Thursday, October 23, 2003

One more distraction before the next Vendor Report Card!

We get a lot of email here. Most all of it is supportive. Today we received a very critical message from Debbie McGrath, CEO of hr.com. The email copied Derek Mercer, CEO of Recruitmax - Deb Besemer, CEO of BrassRing - Luis Tetu, CEO of Recruitsoft - "bill" from lrp.com, although when I replied it turns out Debbie had his email wrong (we think this is Bill Kutik of HRExec/HRTech - self proclaimed analyst) - Allan Schweyer of HR.com (we love his stuff!) - Jeanne Achille, of devonpr - and Mark Lange, VP of Marketing for PeopleSoft HCM. She asked that we share the email with our readers.

Below, we share not only her email, but our reply. At first we found it interesting that Debbie was so compelled to take such a defensive stance for the vendors she copied on her email. Then we thought about how she puts bread on her table - via advertising and sponsorship revenue from the vendors. Next we thought of the vendors she chose not to copy. Why did she leave them off? Are Recruitmax, BrassRing, and Recruitsoft her current primary sources of revenue? Is she just defending these vendors alone hoping for added advertising revenue? Does she simply not respect the others in the space?

We added two emails to our cc line, Virtual Edge's VP of Corporate Development. He takes his time to email and inform us, so we copied him since we used his firm's name - and John Sumser from interbiznet because he really paved the way for sites like hr.com, ere, and all the blogs, and we thought he would enjoy it.

Below is the email thread, type-o's and all. My reply is first, followed by Debbie McGrath's email.

My email:

Thank you for your interest in the Talent Management Blog.

I appreciate your perspective and encourage you to provide more feedback as we continue to develop the blog. I will share your thoughts with my readers. I will share my thoughts with you - and also with my readers.

Here are my thoughts:

We get a lot of feedback here. Most all of it is encouraging and positive. Some challenging. Very little negative. Most of the encouragement comes from your peers in the media and from vendors in this space you seem to think you are defending. The Vendor report cards are controversial, but if they give one person out there in the industry a reason to pause and think about things we are successful. The emails I receive from executives at Recruitsoft, BrassRing, and the CEO of Recruitmax seem to suggest they are not quite as horrified with the blog as you may be.

Perhaps you need to read all of the posts on the blog, starting at the beginning - from November of 2002. You see, Debbie, I am not against this space. I believe it is a viable space. It has been viable since the days of Restrac and Resumix. It will remain viable. The fact is that while the space may be fragmented, and the economy just starting to, dare I say, open up a bit - several vendors have been emerging and eating the lunch of the vendors you are defending.

Recruitmax is one of those - they are the death of BrassRing and the first bullet to hit Recruitsoft. Virtual Edge has also made a huge dent in the market for these two stumbling giants. Deploy has started to emerge - winning several deals and about to close on several others, ripping most of them right out of Recruitsoft's hands. The question about these three vendors du jour is whether they can sustain (whether Deploy will get there for real at all), or are they just paving the way for the next generation in this fragmented space. You know our feelings on Recruitmax - you read our report card it seems, I actually hope I'm wrong about them. You'll see what we think of VE & Deploy very soon. BrassRing too.

Let me not forget PeopleSoft. You have seen small comments on the blog or in the newsletter about them and where they are today with their product, but through their market share alone - not their product, they have also been sucking up the Enterprise-level accounts. You'll see what I think about PeopleSoft's future in the Talent space soon, and it will surprise you. When I look five years down the road, and I factor in what they are working on for their product... well, you'll see in a few weeks on the blog.

All that being said Debbie, it's really been a matter of execution. Luis and Deb might not tell their boards that. But, those of us paying attention know that there were more than enough deals for both of your beloved Brassring and Recruitsoft to hit their numbers last year - Recruitmax, Virtual Edge, and Deploy just didn't let them win them.

I flat out disagree with your assertion that commenting on culture and egos isn't helpful. When the sales reps from these vendors you so proudly defend come and pitch me every last one of them have powerpoint slides about their culture and they all tell me how special they are. When they wheel their CEOs in front of me, Debbie, they wax poetic about their cultures. Their websites have pages dedicated to their cultures, selling us on them. Debbie, please, if they get to force feed us on culture and values in their pitch and on their sites, we get to comment on the contrast between the reality of our experience and what they preach.

