How will the consolidation of integrators within Workday & Oracle's markets affect your business?

With the rise of SaaS (software-as-a-service), plenty of small, boutique firms have entered the market originally dominated by larger, well-known names. Where you once needed a “Mexican army of consultants” to implement the traditional ERP on premise, you now only need a fraction of that number. The ratio is 1 to 7, I have been told.

This change has opened up great opportunities for some of the smaller players and has provided clients with a wider choice than was traditionally available. However, although this change is fairly recent, it looks as though this period is coming to an abrupt end as these small, local companies are gobbled up by some of the larger players looking to diversify their offering.

Here are some of the recent transactions, just to name a few, that have taken place in Europe:

In the Oracle ecosystem

• Accenture acquired Certus an Oracle Cloud Specialist implementation partner.
• Version 1 – Headquartered in Dublin – acquired Cedar Consulting a PeopleSoft and Oracle Cloud partner

I am sure that there are a few different reasons for these acquisitions (personal to each company and its management) but nevertheless, I do see trends forming and many similarities between the transactions.

Oracle is increasing its offering with OCS (Oracle Consulting Services) which could potentially threaten smaller players who rely on local implementations (smaller projects) and cannot deploy staff across continents or across a broad range of technologies to avoid keeping consultants on the bench.

Within the Workday landscape

• The French consultancy HR Path (newly a Workday partner) acquired Ataraxis (headquartered in Belgium) – Workday consultancy. 
• Ever Be got sold to Mercer the American Heavyweight.

Ever Be and Ataraxis where “small” local partners who invested heavily in building a Workday practice before the “big consultancies” followed suit. Both had their share of successes. However, it has been hard for them to win the “big projects” which would have enabled them to scale up and compete.

Most of the big Workday projects are international by nature and are also part of a larger transformation program requiring more than Workday implementation knowhow!

Also, same as Oracle, Workday is growing is consulting practice. One of the biggest project in Europe - an ICT company in the Benelux - is about to start and will be managed by Workday... Food for thoughts...

Doing my research on transactions in the USA, I came across this interesting article from Deb Card (which lists some of the transactions in the US in the Workday market) which outlines the pros and cons of such consolidation. Since it is (unfortunately) better written than mine, and I do agree with most of Debs comments, I will refrain from elaborating too much on the pros and cons. But, if you are interested I advise you to read Deb’s article here:

https://www.isg-one.com/index/module-article-detail/big-fish-little-fish-what-does-hr-tech-consolidation-mean-for-workday-clients

Deb Card: "Aggressor, Omnipoint, Jeitosa, Kloud, Meteorix, CPSG, DayNine, Appirio. One-by-one these boutique Workday implementers have been picked off and swallowed up by the big fish: Deloitte, Aon, Mercer, IBM, Accenture and Wipro"

To name a few cons:

·        Reduced and therefore limited options for clients

·        Increase in cost of implementation and support

·        Loss of deep product experience 

On the pros side, I am slightly more pessimistic than Deb but, the obvious one would be access to integrators that are better suited for global international roll-outs. 

However, I do not believe in the one-stop-shop approach and do not think that a customer should be using the same global integrator for all its projects.

I may be going a bit far here, but do you remember the Enron scandal where consultancies could audit and consult with the same clients? Yes, we are in the IT field here but small, niche players who know their products extremely well have their value too. Diversity is often good as it provides clients with different views and solutions to their problems.

For businesses, it’s vital to keep an eye on this ever-changing landscape and to be aware of what’s happening and how it might affect them. When sourcing partners to implement technological solutions it’s important to know how the processes being put in place, and the structure of the company you are working with, will affect the type of solutions offered, and your business goals.

Is that consolidation good for clients and prospects? Is it inevitable as a sign of a maturing market?