Modest Rant — Your HR Technology Portfolio Contains Three Types Of HCM Applications

Different But Equally Beautiful

[This post was inspired by an exchange in the HR Technology Conference discussion group.]

When I look across all of HRM with the most expansive and contemporary perspective on work and workers (so here I include humanoid robots as workers but clearly not persons), I see the need and market for three very different types of applications.  I’ve chosen to call these (making it very obvious that I am NOT a marketing guru) utility, core and niche applications.

Utilities are those cross process foundations which are critical to providing customers with a terrific user experience while enabling all of the goodness needed by vendors in time, quality and cost-to-market and, in the world of Blooming SaaS, operational efficiency and effectiveness.  Increasingly, the term “platform” is being used to refer to the collection of these utilities, to the foundations upon which subject matter/domain applications are built, and I’m okay with that.  Included, therefore, in the platform are such capabilities as UX design, workflow, process management, inheritance across and within tenants, metadata management, systemic effective-dating, collaboration, video creation and embedding, mobility and the special considerations of mobile security, overall data privacy and security, reporting, analytics, and much, much more.  What’s important is that most of these utilities are very difficult to piece together by an end-user from disparate vendor products (although some of this could be done, with considerable pain and cost, both initially and in perpetuity, on a best of breed basis).  These utilities deserve to be part of the foundation of your HR technology strategy and are best obtained from the vendor you choose to provide your core applications.

Core applications, back in the day, referred to basic HR recordkeeping, payroll and benefits administration with some basic T&A thrown in.  But today this core must include a broad range of workforce and talent management applications, from staffing and compensation management to development and succession and on to basic scheduling, assignments and time recording.  Today’s core is MUCH larger than that of yesteryear because we’re automated so much of what used to be done either manually or via an array of spreadsheets and similar office tools.  I define core as those applications which have deep and complex interconnections across and impact on work locations, work units, jobs, positions, persons and person roles plus non-person workers, and every flavor of knowledge, skills, abilities and deployment-related characteristics (what I call KSAOCs).  This core is the foundation of your HR technology portfolio.  It sits on top of the utilities and is enabled by them, and much of it is absolutely required for organizations of any significant size.  I think it’s critical to get as much as possible of the core from a single vendor but only if that vendor can offer you a truly integrated core.  And of course today’s core includes a deep reservoir of truly integrated embedded analytics, both operational and predictive.

And then there are the zillions of important niche applications which live around the edges of that core. From background checking and social sourcing to tax filing and assessments of all kinds, there’s a lot of valuable innovation going on in these many niches, but their interconnections to the core are well-defined and not terribly complex.  No matter how cleverly done is sourcing sourcing, it doesn’t change independently the organization’s design of positions.  And no matter how important tax filing may be, the data required to drive it is pretty stable and straightforward.  Sometimes, what starts out as a niche application, as did many ATSs, evolves to become a critical part of the core as the scope and complexity expand along with its interconnections across the core.  Others begin and remain niche applications, like tax filing or background checking, because their interconnections to the core begin and remain well-defined and quite bounded.  But in the end, what characterizes a niche has nothing to do with it’s importance, degree of innovation, addressable market or the flow of VC funding but rather the ability to bound its interconnections with the core in such a way as to enable relatively easy and survivable interfaces.

My view is that you should get most of those utilities, i.e. the platform, and as much as possible of the core applications from a single vendor (even if that vendor isn’t the owner of all the platform components) and then interface via APIs or platform-built extensions as many niche applications as are needed by your specific organization.  We will always need to be able to do these types of interfaces, and I hope that we get much better at doing this, but trying to piece together the core as a long term proposition is not the preferred approach, at least in my opinion.  And let me say it one more time: just because it comes from a single vendor does not mean that it meets my definition of integrated nor that it’s good software.  So much for my point of view on this topic; what’s yours?