Debbie, I know that you have never actually bought or used any of the systems you are defending, but in our world here we care about the people that we buy from. We care about who we do business with. So culture matters, and when they flaunt their ego and their arrogance in front of me along with their business card when they come to ask me to buy something, they need to be called on it. Many people have told me they didn't buy from some of the vendors you are defending because of their egos and their arrogance. It's an issue.

Your rhetoric blaming the clients and the business dimensions around their install for the systems not performing is right out of the Vendor Crisis Management Handbook - Chapter II I think it's the one Besemer wrote isn't it? When it doesn't work blame the customer. Really Debbie, you should be ashamed of yourself. Sure, there are cases when customers haven't done themselves favors, but there are far more situations that are caused by the vendors over committing, under-delivering, and not taking the time to scope the project that they should have.

My comments on the HR Tech show being under whelming only mirror what every single vendor you defend has told me. Don't over react to one comment on a website. And how dare you turn an under whelming trade show into another opportunity to say the vendor is right and the customer is wrong. A balanced look at the problem would do you some good.

And finally Debbie, I am not in the media. I am a blogger. I write what I write as much for myself as I do for anyone that reads it. Somehow people started reading what I was writing, a community formed around my thoughts, and it motivates me to write more.

I do what I can when I can in the market to help move the industry in the right direction. I try to have this kind of impact on everyone that I touch as I go about my business. I do not solicit advertising so I hold no allegiance to any vendor, advertiser, or professional organization. You however do consult for, accept advertising dollars from, and sell the heck out of your speaking engagements, trade show booths, etc. to these vendors that you represent. How unbiased can you really be? Your buyers guide is even a revenue stream. Your site is helpful, I like it. But please don't question my intentions, when you are driven by the dollar.

A blog is a place for opinions, thoughts, and personal ideas. If you don't like mine don't list it on your favorites in your browser.

Please do continue to provide feedback. I appreciate it.

See you at the next Masters Symposium.

Talent.


http://talentmanagement.blogspot.com
----Original Message Follows----
From: "Debbie McGrath"
To:
CC: ,,,,"Allan Schweyer" ,"Jeanne Achille" ,
Subject: Comments on your blog
Date: Thu, 23 Oct 2003 12:11:35 -0400
I would like you to share my information with your readers.

First of all I find this type of Blog very amusing but very
unconstructive. Your opinions and low grading on some or all of the
vendors in this space does nothing to elevate or help grow the space.
This is a viable space, it just happens to be too fragmented, over
capitalized in the glory days and in a market that automates a process
that frankly not a lot of people are investing in right now -
Recruitment. Mark my word, if we were still in the hot recruitment days
of the 2000, we would have had even more vendors in the space , all
still building out their platforms and growing at exponential rates.

Commenting on people egos, religion, culture are all amusing but not a
reflection on the quality of the product or service these vendors offer.

As media , which we both are we really need to help grow the industry in
a constructive and positive way. We need to help buyers understand the
potential of the software and articulate samples of their best users. As
well we all know, all of these products work- yet in many of the
cases it is the business dimensions around a clients install that affect
the value they get out of the systems.

Finally the HR Tech Show run by LRP is a first class event that
continues to draw more interested buyers than any other HR technology
event in the US market. It is not from lack of trying from LRP and the
gang that attendance is stagnate. In fact, this event should be on the
schedule for every single HR-IT person whether they are making a major
purchase decision or not. It is a lack of education and awareness of the
technology and business opportunities of senior HR people and HR - IT
people that is slowing the automation of HR processes, not the vendors
capable of supplying these solutions. Until HR automates the
administration they will continually struggle to work on the alignment
and strategic part of their role.

Regards,
Debbie McGrath
HR.com Inc.

Tuesday, October 21, 2003

Virtual Edge keeps a promise.

I know - I know, you are all emailing me wondering when the next Vendor Report Card is. It's on its way. But, in the mean time, it's very unusual in this day and age that someone keeps a promise. When it happens it's good to reflect on it. That very thing happened today.

