Jan 12, 2011
A while back, I was an SC for a large vendor organization. It was a lot of fun highlighting the great stuff in my applications (actually – those were the fun parts). But our jobs were to help find solutions as well as workarounds to things that could simply not be done. Given this is a decade ago when functionality had not really arrived yet, Still, the differentiation between applications back then was about who had more functionality. The depth of any HR application varied widely between vendors. Today’s world is vastly different.
Is there really any differentiation in between SaaS vendors/ I mean, they all seem to say the same thing. Everyone talks about great service, they all like to say how you don’t have to customize anything anymore, and every SaaS application is “versionless.” The core things taht many of the SaaS vendors sell no longer really apply – SaaS vendors are so often competing against other SaaS vendors rather than legacy server based technologies where these were indeed valid arguments and true differentiators.
I’ve also argued that the days of functionality are pretty much over. Vendors simply can’t compete on feature-functionality anymore. Once again, there was a time when it was important, but today’s reality says that every vendor is going to have 98% of what you need, and the other 2% are probably nice to have’s that you can live without. The truth of the matter is, feature functionality ruled in the days of long ago (what, all of 5 years?) when HR was the center of the HR universe. We needed better transactions, more efficient processes, better storage spaces for more and more data. That’s not true anymore.
Today’s center of the HR universe has transformed into employee’s and managers. Those groups don’t need feature functionality. In fact, it’s a Google and Apple world where minimalism and ease of use reign supreme.
The true differentiators for vendors is also evolving. No longer is it feature-functionality, great service, or being versionless. Today’s differentiation comes in the form of the analytics framework and how capable HR can be at delivering data to managers. it’s about what I have called “enterprise digital interactions” (social media) to help employees connect, collaborate and learn, it’s about how well you can use technology to create the simplicity that end users crave.
The problem is that feature functionality is easy to demo. Whether analytics are really easy to create and consume, if end users will adopt digital interactions, or if the usability was hiding under a layer of slick demo style is sometimes hard to discover. At the end of the day, these are the features that are differentiators today. Feature functionality does not prove much anymore. It’s about pushing your future vendor partners during demos, inviting end users (employees and managers) for a full court press during demos, and figuring out how to ensure that all the flash that your future partners are trained to demo is not all that you see.