The Talent Myth Part V, continued
The Curse of the ATS Marketplace
In our ongoing saga, following The Dinosaurs (Resumix and Restrac - now webhire) as they navigate the path to extinction, we have discussed two stops so far:
Stop One on the path was: They listened to their customers a little too much, and not effectively for their business. (find this post here)
Stop Two on the path was: They over-complicated their products while they over-inflated their egos. (Find this post here)
I could probably write a complete book on all of the mistakes these Dinosaurs made on their way to extinction, but in the interest of moving on to other more recent vendors, I'll discuss one more. Remember that we're highlighting the mistakes that have been made and repeated by every vendor in this space that has flamed up and then flamed out.
Stop Three on the path to extinction is: They diluted their strength as a vendor by diluting their domain expertise in customer facing positions.
In order to understand how critical of a mistake this is, you have to really understand the size of the Enterprise ATS marketplace. There are really only 3500 to 4000 companies in North America that are the right size, have the right sets of challenges, issues, and complexity to warrant an Enterprise level ATS. Given that this is your entire universe - you can only expect 10% of that market to purchase new systems each year. That puts the potential new revenue for this market between $80,000,000 to $1,200,000,000 per year MAXIMUM. You are never going to become another Oracle, PeopleSoft, or Seibel selling in this space - but the vendors seem to forget that.
As I told you at the beginning of my blog (The Beginning) this is a small industry. In an industry like this, you need a very delicate balance of strong domain expertise with the ability to cast a vision for where the market is going. These domain visionaries are normally present at the beginning of all of the vendors in our market's stories, and they are key to the development of that first product and vision that won their first substantial customers and set them on their path to success. (see my July 14 post for more on this)
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".
The nuances in our marketplace are very real. Early on the vendors understand that and exploit it in their product and their approach. But, after smelling success their eyes get to big for their stomach and they bring in "the experts" to over-process, over-commit, over-sell, over-market, and under deliver. This goes on for a while - where the vendor still experiences success - but over time the disease spreads via the hiring of more talent on the line - in front of the customer - that is "in the image" of the executives we have just profiled.
Founders are put out to pasture as "chief scientists" or "evangelists" - or - just put out completely. Key early employees with incredible market and customer knowledge leave out of frustration, or are pushed out, and end up at the next vendor riding the wave of early success on their way to the path of extinction.
It's ironic in a way. The talent model that most vendors in our space have subscribed to has a lot to do with their demise in the end. Resumix, Restrac, PeopleClick, hire.com, Recruitsoft, Recruitmax, iSearch, and BrassRing - all victims of this at different stages of their lifecycle. My god, BrassRing is a Harvard Case Study in how a CEO (Deb Besemer) can single handedly turn a juggernaut of a systems company into a pitiful bunch of tired ex-Lotus execs and early day inexperienced hangers-on.
In my next post we'll start to discuss the vendors listed above and some of the ways they have taken these three mistakes to an entirely new level, and introduced some of their own.
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Until then,
Talent.
Wednesday, July 23, 2003
Monday, July 14, 2003
The Talent Myth Part V, continued
The Curse of the ATS Marketplace
Last week we explored the first stop on the road to extinction for Resumix and Restrac, whom I affectionately refer to as The Dinosaurs. While the first stop on the path to extinction was an important one, there were several mistakes The Dinosaurs made that have been repeated by most ATS vendors that have come after them.
Stop One on the path was: They listened to their customers a little too much, and not effectively for their business. (find this post here)
How could they top the first stop on the road to extinction? After making their first mistake over and over again for years, compounding the errors in the direction of their products - feeling self-righteous and secure because there was no one to compete with. What could they possibly have done that even compares?
Stop Two on the path is: They over-complicated their products while they over-inflated their egos.
The Dinosaurs started yet another trend that has been repeated by each vendor that came after them. After incorporating all of the wrong kind of input for their product development path, based on their first mistake, they bring back to the customer an over-complicated product.
