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Hosts Stacey Harris and John Sumser discuss important news and topics in recruiting and HR technology. Listen live every Thursday at 7AM Pacific – 10AM Eastern, or catch up on full episodes with transcriptions here.

HR Tech Weekly

Episode: 67
Air Date: April 21, 2016

 

This Week

This week John and Stacey discuss:

  • Equifax Users Conference
  • SAP SuccessFactors Analyst Event Update
  • Acquisition to “accelerate the growth” of Leeds software firm Link
  • SHRM India hosts 2nd HR Tech Conference and Exposition Link
  • The Question of Who Owns the Data Is About to Get a Lot Trickier Link

About HR Tech Weekly

Hosts Stacey Harris and John Sumser discuss important news and topics in recruiting and HR technology. Listen live every Thursday at 7AM Pacific – 10AM Eastern, or catch up on full episodes with transcriptions here.

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Begin Transcript

John Sumser: Good afternoon, and welcome to HR Tech Weekly, One Step Closer, with Stacey Harris and John Sumser. This is our 67th show, and we’re coming to you at a very special time, from a very special new location, live now in Sebastopol, California. Stacey is holding up the fort in the beautiful Raleigh, North Carolina.

 

Stacey Harris: That is correct. It is.

 

John Sumser: How are you, Stacey?

 

Stacey Harris: I’m doing well. It’s definitely beautiful here in North Carolina. No rain yet, although my heart goes out to all those in Houston and Texas right now. As I hear, we’re getting some of the rain they’re going to get in a few days. Right now, we have sunshine, but it is evening, which is not our usual time for doing our call, John. But both me and you were sort of doing some different things this morning, so we’re coming a little bit later in the day today. That’s the wonderful thing about Internet and radio. We can do it at different times, right?

 

John Sumser: That’s right. What’s in Stacey’s mailbag?

 

Stacey Harris: It’s not been a busy week, I guess. There’s been a couple of analyst events and a few conferences. We’re definitely in the middle of conference spring. But not a lot of big announcements, I guess. That was sort of the thing I was surprised. I was looking for some more announcements. But we have some updates. I spent a day and a half at SAP SuccessFactors’ analyst event. I have some wonderful people who helped me out at home that have allowed me to do a little bit of traveling this week I haven’t been able to do for a while. I got to go and visit one of our old friends out there, Yvette, who is taking on a new strategy role, Yvette Cameron. Also, I know you’ve been at the Equifax event. Is that correct, this week as well?

 

John Sumser: That’s right. I was in Austin for the Equifax Annual Users Conference. It’s very interesting. Equifax is a very quiet, very modest company with a very great reach of impact. Every time I go and spend time getting to know the company a little bit better, I come away surprised by things. It turns out that they are the largest workforce analytics company in the world. We’ll talk about that a little bit, but that’s a surprise. They don’t even think about themselves that way, because they are so busy doing a whole range of things that are the hard work that people don’t want to do organizing and managing compliance paperwork and forum outputs of data is at the heart of a lot of their business. They don’t really have the chance all the time to pick their heads up from the work and see how impressive that they’re doing actually is.

 

Stacey Harris: How big it is. How big it’s gotten. Yeah. Wow. We’ll definitely take some time to talk about that then with what you’ve learned at Equifax. There’s been a couple of little business acquisitions in the UK with an organization called Leeds-based Cascade HR and IRIS Software Group and a little firm called Octopus HR. We’ll talk a little bit about that.

 

Here’s a bit of information. There was a couple of events in India this week, as well as in China. There was an HR tech conference in China I think actually that was through the latter part of last week. Then this week, there was an annual SHRM HR Tech event in India. Was worth mentioning both of those events.

 

Then there was some interesting articles that I pulled that sort of goes along with what you were just talking about, which is covering how organizations are leveraging different types of data. The Department of Homeland Security is doing flexible hiring paths for cyber-talent acquisition. Then we also have some interesting data on sort of who owns the data. There was a great article about the question of who owns the data and what that data means to a lot of organizations these days.

 

Then if we have a little bit of time, there’s a great way to wrap up the call today. There’s an article from SHRM on American employees are now the happiest they have been in years. I’m all about ending on a good note. If we get a little bit of time, we can talk about that as well as the naming of the wonderful boat Boaty McBoatface, which has been all over the news. That is a British-based natural environment research council’s launching of a great big ship that they’re launching and the campaign to name their ship. It’s all about what happens when you do crowd-sourcing. Fun things to wrap up with.

 

John Sumser: Great. I want to get to Boaty McBoatface.

