The Great HR Technology Turf War…

Another year another great #HRTechConf – the 20th year in fact! And what a year. If you’ve not been, the conference and expo is huge. Every time I walk into the main room where the keynotes and startup competitions take place, I’m left in awe about how large it is. Ok, so its not the largest show on earth – I think Dreamforce tries hard for that with over 120,000 attendees! But for an HR audience all focussed on technology, its something to behold.

The trick with any conference, especially large ones like this, is to navigate your way through to the stuff that resonates with you personally. The case studies and vendors that you are really interested in. Focus is key as there is inevitably a lot of noise. As a blogger, the same is also true. On the face of it, there is so much to go at – AI, bots, blockchain, realtime, automation. And thats just a few of the tech buzzwords flying around the event over the three or so days. But for me, cutting through this noise, stepping back and thinking about the trends, the movement over successive years and the direction of the market is what really interests me and cutting through the noise to get to the nub of whats going on is what I think my role as a blogger and commentator is really about.

The HR Tech industry has a deep history of shifting sands between the enterprise vendors who have over the years bought more functions into the ‘enterprise suite’ (in this case HR and resourcing) and the “best of breed” players, usually and increasingly so, new upstarts that take a slither of various sizes of the enterprise stack. These newcomers tend to emerge in one of two ways. Some pick off areas of generality that have been skimmed by the big guns in terms of attention to detail or utility in favour of creating the one size fits all, epic rich but story poor, ‘end to end’ HR and recruitment system.  A system fit for a king. At a kings ransom too. Or, they target those new segments that have become ‘fashionable’ through the general noise and trending conversations out in the HR Tech echo chamber, such as assessments, on-boarding or engagement.

This rinse and repeat cycle has been going on for decades, adding to the technology architecture we have today. And our technology stack is exactly that; a stack. It’s history can be traced back simply by lifting the hood. It’s like cutting through the trunk of a tree – the story laid out in every ring.

The challenge is, that architecture has been around for a long time and still heavily influences the shape of how we think about, assess and ultimately buy technology today. In the early years this was simply about software. Providing a coded bucket to manage whatever process was on the agenda and to store and report on your data. The newcomers would do more of the same, only in some way slightly better, and after a while would live in an uneasy truce with the enterprise incumbent as more and more clients bought the independent solution, thus driving the need for integration. These periods of co habitation last only a few years before they are themselves gobbled up in an acquisition frenzy by the enterprise players in the throws of a trend to ‘consolidate’ the stack all over again. Rinse and repeat as i said.

Or is it? I’m not so sure. Things are changing. And the catalyst is data.

‘Transactional’ software has a value, but as stand alone data blind systems they look increasingly cumbersome in our connected, data driven world. Providers old and new are realising there could be value in the vast amounts of data their clients keep in their systems. This might sound obvious now, but even the early cloud solutions were simply replicating the existing client server landscape into a browser. Sure it could look better, be more flexible, be ‘in the cloud’ God forbid, and generally deliver many benefits. But the value, the real value, is in the data. The first, and probably the second wave of SaaS and cloud driven’ technologies missed this altogether in my view. Especially in our sector.

So why does this matter for the enterprise stack? Isn’t this just another bunch of upstarts that will be gobbled up? Possibly, but the stakes are higher. And increasingly the nature of the stack is being challenged. You see, previously you either chose to pick off a weak area of the enterprise segment – assessments or performance reviews for example. Or, you chose to take on an entire slice, and pitch for a new place in the enterprise hall of fame. Not easy thing to do and a strategy that requires very deep pockets. But data is changing everything. The more data becomes core, the more the vendors want, and need, to own the overall data journey. Or at least a significant slice of it. Assessment providers are no longer happy just to squirt their raw data scores into the enterprise ATS and leave it up to you to buy the reports. The new kids on the block realise that they are sitting on a goldmine of insight, and they want to own the delivery of that insight. That means they want to create an environment within which to do that and all of a sudden you have feature clash, multiple log ins and a general overlap of solutions.

This trend changes the game. It’s no longer good enough to ‘slot in’. The power of the data and insight drives a need for ownership that promises to blow a hole in the traditional enterprise architecture which lets face it is now looking a bit shabby after 40+ years in driving seat. What does this mean for HRTech? It means there’s a turf war underway. Assessment providers, video interviewing platforms, performance management systems are no longer simply competing with each other; they are starting to compete with the core platforms too. The market leading CRM’s like Beamery and Avatar are now being drawn into full service ATS functionality, and arguably doing a better job, WCN is apparently developing its own assessment and AI capability and there’s a vicious rumour that SAP has its eye on a Hirevue as a potential acquisition. Why? Data. Insight.

How this will pan out and the impact on the overall HRTech market will be interesting to see. Slotting an assessment provider into your enterprise ATS as an integration or as an acquisition is one thing, trying to blend in a solution that has cleaner, overlapping functionality, a complex data engine and machine learning at the core is another. Watch this space.

Someone once said that Data is the new oil. That turns out to be a massive understatement. It’s going to be worth far far more. And the fight for ownership and control of that data has only just begun.