Every ATS system I have had exposure to has started it's journey in a great place: Offering their users an experience that makes their jobs, and thus their lives easier. Each system usually starts out with a strength or focus - some were better at process automation at first, while others did great at searching, others were amazing in their innovation for turning candidate information in any form into a web-profile, some were great at reporting, and the list goes on. They focused on these strengths, sold their vision of these strengths, and ultimately won the hearts and the minds of customers on these strengths. They had gaping holes when they started, but the customers looked beyond it, trusting the executives they met that promised they would lead on those fronts with the vision and common sense they had applied towards their strengths. Those that were strong in process automation were probably awful with search, and the combinations of those strengths & weaknesses abound.
What they then tried to do - each and every one of them - was do everything for everyone. They all had to bite off more than they could chew and try to become: THE PLATFORM. THE END TO END SOLUTION. FROM WOMB TO TOMB, CRADLE TO GRAVE, FROM CANDIDATE TO RETENTION TO EXIT TO ALUMNI. THE EVERYTHING EXCEPT WHAT YOUR HRIS SYSTEM DOES SO WELL SOLUTION. And every single one of them, simultaneously along the way, became the market leader. Regardless of their lack of profit, or their customer base, or their revenue. Check their websites - every one of them is the market leader of some acronym or phrase that we all know really means ATS.
Is it bad to have a goal? Is it bad to strive to develop "THE PLATFORM"? No. Of course not. But again, what The Dinosaurs did, and what everyone else has followed, is a model where they attempt to be that end-to-end solution in a very complex space where the customer's requirement has always been and will always be customization. Whether you get there via configuration or via custom code - they want their process their way, and I don't blame them. Attempting to be that solution isn't really the problem. The problem is attempting to be that solution with a technology base that doesn't support that kind of solution. Now take that challenge and put in front of it what we discussed in the first stop on the way to extinction and ladies and gentlemen what we have here is a recipe for disaster!
What's interesting is that through all of this over-complication the one person that gets over-looked again and again is The Recruiter. Even the vendors that started out pure - and The Dinosaurs were that when they started - ended up crafting up solutions that put more of a burden on the Recruiter and Staffing Organization than they ever did to help it.
Okay, but what about the over-inflated egos I mentioned?
As the Dinosaurs grew very big, they grew very arrogant. As they incorporated their narrowly connected feedback (see stop one) into their product roadmap, and as they over-complicated their solutions they began to feel they knew it all.
Put yourself in front of one of The Dinosaurs in the late-eighties to mid-nineties, or in front of any of the vendors now in the market. As they have extended their products in different directions they of course take every opportunity to show it and discuss it with people willing to buy. Based on the challenges created by the curse that I've outlined so far, what most vendors end up with are solutions for highly complex problems that represent only one way of solving a problem - normally limited by their technology and the blinders they had on when thinking about the solution.
EEO compliance is a great example of this issue. EEO compliance is one of those issues that is a legal requirement. Laws are interpreted by lawyers. Lawyers are people. People have different views of what certain laws mean. Their view is normally driven by the conditions existing in the company they work for. Meaning that someone recruiting for a large number of non-exempt and/or hourly workers in a high volume recruiting environment has different issues to worry about when it comes to EEO data capture, reporting, and compliance. Sure, at the root it's the same, but those issues are very different than the company, or part of a company hiring mainly highly-skilled exempt workers in a low volume - pro-active recruiting/sourcing environment. Even companies that are similar have different views and policies on these requirements. I've met with hundreds of you, and the number of views on compliance and policy I've run into are about equal to the number of companies I've met with.
That being understood - In walks the Vendor to the meeting to show the product.... eventually we get to the issue of diversity and compliance. You tell the vendor what your requirement is around capturing certain data, around screening in or out candidates, reporting, searching for candidates - whatever - and what do you hear back.... normally not an attempt to understand what you, the company that would pay them for their system, needs. What you get back is an argument normally based on some narrow experience, opinions, and of course the limitations they built in their product because they are standing squarely on Stop Two on the path to Extinction! Even just the terms they use are arrogant: "You don't understand - you don't need to do that" Oh, well those of us here at this Fortune 1000 manufacturing company now see how stupid we are. "Well, if you want to be compliant do it this way, I know because I've been a vendor 10 years now." Oh, well here we were thinking that since we actually hire thousands of people per year and actually deal with the OFCCP that we had an idea of what we need to do. Where were we before you came along. "Companies do it this way, so we built our product this way." Oh, wow. Now that we've crawled out from under our rock and met you, once we get cleaned up we'll be sure to cut you a check.
