Just a couple years ago, we always seemed to talk about outsourcing activities, processes and tasks that were administrative in nature. Part of the boom in Software as a Service (SaaS) was a re-visioning of outsourcing in a way that provided the scalability and cost efficiencies of traditional outsourcing to other services. (yes, broad generalizations here) Today, we’ve now seen this re-visioning of outsourcing as SaaS overtake traditional outsourcing. Let me explain.
Traditional outsourcing such as for payroll and benefits has always been tactical and transactional in nature. There have been very few outsourcing organizations for example, that provide true benefits consulting around the transactions. Instead, organizations have often had to hire their benefits consultant for the strategy, and then hire a separate vendor to manage the transactions. Similarly, payroll processing is almost purely transactional. Any strategic analysis is probably being handled on the back end by financial cost accountants that payroll has nothing to do with.
Enter talent management. Talent in a SaaS world started as just a simple hosting of an application in a specific model that facilitated scalability and service. However, beyond simply transacting processes for performance reviews and executing the associated workflows, talent providers have not begun to move further into the strategy space. By engineering their applications to maximize user adoption and user experience, vendors can influence an organization’s ability to create impact to the business. While I’d still go to a consulting firm for strategy around performance process and compensation linkages and such, talent vendors seem to be stepping up to the plate. They realize that flashy UI is not just for selling, but that properly targeting certain functions and good deployment of that UI will be more effective for their customers in the long run.
Talent suites are also getting much more integrated. Take Workstream’s newest release that brings their entire suite together through a single reporting tool. The ability to report cross functionally used to be the domain of the ERP world, but developments like this in the SaaS talent marketplace provide more strategic viewing of the organization by allowing more detailed cuts of data than previously possible.
A few years ago at the start of systematicHR, I was greatly excited about talent management systems. I then grew bored by them and moved onto other topics. As we close 2007 and enter 2008, I think I’m getting pretty excited about them once again. Talent is going to be a cool place to be, and if the vendors continue to advance their applications, not from a functionality and technology perspective, but targeting HR strategy, they will make HR a cool place to be as well.
Thanks to Gary Damiano from Workstream whose comment to me on September 25 inspired this post.