Talent Management Vendor Authoria Acquired by Private Equity Firm Bedford Funding

September 30, 2008

 

 


We love the Talent Management and Human Capital
Management space. It is a vibrant, thriving part of our
economy and there is never a dull moment.


While there will no doubt be countless of blogs and stories about this acquisition, we wanted to be one of the first to give our unique viewpoint. As an HR technology consulting firm that prides itself on our knowledge of Talent Management and HCM vendors, it is our job to keep up-to-date on happenings in our industry and pass that knowledge on to you.

 

For starters, this is no surprise to us. We have felt that Authoria was an acquisition or merger target for quite some time now and felt in the past few months that something was about to happen. They are a well run company with great people, great technology and a great customer base. As an implementation partner of Authoria’s, we have had a great relationship with them for years and look forward to that continuing.

 

Before we talk about the acquisition itself, think about this. The market for Talent Management Suites, of which Authoria is one of, is estimated to be around $2.5b currently and is looking at a 25-30% growth rate…and we feel the market is still largely untapped!

 

So let’s talk about the acquisition.

 

For starters, Bedford Funding is a private equity firm out of New York with a roughly $800m fund. It is possible they will be looking at other acquisitions in the dynamic Talent Management space and it is also very possible that other private equity firms will be looking to stake claims in this space.

 

The acquisition took place for $63m, which in my opinion, at least on the surface, is a steal for Bedford Funding. Given that Taleo acquired Vurv for $128m and we believe the companies were similar in size, it certainly does raise some questions.

 

Authoria has been relative quiet as of late, although they did recently issue a press release talking about over 90% growth. HRchitect is the leading Talent Management Systems evaluation and selection consulting firm and we haven’t seen them showing up in as many deals over the past few months. I expect that to now change with this announcement.

 

This acquisition will also put $8m into Authoria immediately to help the company grow. Authoria also received $22m about a year ago. With this kind of money, and the potential for deep-pocketed Bedford Funding to put more into Authoria, this is good for our industry all the way around. Given that this is Bedford Funding’s first foray into this space, they would be best to let Authoria management run itself for the time being.

 

Also, it is important to note that this appears to be more of a “funding” venture for Authoria than an acquisition. At least for now. Acquisition can many times be a dirty word for those involved but funding is usually a good word!

 

What does this mean for customers? For existing customers, this is certainly good news as additional investment into the product will be made. For prospective customers, this should also spell good news but as with any Talent Management or HCM purchase, please don’t go it alone. Hire a firm like HRchitect which will take you through a series of Decision Drivers, including vendor viability, to help ensure you have a long-term and productive relationship with a vendor, while virtually eliminating the risk that typically exists in these projects from the start.  Join HRchitect for it’s webinar discussion Decision Drivers on October 8 or November 11.  Click here for more information and to register.

 

Watch this blog for more on the acquisition, and other happenings in the Talent Management and HCM space, as it happens.  Tune in today, September 30, at 1 PM Central time for HRchitect’s Suite Life of Integrated Talent Management webinar for in-depth information regarding the Talent Managment market.  Click here to register for the webinar.

 
  Solving a piece of the puzzle… 
Matt Lafata, HRchitect

 

 


Integrated Talent Management (ITM) Decision Drivers Blog

September 23, 2008


As the leading HR and Talent Management Systems consulting firm, HRchitect has helped hundreds of companies properly and successfully evaluate and select the right system for their needs. Throughout this process, HRchitect has learned what it takes and what kinds of decision drivers should be used in an evaluation. Even though this is about ITM, it would apply to any Talent Management module or other HR system.

 

Perhaps the biggest mistake prospective buyers make in evaluating ITM vendors is to focus all their efforts on assessing functionality fit, while downplaying or ignoring a number of other significant criteria that can dramatically impact long-term satisfaction with the preferred solution. Of course functionality is critical, and end-user stakeholders cannot be totally blamed for their desire to buy a solution that has (or appears to have) all the ‘bells and whistles’ they want. However, a number of other criteria should be assessed as part of any evaluation/selection process, and are briefly described below. Also, HRchitect will dive further into each of these in a series of upcoming blogs:

 

Vendor Viability – an aggregate rating including the following elements: Financial status of company (such as funding, cash position, burn rate, profitability), market position, strength of product landscape/road map, vision, execution, and channels/ partners. Metrics include recent client wins in recent quarters, number of customers, number of employees, or likelihood to be acquired.

 

Package Usability – package usability is determined by demo script/hands-on scoring, as well as reference feedback. How intuitive is the system? What is the number of clicks required to complete a transaction? How easy is it for end-users to navigate through the system? Are the screens cluttered or clean? Can the application appearance be configured to reflect the client style guide? How much training per client role will be required?

 

Cost / ROI – this criteria reflects the total cost of ownership for the solution. How will the cost of ownership be shared between the client’s various business units/companies? This rating normally includes software purchase or rent price, hosting fees, implementation services price, client resources needed during implementation and post-implementation, hardware and any other third party costs.

