Appirio’s next steps in HCM

Appirio partnersYesterday’s announcement that Appirio is partnering with Cornerstone OnDemand as its preferred solution for talent management should not come as a surprise, following Appirio’s recent acquisition of Knowledge Infusion, a specialist HCM consultancy.

On a pre-briefing call, Jason Corsello, VP corporate development and strategy at Cornerstone said:  “In the past, we have done most of the hands on deployments ourselves. We can’t scale at the rate we need to so this partnership comes at the right time. Knowledge Infusion are the biggest and best HR cloud services providers. We have 30 percent of the business in international plus we are  expanding into the Asia-Pacific region where Appirio is already strong.”

What may not be well known is that in a past life, Corsello was a senior executive with Knowledge Infusion so it doesn’t take too much imagination to understand how the logic of this deal comes together. How it works out going forward is another matter. My concerns are two fold

Concerns

First, while there may be a large addressable market for talent management – something around $4-5 billion, it is the kind of application that only gets limited use. Corsello believes that is changing. “Performance reviews are not going away, but we’re seeing social performance and feedback coming along. It is quickly becoming much more relevant to how people work.”  To flesh this out, Mike Brennan VP deployment services at Appirio said: “In professional services for instance, the ability for someone coming off a project where they are doing a debrief via a Salesforce form can be leveraged to trigger a 360 that shares what went well and what didn’t, provide new learning opportunities for budgeting, new presentations etc..” From where I am sitting that sounds like the ol’ integration story but with added benefits for customers.

Second, I wonder how this partnership will work out in the long term. If you check out the image above, it is clear that Appirio is aligning itself with partners that share common legacy applications enemies in the shape of SAP and Oracle. However, in the past Cornerstone OnDemand was more likely to be plugging its solution into an incumbent on-premise landscape. That now changes if the Appirio partnership is to bear fruit. However, neither Appirio nor Cornerstone can expect that the enhanced offering will lead to massive displacement given that both SAP and Oracle are leveraging their own customer bases to ensure that their offerings remain preferred. That may change as Workday grows, pushing aside its more expensive rivals.

Recommendation to buyers

  1. This expanded offering makes a switch to the cloud for core ERP, CRM and talent management a much more viable alternative to mixed or hybrid landscapes. Cost savings in the 30-50 percent range alone will be enough to get attention, even though integration is required.
  2. Custom development that leverages more than just HR/talent management but includes CRM and finance data becomes tempting. The ability to quickly assemble new user experiences, add to and share the pool of knowledge in service industries will mean that transformative value is now on the table. That should be an instant hit with upside for everyone.
  3. Pressured CIOs, looking to be a central part of the innovation team should find they have the opportunity to become heroes, provided they are comfortable with public cloud offerings.
  4. Anyone expecting SAP and Oracle to hang around will be disappointed. At the last SAP earnings call, Lars Dalgaard, CEO SuccessFactors was effusive about the impact access to SAP’s customer base has had on its growth. More quietly, Oracle is enjoying success with its Fusion HR offerings, benefitting from a well defined hybrid deployment ‘choice’ play. Expect SAP and Oracle sales people to come knocking – if it hasn’t already happened – but be prepared to think whether alternatives provide a bigger bang for the buck.

One more thing

Now for some speculation. Cornerstone uses NetSuite as its core ERP. How long before Appirio becomes a NetSuite partner? If/when that happens the door opens for a 2-Tier ERP discussion, something that has worked very well for NetSuite the last year or so. In turn, that introduces the possibility for businesses to consider a switch to the cloud with a large enterprise suite of offerings while surrounding that core with a mid-market cloud offering. The potential aggregate cost savings in this scenario plus the possibility of acquiring (relatively) modern technology that delivers a flexible solution set will be attractive. Wild idea? Perhaps but still something that piques my interest

Disclosure: some of the vendors mentioned in this article either have been or are current clients.

5 thoughts on “Appirio’s next steps in HCM

  1. Den – First, congrats on the new blog. As much as I’d love to take credit for putting this relationship together, let me assure you much smarter people should take credit. Nonetheless, I still believe Knowledge Infusion has the best domain expertise in talent management and, now combined with Appirio, provide a huge value to clients that want to blend the best technology with the best cloud service and strategy expertise.

  2. Pingback: Appirio outlines 2013 focus; Eyes HCM as springboard | News Trading or Technology

  3. Who needs ZDnet, Den? Congratulations on your first blog being about HCM. But CSOD on Netsuite? How much have they got for an HRMS?

    • You won’t find me knocking ZDNet. They have been very kind to me over the years and much more so than any other media outfit I’ve worked with.

      Anyhoo, not as much as thee and others would like but then Tier 2 businesses don’t need the flexibility or customisations of a Tier 1. It’s a strategy that absolutely makes sense where an SAP/ORCL is too top heavy. But…I can see how a TM solution could readily goes beyond Tier 1 – provided the price is right.

      • We actually use many of the best of breed cloud solutions out there including Salesforce.com, Concur and Box. Why would anyone want to waste their hard earned revenue on legacy ERP software?

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