Enabling Technology

The Innovation Gap Survey

Tech providers think they give practitioners what they want. They’re wrong.

By Brent Skinner
Earlier this year The HRO Today Innovation Gap Survey set out to identify disconnects between vendors’ and users’ perceptions of human resources technologies. But the survey’s title, however provocative and promising, falls short of doing the survey’s results justice. This is not a gap. It’s a canyon.
The differentials in perceptions are gaping, revealing possibly deep shortcomings in the ability of vendors’ technologies to assist practitioners with the most important aspects of their jobs. Vendors might, in fact, be creating solutions whose functionalities hew poorly to practitioners’ needs. At their core, the findings cast doubt on whether or not vendors and practitioners even agree on the very semantics of innovation itself (not that they’d necessarily think to ask the question in the first place).
Vital Stats and Hyperbole Set the Stage
To mirror the fundamental segmentation of the marketplace, HRO Today’s survey divided HR technologies into three categories: talent management, performance management, and human resources management systems (HRMS). In all, a roughly equal number of vendors (48) and practitioners (53) participated in the survey, and in both cases, professionals working at the manager level or higher comprised the bulk of respondents. Among practitioners, the most represented group was HR vice presidents and HR directors (44 percent of participants), and among vendors, vice presidents and directors were most represented (40 percent).
“Vital!”—with an exclamation point—was the most positive response on the several Likert-type items that HRO Today prepared for this survey. And “vital!” is the response that sizable majorities of vendor-side participants gave, much of the time. Between this and the second most positive response, “important,” large majorities of vendor-side participants gave glowing self-assessments of their technologies across a battery of tightly focused questions designed to ascertain how innovative or trailblazing and original they think their products are. These findings are meaningful: The hyperbole built into the survey’s Likert-type items gave HRO Today the ability to strongly infer providers’ sentiments, and many appear to believe their technologies are, in a word, exciting.
Vendors Love Themselves
Across all three categories of technologies, healthy majorities of vendors believe themselves to be innovative and trailblazing (72 percent, talent management; 68 percent, performance management; and 64 percent, HRMS). Their sentiment stands in stark contrast to that of practitioners. Just 33 percent of practitioners think performance management vendors are innovative or trailblazing, and that’s the high water mark: Only 32 percent think talent management vendors are, and even fewer (27 percent) think so of HRMS vendors.
Strong majorities of vendors across all three technology categories also believe their offerings are more advanced than the competition’s (63 percent, talent management; 58 percent, performance management; and 58 percent, HRMS), and low percentages believe theirs lag behind the pack (14 percent, talent management; 11 percent, performance management; and 11 percent, HRMS). Here, as well, the contrast with practitioners’ views is notable: Much larger percentages of practitioners see vendors’ products as lagging behind competitors’ (32 percent, talent management; 29 percent, performance management; and 40 percent, HRMS). Just what practitioners are benchmarking vendors’ technologies against is up for debate—the ideal, a solution they know of, or something else entirely are all possibilities.
Vendors Love Themselves Because They Have To
It makes sense that vendors would believe that their technologies, replete with their gadgets, are innovative, even indispensable. Rarely are successful companies complacent or restrained about their products’ utility. Remaining reserved isn’t a proven strategy for increasing sales. Furthermore, the appearance of innovation can boost the initial attractiveness of a vendor’s technology, and just as often, innovation itself depends on the appearance of innovation.
“People include these flashy things because it works sometimes, in a sale process,” says Mark McMillan, cofounder of Talent Function Group and a panelist at the May HRO Today Forum luncheon in Las Vegas, where the results of the survey were revealed. “In some respects, practitioners aren’t really victims. Vendors do this because practitioners respond. They do it sometimes as a way to validate directions they’re moving in, as a way to discern how serious buyers are about it. You saw it a lot in the early days of mobile applications—very basic functionality, but it looked and felt neat.”
Specifically, vendors might include a certain functionality to test buyers’ reactions and, from that intelligence, determine whether or not to incorporate a more robust version of the functionality in future iterations of the product. Such an approach to innovation is valid and necessary. It helps vendors to become even-better vendors. But the tactics that comprise the approach can become overwhelming to the user, especially when the entire marketplace seems to employ them in ways that appear bereft of method—and perhaps even desperate.
Gadgets, Be Gone!
The proliferation and preponderance of so-called gadgets, those neat-o add-ons and apps that can make an HR technology seem dazzling and oh-so-next gen, have in fact become a bit of a scourge. To wild applause, Kevin W. Grossman, vice president and research director for Ventana Research, bellowed “Gadgets, be gone!” from his seat among his fellow panelists at the HRO Today Forum.
Scores of practitioners don’t even see innovation as innovation; all they see are gadgets. And their view underscores an apparent misunderstanding between vendors and buyers about just what constitutes a helpful functionality in an HR technology. Whereas most vendors believe innovations support HR work (70 percent, talent management; 63 percent, performance management; and 71 percent, HRMS), the percentages of practitioners who think likewise provide a sharp contrast: Just 20 percent for talent management, 17 percent for performance management, and 25 percent for HRMS. Furthermore, while exceedingly small percentages of vendors think their innovations are merely gadgets, robust percentages of practitioners think so.