Virtual Edge's VP of Corporate Development emailed today, "closing the loop" on a communication thread he started several weeks ago when he alluded to 6 new accounts that he was hoping to announce at this year's under whelming HRTech show. VE didn't have the time or "bandwidth" (I hate that term) to get the announcements out for HRTech, but they were able to find the time to share their new customers with me today. For this I am grateful, and I'm taking the time to share the details with all of you.

Virtual Edge reports that they have closed on an impressive 15 new accounts year-to-date. Scanning the new customer list, we put 8 of them at the Enterprise level - without any supporting data, except our knowledge of the scope of the deal based on previous market information - or a previous understanding of the size of the customer organization. The rest of their new customers look to be larger mid-market deals or divisions of larger companies. This is all good - Most of the players at the Enterprise level have only closed 2-4 true enterprise level deals year-to-date. Some, like BrassRing, have only closed 1.

This does reflect, however, our perception of Virtual Edge. A vendor caught in the middle as they attempt to transverse the move from mid-market vendor to enterprise player and tackle all of the challenges associated. But, this isn't VE's report card - that's coming in a couple of weeks.

They also report that their product is operational in 9 languages, spanning the recruiting function over 80 countries for two of their larger existing customers. We don't know how deep the internationalization of their product extends - is it just user interface? but nonetheless, this is somewhat impressive given the track record of the vendors in market today with regards to multi-language capabilities.

When we get to VE's report card, we'll share a lot more about what we know about them.

Talent.

Just a quick post to thank everyone. Once again I've been overwhelmed by the support received for this blog. It's incredibly motivating.

Thanks to all of you that have taken the time to share your thoughts, experiences, perspectives, and feedback! I am working to respond to each of you in detail individually, and of course that takes time. I appreciate your patience.

The next vendor report card will go out this week, and of course newsletter subscribers will receive some special tidbits along with the latest post.

Thanks again,

Talent.

Thursday, October 09, 2003

TalentManagement Newsletter NO_4.htm
TalentManagement Newsletter NO_4.htm
The Talent Myth Part V, continued
The Curse of the ATS Marketplace
Vendor Report Cards


Continuing on with our Vendor evaluations against the 6 mistakes I've outlined in The Curse of the ATS Marketplace.

Each vendor will be reviewed against the six mistakes listed so far. We will also give general impressions of the vendor, their products, service, and any overall issues. Our comments will be based upon direct input received over time from customers, prospective customers, partners of the vendor (consulting firms, technology vendors, etc.), employees, ex-employees, market analysts, industry press, our direct experience with the vendors, as well as other sources.

The next vendor requested to be covered, by you - the readers is: Recruitmax

General Overview

Year Established: 1996

# of Employees: 50-70

Headquarters: Ponte Vedra Beach, FL

Customers: 130 - 150 using Corporate Edition. Most of these customers are very small firms. We put their true "Enterprise Level" customer base between 50 and 70 customers. Based on knowledge of current customers beginning evaluations of ATS products to replace their Recruitmax solution, we ballpark-estimate their customer attrition rate for their Enterprise Level customers at 10%-15% for the 12 month period looking forward. We estimate a much higher level of churn in their small to mid-market customer base during the same period.

Recruitmax boasts a much larger number of customers - near 500. This is extremely misleading, given that they seem to be including their ProHire job-board and Staffing agency customers in this number. Safety is not in numbers when looking at Recruitmax - the key issues we all associate at the enterprise level (security, scalability, configurability, vendor support & service process & methodology) are not relevant in the agency or small to mid-size company markets. They would be smart to go easier on the "spin" and be more honest in their marketing and sales approach. This is beginning to bite them as their customer base matures. We expect to see their customer attrition rate increase dramatically looking beyond the 12 month period looking forward.

Much of their growth in the enterprise market has been based on selling on low-price. Not an uncommon tactic when the economy is down, and also when the market is saturated with more than 2 or 3 vendors that have fairly similar functionality. The competitive landscape in the ATS market was ripe for a low cost vendor to come in and stir things up, and Recruitmax has filled that role to date very well. Recruitmax's approach should scare the buyer community. Selling on low-price alone as they do is like competing in track & field on steroids - You may win several races and have a good year but you can't sustain over the long term. Without focusing on your true health and your ability to scale as a vendor to meet your customer's needs your "legs" will eventually get weak. We think we are seeing Recruitmax's legs starting to tremble.