 

Stacey Harris: I would as well. Let’s start out with the events. Why don’t you go ahead and start out with Equifax, John, because you started talking about them a little bit. Then I’ll talk about SAP. What else did you learn at Equifax this week? What were they doing and what were big announcements for them?

 

John Sumser: Equifax is a big enough and old enough company so that they have a very well structured management rotation process. Every 4, 5, 6 years, they take the top management team out of the operating unit, move it to another operating unit, and put a new top management team in place. Everybody, all of the … These are billion dollar businesses. All of the things that are the equivalent of a C-level person get moved out and the new team comes in. It’s really wonderful to see what happens when that kind of rotation gets in play. What happens is the existing team gets much more confident about their ability to get things done. This user conference was right in the middle of that transition, so I got a chance to meet all of the new people. They’re bright and enthusiastic about their jobs. I got to talk with all of the people who are still there from before the transition. All the sudden, they’ve got new bosses and different things matter. They’re all excited about their jobs.

 

It was a cool environment. I get to a lot of these user conferences. This is the first time I saw fireworks. They had fireworks. They had a 12-minute fireworks show in the cloudless Texas night with a big moon. It was wonderful. This is the group of people in HR, the people who do I-9’s and compliance regulatory stuff who don’t always get a lot of attention. It was really wonderful to get to spend time with those sorts of people too as they got a little break from their day-to-day work. I was excited to be there.

 

The thing about Equifax being the largest workforce analytics company … They bought a company called eThority I think about 3 years ago now. They turned eThority, which was the first major workforce analytics company. They turned eThority into First Pass, an ACA compliance and analysis business. They now have in their ACA compliance and analysis business, they now have about 1,000 clients and about 26 million employees in this analytics sphere. To do ACA, you have to be able to have payroll, time and attendance, and other aspects of the job all under a single data feed. That’s the foundational essence of any workforce analytics package.

 

Stacey Harris: It’s the hardest part.

 

John Sumser: They’ve got all this data about all these people. It’s really kind of astonishing. They’re so modest and focused on getting their work done that they’re not running around claiming to be the largest workforce analytics company.

 

Stacey Harris: We just went through I think this is the first tax period where people started to have to have some of that paperwork. I don’t think there’s as many fines yet or issues around that. But I think this is the first … We’ve started to have that first tax paperwork must be in and must be sent out to people. Did the Equifax team have any comment on getting through the first tax period with all of this, or are they still feeling like the big push is coming yet for them?

 

John Sumser: Nope. The big push is done. They made it. They were relaxed. This is a crew that handles that kind of heavy pressure, heavy deadline-driven HR output for their clients on a routine basis. One of the things that’s interesting about the company is how calm they are in the face of chaos.

 

Stacey Harris: One of the things I think they were also always very focused on is onboarding tools. Did they announce any new updated to what they’re doing in the onboarding space at all at this customer event? Or were they maybe holding off on that? I know they’d mentioned there were some new things coming up in that last year.

 

John Sumser: They’re starting to really deploy an API business, because they understand all of the compliance-oriented parts of onboarding. They’re starting to build down a network of partners that can push out what they know to do and integrate with some of the more sophisticated kinds of onboarding. Getting the paperwork right, getting the regulatory stuff okay is the most important thing in onboarding. Then the second most important thing is helping people get productive. That’s where their new product stuff is headed.

 

Stacey Harris: Interesting. It sounds like you had fun. We had a nice time with SAP. SAP wasn’t quite as showy. There was no fireworks or anything, but it wasn’t a customer event. This was just an analyst event. It was in the San Francisco area. They did have us right down in the area there by the bay and it overlooks all the bridges and everything. Then they had the Natural Science Museum for our meetings.

 

I think this analyst event was the first time I’ve started to really sort of see SuccessFactors and SAP become a single unit. It’s kind of hard to remember that it was December of 2011 that SAP purchased SuccessFactors. I think at that point in time when they purchased it was such a big thing in the market that everybody was like … It was sort of the first big acquisition, the really, really biggest one. Everybody was like, “Oh, how long is this integration going to take? How long will it be before the culture of SuccessFactors is overtaken by SAP?” I think we’ve seen this year the first merging of those two worlds. I think they’ve done a very nice job of it. You haven’t lost the SuccessFactors feel of the cloud business underneath the SAP model. But what we definitely saw was a lot more SAP alumni now involved in the SuccessFactors business.

 

You also definitely saw a lot more conversation about how SAP’s cloud business is standardizing the processes around service and support across all of the SAP cloud businesses which includes SuccessFactors on the HR side. There was a lot of conversation about that this week. They did mention that they are now up to 1,118 employee center buyers for the HCM. Employee Central is their core HR mass product. That’s the big number everybody’s watching is how many people have adopted it. That’s about double where it was at last year. They’re continuously putting up new numbers. Now that does not include everyone who’s implemented it. They did not give that number out.

