The Decline of the Single-Source HCM Vendor

“The Customer is King.” This is a great motto for any successful business to live and work by. But somewhere along the way, in the fight to win in our marketplace, people lost sight of what is important. There are those that forget what’s best for us might not be what’s best for our customers. You hear suppliers throw out terms like “Best Practice”, but this is a misnomer. “Best Practice” in this context is the supplier’s Standard Operating Procedure and how their system is structured, which loses something for the customer. This has been prevalent in the HR technology industry.

Over the last 15 years, the HR technology space has seen trends shifting from smaller companies and discrete solutions to bundles of solutions that complement each other to holistic “suite” solutions. Large and small HR tech suppliers have all been vying to capture larger and larger shares of the market, claiming to offer “end-to-end solution suites” that meet all the customer’s HR needs throughout the employee life-cycle, and trying to become the single-source vendor of choice for more and more customers. The customers have responded to this viscerally, demanding that HR tech vendors dramatically improve functionality available in each part of the suite, or play nicely together in the competitive market. We have all nurtured our egos in the belief that we can be all things to everyone. But the time has come for a reality check. No matter how good their products (and they are usually just fine), no one in the industry has the complete suite of best-in-class offerings that guarantees business success for the customer using it. Here is a big idea: Let’s put the customer needs first. Let’s change the focus, making the customer central to strategy and building on all the solutions available right now.

At IBM, we decided to do just that. We have formed a landmark alliance with SAP that promises to revolutionize our industry and pave the way for great changes in the way work gets done and businesses optimize their employee and manager experience. What could be better than two vendors with best-in-class HR solution offerings that complement each other forming an alliance so that their customers actually have access to everything they need to complete their needs? Now, the customer has the flexibility to build a talent strategy that can build on their business strategy.

We are in an API economy where easier, faster integrations are possible, on the cloud, making the single vendor approach suboptimal. So, how will this new alliance work in terms of the technology? Through easy-to-build connectors that allow clients to switch seamlessly and instantaneously between complementary solutions, saving time, effort, and money, and offering flexibility that will bring them new capabilities. In addition to the SaaS and cloud-play, this alliance will prove a disruptor in the industry and play a huge role in the direction in which it evolves in the future. For more information, see IBM, SAP Team to Advance Talent Management blog. I truly believe that this is a watershed moment that will pave the way for similar alliances between other companies across industries, changing the way work gets done.

The beauty of the IBM-SAP alliance is that it will build on a 40-year relationship the two companies have had in other areas of business. We know and understand and work well with one another, and are committed to proving that for us, the customer is indeed, king.