2002's vendor to beat has been quieting down A LOT over the last 6 months. Right on schedule - as their enterprise level customer number approaches 60-70 they seem to be wrestling with many growing pains. A company that put no focus on infrastructure, internal support processes, professional services, or operational scale - after glossing up the marketing and sales front, is finding themselves confronting issues they just haven't had to - EVER.

Management Team: The executive team at Recruitmax falls short of impressive. Of the six executives listed on their website 50% (3) are "home grown" - with no industry or market experience outside of the CEO's previous life as a contract programmer. The other 50%, while bringing industry experience, hail from shops that don't give us the warm and fuzzies about the future at Recruitmax. One from Resumix and Personic - this entire blog is focused on the incredible smoldering ashes they've left behind after exploding; One from MPS - who? - exactly - a candidate database tool that is rudimentary at best, big in the agency world - not very valuable for the enterprise market; and, rounding out the pack is one hailing from The Newman Group - a hire that gets Recruitmax closer to the boutique consulting firm - and buys them some business - given the executive's relationship this will no doubt further Newman's propensity to drive business to Recruitmax. Given Newman's history of leaning towards the one or two vendors that put more revenue in their coffers.

Not incredibly diverse. Only one woman and one non-white male. Percentage-wise the numbers work for them here.

At 70 employees (the number they report) and 6 Executives, the exec to employee ratio is 1:11.6. Top heavy.

Culture: Employees and ex-employees alike speak of a culture that sounds "cult-like". While not a lot of data is out there on their culture, several employees and ex-employees have referenced a divide in the company that seems to spawn from the company's focus on religion. It seems that a large number of the management, the executive teams, and the company for that matter, are quite passionate about their Christian faith. I guess those that aren't so passionate sometimes feel they're not a part of the club. Nobody knocks the faith - it just seems that sometimes it leaves people feeling a little uncomfortable and possibly judged for the choices they may have made that don't align.

Recruitmax's sales approach is simple. Waive your hands at what the product doesn't have - they will customize anything - and as their CEO states, "heck, we'll give you the source code"; Drop the price to $100K per year if need be, regardless of the margin; and don't bother the customer with considering what happens at upgrade time in the future. For a very tiny shop this might not be all bad, but for any enterprise of real scale this should send the customer running. Customization is a bad word - Recruitmax's customers are a string of one-offs that are beginning to challenge the brand new services and support teams as they try to help their customers be more effective. If it sounds challenging now, wait until the next major release where customers attempt to move all of their customizations forward on top of the newly released product. Which leads us to the next section....


Delivery Model: Licensed/installable software and ASP. The bulk of their business at the enterprise level reflects the market - primarily ASP. The application components of their architecture are J2EE and Cold Fusion. Their infrastructure, down to the hosting facility, on the ASP side is a weakness. It's surprising the customers they have been able to win. When you look under the hood at their back-end they fall short of most all other vendors.

On the application side - they use J2EE and Cold Fusion - these technologies have proven challenging to scale for other vendors in this space. Several vendors in the market have already had to move off of this approach in order to scale effectively. For ASP customers, over time as we watch Recruitmax start to address their enterprise customers needs (once again timing is ripe here) we will see them attempt to cram more functionality, addressing more workforce issues and capabilities into what is going to become a VERY HEAVY, VERY FAT user interface. Performance will be a major issue for them - a heavy user interface feeding off a not-impressive back end infrastructure. Scale will follow - customers will begin to have serious challenge with user acceptance based on difficulties in getting the interface to look the way they want it to. Challenges will abound when a new release comes out and customers with large amounts of hard-coded customizations try to shift to new product while maintaining their customizations. A huge support and services issue - and we predict this is where the customers will start to pay. You don't get anything for free - especially not developer time.