Okay, a little venting. But remember I've been an executive on both the customer and the vendor side, I'm not just throwing rocks from one direction at the other.
The real problem for The Dinosaurs, and every other vendor as they hit this spot is that this is where the founders, the CTOs, the executives, the sales engineers, the sales reps, and the service people start to alienate themselves from their customers and their audience. It's happening out there right now in the market - it's not surprising any more to watch, but while the only thing we can all agree on is that there are NO STANDARDS to the process, these arrogant fools stand in front of you and try to tell you there is.
This approach resulted in down right hatred in the Dinosaurs installed base. I've only seen peoples faces get purple at the mention of a few things: The DMV, their ex-significant other, and their experience with their ATS.
It's not just compliance, that's just a great example. It's issues more simple than that, too. Centralized or De-centralized? It runs about 50% in the market in my experience but some vendor is always telling me it's one way or the other. I think it comes and goes like the tide and always runs about 50% each. Recruiters are pro-active or reactive? 50% each direction Strategic or focused on moving the process along? 50% each Hiring managers or recruiters start the requisition process? 50% each! I'll go no further, you get the idea.
The lessons for the vendors at this stop:
As you go out into the market with your product. Sell your strengths and your vision for your product. Talk about where you have been and where you are going. Tell us what makes you different - whatever you think that is - and after that, when we get a closer look at your product - Be honest with where you are and what your limitations are. We'll respect you more for that. Listen to your audience. Don't tell them they are wrong, don't ever forget that there are more ways to handle each step of the hiring process than any of us have thought of yet. When you are faced with an issue where you don't do something the way a prospect or customer needs you to - admit it - acknowledge it and if a conversation pursues it should be about the reality of the complexity of the challenge, the reality of your technology and it's abilities to solve the problem, and the reality of where you are going and why even though you might fall short on 20-30% of the requirements (because you will) your 80% is better than anyone else's - and explain why. Try it.
The lessons for the HR Team at this stop:
To the degree that you overcomplicate the solution you are looking for: the candidate experience, the process you expect your recruiters to execute within, the vision of what you need and where you need to get to, and YOUR BUYING PROCESS you will be playing right into the vendor's hand as they are experiencing step 2 on the path to extinction. Simplify everything. You can do it. Need some help?
The best advice I can give you when you're faced with the arrogant vendor that is going to argue a position with you as described above: Don't argue with them - you can't win. When they cross the line, put your hand up like you are stopping oncoming traffic, quietly rise from your seat and ask the key stake holders on your project team to join you in the hall. Take a 3-5 minute break, and come back in picking up where you left off. Do this each time they cross the line. If they don't get the message after the second time - explain that you would like them to listen a little more, be a little more consultative, and if they approach the line a third time - this time don't come back in the room after you quietly leave. You shouldn't want to do business with them anyhow.
One more stop for the dinosaurs and we're on to the current cast of characters in the ATS Enterprise market.....
See you next week!
Talent.
The Curse of the ATS Marketplace
Last week we explored the first stop on the road to extinction for Resumix and Restrac, whom I affectionately refer to as The Dinosaurs. While the first stop on the path to extinction was an important one, there were several mistakes The Dinosaurs made that have been repeated by most ATS vendors that have come after them.
Stop One on the path was: They listened to their customers a little too much, and not effectively for their business. (find this post here)
How could they top the first stop on the road to extinction? After making their first mistake over and over again for years, compounding the errors in the direction of their products - feeling self-righteous and secure because there was no one to compete with. What could they possibly have done that even compares?
Stop Two on the path is: They over-complicated their products while they over-inflated their egos.
The Dinosaurs started yet another trend that has been repeated by each vendor that came after them. After incorporating all of the wrong kind of input for their product development path, based on their first mistake, they bring back to the customer an over-complicated product.
Every ATS system I have had exposure to has started it's journey in a great place: Offering their users an experience that makes their jobs, and thus their lives easier. Each system usually starts out with a strength or focus - some were better at process automation at first, while others did great at searching, others were amazing in their innovation for turning candidate information in any form into a web-profile, some were great at reporting, and the list goes on. They focused on these strengths, sold their vision of these strengths, and ultimately won the hearts and the minds of customers on these strengths. They had gaping holes when they started, but the customers looked beyond it, trusting the executives they met that promised they would lead on those fronts with the vision and common sense they had applied towards their strengths. Those that were strong in process automation were probably awful with search, and the combinations of those strengths & weaknesses abound.