 

Ease of Integration/Interoperability – includes the application’s integration framework, Application Program Interfaces (APIs), and ease of integration with 3rd party applications. In addition, this category examines the extent to which the vendor has implemented services-oriented architecture (SOA) to enable/increase interoperability.

 

Technology – examines overall fit with Client tech standards/conventions as well as the strengths/qualities of vendor’s technology strategy and infrastructure. This is usually preliminarily assessed in the Request For Information (RFI) or Request For Proposal (RFP) stage of the evaluation, and then verified at the technical portions of the demo and during a technical review meeting.

 

Package Configurability – this driver rates the ability of the software to configure panels, workflow, user-defined fields, and reports. How strong is the system administration workbench? How self-reliant can the Client be from using vendor resources? How comprehensive are the configuration parameters, i.e. how much of the system can be tailored/personalized to Client requirements without impacting system upgrades?

 

Package Scalability – answers the question, ‘Can this application truly meet our current and anticipated future processing needs?’ Input to the rating includes the number of large volume customers (e.g. employee, requisition, performance appraisal, compensation planning, applicant and user volume counts), bandwidth of hosting center as well as core software to meet client volumes or expected growth.

 

Service and Support – evaluates the breadth and quality of the vendor’s service infrastructure. Included in this category are the size / tenure / hours of support and professional services functions, implementation methodology / approach, results of client reference calls, and vendor liability as defined within its service level agreement (e.g., priority escalation of problems). If the solution is hosted or SaaS, this category also includes an assessment of facilities, including security, backup, disaster recovery, etc.

 

Business Segmentation – the degree to which the vendor’s software architecture and structure can meet the organization’s multi-company or multi-division needs (e.g., ability to deploy different process flows for the same function by division, separate and consolidated reporting).

 

Global Capability – The vendor’s ability to meet language and/or country-specific requirements and regulations. Criteria for the rating includes the number of global customers, countries represented and supported, and number of languages supported. The category also includes safe harbor data center, data privacy and country specific legislative support (e.g. Sarbanes Oxley, Basel II).

 

Operational Effectiveness – the impact the vendor application will have on the staff and the overall functioning of the ITM operation. This includes staffing impact (either reduction using the software or lessens the need to add to staff to provide additional functionality or service organizational growth).

 

If you are looking to evaluate Talent Management projects in the future, we implore you to utilize our services to help find the right product, the first time. HRchitect has heard of too many horror stories of companies who have tried to go through the process without the help of subject matter experts and we don’t want to see this happen to you.

 

 Solving a piece of the puzzle… 
Matt Lafata, HRchitect


Report from TaleoWorld 2008 – Taleo’s Customer Conference

September 19, 2008

 

HRchitect exhibited at TaleoWorld in Boston this past week, which was our second Talent Management vendor conference that we were able to attend in as many weeks.

 

Attendance at the conference, held at the historic Boston Park Plaza Hotel, was close to 1,000. The welcome reception on Monday night was very well attended and they served one of my favorite foods – sushi!!! Tuesday night’s event was held at the Roxy Nightclub where Taleo’s own house band played 80’s favorites.

 

Oh, you probably wanted to hear about the actual conference itself though so here goes.

 

A number of announcements came out of the conference including some details on the improvements and new features in Taleo’s next release of its Talent Acquisition System (TAS), code named “Monarch”.

 

Taleo also announced Taleo Business Edition Performance which will be available in the November 2008 timeframe. TBE Performance will integrate with Taleo’s existing TBE Talent Acquisition System.

 

There were some other product announcements and great sessions and presentations from Taleo and customers.

 

For those Vurv customers who attended the conference (actually any Vurv customers), please talk to us about your options moving forward. HRchitect stands ready to assist.

 

Lastly, Taleo was profiled in HRchitect’s recent report, The Suite Life of Integrated Talent Management and you can learn more about the report, and how you can get your copy to learn more about the Talent Management vendors, on our website.

 

 

 Solving a piece of the puzzle… 
Matt Lafata, HRchitect


Report from Plateau’s Customer Conference

September 16, 2008

 

As I mentioned last week, HRchitect tries to attend as many vendor conferences as possible. Unfortunately sometimes they get scheduled at the same time as previous commitments and therefore we had to miss this year’s Plateau conference at the beautiful Sheraton Wild Horse Pass in Phoenix, AZ. We attended last year and look forward to next year’s event and although we missed it, we are still keeping up with what is coming out of the conference.

 

Amongst all the great tracks and presentations by customers, one of the biggest happenings at the conference was Plateau’s announcement of the latest release of their Talent Management Suite.  

 

Plateau has long established itself as a leader in the Learning Management Systems (LMS) arena and their Talent Management enhancements will only further solidify themselves as an Integrated Talent Management (ITM) vendor.  Because HRchitect believes the linkage between LMS, Performance and Succession has become more and more important in today’s Talent Management world, this release spells good news for existing Plateau LMS customers.

 

Plateau was profiled in HRchitect’s recent report, The Suite Life of Integrated Talent Management and you can learn more about the report, and how you can get your copy to learn more about the Talent Management vendors, on our web site.

 

Solving a piece of the puzzle… 
Matt Lafata, HRchitect

 


Quick Report from Kenexa’s World Conference

September 11, 2008

 

As The Leaders in HR Systems Strategic Consulting, HRchitect prides itself on its unparalleled knowledge of the vendors in the Talent Management space. As such, we try to visit user conferences whenever possible. We can’t get to as many as we would like, but we are trying our best!

 

Rick Fletcher (President and Founder of HRchitect) visited this year’s “Kenexa Connect 08” conference in Minneapolis with me and we were both very impressed with the caliber of the sessions and the smoothness in which the conference was run. As a Beatles fan, I particularly liked the idea of the Wednesday evening event at the Metropolitan Ballroom & Clubroom where “Twist  and Shout” rocked the night away.

 

But back to the conference itself as these events aren’t all fun and games!

 

One of the biggest happenings at the conference was Kenexa’s announcement of an LMS (Learning Management System) called Kenexa Learning Management, or KLM for short. Kenexa is a major player in the Talent Management space and was profiled in HRchitect’s recent report, The Suite Life of Integrated Talent Management, and this offering just further solidifies their product suite.

 

If you have seen our report or read some of our blogs on Integrated Talent Management (ITM), particularly part five of the nine part series, HRchitect firmly believes the linkage between Learning, Performance, and Succession Planning is increasing in importance. I won’t re-state everything that was in that blog but with learning and development playing such a critical role in today’s talent management, this announcement by Kenexa is an extremely strategic move that completes their talent management platform.

 

 

Solving a piece of the puzzle… 
Matt Lafata, HRchitect

 

 


Integrated Talent Management (ITM) Market Factors – Part 9, Service and Support are Key

September 4, 2008


This is the last entry in our nine-part ITM Market Factors series. The first eight parts covered the market factors of “Consolidation”, “Marketing”, “Niche and ITM Vendors vs. ERP Vendors”, “ITM Application Portfolios”, “Importance of Linkage Between Performance, Learning and Succession”, “Linking Competency Data to ITM Components”, and “Business Results vs. Technology Focus”.


HRchitect believes that a number of other factors will impact the evaluation, selection and implementation of ITM applications over the next 12-36 months. In this blog we will cover the fact that service and support, basically how a vendor makes somebody feel and how fast they solve their problems, is still key to long-term customer satisfaction.


Despite the marketing emphasis on feature/function, vendor service and support are key to long-term customer satisfaction
– Perhaps the biggest surprise of the October 2007 HR Technology conference was the number of HRchitect clients and prospects who came to our booth expressing dissatisfaction with their current vendor’s responsiveness, implementation, ongoing services and support. Most leading vendors were mentioned in our admittedly unofficial and unscientific sample, so the issue seems to be universal. Adding to the customer angst was how much was being spent on marketing presentations and booth exhibits, with the perceived net result (from the existing customer perspective) of adding more clients to an already unsatisfied base.

 

Countless studies have indicated that service and support is key to long-term customer satisfaction. While it is tempting for a vendor to trim this area rather than marketing programs or development, neglecting customer care is an ultimately perilous undertaking. We particularly see issues when a vendor is on a rapid growth curve, and struggling to balance growing the customer base with maintaining customer satisfaction levels. In our view, the vendor community would do well to up the ante in their customer support functions, and take the view that a satisfied customer base will ultimately increase profitability and viability over the long term.

Solving a piece of the puzzle… 
Matt Lafata, HRchitect

 

 


Integrated Talent Management (ITM) Market Factors – Part 8, Business Results vs. Technology Focus

September 2, 2008

 

So far in our ITM Market Factors series, we have covered the market factors of “Consolidation”, “Marketing”, “Niche and ITM Vendors vs. ERP Vendors”, “ITM Application Portfolios”, “Importance of Linkage Between Performance, Learning and Succession”, and “Linking Competency Data to ITM Components”.

 

HRchitect believes that a number of other factors will impact the evaluation, selection and implementation of ITM applications over the next 12-36 months. In this blog we will cover the how we believe those vendors that have solutions geared towards creating real business results will gain market share over those that focus solely on the technology.

 

 

ITM Vendors with holistic solutions that drive business results will gain share versus technology-focused providers - The HCM market has suffered from decades of frustration with HCM technologies that did not deliver business value or return on investment. Prospective customers (particularly large, global, complex firms) are increasingly looking for providers that can deliver a combination of deep domain/process knowledge, measurement/analytic rigor, and enabling technologies to drive process change, actionable metrics, and business value to the enterprise. ITM vendors that can execute a solutions-driven approach (e.g., Kenexa’s enterprise in embedded assessments and business-focused metrics, Softscape’s implementation methodology incorporating leading practices, Taleo’s research arm that leverages aggregate customer data) should see increased win rates and improved referenceability in the ITM marketplace.

 

 

Solving a piece of the puzzle… 
Matt Lafata, HRchitect


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