 

The interesting thing was they also gave a number for their on-premises this time. They haven’t really talked a lot about on-premise, but they mentioned the number of around 16,000 on-premise HR buyers. That’s bigger than what we had seen in the past. We did have a little bit of a conversation with some of the leadership at SAP there and SuccessFactors about the fact that their on-premise numbers seem to have risen. They were very open about the fact that they are still in some cases … They don’t openly sell it. Their salespeople aren’t comped on anything but their cloud business, but that they do have buyers who are still buying the on-premise solution on a pretty decent basis, which is about 1,000, 1,500 up from where it was maybe 3 years ago. Does that surprise you, John, to hear that people are still buying or still putting a lot of investment in their on-premise systems from a new perspective for SAP? I mean, we’ve seen it in the PeopleSoft side for Oracle, but are you surprised to hear about it from SAP as well?

 

John Sumser: No. Not at all. SAP is a wonderful company, but it has a very strong legacy in command and control environments. I think if you were to do the segmentation by industry, my guess is that SAP serves industry where security matters more. As much as people believe that the cloud stuff is secure, it’s hard to bet your business on that. It’s really hard to bet your business on that. The more conservative and the more historically security-conscious a company is, I’m going to guess the more likely they are to be an SAP customer and the more likely they are to be less persuaded that SAS is a good solution. It doesn’t surprise me. It’s interesting to hear it. Part of what that means to me is we’ve been talking about SAS for 10 years. It’s the last thing. It’s no longer the next of things. That’s starting to show up in that people are saying, “Oh, right. You can have different flavors of ice cream. It doesn’t have to all be vanilla here. We still like chocolate.”

 

Stacey Harris: Mike Ettling said, “We’re all in cloud.” There’s no confusion on that from his perspective. But I think the conversation from his senior leaders and even him was that there are just some certain regions and areas where at this point on-premise still makes sense, because they haven’t figured out data sovereignty yet. One of the things that Mike very clearly stated for everyone was that where they were putting their investments over the next 3 years. Basically they were saying one third of their investments is going to go into platform updates focused on stability, scalability, and data sovereignty issues. I think that’s really what it comes down to is until they can figure out and probably SAP’s ahead of the curve on this over many other organizations … Until they can figure out the data management side of this, there are some organizations, particularly those who are government-based or compliance-driven who are going to have to work with some on-premise environments.

 

He also said that they’re going to spending one third of their work on suite integration efforts. They still, I think, are probably one of the organizations dealing a little bit with the integration challenges. But they’re really focusing on changing 80% of the most-used HR screens into the SAP Fiori look. We are starting to see things look a lot more similar across all of their products. They are definitely getting there.

 

Then they’re spending another one third on innovative features, really in the space of learning intelligent services and performance management. Those were the big call-outs for them. Yvette Cameron, who was previously an analyst not too long ago and has just recently taken a lead role as Head of Strategy over at SAP SuccessFactors, she spent a couple of minutes doing a presentation. In hers, she was talking about where the organization is probably going to be going in 3 to 4 years. It was sort of interesting to hear that they’re really looking at things like rethinking the idea of payroll and understanding support and processes a little bit differently. Maybe rethinking relationship with partnerships.

 

I think that the nice thing to see with SAP is that they’re looking at what they have to get done now, the really important infrastructure decisions that are going to help move organizations to the cloud more quickly. But they’re also looking at the 3- to 5-year roadmap, which a lot of technology vendors haven’t really gotten to yet. They’re still focused on what’s happening in the next 3 years. It was a good event. We got a lot of interesting information from them.

 

One of the things they did bring up, it was also about the kind of organizations that they are going to be continuing to acquire. They are planning to still acquire some small organizations, but they were very clear about their acquisition approach was going to be small organizations, that they’re looking for talent and certain technical skills that they want. But not large organizations where they would have to combine big cultures any longer. I think that we’ve heard that from a lot of organizations on the merger and acquisition side, is they’re looking for much smaller organizations that haven’t really built their own cultures yet. Are you seeing a lot more conversation about mergers and acquisitions in any of the conversations you’re having, John? It was definitely a topic here at the SAP SuccessFactors event.

 

John Sumser: I think it would be a topic of conversation there now that they’ve digested the really big thing and have kind of a tummy-ache from it. It’s telling that 5 years after the SuccessFactors deal, they’re going, “Oh, we think we’re going to stick to hors d’oeuvres next time.”