For installed customers, the future probably looks even worse. It sounds compelling when the CEO says, "heck, we're so flexible we'll give you the source code." But, when a customer modifies source, then a new release comes out with vendor modifications to source, then you try to maintain all the customizations that were required to get this thing working with your process... GOOD LUCK!

We can hear them in FL now - as we have before - "We don't have that problem." Well, at 40 and 50 enterprise customers you don't have that problem. At 70 it starts to hurt. At 100 you had better have been working on the back end and thinking of these issues. There in lies the problem for Recruitmax. That's our guess - we'll wait and see.

Regardless of whether you install or ASP the product, don't expect to receive future releases without paying incrementally for every added capability. Recruitmax spins this as giving the customer the ability to pick and choose which capabilities they would like to use moving forward. They have a complex model involving maintenace dollars and allocation to justify it. The bottom line: if you want to keep up with the product's new capabilities you are going to pay for it. Competition in the space offers ASP customers new capabilities as part of their subscription fees, and when licensing/installing - as a part of maintenance - which is in line with industry standards.

Strategy/Vision: Nothing very special here. Total Workforce Management. Recruit, Retain, Optimize. Charts and slides that remind me of Personic and Resumix, to no surprise. (scary, though)

Recruitmax seems to be more focused on positioning for an exit strategy than in building a business with true value. Their new CEO has utterly no operational experience on his resume. He brings an investment banking background, driving many of the larger mergers and acquisitions in the job board space. Not someone that, looking forward, is thinking about what we are pointing out as key issues here - like scale and stability. More likely someone that will keep these issues in check and under the covers while positioning the company to be acquired. They have a long way to go before their customer base is worth acquiring by any real player in the market as we see it. What about the prospect of going public? We just don't see it in the cards for a firm like Recruitmax in the next 3 years. While the market may open a bit, we don't see them in that position. Our guess is they are about to go un-profitable in order to address pending customer issues - if they don't their customer attrition will impact their growth in a way that will put any IPO on hold.

Product: End to end Applicant Tracking, including web-site hosting. Full featured, fairly clean interface. Like most of the vendors in the space they solve their 80% of the problem. (Sound familiar? You'll probably see this again)

Recruitmax has done a good job "on the surface" for both the company and the product. Prospective buyers find the product looks easy. After heavy customization, not difficult - but heavy, users find the product works. The challenges for Recruitmax, like all that have fallen before them, are unfolding as we speak. After selling on price, and waiving their hands at what it takes to build a company and product that scales for the future, for the customer, they are on their way to some scary ground. Scary for an executive team that lacks depth, and scary for the customers that are depending on them.

The Report Card:


1. They listened to their customers a little too much, and not effectively for their business. (see this post here)

Recruitmax is just about to hit this one hard as their customer base is reaching 60-70 enterprise level clients. They have just hired the brand new teams that are capturing all of these customer issues in support and services. They fare well on this one, since they just haven't had the customers to listen to for very long, but we can see that they haven't been doing their homework, so we expect their mid-term grade to be much lower.

Recruitmax's grade: B

2. They over-complicated their products while they over-inflated their egos. (find this post here)

Ego is one thing that abounds at Recruitmax. An incredible arrogance when it comes to their competition. They should realize that we are all looking for simple solutions, but not to the degree that they don't work because of a simple infrastructure. Again, on the surface level they seem easy to use, but with the level that they have hung their hat on customization to meet their customers goals, they have really complicated things. The kind of complications that hurt the customer the most.

Recruitmax's grade: D

3. They diluted their strength as a vendor by diluting their domain expertise in customer facing positions. (find this post here)

Not only is Recruitmax weak on domain expertise in the ranks, they are weak in the customer facing positions that matter the most - support and service. The fact that they will begin to encounter these issues in the next 6-9 months keeps their grade up, but we expect not for long.

Recruitmax's grade: D

4. Vendors aggressively acquire customers in large numbers before their infrastructure or product are able to support them. (find this post here)

Recruitmax is in the eye of the storm on this one. Get ready for the wind to pick up as this one hits the shoreline in Florida. It will be interesting to see what's left after the scalability hurricane impacts their business moving into 2004.