The survey’s findings demonstrably imply that practitioners don’t find gadgets useful in improving daily workflow. And they certainly want improvements to daily workflow. But what we know about the sales process strongly suggests that neat-o gadgets nevertheless provide powerful tools of persuasion for sellers during the buying process. Additionally, vendors are playing catch-up to at least appear to integrate what practitioners have taken upon themselves to truly integrate into their daily workflow (e.g. social media and mobile).
“The desperation is catching up to where users have already been playing, and where the organizations they work for have been fighting against,” says Grossman. “So in order to get to market more quickly, vendors create an app for app’s sake, for example, not really thinking through its usability in the marketplace.”
Or they scramble to acquire assets and expand their core offerings, thus becoming providers of everything and perhaps losing their edge in their original areas of focus. “Innovation has been slowed down because of consolidation,” says McMillan. “The tier-one vendors originating in talent acquisition and in performance management have been engaged in broadening their platforms—e.g. through acquisitions and building out the suite. As a result, now they’re becoming more like staff ERPs and losing some best-of-breed edge, especially in their markets of origin, but also in the areas they’ve expanded to.”
The Semantics of Innovation Cloud Communication
“Innovation has become a buzzword in talent management,” says Madeline Laurano, talent systems analyst and advisory practice manager (and another panelist at the HRO Today Forum). “Providers use this term to describe any product enhancement, solution, or partnership they announce. What is new or innovative to a provider is not necessarily new or innovative in the market. So, we have a disconnect between what solution providers and customers consider innovative.”
What do vendors think when they think about innovation? Are practitioners thinking of the same thing? These are apt questions, and their answers might help to unearth solutions that close the innovation gap.
“Innovation should be a bridge between a process and a technology,” says Jayson Saba, research analyst for human capital management at Aberdeen Group (and a forum panelist). “The question is how to get the two to feed off each other. The practitioner wants to know: ‘If I click on this one button, will I complete these five tasks in one step and be able to go home for the day?’ “
Semantics are probably at play, with buyers and sellers of HR technologies viewing the notion of innovation from very different vantage points, even equating innovation itself with very different things. Here is where Saba’s observation gains traction: Vendors may tend to think of innovation as the technological “wow” factor, whereas practitioners think simplification of their workflow is innovative.
Majority percentages of vendors see their innovations as “very much” applicable to HR work, but among practitioners, the highest percentages see it as merely “somewhat” applicable. Strikingly, very large majorities of practitioners (64 percent, talent management; 60 percent, performance management; and 76 percent, HRMS) report that the functionality of vendors’ solutions is “not really” used by all stakeholders in the business. Once again, their opinion strongly counters that of vendors, who in large numbers believe their technologies are used by all stakeholders “to some extent” or “a lot” (79 percent, talent management; 68 percent, performance management; and 64 percent, HRMS).
What Happened to This Relationship?
A lack of communication happened. Interests changed, and vendors and users stopped doing things together. And, with the ERP software model, inertia set in as vendors became difficult for practitioners to approach with substantive feedback.
“A persistent desire by practitioners for better support from vendors shows up consistently in our research,” says Katherine Jones, principal analyst for Bersin & Associates (and a forum panelist). “HR organizations are under intense pressure to deliver new strategies on a number of fronts: to globalize their workforce, drive collaboration and innovation, integrate the hiring and career management processes in their companies. To support these needs, HR systems buyers now want technology providers who offer more than advanced features—they want a provider who delivers excellent support, service, and a deep understanding of their industry’s HR needs. Vendors vary widely in their ability to deliver this level of support and of true business partnership.”
Across all three categories of technologies surveyed, vendors express a deep lack of confidence not only in practitioners’ abilities to understand how to use technology to support business strategies and objectives, but also in their abilities even to understand the very process of innovation in technology. Concurrently, practitioners note, in large percentages (72 percent, talent management; 74 percent, performance management; and 74 percent, HRMS), that providers “rarely or never” consult with practitioners on business strategy/technology alignment.
Given this backdrop, the now-unstoppable migration to cloud computing and the Software-as-a-Service (SaaS) might in fact spur a shakeout in the marketplace. Generally far more willing or better able to field and incorporate customers’ feedback into continually updating versions of their solutions, SaaS providers are poised to work the dynamics behind the innovation gap in their favor.
“There will be a shakeout,” says Grossman. “There will be further vendor death. There will be further vendor consolidation. And there will be further vendor innovative disruption.”
Fix This Relationship: Listen Is the Other L Word
“He said, she said” can get in the way of two people fixing a relationship, and a difference of opinions like those unearthed by HRO Today’s survey might lead friends to wonder, “Whose fault is it, anyway?” or even, “Are they right for each other?”
If, as the innovation gap reveals, practitioners most often say technology innovations have had little or no impact on the user experience, and yet providers insist that their own innovations have indeed improved the user experience, an impasse must be traversed. But asking whose opinion in a relationship ought to enjoy greater weight is the wrong question. Sure, in the case of HR technology, the practitioner’s—the user’s—is most important. Drill down, however, and there’s nuance to this.
“Providers create roadmaps [for their products] based on where they see the market going and where they are comfortable going,” says Laurano. “They often form myopic views of their development. When customers challenge their roadmap or present alternatives, most providers are fearful that they can’t execute on these recommendations.”
HR technology vendors and the practitioners who use them are right for each other, of course. There might even be some love there. But for things to work between them, vendors need to embrace the other “L” word: They need to listen to their buyers—all of them.
“Large companies have totally different needs than smaller ones,” says Saba of Aberdeen. “A lot of the solutions cater first to the larger companies. The provider’s job is to stay ahead of the practitioner. Don’t let big clients dictate enhancements. It’s important to listen to top-performing buyers’ practitioners, who may be more advanced than other buyers’ practitioners. Then, communicate these top performers’ observations and feedback to other buyers as, ‘This is what we’re seeing.’ See what happens; see what these other buyers say. Paying attention to customers whose operations are particularly mature is important.”
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Tags: Enabling Technology, HRO Today Forum APAC, HRO Today Forum Europe, HRO Today Forum North America, HRO Today STA

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