it changes in many companies. Poor integration of systems doesn’t help either.”

If “people are our most important asset,” as most executives claim, then at some point they need to put their money where their mouth is and invest in the tools and technology needed to effectively support the people-related activities in our business.