What they then tried to do - each and every one of them - was do everything for everyone. They all had to bite off more than they could chew and try to become: THE PLATFORM. THE END TO END SOLUTION. FROM WOMB TO TOMB, CRADLE TO GRAVE, FROM CANDIDATE TO RETENTION TO EXIT TO ALUMNI. THE EVERYTHING EXCEPT WHAT YOUR HRIS SYSTEM DOES SO WELL SOLUTION. And every single one of them, simultaneously along the way, became the market leader. Regardless of their lack of profit, or their customer base, or their revenue. Check their websites - every one of them is the market leader of some acronym or phrase that we all know really means ATS.
Is it bad to have a goal? Is it bad to strive to develop "THE PLATFORM"? No. Of course not. But again, what The Dinosaurs did, and what everyone else has followed, is a model where they attempt to be that end-to-end solution in a very complex space where the customer's requirement has always been and will always be customization. Whether you get there via configuration or via custom code - they want their process their way, and I don't blame them. Attempting to be that solution isn't really the problem. The problem is attempting to be that solution with a technology base that doesn't support that kind of solution. Now take that challenge and put in front of it what we discussed in the first stop on the way to extinction and ladies and gentlemen what we have here is a recipe for disaster!
What's interesting is that through all of this over-complication the one person that gets over-looked again and again is The Recruiter. Even the vendors that started out pure - and The Dinosaurs were that when they started - ended up crafting up solutions that put more of a burden on the Recruiter and Staffing Organization than they ever did to help it.
Okay, but what about the over-inflated egos I mentioned?
As the Dinosaurs grew very big, they grew very arrogant. As they incorporated their narrowly connected feedback (see stop one) into their product roadmap, and as they over-complicated their solutions they began to feel they knew it all.
Put yourself in front of one of The Dinosaurs in the late-eighties to mid-nineties, or in front of any of the vendors now in the market. As they have extended their products in different directions they of course take every opportunity to show it and discuss it with people willing to buy. Based on the challenges created by the curse that I've outlined so far, what most vendors end up with are solutions for highly complex problems that represent only one way of solving a problem - normally limited by their technology and the blinders they had on when thinking about the solution.
EEO compliance is a great example of this issue. EEO compliance is one of those issues that is a legal requirement. Laws are interpreted by lawyers. Lawyers are people. People have different views of what certain laws mean. Their view is normally driven by the conditions existing in the company they work for. Meaning that someone recruiting for a large number of non-exempt and/or hourly workers in a high volume recruiting environment has different issues to worry about when it comes to EEO data capture, reporting, and compliance. Sure, at the root it's the same, but those issues are very different than the company, or part of a company hiring mainly highly-skilled exempt workers in a low volume - pro-active recruiting/sourcing environment. Even companies that are similar have different views and policies on these requirements. I've met with hundreds of you, and the number of views on compliance and policy I've run into are about equal to the number of companies I've met with.
That being understood - In walks the Vendor to the meeting to show the product.... eventually we get to the issue of diversity and compliance. You tell the vendor what your requirement is around capturing certain data, around screening in or out candidates, reporting, searching for candidates - whatever - and what do you hear back.... normally not an attempt to understand what you, the company that would pay them for their system, needs. What you get back is an argument normally based on some narrow experience, opinions, and of course the limitations they built in their product because they are standing squarely on Stop Two on the path to Extinction! Even just the terms they use are arrogant: "You don't understand - you don't need to do that" Oh, well those of us here at this Fortune 1000 manufacturing company now see how stupid we are. "Well, if you want to be compliant do it this way, I know because I've been a vendor 10 years now." Oh, well here we were thinking that since we actually hire thousands of people per year and actually deal with the OFCCP that we had an idea of what we need to do. Where were we before you came along. "Companies do it this way, so we built our product this way." Oh, wow. Now that we've crawled out from under our rock and met you, once we get cleaned up we'll be sure to cut you a check.
