HR SaaS applications are changing the HR game.
By Jay Whitehead
Business history is ripe with stories of the “third mover,” that is, the third company in any market that clearly defined the top two, and sometimes, eventually, took first place. In car rentals, it was Hertz and Avis, then Budget and Enterprise called out the top two. In colas, Coke and Pepsi made the category, then got trumped by plain old water (see: Nestle Water, which now owns Perrier, S. Pellegrino, Poland Spring and others). In computing, it was IBM and Apple and Dell, then HP redefined the game, and now Xerox, Cisco and a bunch of others have claims to top spots. In cars, it was GM (before bailout), then Ford, then Toyota (before product liability), then Nissan, Mercedes, BMW and others. In nations, it was the U.S. (before the debt crisis), then China, then Japan, then Germany. But today, who knows?
Today, in the same way, the HR Software-as-a-Service (HR SaaS) community has blasted up between the two HR support leaders, in-house HR technologies and HR outsourcing. HR SaaS has caused a new split, a middle ground between in-house HR tech people (“I want to control my own box”) and the folks who want to outsource (“take my tech off-site and give me one throat to choke for my HR processes”). HR SaaS’s message is a hybrid (“host my software off-site but I want to manage my HR processes in-house”).
Guess what that means? Once again, HR and line management executives have more work, a new skill to master: HR SaaS applications, “in the cloud” technology, and on-demand—HR enterprise; talent management; workforce, payroll and time and attendance management; performance and recognition management; predictive technologies; and everything in between. And HR SaaS means you keep your point-solution processes in-house. Or you could have someone else manage them. Or not. It all depends on your leader’s “whim of iron.”
HR’s mission has been, from the inception of SHRM, to command a seat at the C-table. Dave Duffield’s Peoplesoft (now part of Oracle), the HR technology gold standard, took nearly a decade to establish technology as the path to HR’s mission. (Duffield now runs Workday, a SaaS leader.) Then HR outsourcing, HRO for short, with its young brother RPO or recruitment process outsourcing, stood on HR technology’s shoulders and added services to the technology platform, resulting in outrageous economies of scale.
A bunch of HR leaders defected to the HRO camp. HRO has its big boy heroes. The names are legend: IBM (sold outsourcing to PWC, then re-emerged as an outsourcing leader), Accenture, Exult (bought by Hewitt, acquired by Aon), Convergys, NorthgateARINSO EuHReka, etc. Then there emerged two camps—in-house tech versus outsourcing. The war was on. But nobody declared victory.
That is, until SaaS emerged in 2005-2006. New names evolved: Success Factors, Kenexa, Taleo, Workday, iCims, EuHReka, Oracle, ADP, Ceridian, Ultimate, SAP, Workforce, Human Concepts, Kronos, Peopleclick, Salesforce.com, and dozens of others. And deeply-respected advisors such as Deloitte built large advisory practices around all flavors of SaaS.
Suddenly, the world changed for HR leaders and line managers. HR point solutions were available on-demand, no IT manager required. Once Salesforce.com arrived, sales leaders could specify a technology solution for its customer relationship database nightmare, without a gigantic IT footprint. It was the emancipation proclamation for sales. And HR soon caught on to the SaaS promise, with a vengeance. (Hint: As rivals for resources, HR and IT often despise each other.)
So today, here we stand. HR SaaS solutions have freed HR leaders and line managers to pick a point solution to fix HR problems—recruitment, screening, HR data management, recognition and predictive analytics, performance management, payroll, time and attendance, workforce management, or any other variant.
But how do you see all these new HR SaaS applications, compared side-by-side? A good option is the first-ever HR SaaS-only event, the HR Demo Show (www.hrdemoshow.com). You can also join the HR SaaS Consortium (www.HRSaaS.com) and get connected to some experienced buddies. The HR SaaS trend can be your friend. And new friends can help you deal with the (confusing new) trends.