Bill Kutik's latest column

A few days ago Bill Kutik wrote a column about recent events at Authoria http://www.hreonline.com/HRE/story.jsp?storyId=155253755. In a single column, Kutik manages to provide the single best and most useful overview of Authoria and Tod Loofburrow ever published, at least to my knowledge. Simply by reporting the facts and history of the company as they are, any organisation looking at Authoria now has a much better context of what this company is about, good, bad or otherwise.

I reviewed earlier analyst and media coverage of Authoria for the last few years, and it was overwhelmingly worthless hype or commonplace information that would not help a buying organisation really understand a potential vendor. I am on the record as being more negative than Kutik on Authoria, and it is certainly not my intention to plant my nose firmly between his arse cheeks. But, with this column and others, Kutik reminds us of why proper press coverage and informed reporting are so important, not just to HCM technology, but to business in general.

It's truly baffling that with all of the analysts and consultants out there charging organisations premium fees to help make HCM technology decisions, that a simple column by a member of the press is the person to actually deliver some goods. Best of all it was free!

The Workday Mystery

Why is it a mystery? It's a mystery because no one seems to know how Workday is truly performing. Recent press releases indicate that Workday has over thity customers live, but what vexes me is that I can't say whether or not this is good, bad or in between.

Among analysts, publications, trade shows and the general industry buzz, no company is quite as well known as Workday. I guess having Dave Duffield as your founder helps that. Some of that buzz is truly deserved as Workday is making the most audacious effort possible in HCM, namely overturning the Oracle/SAP ERP hegemony in HCM. Also, having seen a few demos, there is no lack of innovation, coolness and utility from the application itself. It's definitely not yet complete though, and likely lacks polish in a number of areas, but it seems to be getting there and it has a first rate technology team.

Still, questions remain:

• How much in revenue are they doing? Are they profitable? Do they care?
• How happy are these thirty customers? What are they implementing?
• Is the technology working? Is it buggy, reliable, fast?
• Is the functionality really flexible enough for the enterprise, or are there pressures to customise?
• How are Dave Duffield and Greylock Capital defining success for Workday?

Lucky for them, as long as Dave is paying the bills (something he can do for a long time), they don't really HAVE to answer any of these questions anytime soon. However, if they are meeting with success, one would think that they would WANT to tell the world.

Personally, I am cheering for them.

Reality sinks in for Authoria and its customers

An "I told you so" is in order here, as Authoria last Friday announced the replacement of longtime CEO Tod Loofburrow, with former GEAC alumnus (like his Bedford brethren) James McDevitt. If one takes a moment to review my post on 3 October (http://techsphinx.blogspot.com/2008/10/holincheck-and-corsello-are-nuts-re.html), you'll see that I was disagreeing with at least a couple of industry analysts about the true nature and effect of the Bedford Authoria acquisition. As the Authoria press release states, Mr. McDevitt has "...a proven track record of developing corporate strategies that have significantly enhanced efficiency, profitability..." and so forth.

Now that reality is setting in for Authoria and its customers, it is time to have another look at what this really means for customers. My opinions are contained in my previous post, but I am sure there are other ways of looking at it.

The HCM community is full of bullshit

Sorry everyone, but it's true. I am the type of person that rarely throws away old magazines. As I was flipping through a few new issues of a couple of well known HCM periodicals, it just struck me that all of the editorial columns aren't saying anything interesting at all. It's just the same old bullshit. To verify, I started looking through various old issues over 10-years in age. You know what? You could lift almost every editorial column from 10 years ago, drop it in today's periodicals, and you'd never know the difference. If you looked closely you might notice a dearth of the terms "SaaS" and "Web 2.0", but other than that it's same old shit.

Now to be fair, some very fine columnists recognize this phenomenon and actively note that certain territory has been well covered before - HRE columnist Bill Kutik being a great example. But the "soft language" sorts, you know who I am talking about - consultants, ex-CLO's, industry pundits, etc. just drone on about the same "enlightening" ideas that have been around for years. Go check this for yourselves, you already know it, you just need to admit it.

And because these ideas are so recycled, so devoid of useful information, they must be considered bullshit. I encourage everyone to read the wikipedia entry on the term "bullshit" http://en.wikipedia.org/wiki/Bullshit. It's actually a very useful term, and from a linguistic and philosophical point of view, it has some unique application.

So this is my plea to our HCM community, of which I am a part, that is full of bullshit - please use plain language, please say what you mean, please tell us something we probably don't already know, please tell us things that we can actually use, and if all of that fails, please entertain us. If we can laugh, or just manage a chuckle, at least we got something out of it.