Okay, a little venting. But remember I've been an executive on both the customer and the vendor side, I'm not just throwing rocks from one direction at the other.
The real problem for The Dinosaurs, and every other vendor as they hit this spot is that this is where the founders, the CTOs, the executives, the sales engineers, the sales reps, and the service people start to alienate themselves from their customers and their audience. It's happening out there right now in the market - it's not surprising any more to watch, but while the only thing we can all agree on is that there are NO STANDARDS to the process, these arrogant fools stand in front of you and try to tell you there is.
This approach resulted in down right hatred in the Dinosaurs installed base. I've only seen peoples faces get purple at the mention of a few things: The DMV, their ex-significant other, and their experience with their ATS.
It's not just compliance, that's just a great example. It's issues more simple than that, too. Centralized or De-centralized? It runs about 50% in the market in my experience but some vendor is always telling me it's one way or the other. I think it comes and goes like the tide and always runs about 50% each. Recruiters are pro-active or reactive? 50% each direction Strategic or focused on moving the process along? 50% each Hiring managers or recruiters start the requisition process? 50% each! I'll go no further, you get the idea.
The lessons for the vendors at this stop:
As you go out into the market with your product. Sell your strengths and your vision for your product. Talk about where you have been and where you are going. Tell us what makes you different - whatever you think that is - and after that, when we get a closer look at your product - Be honest with where you are and what your limitations are. We'll respect you more for that. Listen to your audience. Don't tell them they are wrong, don't ever forget that there are more ways to handle each step of the hiring process than any of us have thought of yet. When you are faced with an issue where you don't do something the way a prospect or customer needs you to - admit it - acknowledge it and if a conversation pursues it should be about the reality of the complexity of the challenge, the reality of your technology and it's abilities to solve the problem, and the reality of where you are going and why even though you might fall short on 20-30% of the requirements (because you will) your 80% is better than anyone else's - and explain why. Try it.
The lessons for the HR Team at this stop:
To the degree that you overcomplicate the solution you are looking for: the candidate experience, the process you expect your recruiters to execute within, the vision of what you need and where you need to get to, and YOUR BUYING PROCESS you will be playing right into the vendor's hand as they are experiencing step 2 on the path to extinction. Simplify everything. You can do it. Need some help?
The best advice I can give you when you're faced with the arrogant vendor that is going to argue a position with you as described above: Don't argue with them - you can't win. When they cross the line, put your hand up like you are stopping oncoming traffic, quietly rise from your seat and ask the key stake holders on your project team to join you in the hall. Take a 3-5 minute break, and come back in picking up where you left off. Do this each time they cross the line. If they don't get the message after the second time - explain that you would like them to listen a little more, be a little more consultative, and if they approach the line a third time - this time don't come back in the room after you quietly leave. You shouldn't want to do business with them anyhow.
One more stop for the dinosaurs and we're on to the current cast of characters in the ATS Enterprise market.....
See you next week!
Talent.
Thursday, July 10, 2003
The Talent Myth Part V, continued
Technology Vendors Continually Make Mistakes that put them on the bottom shelf. Repeat.
OR
The Curse of the ATS Marketplace
I'm back after the July 4th holiday. Recharged and ready to tell the story of the curse of the ATS marketplace.
A good curse, or legend of one, starts long ago and far away. This one starts 15 to 20 years ago - before the Internet had emerged, before anyone had developed an ATS solution for the large Enterprise. It starts with two companies: Resumix and Restrac (now webhire).
Resumix and Restrac owned the world of ATS. There weren't any other players. ERP wasn't even an acronym yet - so there were not ERP players considering moving into their space. The cost of technology barrier was higher then than it is today, so you didn't have a flock of small companies trying to quickly release competitive products. For years companies that wanted to automate their staffing process bought one of two solutions. Those must have been the days for the Resumix and Restrac teams. "Well, they won this deal, but we won that one."
Rather than typing Resumix and Restrac over and over again, I'll just refer to them from here on out as "The Dinosaurs".
When the Dinosaurs first emerged they were greeted with great acceptance by the HR and IT buying communities. There had never been anything like what they offered corporate America. The promise of less paper? A searchable database? Our very own system to track everything and run reports? Heck! Explain what that all means and then sign me up!
