Friday Rant: Will Services Procurement Get Eaten by Talent Management?

Earlier in the week, Authoria, a talent management vendor, announced it was merging with Peopleclick, a VMS provider (which also happened to have significant capability in other human capital management / talent management technology areas). The new company will be known as Peopleclick Authoria. Reading between the lines of the announcement -- not to mention the early analyst/blogger commentary on the deal -- it's fairly clear that this roll-up of sorts tosses a fairly interesting and somewhat plausible monkey wrench into the trend of procurement organizations taking more ownership of contingent spend as part of a broader services Spend Management umbrella. We could see this trend accelerate further if a talent-management leader such as Taleo, for example, acquired a VMS provider such as a Fieldglass, IQNavigator, or Provade.

In my view, if companies relegate contingent procurement applications to a sub-sector of talent management technology (which remains under the purview of HR organizations), procurement will have a more difficult time taking ownership of its services-spending destiny. This spells potential trouble for companies bent on reducing costs and getting the most from their contingent workforce programs. Now, don't get me wrong: I have nothing against HR; it can be quite a fun corner of the company to socialize with, and the younger folks getting involved in the HR field tend to be easier to get along with than those in procurement. Moreover, they're far more likely to split the tab with you when it comes to social outings. (Not that I would know any of this whatsoever based on any personal experience, mind you. Nor am I biased on the subject. Just pragmatic. And cheap.)

But on a serious note, when it comes to what's right for shareholders, I candidly believe that the closer HR remains to contingent services spend management, the less likely an organization is to get the most for every dollar spent. Based on my own experience, I simply can't see HR executives taking to heart the types of analytical approaches that MSPs and procurement organizations pursue to analyze and implement savings and compliance opportunities from different contingent spending strategies. Moreover, it's been my observation that HR is less equipped than procurement when it comes to coordinating all of the potential compliance hiccups that a contingent workforce can bring, especially when it comes to working closely with other functions.

Perhaps I'm reading too much into this particular deal. It's likely that Peopleclick Authoria will continue to sell its services Spend Management platform quite successfully into procurement organizations via its MSP channels (and potentially, directly). In fact, I plan to examine its solution in significant detail in the coming weeks on Spend Matters. Still, I can't help but feel that this deal, with its trappings of a land grab for contingent labor spending, has the potential to be a foreboding setback for procurement organizations. If Taleo, SuccessFactors, Kenexa, and other HR-focused vendors end up following the lead of Peopleclick Authoria and pursue this sector more aggressively than say, Ariba, for example, we should all take it as cause for services-spend savings alarm, given their primary audience. As part of my forthcoming analysis, I plan to ask Charles Jones, Peopleclick Authoria's new CEO, some pointed questions on this very subject.

But in the meantime, what do you think? