Naomi’s Top Ten List — Coping With Vendor Consolidation

Last week I delivered a keynote for HR Technology Week  which I hope many of you attended and/or for which you have access to the replay.  I thought that the top ten preparedness list I created for this session, with many thanks to Ed Frauenheim for suggesting it, might make a good blog post.  Hopefully, you’ll agree.

In a few cases, the acquired product becomes a primary part of the technology and/or product foundations for the new landlord’s next generation offering, perhaps a primary enabler for advancing the new landlord’s product portfolio.  These are often the standout cases, where the acquirer is buying great technology, talent and more to support their push into new markets/functionality/technology, etc.

In many to most cases, the new landlords make ongoing investments (of course it’s usually their customers’ money that they’re investing, so this isn’t just an act of kindness) to maintain and enhance their acquired products — and to secure the revenue stream from those customers.  They may attempt to retain the acquired product’s brain trust, which is one of the reasons to pay close attention to who stays and who leaves after an acquisition.  They may extend the technological lifespan of the acquired products, perhaps by providing some mobile and/or social capabilities.  If they’re a serial acquirer within the HRM domain, they may provide a middleware layer and common user experience to connect a range of otherwise quite separate products.  However, few acquirers of aging products, regardless of how highly they value their installed base, undertake a major rearchitecture of the acquired products.  Instead, they may offer other products in their portfolio as a next generation option for those customers who are ready to make a leap.

But there really are slumlords.  There really are acquirers whose only interest is to squeeze as much profit as possible for their owners/investors and let the customers be damned.  They may not be able to attract many new customers once the word gets out, but that takes time.  And it can take years before enough customers bite the bullet and walk away from the lock-in that major HRM products produce for the slumlord to suffer any real pain.  And by then the smartest of these slumlords has already sold off that diminished revenue stream.

So, with our industry still consolidating, I present my top ten list for ensuring that you’re prepared to deal with any eventuality when it comes to your own HRM delivery system.

#10 — Know Your Systems And Strategies!

• Our HRM and HRM delivery system current state assessments, strategies and plans are up-to-date and very clever.
• We know what we’ve got, what we want and need, and why we want and need it when it comes to HRM policies, practices, plans, business rules, processes and governance; as well as HR technology.

#9 — Know The Competitive Landscape!

• Our competitive intelligence is ongoing and very clever.
• We know what’s happening in technology quite broadly as well as across the HR technology vendor landscape — and not just for our current vendors.
• We know the implications of vendor landscape changes for our HRMDS’ current state, strategies and plans — and for the implementation of those plans.

#8 — Know Your Products And Select Them Well!

• Our scenario-based product evaluation(s) look deeply into product architecture/object models/every aspect of product robustness and cleverness as well as into functionality.
• We know which of our products are keepers, for current or new owners, and which of them are not.
• We?ve assessed the implications of running on products which aren’t keepers and are prepared to deal with the consequences.

#7 – Know Your Vendors!

• Our vendor evaluation(s) look deeply into vendor ambitions, ownership, leadership, financing, progress-to-date and more.
• We’ve done our own forecast(s) for their future ownership and/or changes in control, and for any possible disruptions.
• We know for which products we’re likely to get new landlords, and we?re prepared to deal with the implications.

#6 – Get The Right Licenses/SLAs Upfront!

• Our vendor license(s) and SLA(s) are written to ensure that our rights and interests are protected in case of a change of ownership or control.
• We’ve ensured that we can live with these provisions.
• We revisit our SLA(s), which is another benefit of SaaS, annually and at renewal time along with #8 & #7.

#5 – Partner With Your Important Vendors!

• We partner actively with those vendors who matter the most to us and on whose success our own success depends.
• We work hard to contribute to their success by making effective use of their products and talking about our results.
• We participate actively in vendor-provided and independent forums both to influence product direction and crowd-source learning.

#4 – Create Organizational Readiness!

• We organize and run a semi-annual workshop for our HR leaders and business partners on what’s happening across the HR technology competitive landscape, how our HRMDS and vendors are affected, what’s likely to happen next, and the great unknowns that could disrupt our world.
• We video it for replay, and it’s a YouTube hit.

#3 – Stay Up-to-Date With Vendors!

• In view of the level of ongoing consolidation, we now update our competitive intelligence assessments twice a year, and present our findings at #4.
• Everyone is impressed with our command of the relevant tools and what effective use we’re making of social tech, professional networking, and scenario-testing to understand what’s happening.

#2 – Don?t Panic, Do Swing Into Action!

• When we get wind of a potential change in landlord, we swing into action.
• We use our up-to-date checklist to revisit the implications of such a change, assign responsibilities and tasks, and execute our plans for dealing with the possible outcomes.
• We communicate about the likely change and how we’re addressing it.
• We do NOT panic.

#1 – Stay Calm And Carry On!

• By the time the press release or official announcement is made, we’re well into our action plans because such changes are usually anticipated.
• Our action plans and internal communications go into high gear.
• It’s business mostly as usual while everyone else is running around like chickens with their heads cut off.

Competitive Intelligence Resources

• Suggested immediate reading www.InFullBloom.us including:
  http://infullbloom.us/?p=2989  the different views of customers and investors on HR technology
  http://infullbloom.us/?p=2998 vendor consolidation fairy tales
• Use Twitter — follow every vendor that’s relevant to you, all the “talking heads” who contribute something useful (and here you may want to check out those I follow as a starting point), and your vendor contacts.
• Use LinkedIn — get alerts for relevant talent movement, vendor developments, vendor hiring.
• Use LinkedIn — connect with the relevant folks at your key vendors and pay close attention to any changes in their professional lives.
• Use Google (or other) News — get alerts for relevant topics, people and vendors.
• Attend relevant conferences — most important are those of your major vendors, the HR Technology Conference in Chicago (2012), the newer and independent Euro HR Technology Conference in Amsterdam (2012).
• Build and nurture your own network of “informants” and “influencers.”  These are the folks who are  in the know because it’s their job to be such.  As I’ve said before, it takes a village.

(Cross-posted @ In Full Bloom)