But it remains to be seen how long the company’s celebrity will last amid bruising competition and the demands of rapid growth.
In October, Authoria handily won a showdown of talent management vendors at the annual HR Technology Conference & Exposition in Chicago. The Waltham, Massachusetts-based firm beat rivals Vurv, SuccessFactors and HRsmart in an audience-decided contest to see who best connects recruiting and performance management applications. Authoria’s win follows the firm’s victory two years ago in a similar "shootout" among vendors that sell compensation and performance management software.
Besides the conference wins,Authoria recently has been touted highly in analyst reports and is seeing torrid sales. For the first half of this year, bookings rose by 40 percent, with new customers including 3Com, GlaxoSmithKline and L-3 Communications.
But all the customers—more than 300 large organizations in total—raise the prospect that Authoria may struggle to provide them with excellent service. And although Authoria’s star has risen, it sits in a busy constellation with competitors ranging from talent management specialists to larger, more comprehensive software players such as Oracle and SAP.
Jim Holincheck, analyst with research firm Gartner, gave Authoria a "positive" rating this year in his report on software for performance management, compensation and succession management. No vendor surpassed Authoria, but 13 others got the same positive rating.
"It’s a crowded market out there," Holincheck says.
Authoria founder and chief executive Tod Loofbourrow is confident the 10-year-old company can continue to stand out, by taking into account the needs and wishes of managers and employees and by focusing on improving clients’ business results.
Loofbourrow also expects his firm to be among the few talent management vendors left standing as the market shakes out over the next few years.
"I’d say we’re in the third inning of a nine-inning game here," he says.
The talent management software game is lucrative.
Authoria and its rivals sell tools for key HR duties such as recruiting, performance management, compensation and employee development. Talent management applications are among the fastest-growing products within the HR software arena, which is itself the fastest-growing category of business software.
Thanks to factors including fear of talent shortages, revenue from "human capital management" applications is slated to rise 11 percent annually between 2006 and 2011, to $10.6 billion, according to AMR Research.
Some 20 vendors of talent management tools have a common mantra: integration. That is, they typically claim close links between a number of component applications for the purposes of more efficient operations, new insights and, ultimately, a better bottom line.
Despite the promises, talent management as a field has room to improve. Research firm Bersin & Associates found organizations with multiple applications from the same vendor report that their talent management systems offer just slightly better than "fair" assistance toward key talent goals such as retaining top performers and ensuring quality of hire.
Authoria brings a unique background to the talent management field.
While other rivals started off as recruiting or learning management system specialists, Authoria’s roots are in the area of employee self-service tools. Authoria’s first products were designed to help employees access personalized information about corporate benefits and policies. The company still offers that software, but partly through acquisitions it has added capabilities such as recruiting and performance management.
Employee communications may not seem at first glance to be a critical part of talent management. But Authoria has used that expertise well in building applications that are used by the bulk of employees, not just HR "power users," says Nov Omana, founder of consulting firm Collective HR Solutions. "They have a significant strength in bringing information to people’s desktop," he says.
Authoria also has won kudos for an "elegant user interface," in the words of analyst Josh Bersin, and a well-rounded product suite. Gartner’s Holincheck says Authoria has "pretty strong functionality across a pretty broad set of talent management areas."
Alcon Laboratories, which makes contact lens solutions and many other eye care products, recently chose Authoria for its entire lineup of talent management applications. The company is starting with recruitment software, followed by compensation management and later performance management and succession planning. Kay Teague, director of HR technology for the 13,000-person company, says Authoria impressed Alcon with its clean user "look and feel."
Also important to Teague was Authoria’s vision of a comprehensive package of tightly connected talent management applications, where, for example, a single "dashboard" screen allows users to access a variety of software tools. "They are working toward a truly integrated suite," she says.
Alcon also considered SuccessFactors, Vurv and Workstream. Cost was not much of a factor in the competition, Teague says: "There was very little price difference."
Winning the shootout
Authoria got the best of Vurv and SuccessFactors again at the HR Technology Conference, as audience members voted it the winner in each of the three shootout segments. The first segment involved showing how the software could create a new job requisition based in part on the example of a successful employee in a related role. In the second, vendors were asked to show how their applications could search for both internal and external candidates, assess the quality of hires from external recruiting firms and compare their fees, and finally compare an internal candidate with two external candidates.