And the Dinosaurs plodded along signing up significant numbers of the Fortune 1000 and large private and public companies. Owning the market. The only games in town....... but what happened? Some say they weren't ready for the evolution of the Internet and were slow to release web based products -- this only partly true. Some say they lost their vision and their sales teams weren't executing -- only partly true again. Some say they just didn't react quickly enough -- again only partly true. So, how then after years of leading the market - un-interrupted growth with minimal competition - and development of large customer bases did the Dinosaurs put themselves on the brink of extinction almost overnight?
The Dinsosaurs made mistakes that are/were in part common mistakes for technology vendors to make. They made them so egregiously that they became engrained in our market - engrained in the customer's expectation of vendors impacting customer retention habits and buying behavior, engrained in the vendors' view of what is acheivable (you know until the four minute mile no one could do it, now your mom runs one), and have thus truly cursed the ATS market.
The Path to Extinction
We need to follow the Dinosaurs path to extinction at some level because as we will learn history continues to repeat itself. We'll start today with the first of several key mistakes the Dinosaurs made, and then review others in individual posts, leading to a review of the vendors in the last 7-10 years that have followed suit - reviewing their mistakes, and then looking at those that seem to be next in line for extinction.
Stop One on the path: They listened to their customers a little too much, and not effectively for their business.
I know we all want to believe that if vendors just listened to their customers everything would just be okay, because then when customers gave feedback it would get incorporated into a product and everybody would win - even new customers. Well this is only true in some measure. Once you buy a product and start using it your perspective begins to take on blinders. You stop considering what your process could be, or what you need in a best-case scenario, and become more limited in your perspective, only offering input that moves a product forward incrementally and slowly. It's not all your fault as a customer, the vendor tends to pigeon hole you within the capabilities of their technology - "sure give us feedback, but first understand the limits of what we can and can't do." This creates an environment where rather than describing what a customer needs "holisitcally" the focus shifts to features and functions and push vendors there - "I want better searching, so when I click here I want it to do this, and when I click there it should do that."
Contrast that against a company looking for a new solution. They tend to have a vision for the solution they need at a high level. Okay, at least a vision for components of their solution. Using the example above - "I want better searching. I don't want my recruiters to have to know Boolean logic. I want to use my job requisition and competencies key to a position to drive the initial selection of candidates for review. AND I want to understand what the market is doing in this regard. What is new and available to me?" Which would drive you to develop a better product.
What the Dinosaurs did was confine their customers to giving feedback within their technical capabilities, then they prioritized the customer requests and created their product development schedule based on it. The only way the market took them in a new direction was when a large prospect with their checkbook out said they wouldn't sign until a feature was comitted to.
Is this unique to the Dinosaurs or to our market? No. But what was unique was the fact that neither of the Dinosaurs rose to the challenge of the market and actually crafted vision to continue leading the market. They buckled under the weight of trying to support their existing, impressive, and long customer lists. As the market moved aggressively to the Internet and to the web, both vendors focused on incremental improvements to their own products while their customer base began to erode. They began losing customers to less featured solutions that were offering enough of a solution to meet the needs of the customers and a LOT of vision around the new world of Internet Recruiting. The confusion and stress the Dinosaurs experienced from 1998 to 2000 must have been staggering.
The lesson for the vendors at this stop:
Listen to your customers, but balance it against market feedback that comes from your sales channel, analysts, industry research, etc. When you listen to your customers - get the incremental feedback that helps move a release along, but force them to step back and out of your product and define their ideal world when it comes to their process (READ: NOT YOUR TECHNOLOGY). Bring them back the market feedback that you gather and CHALLENGE your customers with it - show them where the market is going - and stop showing them where your next release is going!
The lesson for the HR Team at this stop:
Force your vendor to get out of the confinements of their technology and to focus on your process needs and where the market is going with regard to solutions to address them. Make them bring you feedback from OUTSIDE the user community. Consider that data - which should be focused on process and best practices NOT TECHNOLOGY. Separate your communications between user issues and incremental requests and serious requirements for a long term solution. Map your needs to your business goals and strategy (see my 6/26 and 6/27 posts). Get out in the market and talk to other companies and utilize resources that will help you identify where you should be as a staffing organization and what other companies are experiencing in that regard.