 

Stacey Harris: That’s a very good way of putting it, yeah.

 

John Sumser: “We’re going to go to the tapas restaurant here, because that all-you-can-eat buffet, that was a little hard to swallow.”

 

Stacey Harris: Yeah.

 

John Sumser: Right? I think they’re probably much more aware as a culture of the risks and benefits or large integrations. They’re probably sobered by their experience. That said, there’s a lot of investment going into the space that hasn’t slowed down. I thought it was going to slow down. It hasn’t. It would slow down a lot. That means that there is just this enormous outgrowth of small companies who do things that look more like a drop-down menu item than a whole company or a whole product. The strategy from the investment banks and VCs has been to build things that are easy to acquire. If they’re saying that they’re going to start buying small plates at the small plates restaurant, that means that the VCs were right. That makes all the sense in the world for me.

 

Stacey Harris: I think the other side of this is that while you’re seeing the big companies probably looking at a lot of these small vendors, we’re seeing a lot of the, I’d say, mid-market vendors starting to look at how they can start to consolidate among themselves. There was an interesting story coming out of the UK about 3 of their what I would call HR vendors that are probably on the smaller side dealing with almost 100 to 50 employees or smaller. Generally would fall into my or your sphere, but this Leeds-based Cascade HR organization under the IRIS Software Group acquired technology from a firm called Octopus HR for an undisclosed sum. There was no financial numbers in there.

 

But what I thought was interesting was that combining the Cascade brand, which is the smaller group, with the smaller organization Octopus that dealt with larger companies, 10,000 employees or so, we’re going to see at least what they’re saying is one of the largest cloud-based HR technology providers in the UK market. There’s going to be somewhere in the range of 350 to maybe 500 clients added to another 600, so you’ve got like 1,200 different clients now across all these organizations. Are you thinking we’re going to see a lot more of these mid-market groups or these small groups that sort of are running in that range of 300 to 400 clients start to merge with each other to compete with the big guys?

 

John Sumser: I was talking with somebody the other day who started a really smart company about 3 years ago. We were talking the other day. She said, “I thought I would’ve been out of this by now. I’m 3 years into the beginning of this company. It looks like I’ve got 7 more years to go before I can be done, and I didn’t really mean to sign up for that.” I believe that part of what you’re seeing is there are a lot of little companies who’ve found a lot of little niches. They’re 3 or 4 years old and they’re bored. The business of making the company grow, which is turning the crank and repeating and repeating and repeating and repeating is not what entrepreneurs who start companies are really great at doing.

 

Stacey Harris: Yeah, they’re beyond lifestyle programs. They’re a little bit harder than an initial entrepreneur wanted.

 

John Sumser: Yeah. I think you’re seeing some fatigue from the original entrepreneurs. That leads to a kind of hope for integration. But my view is generally that all of the little companies are finding lots of little market niches, and there isn’t really a good way to consolidate all this stuff. I’m going to bet that there’ll be lots of things that try to do this, but that the result of trying to do this will be bad for the companies and bad for the customers.

 

Stacey Harris: We saw a lot of that in the US 5 years ago. That was I guess at the beginning of it. We saw a lot of that mid-market mergers along with the big companies picking up things. What’s happening is that what we’re seeing is I think a lot of this is also now happening outside the US with organizations that were sort of regionally based and they’re international groups.

 

This was an acquisition conversation out of the UK, but there was 2 big events just in the last two weeks. One was an HR tech China event that was held by LRP. Then there was another event, the 2nd-annual SHRM Tech 2016 in India held in Mumbai that was managed by a great group of SHRM India entrepreneurs who have really built up this pretty nice event in the India space around HR technology. I think Jason Averbook did the keynote for it. I know that they were sharing quite a bit of data from various organizations. They are also going to be supporting the [inaudible 00:24:32] should note just so people know that that’s the case.

 

But I thought it was interesting that we’ve got all these international technology conversations going on. We know HR Tech World Congress has gotten quite large in the last few years as well. We’re really seeing a lot of conversation internationally I think about HR technology that we haven’t seen in the last several years.

 

John Sumser: Yeah. It’s an exciting time, and the number of consumers in the world is skyrocketing. Each new person who comes from abject poverty who can become a consumer is also somebody who’s going to be encountering a bit of HR technology. Part of this is the working class in all of both of those places, India and China, are exploding. When the working class explodes, you need more HR software.