The last segment centered on a midyear review for an employee hired externally, in which vendors were asked to show how their software captured data from the recruiting process to help fill out an employee profile as well as demonstrate a quality-of-hire "dashboard" report.
Among the factors that carried Authoria to victory was the performance of Loofbourrow himself. The chief executives from each vendor demonstrated their software, but Loofbourrow stood out with a showman’s presence. For instance, he ended the first two segments with "cliff hangers" about what else Authoria’s software could do.
Despite Authoria’s successful conference presentation, there are questions about how much the company reveals about its financial performance. Rival talent management vendor Plateau says profitability and revenue growth over time should be a factor in choosing a supplier.
"Numbers tell a story," says Paul Sparta, Plateau’s CEO. Sparta says Plateau was growing and profitable for 13 straight quarters until 2006, when it purchased compensation management specialist Nuvosoft. "We are break-even now and will be profitable again next year," he says.
Authoria provides some financial data, including the fact that it recently brought in $22.5 million in financing, and that recurring revenue grew 42 percent last year. The company also points to its roster of well-known clients, such as Aon Corp., Boeing and PepsiAmericas, as a sign of its financial strength. But Authoria declined to disclose whether it is profitable or to discuss revenue or profitability information from years past.
"As a private company, we really don’t disclose our financials, including revenue, revenue growth, profitability, etc.," Michael Blaber, director of marketing communications, said in an e-mail.
Teague says Authoria was similarly tight-lipped with her about financials.
"They weren’t really willing to lay it all out there," she says. On the other hand, she says, Authoria convinced finance officials at Alcon that the company was a safe enough bet.
Competition still steep
Authoria may have won the Alcon account, but plenty of Authoria’s competitors are snagging new customers as well. Besides Oracle and SAP, another larger software company pushing hard into talent management is Lawson. These players offer customers the potential of streamlining the number of software vendors, since they offer core HR systems for tracking basic employee data as well as a range of business applications beyond HR software.
Even within the talent management field, Authoria doesn’t have all the bases covered. It lacks what many see as a key component: a learning management system, which is software for tracking employees’ coursework and certifications. Loofbourrow says his software ties into the learning management products from other vendors. He does not see an Authoria learning management application as a priority. The most central aspects of talent management are recruiting, performance management and compensation management, he says, while learning management is "secondary."
Lately, customers seem to be buying Authoria’s argument about the best approach to a talent management suite. During the past few quarters, 40 percent to 50 percent of Authoria’s new customer wins have involved three or more software products, compared with 25 percent during the first half of 2006.
But by selling software suites to so many customers, Authoria is setting itself up for a customer-service challenge. Authoria and other talent management specialists face the task of providing good service to clients who have been used to a high level of care from the traditional, large HR software suppliers Oracle and SAP, says Jason Averbook, chief executive at consulting firm Knowledge Infusion.
"The vendors are not doing a good job setting expectations when they implement these solutions," he says. "All of them are struggling with it.
The issue is exacerbated, in a way, by the "software as a service" approach used by Authoria and other talent management vendors. It refers to applications that are accessed over the Internet as opposed to software that runs on a customer’s internal computers.
"Because it seems so easy to deploy, customers don’t expect issues," Averbook says. "When issues arise, it is a surprise to customers, creating a chasm between expectations and reality."
Without having turned on Authoria’s software yet, Alcon’s Teague has no complaints about Authoria’s service. But given the industrywide concern and Authoria’s fast addition of customers, poor service is a worry. "I’m afraid of that going forward," she says.
Blaber says Authoria has its eye on the service ball. The firm’s "Rapid Results" implementation process uses "best practices" to speed up the deployment of Authoria software, Blaber says.
"Over the past 10 years, Authoria has built a very solid track record of meeting the expectations of the most demanding employers in the world," he says.
Teague is hopeful about Authoria. But she realizes today’s talent management sensation could fall from its pedestal.
"No one’s really there with an integrated system," she says. "I just hope Authoria is able to provide good service to their customers as well as deliver on its vision of a truly integrated suite."