I didn't say there were going to be easy solutions to these issues. As a vendor or as a corporation, if you decide to incorporate these lessons I'd love to hear about it, even offer some input. Send your questions, comments, or feedback here.
Check back soon to hear about the next stop on the road to extinction.....
Talent.
Technology Vendors Continually Make Mistakes that put them on the bottom shelf. Repeat.
OR
The Curse of the ATS Marketplace
I'm back after the July 4th holiday. Recharged and ready to tell the story of the curse of the ATS marketplace.
A good curse, or legend of one, starts long ago and far away. This one starts 15 to 20 years ago - before the Internet had emerged, before anyone had developed an ATS solution for the large Enterprise. It starts with two companies: Resumix and Restrac (now webhire).
Resumix and Restrac owned the world of ATS. There weren't any other players. ERP wasn't even an acronym yet - so there were not ERP players considering moving into their space. The cost of technology barrier was higher then than it is today, so you didn't have a flock of small companies trying to quickly release competitive products. For years companies that wanted to automate their staffing process bought one of two solutions. Those must have been the days for the Resumix and Restrac teams. "Well, they won this deal, but we won that one."
Rather than typing Resumix and Restrac over and over again, I'll just refer to them from here on out as "The Dinosaurs".
When the Dinosaurs first emerged they were greeted with great acceptance by the HR and IT buying communities. There had never been anything like what they offered corporate America. The promise of less paper? A searchable database? Our very own system to track everything and run reports? Heck! Explain what that all means and then sign me up!
And the Dinosaurs plodded along signing up significant numbers of the Fortune 1000 and large private and public companies. Owning the market. The only games in town....... but what happened? Some say they weren't ready for the evolution of the Internet and were slow to release web based products -- this only partly true. Some say they lost their vision and their sales teams weren't executing -- only partly true again. Some say they just didn't react quickly enough -- again only partly true. So, how then after years of leading the market - un-interrupted growth with minimal competition - and development of large customer bases did the Dinosaurs put themselves on the brink of extinction almost overnight?
The Dinsosaurs made mistakes that are/were in part common mistakes for technology vendors to make. They made them so egregiously that they became engrained in our market - engrained in the customer's expectation of vendors impacting customer retention habits and buying behavior, engrained in the vendors' view of what is acheivable (you know until the four minute mile no one could do it, now your mom runs one), and have thus truly cursed the ATS market.
The Path to Extinction
We need to follow the Dinosaurs path to extinction at some level because as we will learn history continues to repeat itself. We'll start today with the first of several key mistakes the Dinosaurs made, and then review others in individual posts, leading to a review of the vendors in the last 7-10 years that have followed suit - reviewing their mistakes, and then looking at those that seem to be next in line for extinction.
Stop One on the path: They listened to their customers a little too much, and not effectively for their business.
I know we all want to believe that if vendors just listened to their customers everything would just be okay, because then when customers gave feedback it would get incorporated into a product and everybody would win - even new customers. Well this is only true in some measure. Once you buy a product and start using it your perspective begins to take on blinders. You stop considering what your process could be, or what you need in a best-case scenario, and become more limited in your perspective, only offering input that moves a product forward incrementally and slowly. It's not all your fault as a customer, the vendor tends to pigeon hole you within the capabilities of their technology - "sure give us feedback, but first understand the limits of what we can and can't do." This creates an environment where rather than describing what a customer needs "holisitcally" the focus shifts to features and functions and push vendors there - "I want better searching, so when I click here I want it to do this, and when I click there it should do that."
Contrast that against a company looking for a new solution. They tend to have a vision for the solution they need at a high level. Okay, at least a vision for components of their solution. Using the example above - "I want better searching. I don't want my recruiters to have to know Boolean logic. I want to use my job requisition and competencies key to a position to drive the initial selection of candidates for review. AND I want to understand what the market is doing in this regard. What is new and available to me?" Which would drive you to develop a better product.
What the Dinosaurs did was confine their customers to giving feedback within their technical capabilities, then they prioritized the customer requests and created their product development schedule based on it. The only way the market took them in a new direction was when a large prospect with their checkbook out said they wouldn't sign until a feature was comitted to.
