Sramana Mitra: That’s not entirely fair. These are not ERP solutions; they are best-of-breed solutions as well.
Adam Miller: Well, they used to be.
SM: They’re not ERP solutions. They’re best-of-breed talent management solutions.
AM: Well, let’s talk about that for a second. Oracle quickly announced that Taleo’s comp would be discontinued, and Taleo’s performance management would be changed to Oracle Fusion. Essentially, what they’re keeping is Taleo recruiting. So, as a recruiting solution, yes, Taleo is one of the top providers of ATS solutions out there. But they’re no longer a pure play SaaS company. They are completely focused on integrating these other products. They no longer are as close to the clients as they used to be, or specifically, the clients are no longer as close to the powers that be at that company as they used to be. So, you see a big difference there.
In the case of SuccessFactors, it’s a bit distinct. SuccessFactors is operating independently. What’s there is that SuccessFactors is now responsible for – specifically, what [CEO] Lars [Dalgaard] is responsible for – is cloud computing at SAP. Well, SAP’s revenue is 99% not talent management. So, if you’re responsible for cloud computing at SAP, you’re probably going to shift your focus from talent management to the other 99% of the revenue of the company. As a result, you are no longer focused on operating as a best-of-breed provider in that space. There is a distinct difference today. That distinction will become more and more clear over the next 12 to 18 months. We’ve already seen that happen in the market.
SM: I take your point on Taleo. I’m not totally convinced about SuccessFactors. Part of it is because I know Lars. He is very passionate about SuccessFactors.
AM: I understand, but Lars is now going to be very focused on what SAP is doing, and what SAP is doing is more than talent management.
SM: Yes. But I still don’t see Lars as becoming an SAP executive who’s focused on …
AM: There are a lot of people who think he’ll become the CEO of SAP, and that’s why he did the deal.
SM: That would be perfectly fine. All right. So, let’s talk about some of the innovation that you’re seeing in the space. What’s interesting to you trend wise that’s driving your company today. When you look five years into the future, what is the vision for talent management? What do you see in terms of where you want to take this industry?
AM: I think companies today are starting to understand and appreciate the importance of talent management. Our society obviously has shifted from one of unskilled to skilled workers, and one where employee engagement is incredibly important. We also have shifting demographics in the workforce from the baby boomers retiring to the millennials entering the workforce with very different expectations and dynamics in terms of how they work.
Talent management is becoming increasingly important. We believe that to have an effective talent management practice, you have to deal with the entire life cycle of the employee. You have to deal with an employee from the time you’re sourcing candidates through to retirement. You have to keep them connected and collaborating with others. You’re going to have more people telecommuting, working from home, from outside the office. You have to keep them globally connected. You have more people working at global organizations. Even small companies today are, typically, global. And you absolutely want to make sure that people have good alignment and that there’s good transparency and communication among the workforce.
The other thing we find over and again is that when people leave organizations, they’ll leave for primarily three reasons. One, they didn’t feel like they were learning anything. Two, they didn’t feel like they were going anywhere. Three, they didn’t feel like they communicated well with their managers. It’s typically not money. Money’s typically not the reason people leave companies. It’s one of those three things. And an effective talent management practice solves all three things. You ensure that the employee’s engaged. You ensure that he or she being developed in a personalized way so that the training he’s taking, the performance support he’s getting, are specific to what his job is and what his needs are as an individual. You ensure that employees’ goals are aligned with the goals of their managers and that they’re communicating effectively about their goals and performances, and they’re doing it on a frequent basis, not once a year or never. Some of that is even driven by the employees and not by the managers.
The [next] is being very clear on what the ability is to move throughout the organization. What the mobility is, what the opportunities are to move up and move around, understanding what the other positions are, understanding what the expectations are, and what the skills and competencies are related to those positions – in effect, ensuring that the employee has a full picture of what’s expected of her, how she’s doing, how she can get better, and what she can do next. That’s how you end up with an empowered workforce that feels good about what it’s doing. That, of course, makes them more productive and more effective. That’s what we’re providing: tools to enable people to do all of those things in an integrated, seamless way.
The other thing that’s happening in our space is a shift from process orientation to employee orientation. Things are become much more about the user and much less about simply process automation. We’re seeing that stuff happening as well. We think we have an advantage in this because we’ve developed everything organically.