Issue link: https://www.e-digitaleditions.com/i/227268
Tech Report Warning: Roadblocks Ahead Has integration slowed innovation in human capital management tech? By Brent Skinner Integration and innovation—we hear those words all the time in this industry, especially after an acquisition. This or that integration will yield innovation, and the market will move forward all the wiser. It sounds so good. But, usually, integration gets in the way of innovation. Users of human capital management (HCM) technology must look critically at innovation-promising acquisitions, large or small, when the byproduct is a need for more integration. Technology companies specializing in HCM have witnessed numerous mergers and acquisitions over the past couple of years. In late 2011 and early 2012, two big deals kicked off the ensuing excitement: first, SAP's acquisition of SuccessFactors, then, Oracle's of Taleo. Other acquisitions have taken place since, including Rypple by Salesforce.com and, most recently, Kenexa by IBM. As many customers weathering the M&A storm have found, the results often lead to integration. What does integration mean? Put simply, the acquiring company does its best to combine its own technology with the acquired company's through intricate interfacing that endeavors to make two [56] HRO TODAY MAGAZINE | NOVEMBER 2013 systems act as one. But they seldom do. Typically, integration in practice falls short of achieving the promise behind the apparent meaning of the word. Integration almost always slows and complicates resulting systems, which struggle to function, let alone deliver. Oracle's and SAP's opening moves suggested far-reaching implications for the staying power of on-premise technology for HCM; namely, it's looming demise . At the time, the conventional wisdom coalesced: SAP and Oracle were implicitly acknowledging that software-as-a-service (SaaS)— residing in the cloud—would eventually overtake onpremise technologies for HCM. Research reinforces this as an accurate read. According to the CedarCrestone 2012-2013 HR Systems Survey in 2012, SaaS adoption was 23 percent. Two examples further underscore HCM's apparent exodus to the cloud with cloud-based Workday's IPO and Ceridian Corporation's acquisition of Dayforce, a single, SaaS application for human capital management with one employee record, one user experience, and zero interfaces.