Is this unique to the Dinosaurs or to our market? No. But what was unique was the fact that neither of the Dinosaurs rose to the challenge of the market and actually crafted vision to continue leading the market. They buckled under the weight of trying to support their existing, impressive, and long customer lists. As the market moved aggressively to the Internet and to the web, both vendors focused on incremental improvements to their own products while their customer base began to erode. They began losing customers to less featured solutions that were offering enough of a solution to meet the needs of the customers and a LOT of vision around the new world of Internet Recruiting. The confusion and stress the Dinosaurs experienced from 1998 to 2000 must have been staggering.
The lesson for the vendors at this stop:
Listen to your customers, but balance it against market feedback that comes from your sales channel, analysts, industry research, etc. When you listen to your customers - get the incremental feedback that helps move a release along, but force them to step back and out of your product and define their ideal world when it comes to their process (READ: NOT YOUR TECHNOLOGY). Bring them back the market feedback that you gather and CHALLENGE your customers with it - show them where the market is going - and stop showing them where your next release is going!
The lesson for the HR Team at this stop:
Force your vendor to get out of the confinements of their technology and to focus on your process needs and where the market is going with regard to solutions to address them. Make them bring you feedback from OUTSIDE the user community. Consider that data - which should be focused on process and best practices NOT TECHNOLOGY. Separate your communications between user issues and incremental requests and serious requirements for a long term solution. Map your needs to your business goals and strategy (see my 6/26 and 6/27 posts). Get out in the market and talk to other companies and utilize resources that will help you identify where you should be as a staffing organization and what other companies are experiencing in that regard.
I didn't say there were going to be easy solutions to these issues. As a vendor or as a corporation, if you decide to incorporate these lessons I'd love to hear about it, even offer some input. Send your questions, comments, or feedback here.
Check back soon to hear about the next stop on the road to extinction.....
Talent.
Wednesday, July 02, 2003
The Talent Myth Part V, continued
Technology Vendors Continually Make Mistakes that put them on the bottom shelf. Repeat.
OR
The Curse of the ATS Marketplace
Every single technology vendor that has entered the Talent Management Marketplace has made it to almost exactly the same position in the market - seemed like they were going to make it and couldn't sustain. Some came on strong out of the gates, caught our attention - we might have even believed in them - they generated 100 to 200 customers, and then ~POOF!~ they were gone. Others hung around for a while, not doing much, started to get it - then became a player, but then again somewhere between 100 and 200 customers, ~POOF!~ Others in the market right now are on the brink of, well, ~POOFING!~
Their explosions or implosions, depending on your perspective, if happening all at once would fill up a skyline like 4th of July fireworks. (I just couldn't resist)
The interesting thing: They all made the same mistakes when faced with the same challenges. What mistakes did they make? Could they have avoided it? Can those on the brink pull out of the downward spiral they are getting ready to flat-spin into? Will they, or anyone ever get it right?
Check back after the holiday weekend. I'll start to answer those questions and more. At least I'll give you some really strong opinions about them!
Enjoy the holiday weekend!
Be safe.
Talent.
Technology Vendors Continually Make Mistakes that put them on the bottom shelf. Repeat.
OR
The Curse of the ATS Marketplace
Every single technology vendor that has entered the Talent Management Marketplace has made it to almost exactly the same position in the market - seemed like they were going to make it and couldn't sustain. Some came on strong out of the gates, caught our attention - we might have even believed in them - they generated 100 to 200 customers, and then ~POOF!~ they were gone. Others hung around for a while, not doing much, started to get it - then became a player, but then again somewhere between 100 and 200 customers, ~POOF!~ Others in the market right now are on the brink of, well, ~POOFING!~
Their explosions or implosions, depending on your perspective, if happening all at once would fill up a skyline like 4th of July fireworks. (I just couldn't resist)
The interesting thing: They all made the same mistakes when faced with the same challenges. What mistakes did they make? Could they have avoided it? Can those on the brink pull out of the downward spiral they are getting ready to flat-spin into? Will they, or anyone ever get it right?
Check back after the holiday weekend. I'll start to answer those questions and more. At least I'll give you some really strong opinions about them!
Enjoy the holiday weekend!
Be safe.
Talent.
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