Recruitmax's grade: F

5. Vendors fool themselves into thinking their products are incredibly different than everyone else's, then they try to fool their prospects and customers. (find this post here)

When the Recruitmax Revival rolls into a conference room near you, expect a lot of preaching about how easy and simple they have made the process and product - and how the other solutions out there just don't get it. Meanwhile, back in Ponte Vedra they all have their fingers stuck in the holes in the dike.

Recruitmax's grade: C-

6. Vendors develop a case of Business Model Paranoia and Competitive Denial (find this post here)

We've met with the Recruitmax team on several fronts. We're not sure if they are paranoid or just have very little of a compelling nature to say. Both scare us. Competitive Denial? You bet. They really need to start understanding that they are just like the other vendors in the space - and are beginning to deal with all the same issues.

Recruitsoft's grade: D

Recruitmax's Grade Point Average: 1.33 - almost a D+.

Are they following the Dinosaurs along the path to extinction? Only time will tell. It's clear they have some tar pits to navigate through.

Help select the next vendor to be reviewed - email me your suggestion here.

Monday, October 06, 2003

The Talent Myth Part V
The Curse of the ATS Marketplace
Vendor Report Cards

We should be ready to post the next Vendor Report Card very soon!

Thank you all for the continued support. Your emails have been inspiring. I look forward to hearing from more of you as we move on to our next Vendor.

You still have some time to impact which vendor gets reviewed when. Email us here and tell us who you would like to read about.

Talent.
The Talent Myth Part V, continued
The Curse of the ATS Marketplace
Mistake Number 3 in Progress....

If you were a newsletter subscriber you would have received this post in your email 4 days ago.

In my September 16 post I covered the real-time execution of Mistake Number 3 by Recruitsoft and hire.com.

Mistake #3 was: They diluted their strength as a vendor by diluting their domain expertise in customer facing positions. (find this post here)


With the appointment of an Oracle executive to the top sales management post at Recruitsoft, the boys in Quebec demonstrate this once again.

While the basic tenets of selling enterprise solutions are true in any environment - and while sales is a transferable skill, as we stated in our original post of Mistake #3:

"Once the vendors start tasting some substantial success they get greedy, get more funding, and this is where they forget about the small size of our market. They start thinking they need to build out their teams with leadership from outside our space - or should I say from FAR AWAY from our space. Leadership that might have known how to sell, market, support, implement, or define products for ERP systems, Workgroup Software systems, Time & Attendance Systems, CRM systems, SPM systems, or other very complex markets. But not people that understand what makes a VP of HR or Staffing, or a Recruiter or Candidate tick!

In a small market like ours - a small community like ours. This understanding is critical to success. In the vast majority, these market converts just don't have the patience for the customers in our space. (For more understanding of our customers start here)

I'm not saying that smart people from other markets can't change industries and be successful. It happens all the time. What I am saying is that every vendor in our category to date has pushed aside some of the core principles in their offering/company to make way for leaders to take them to a next level. These leaders, in most cases, have first confused the vendors internally, then taken that confusion to the market. In the process - along the way - other vendors start to "eat their lunch"."


We've seen it first hand several times. At first the industry veteran enters and brings a blast of energy, fresh perspective, eagerness, and most of the time sales rigor that inflates the sails of the existing/remaining sales team and the executive team that is watching. Then time goes on and the honeymoon ends....

The new executive starts making all the assumptions that they have been trained and have learned to make via years of trial, error, and success - as they sold and led their sales teams selling large ticket technology solutions to Corporate Information Technology buyers. Instilling this new discipline while systematically working out the wheat from the chaff - making sure that those sales managers and reps that don't get it find themselves working for someone else, and replacing them with cronies from their network (generally) that do get it - and can be trusted, based upon previous experience.

BUT WAIT....

In this market Corporate Information Technology isn't the buyer. They are the buyer some of the time - but generally they are an influencer. When they are the buyer - they buy Peoplesoft, or the ERP/HRIS system currently installed. When someone in this space has a chance to win - HR drives the decision. And to the new executives surprise and dismay, we have our quirks in this market. HR execs just don't buy like CIT pros. (To understand more start reading from the very beginning of the blog.... there are so many reasons for this, and I won't repeat 10 months worth of blogging here in one post.)


