Today's big HR software news about IBM buying Kenexa not only adds an 800-pound gorilla to the game. It further changes the terms of the contest. And this is probably a good thing for organizations buying HR software products.
The gorilla part is easy to get. IBM is one of the biggest software and technology companies in the world. Its revenue last year was about $107 billion, and it has a worldwide army of some 433,000 employees.
Oracle and SAP, the other giants in the HR software field, suddenly have serious company, as do all the smaller talent management specialists. The three titans all can claim now that they have a high-quality talent management division, since earlier this year Oracle snapped up Taleo and SAP bought SuccessFactors.
In fact, the IBM-Kenexa deal is making it look more like the era of talent management is over. I say era of talent management, because for the past five years or so, software vendors focused on the talent management tasks of recruiting, performance management, learning and compensation have had a field day. They rightly pointed out that their systems could help companies get a better return on their people, and that these systems were more advanced than the weaker talent management features offered by the old-school human resource management system players like Oracle and SAP.
When Oracle moved to buy Taleo earlier this year, I made some predictions. The remaining talent management players were in trouble, more consolidation could be afoot and the very term "talent management" was on its way out as collaboration and mobile tools became the new thing. It's too soon to say whether the smaller fry talent management vendors are doomed. And I failed to mention IBM as a possible consolidator—darn! But I think my last prognostication is borne out some by the IBM-Kenexa news.
Remarkably, the press release for the deal mentioned talent management only once, defining Kenexa as "a leading provider of recruiting and talent management solutions." The release focused on how Kenexa helps IBM advance with its strategy to offer "big data" analysis services and help companies succeed with "social business" efforts—which basically means tapping social networking for improved collaboration and innovation.
In other words, Big Blue doesn't see "talent management" as big—at least not as big as social networking and data mining. And I'd say IBM is right. Kenexa has been a quintessential talent management player. But IBM seems more interested in what it can build on top of talent management tools.
The essence of talent management software has been to automate and streamline key people processes. That's all fine and good. But there's more to do. For one thing, use those people-tracking systems to make it easier for employees—and possibly people outside of the organization—to connect and work together more effectively.
And then find insights in that networking activity as well as the information created by talent management processes—gems of wisdom such as which frontline managers tend to supervise workers that go on to great things; which classes for salespeople correspond to the greatest revenue jumps; what customer problems are employees discussing that could lead to new or smarter services.
The talent management software vendors—players like Cornerstone OnDemand, SilkRoad technology and Halogen Software—aren't sitting still. They're working to crack those analytics and social networking nuts too.
But their long-standing name is less and less vital. If the era of talent management is dead—and IBM's deal adds a nail to the coffin—long live its data and social biz descendents.
Ed Frauenheim is senior editor at Workforce Management. Comment below or write to efrauenheim@workforce.com.
