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HR Tech Rundown: HR System Convergence - the Big Lie...

I'm at HR Tech, one of the best HR/HR Tech shows that you've never heard of.  If you haven't heard of it, consider coming in 2010.  One of the reasons I love it is because most of the conversations revolve around talent/HR, viewed in the framework of how technology can make those who manage the talent smarter and more efficient.  That makes it cool - and not boring...

Today's Tech Analyst panel was moderated by show chair Bill Kutik, and included industry insiders Josh Bersin, Naomi Lee Bloom, Jim Holincheck and Lisa Rowan.  It was the usual panel stuff, but you always pick up nuggets.

The nugget, out of this panel, that made me think - the topic of convergence in HR and Talent Management systems.

Convergence as defined by Kutik and the panel asks the simple question: Will HR tech providers be able to survive as stand alone players in a single product category (think performance management, learning management or recruiting), or will they have to develop an entire suite of products to survive?  Example - you're offering a great Performance Management solution - do you also have to get good at a Recruiting solution and eventually even dip your toe into a core HRMS to ensure that you survive as a company and give the customer what they want?

The panelists weighed in on this in a variety of ways:

Bersin - Noted that the small to medium size company wants convergence in a big way, and the providers that serve that end of the market are attempting to provide.  He feels that convergence will happen in a big way over the next 5 years.  Unfortunately, he didn't have time to indicate how that would happen, and what some of the trends would be.

Kutik- Rightfully identified the "system of record" (slang for your core HRMS system that keeps track of the boring employee data, benefits, comp, etc) as being at the center of any convergence play.  As Bill alluded to, you have to do that complex system well to be a player with any converged type of system.

Holicheck- Notes that true convergence will probably never happen, and there will always be new players on the fringe of any convergence as new types of solutions initially come to market.

Rowan- Points out that "convergence" plays by some of the non "system of record" companies don't really offer the full functionality of the core HRMS.  For example, she pointed out that SuccessFactors has some employee data functionality in their latest release, but let's face it - data on how many LOA's an employee has gone out on is a far cry from the workflow necessary to tie it to requests for leave, an approval process, auto tie-ins to benefits, etc. 

Me?  As a VP of HR and someone who is actively looking for solutions for the company I just joined awhile back, I'm hopeful that Josh Bersin is right and we'll have solid progress towards convergence in 5 years.

I'm not hopeful.  Guess why?  As a HR pro, I need the system of record/HRMS that Kutik so accurately identified.  The problem is that the HRMS providers in my space aren't very innovative.  They do well with payroll and a HRMS tie in.  They make the trains run on time, which is essential.

The problem is that all the innovation is happening with the single solution providers.  Look at the performance management and recruiting vendors - they're all doing great things.  That's where innovation is.

Meanwhile, I have to have the HRMS/system of record.  So I can get that and then take the half-baked attempt at performance management that someone can do for me there, or I can go get the stand-alone performance management solution that includes all the functionality/thought leadership/innovation that I desire.

Classic "rock and a hard place" situation.  Sucks to be me, because true convergence is a lie.  I hope Josh is right and it gets here in the next 5 years.  I suspect the true innovation will always occur outside of the converged application, which means you'll have to go stand-alone to get the cool stuff.

The one dark horse in my on-demand, small business world - Taleo.  They've got performance management and recruiting, do they dare mess around with HRMS/System of record?  That would be interesting...

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