There are more former ERP reps and executives with serious self-inflicted brain damage after beating their heads against the wall trying to get their tried and true strategies and tactics to work in this space - more than we can shake a stick at. It's generally 12-18 months before they either give up or are asked to... you would think the CEOs and BODs would get it by now.

Well, good luck to the new head of sales at Recruitsoft! He'll need it.

Until next time,

Talent.

Wednesday, October 01, 2003

The Talent Myth Part V, continued
The Curse of the ATS Marketplace
Vendor Report Cards


In my last post I asked the readers and subscribers to the Talent Management Blog Newsletter to identify which vendor they would like to be the first evaluated against the 6 mistakes I've outlined so far in The Curse of the ATS Marketplace.

We will review each vendor against the six mistakes listed so far. We will also give general impressions of the vendor, their products, service, and any overall issues. Our comments will be based upon direct input received over time from customers, prospective customers, partners of the vendor (consulting firms, technology vendors, etc.), employees, ex-employees, market analysts, industry press, our direct experience with the vendors, as well as other sources.

The vendor requested to be covered first, by you - the readers is: Recruitsoft

General Overview

Year Established: 1999

# of Employees: 300 +/-

Headquarters: Quebec, Canada with international offices (sales and support)

Customers: 100+ Based on current customers beginning evaluations of ATS products to replace their Recruitsoft solution, we ballpark-estimate their customer attrition rate at 20%-25% for the 12 month period looking forward.

2001's vendor to beat has slowed it's growth down to a crawl. Recruitsoft seems to be having serious challenges supporting the customers they acquired in 2001 - even more serious problems delivering what they committed while acquiring them. Some customers report after spending Hundreds of Thousands in implementation and services fees, they are forced to pay consulting firms even more to get Recruitsoft even close to fulfilling it's promise.

Management Team: A Highly Pedigreed, Very Top Heavy, Executive team. Not highly diverse, we might add. Of the whopping 12 executives listed on their website, all are white - and only two are women. (as of the date of this post). 50% of the Executive team also hails from Baan Supply Chain systems - 50% of your Executive team coming from one culture is never a good thing. We can only guess this fraternity extends throughout the Recruitsoft workforce as a whole. Never good for empowering creativity. This approach tends to put the shackles of the Executive team's former employer - the limitations and challenges - around the ankles of the current organization. Case in point: When Baan was growing quickly you heard a lot about them, but now when you think of Supply Chain it isn't them you think of. Seems to be the course Recruitsoft is currently on.

With 300 employees and 12 Executives, the exec to employee ratio is 1:25. Top heavy. Especially when you consider that there are several more VPs within the Recruitsoft team, just not listed on their website.

Culture: Employees and ex-employees alike speak of an autocratic culture where it's Louis' way or no way (referencing the CEO Louis Tetu). The cultural divide between the Canadian management team and their US-based or ex-patriot employee population is reported to be very wide. It's been said to us more than once if you can't speak French (Canadian French we would guess) you won't get very far at Recruitsoft. Interesting issue, given that most of their revenue is being generated in US Dollars.

Customers and prospective customers report an arrogant nature to Recruitsoft's approach to sales and service. Little patience for a customer or prospect's existing process - little time for it - given that they look to re-engineer all into their definition of "best practice". Once the sale is made Recruitsoft moves on, not having the resources to dedicate to new customers it once had.

Delivery Model: ASP only. In competitive sales situations they have been known to commit to delivering installed software, but this is not their standard and we are not aware of any successful implementations at this time. Key database resources are shared across all customers limiting the amount of customization/configuration that is possible for any given customer, post-implementation. While Recruitsoft has released configuration tools to the hands of the customer (REPORTED, not customer verified) the scope of the configuration is limited and does not parody what is available in other vendor's toolsets.

Strategy/Vision: Recruitsoft talks a good game when it comes to strategy. Staying in line with their Baan roots they have taken Supply Chain Management, added the word Talent, and there you have their focus: Talent Supply Chain. Like we said - not an environment that is spawning tons of creativity. When we think of supply chain we think of a very binary and cold process moving product through a funnel - driving costs down - delivering products to customers quickly and cheaply. We think of standardization. Not a great analogy, in our opinion, for a process dealing with people, their careers and career choices -- and companies, their cultures and most valuable asset.