SumTotal Systems has a new CEO

Congratulations to SumTotal for bringing in a new CEO. It was announced on Monday, and by the end of the day the stock picked up about $.026 and another $0.16 Tuesday to close at $4.60. SumTotal seems to have quietly been getting its act together, and while they have a long way to go, I think they have the company pointed in the right direction. Others think so too as Vista Equity Partners announced that they now own approximately 12% of the company. It seems they have been quietly accumulating shares over the last couple of months.

It still remains to be seen how successful they will be in truly moving toward an integrated HCM/Talent Suite, but at least the company has a lot of cash, and with their stock where it is, a good bit of room for upside.

The Learning/LMS segment of HCM/Talent Management has always been a bit of an enigma. The few public LMS companies have done terribly over the years, but the market still demands learning at a strong and steady pace, and investors put a good bit of new money in to Cornerstone and GeoLearning within the last year. As the global economy continues to slow, I am very curious to see how the LMS vendors will fare in the consolidating HCM/Talent market.

Something to look for when buying HCM/Talent software

A recent post reply made me think of an important aspect the organisations should consider when purchasing HCM/Talent software, that is solution survivability. This is different than considering corporate viability, otherwise known as "when in doubt, buy IBM" syndrome.

What it means is, assess your vendor's solution based on its quality and market share to determine if it should be the surviving solution in the case of a merger or acquisition. What should you consider? Here are a few things, not necessarily in order:

• Size of customer base
• quality and stability of the technology platform
• feature depth
• satisfaction of the customers
• total Product Development spend - does one company produce better software than its competitors for less money? If so, the more efficient, profit supporting, will win
• gross margin of application revenues - this speaks to technology and hosting operations efficiency

Sometimes, it's not always the bigger fish that wins. Of course, for private companies or those with deliberately opaque financials this could be hard to figure out. Don't let that stop you. If under a non-disclosure argreement, a company refuses to disclose this information to you, you should view it with suspicion.

Last, while HCM/Talent practioners are often novices at understanding corporate financials, the numbers contain important information that your organisation needs to know! Get some help from someone that understands technology finance, like an investment banker or financial analyst, not your purchasing director or some bloke from accounting. Engage your prospective or current supplier in a dialogue, let them explain their numbers, and make sure you have your experts help you check for facts and bullshit.

But most of all, don't look to the industry analysts like Gartner, Forrester, for help on understanding financials. They seem to go out of their way to disclaim financial analysis as if it doesn't matter to what they do, which is of course absurd. And then when they do mention financial aspects, they are usually way off base, comments re: Authoria a case in point. While industry analysts provide a valuable service and should be consulted, many of them tend to be really full of themselves and often more concerned with hype and fluff than substance. Financial analysts face consequences for not dealing with substance, one reason why it's good to pay attention to them.

Holincheck and Corsello are nuts re: Authoria!

God I wish these guys would go to an intensive week-long retreat and learn a thing or two about financial analysis, private equity, and corporate operations. In both of their recent posts about the Authoria acquisition http://blogerp.typepad.com/hcm_research/2008/09/authoria-acqu-1.html and http://humancapitalist.com/?p=631 they respectively assert that this is good for Authoria customers.

Well, I suppose it is from a certain perspective, meaning, it's good that Authoria is not insolvent. But, from their customers' perspective, did they really understand that Authoria had almost no growth over the last four years, was burning tons of cash, and was enormously debt laden? I doubt it. I suppose their customers are now relieved that their supplier didn't fall off the cliff.

Had Bedford not come along, Authoria was heading towards receivership, or more likely, an even worse deal than they got from Bedford. Adding $8M of cash to a company that just burned easily $10M plus in the past year hardly sets that company off to invest even more. Hollincheck's assertion that "Authoria will have more resources to invest in the product, implementation services, and support" is utter rubbish. If Authoria simply kept its previous burn rate, it would be out of cash again in the Springtime. They won't be increasing their spend.

As I noted in comments on Corsello's blog, I am quite certain that the Bedford guys will do just the opposite of what Holincheck suggests, that is, to massively cut spending and bring Authoria to profitability. Ultimately, this will be a good thing for Authoria shareholders (mainly Bedford), but unfortunately it's going to be a while before it's anything but bad-to-neutral for their customers.

Interestingly, Vurv, now that their financials are available via Taleo's recent filing, was a much healthier company than Authoria at the time of their respective acquisitions.

