iCIMS Analyst Event: Building an Ecosystem

Last week I attended the compelling iCIMs Analyst Event in beautiful San Diego. iCIMS’ focus is both simple and strong: “to help clients win the talent war by providing the best talent acquisition software on a pure SaaS platform.”  Underneath that focus lies the strategy to help accomplish that objective, especially in the way iCIMS is building out its partner ecosystem.

As a private technology company in the burgeoning competitive talent acquisition market, iCIMS is in an enviable position as a profitable company for the past 13 years. It has:

• 95% recurring revenue
• About 30% YOY GAAP revenue growth.
• More than 3,000 customers, with about 4,500 organizations (divisions/entities of those customers) using their technology.

iCIMS’ customers represent a variety of industries and sizes, from enterprise (2,500+ employees) to those with less than 100 employees.  Many of iCIMS’ customers are new to applicant tracking systems.

Partner Ecosystem

While iCIMS’ core products are iCIMS Recruit^TM, iCIMS Connect^TM, and iCIMS Onboard^TM, what intrigued me most during the event was their partner ecosystem, which includes more than 150 partner vendors. At first blush, the iCIMS model seems fairly simple — the company wants to make a “home” for each vendor category on its platform – until you realize that iCIMS has transformed this ecosystem into a significant revenue stream.

Customers who want to connect additional talent acquisition technology solutions, like assessments and video interviewing, to the iCIMS talent acquisition suite will pay a monthly API/connection fee for that category to iCIMS.  However, that customer is free to swap out vendors as desired without paying additional connection fees to iCIMS, assuming the next vendor is part of the iCIMS ecosystem.

The vendors’ “cost” is the time it takes to integrate their technology using the iCIMS API.  iCIMS plans to rank the vendors over the next year or so on these attributes: level of integration with iCIMS, amount of referral customers, and customer satisfaction level with product/service.  Based on the vendor tier, a sliding scale will be used to provide each vendor with a percent of revenue received by iCIMS from that vendor’s referrals. The iCIMS account executive will recommend vendor partners as needed by clients. Of course, there are many more details, but this is a general overview of the program as I see it.

Ecosystem Implications

But what are the implications to iCIMS business, besides the revenue stream? Will iCIMS not want to compete with their vendor-partners? Will this inhibit the development of iCIMS product development?

iCIMS executives say their ecosystem focus will not hinder product development. They are always looking to enhance their talent acquisition suite. Examples of some innovations under development are:

• Using predictive data to help recruiters identify who they should be looking for/the best position title for their requisitions
• Using social networking technology in their iCIMS Onboard^TM product
• More mobile recruiting capabilities.

As to being in competition with vendor partners, iCIMS does not view it that way. For instance, iCIMS has a “light version” of video screening on iCIMS Recruit^TM. Once the client adapts to the use of video screening, it may want a more extensive video product. In that case, the client could opt to connect to one of the video interviewing providers in the iCIMS ecosystem.

Differentiators

iCIMS identified three competitive differentiators as the ease of use of their products, strong customer service, and their focus on talent acquisition. There is no doubt about their focus on talent acquisition, as exemplified by their products and ecosystem. The clients and vendor partners that I met at the Customer Advisory Council reception and heard in a panel discussion all liked the iCIMS technology because of its ease of use. One panel member described how the iCIMS product simplified reporting/workflow requirements.  I also saw product demos, which were configurable and their reports provided real-time data.

Given the size of the current ecosystem, customer base, and the focus on talent acquisition, iCIMS is in a good position to grow market share. The challenges will be as vendors make their partner choices, how customers react to the connection fee, the “integration experience,” and potential new competitive ecosystem models.

Daria Friedman, Principal Analyst, Talent Acquisition, Brandon Hall Group