Product: End to end Applicant Tracking, including web-site hosting. Full featured, fairly clean interface. Like most of the vendors in the space they solve their 80% of the problem.

Many customers speak of the challenges with the Recruitsoft product in it's narrow approach to solving their problems. There is only one way to solve the problem - Louis' way we guess - very little flexibility when it comes to workflow. Challenges abound around integration. The interface is deceiving - what looks easy to use during the sales cycle, has proven to be fairly complex upon implementation. The limitations around configuration and customization have proven huge stumbling blocks for shops rolling the product out to hiring managers or large user communities on a whole.

A religious focus on the "Talent Profile" and Skills Based Recruiting, the product leaves you little room to adapt to changes in your approach, the hiring market, or non-web form fed candidates.

The Report Card:


1. They listened to their customers a little too much, and not effectively for their business. (see this post here)

Recruitsoft is reportedly just bumping against this issue. With around 100 customers they are finding it very difficult to manage expectations of their existing customer base and the over-commitments they are so well known for during their sales cycles.

Recruitsoft's grade: C

2. They over-complicated their products while they over-inflated their egos. (find this post here)

Recruitsoft is the poster child for this mistake. HUGE egos and an equivalent measure of arrogance abound from this tiny vendor in Quebec. They started simple - a real focus on skills-based recruiting. A commitment to web-only candidate traffic. Then, true to Restrac, Resumix, and all that went before them they started cramming 20 pounds of complex solutions into a 5 pound bag of interface. Their product demos well in the sales scenario, but when you start addressing the workflow issues found in a large enterprise, and start factoring in integration and reporting it gets messy.

Recruitsoft's grade: D-

3. They diluted their strength as a vendor by diluting their domain expertise in customer facing positions. (find this post here)

Recruitsoft sells a lot of services to their customers. They have a lot of pedigreed consultants, but not a ton of domain experience in the ranks. They counter balance this with a tactic that makes our jaw drop: iLogos. iLogos is a so-called market research firm that is owned by Recruitsoft. All of their content supports Recruitsoft. All of their opinions help position Recruitsoft. Unbiased research? We don't think so. Content to throw at prospects to turn their weaknesses into strengths? Bingo!

They aren't the weakest when it comes to domain experience, but the iLogos thing pulls their grade down. It's like cheating on your homework.

Recruitsoft's grade: D

4. Vendors aggressively acquire customers in large numbers before their infrastructure or product are able to support them. (find this post here)

Recruitsoft is struggling with this as you read this. As we mentioned earlier in this post - their sales have slowed to a crawl. They are beginning to lose customers at a rate we predict will be between 20% & 25%. They built a HUGE executive team during their growth spurt in 2001, it's just unfortunate they put their effort there instead of into the product, or into their culture, where they really needed it.

Recruitsoft's grade: D

5. Vendors fool themselves into thinking their products are incredibly different than everyone else's, then they try to fool their prospects and customers. (find this post here)

Not only is Recruitsoft guilty of this offense, but to take it further, early in their life-cycle they were incredible at taking their weaknesses and turning them into a false advantage. Inability to handle Candidate data in more than one medium - gets turned into - evangelization of web-only recruiting. Inflexible workflow, support of a one dimensional hiring practice - gets turned into - Process Re-engineering revenue for every customer. The list goes on.... They have a tough time getting these over on the market any more, but it's where they come from.

Recruitsoft's grade: F

6. Vendors develop a case of Business Model Paranoia and Competitive Denial (find this post here)

If you've been to Quebec, or had a call or meeting with the Recruitsoft team you know they live this. The secrecy they try build around themselves is borderline comical. I think it has to do with the egoes that are running the operation. Secrecy makes them feel important. Their irreverence for their competition, especially the ones that are just emerging, will kill them. I have written enough about how it's all been done before - I won't waste any more key strokes here.

Recruitsoft's grade: D

Recruitsoft's Grade Point Average: 1.16 - a solid D.

Are they following the Dinosaurs along the path to extinction? Only time will tell.

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