Mergers and Acquisitions

As Jason Corsello notes in his most recent blog post (http://humancapitalist.com/?p=621) , there have been a number acquisitions of interest in the HCM/Talent space. Excluding Oracle and SAP, I would like to ask my small, but hopefully growing, list of readers to identify some of the mergers in the space that they would think are real winners for the space and for users out there. Please post why as well if you have some good combos in mind.

I am not going to post my ideas initially, because I am in a biased position, but I would like to see what others think would make good sense.

Customer satisfaction via SaaS in HCM

Classically, larger organisations are accustomed to driving nearly any business requirement in to their ERP implementations regardless of whether or not that capability existed off-the-shelf. This is not news. However, with SaaS solutions beginning to seriously penetrate large organizations, there does not yet seem to be a proper balance between accepting the best practises (fuzzy edges and all) of SaaS solutions and addressing all of an organisations business requirements.

This leads to an irritating situation all around. Specifically, if an organisation evaluates SaaS vendors against robustly documented business requirements, inevitably SaaS solutions fall short due to the wide variance in business processes. Unfortunately, some organisations choose to utterly ignore their own business requirements, assuming that the price/benefit of SaaS is so good, and that adopting embedded best practises is just something they'll have to do.

This leads to an often huge customer satisfaction issue for organisations as they begin to realise "My SaaS talent management application does not support all sorts of things that my old on-premise application did." The next comment often goes back to the vendor, "Your application sucks. At first it was easy, but when we tried to do some of these more advanced things, you can't help us much at all. Furthermore, you jerks told us in the sales process that you supported all of these best practises, now I think you were just lying." Of course this is an extreme example, but it is absolutely more prevalent in HCM vs. SFA/CRM.

The point is, large organisations MUST take ownership and responsibility for what they are getting from a SaaS vendor, then hold the vendor accountable to what they delivered. But, they cannot foist responsibility for lack of buying diligence on to the vendor. Companies who are satisfied with their SaaS vendor are overwhelming those that went in with their eyes open, knowing what they would get, and how they would get it.

Just because one wants it cheap, easy, and effective doesn't necessarily mean one will get it that way. Unfortunately, this is the way most SaaS vendors sell. Why, because ignorant organisations continue to buy this way.

Bios are not Talent Profiles!

In the latest Human Capitalist post (http://humancapitalist.com/?p=611) Jason Corsello links to Michael Phelps' "Talent Profile." Well, if a short bio is a Talent Profile, than so are baseball cards, IMDB bios, and any number of things. For these things to be useful in Talent Management, you actually have to use them as a starting point to do something useful. This is easier said than done. Organizations should demand real utility out of Talent Profiles.

Similarly, the mere presence of loosely correlated, but highly incomplete and unvalidated, information does not make it necessarily useful. LinkedIn is the king of faux value in my opinion.

Actually, baseball cards contain a lot of useful information. It's a pity that the vast majority of jobs do not have unfied measurement methodologies like athletes do. Talent management would be a lot easier if nearly everyone had the same job functions.

I have finally had it...

This is the inagural post on my new HCM/SaaS blog. I had to do this as an outlet to challenge all of the ridiculous crap I hear in the HCM technology and SaaS community. I have made a few posts in the past on other industry blogs, but those were not sufficient to slake my need to vent, and at least challenge the crazy amount of propaganda and outright bullshit that is spewed in this market.

Now, to set a few things straight about this blog and how I intend to conduct it.

1. I intend to be brutally honest, and you should be as well if you comment on posts...bring it on. We are all allegedly adults, so we can take it.

2. I will use profanity from time-to-time. I will do so if only because it drives HR professionals nuts. Plus, it's just how I say things sometimes.

3. I will not propagate nor tolerate gratuitous personal attacks. Disagree if you like with me or anyone else, but don't disparage anyone without bringing specifics on your beef with that person, company, etc. Breaking this rule will get comments deleted.

4. I really think HCM technology, talent management, SaaS, Social Networking, etc. are great and valuable things, but the misinformation is killing me! So, when I viciously criticize things, remember it's love making me do it. That, and a general desire not to see companies and vendors waste money and time.

5. I really am a senior person in this industry. If you ask the real me if I am TechSphinx, I will deny it. Luckily, most everyone who isn't me will deny it as well.

6. I will try to post regularly, and improve the look and feel of the blog over time.

7. I respect a lot of people in the industry, including other bloggers, so please don't take any vehemently worded contrary opinions too personally. It doesn't mean I think you are a bad person. Feel free to blast me right back.

Alright, now on to the fun!