The Next Disruption
If you’ve been in this business any length of time, you’ve become accustomed to disruptive innovation. More than anywhere else you can name, the front office has been a hotbed for introducing game changing new technologies since the mid-1990s when CRM applications began coming on line. But what’s next?
We’ve had our share of net new ideas over the last couple of years including cloud computing — an expansion on the SaaS model — mobility, which was reignited by the iPad’s disruptive introduction, and, obviously the social revolution, which imported social ideas from popular tools like Twitter and Facebook. However, each of these is not what I think of when I think disruptive. They are more adaptations of some other technology or phenomenon already in market.
It’s not that I am complaining but these are horizontal ideas but I’m thinking about vertical. A good rule of thumb for me is to look at what people are using paper or spreadsheets for and to ask if those crude tools are helping or hurting given the pace of business today. Fifteen years ago if you asked that question you might have zeroed in on the sales process and that would have been a lot of fun.
Helping or hurting given the pace of business is the key. Many of the manual processes we’ve disrupted in the last two decades have been with us for a very long time. But with the acceleration imparted by the high tech revolution, those processes were suddenly lacking. That’s the sweet spot when I look for disruption.
Today, the area that has all of these things — manual processes trying to cope with the speed of change — is human resources and that’s especially true in the hiring process. You might find that hard to believe given the high unemployment rate, but you might also recall a piece I wrote a few weeks ago saying that in Silicon Valley at least, there is a shortage of qualified people to hire and jobs are going begging. That also means there’s a hiring war going on too and in such a situation having systems that can quickly enable you to sift through all the resumes and applications to find the few that meet your needs, can be a competitive advantage.
Companies like PeopleSoft and now Workday of course have wonderful HR products and there is a host of smaller companies with HR products as well. But keep in mind that CRM is composed of a few essential stovepipes with many best of breed solutions clustered around them and HR has the same kind of needs.
What CRM has done well and HR is still getting started doing, is to consolidate the pieces into a coherent solution. So there are hiring solutions, e-learning or training systems and employee management/ benefits systems and even messaging systems. Companies often have to cobble together these solutions into a working system that is necessarily costly and brittle.
Also, HR, like most other areas of enterprise computing, is dealing with the on-premise vs. on-demand or SaaS a.k.a. cloud discussion. Throw in a little social and mobile for good measure and I think HR is ripe for disruption. But all these things need to be or become part of the standard HR suite. The suite doesn’t exist yet but it ought to.
Then there’s the issue of cost. HR systems address a relatively small part of the market because many of them are still on-premise solutions requiring major investments. That means they are not appropriate for smaller companies with tight budgets and that is the opportunity that a cloud based HR suite could address.
To date the number of such suites is small but I noticed that yesterday Jobscience announced its Recruiting Winter ’12 release of TalentCloud, part of a whole HR suite. Just to prove the disruptive point, the company calls what it does Talent Relationship Management or TRM which accords a certain amount of respect to people and acknowledges the importance of skills in a knowledge economy.
The product is built on the Force.com platform, which gives it immediate access to the Salesforce customer base and gives it scalability that few can match, especially at the price point of a cloud solution. There’s a lot of compliance record keeping that needs to happen in HR and having an automated system to help with all that is a great productivity boost.
In the not too distant future everyone will need something like this to help them compete in the talent wars and save time and cost in compliance. Right now, this looks like an important next disruption and, as usual, early adopters will gain the most.