Best-of-Breed vs. Integrated HCM Suite: No Clear Winner
The debate between best-of-breed and integrated suite providers never seems to lose steam. Over the years, the pendulum swings back and forth between single providers that cover many aspects of Human Capital Management and providers focused solely on one area. But with recent consolidation and changing buying behavior, integrated suites might be winning the race in HCM technology. Last week’s announcement of Skillsoft’s plans to acquire SumTotal (see this blog by my colleague, David Wentworth) is just another example of how the market continues to gravitate toward a single provider. So, what exactly does this mean for best-of-breed providers? Is this the end? Well, not exactly. Before you cash in your chips, there are a few areas of HCM technology where best-of-breed is still holding strong and will continue to dominate the market. Here’s a quick look:
Talent Acquisition: Talent acquisition has always marched to its own drum in HCM. It has a different buyer than most other areas of talent management, different users and a different set of objections. Although many companies still invest in talent acquisition systems as part of a larger HRMS or talent management deal, best-of-breed solutions are still thriving and exceeding growth goals. Just take iCIMS, Findly and Jobvite as a few examples.
Social Recognition: Social recognition is one of the most interesting markets in HCM and one that is experiencing significant growth. Yet, very few suite providers (if any) have dabbled in this area. Possibly because they do not want to deal with the e-commerce component of rewards and recognition or maybe it’s just unfamiliar territory. In any case, best-of-breed providers are emerging in this space and acquiring some big companies.
Sourcing: Yes, it is part of talent acquisition but sourcing technology is also its own animal. No longer dependent on job boards for sourcing strategies, companies are turning to some innovative and effective solutions to help identify and attract talent. And there are plenty of options. Some of these solutions offer broader talent acquisition capabilities and others are stand-alone solutions.
Assessments: Assessments is one of the more traditional areas of talent management but one of the most critical for identifying and developing talent. Leading providers offer valid assessments, a team of I/O psychologists and a strong track record for both technology and services. This area is best suited for a best-of-breed that can stay focused on assessments.
Although integrated suites seem to be dominating the market, these specific areas (and a few others) are seeing significant growth from best-of-breed providers. For a more in-depth look at some of these best-of-breed categories in talent acquisition, check out colleague Kyle Lagunas’ vendor landscape report.
–Madeline Laurano, VP and Principal Analyst,
Talent Acquisition Practice, Brandon Hall Group