 

Stacey Harris: As it explodes and we get more software, we’re also getting more data. One of the big articles that I picked up was the question of who owns the data is about to get a lot trickier. It was a Fortune magazine article. I thought they did a really nice job of pulling together quite a few stories about what’s happening with the issue of data ownership with the Internet of things. Their particular story was really focused on the fact that there’s billions and billions of data points flowing around the space, coming from all of these devices and all of these tools and all these locations. But what they’re finding is that organizations are now having, particularly states and governments and utilities, are having to pay other organizations to get their data back from cloud technology environments.

 

There’s organizations like Stay is one company they mentioned. Another one I think is an organization Tech Crunch that’s doing this. These are organizations that I guess are going about the work of … They’ve got young kids who know how to manage the technology who are going back into all these cloud environments and pulling all the data back out for states and utilities and governments and making sense of it for them. They’re paying twice, basically, for the data on some level. Is that what we’re looking forward to with all of this immense amount of workers being in HR technology? Now all of our cloud data being the biggest amount of data in the market? You were just talking about Equifax from that perspective, right?

 

John Sumser: I don’t know how you trace ownership of data. I don’t know how you do it. It seems to me that lots and lots of times, more than one person has a claim to ownership. Let’s look at the data that I enter into my time-card. It’s my name. It’s my social security number. It’s my address. It’s my claim about how much time I worked. How much of that data is the company’s?

 

Stacey Harris: Then it gets into is the company’s data the actual work you conduct? How many times you move a box or how many ways you enter information, does it become the company’s data or your data if it’s your activity?

 

John Sumser: That’s exactly right. There’s good legal precedent for that stuff that says, “Whatever you do for the company, the company owns.” It just gets fuzzy at the edges. Let’s look at an entirely different thing, which is tracking my phone inside of the workplace. If it’s my phone and you’re using the Bluetooth in my phone to monitor where I’m walking …

 

Stacey Harris: Where does that go?

 

John Sumser: I probably have a claim on that data. God knows what I’d do with it. I think none of this is clear.

 

Stacey Harris: This article does a nice job, because they outline it as a transportation issue. They’re talking about every time you get on the road, there’s sensors and every time you go by a light, there’s sensors. Again, same thing we were just talking about with workers is that whose data is that? Is that the driver’s? The road’s? The utility company’s? They’re creating projects for cities where they’ve got applications, basically APIs they’re creating. It was funny because they were sort of labeling out what an API was in this article. They were saying these APIs are going to create ways for all sorts of data to come into the agency, into one location for the state. I was thinking you’ve been talking for quite some time about the idea that HR will have an API model where people can decide whether or not they want to send their information into it, right?

 

John Sumser: Right. The API model for HR is, “I’m not necessarily going to buy your whole product, but I may buy the data that you have to sell. If I’m going to buy the data that you have to sell, I need you to deliver it to me in these formats at these rates with these dynamic variables inside of it. Here’s the API. For you to get paid, you have to deliver to me through that API so that I can create a single data model for my organization at the point that the data hits the organization.”

 

Stacey Harris: Yeah. It’s going to get interesting. It’s definitely. We’ve been through the half hour and we didn’t get to talk about the fact that American employees are the happiest employees, John. I think we’ll have to leave that article for next week, or I would like the people to go take a look at it.

 

John Sumser: You’ll have to hold it off a week. Do you believe that, or is it that they’ve been asked so many times to answer so many poll surveys that they’ve finally just given up and gone, “Okay, if I say I’m happy, will you stop it?”

 

Stacey Harris: “Stop asking me!” I don’t know. This was SHRM’s annual survey conducted. This is the highest percentage in 10 years, they said, of American workers who are happy. Now they are blaming this on the fact that the economy is good, people have been able to move around a lot more, and people are more satisfied with their overall job. That’s what they’re saying. I don’t know. I’d have to read a little bit deeper into the article to find out, or to their actual research. But they’re very, very sure that people are happier. Maybe we can get some people who can call in and let us know at some point if they’re happier at their job.

 

John Sumser: Why don’t we have a whole show full of happy people next week? That’d be great. If there’s so many happy people, maybe we can get them on the phone.

 

Stacey Harris: We’ll also leave the follies of crowd-sourcing to next week when we can talk about why you don’t let the Internet choose your boat name for your $200 million research vessel.

 

John Sumser: That’s great. That’s what we should start with, both us, next. Another great conversation, Stacey. Thanks so much for doing this.

 

Stacey Harris: Yep. It’s been good. Everyone, have a good week.

 

John Sumser: Yeah. You’ve been listening HR Tech Weekly, One Step Closer, with Stacey Harris and John Sumser. This was show 67. We’re glad you joined us, and we will see you next week. Bye bye now.

 

Stacey Harris: Bye everyone.

 

End Transcript



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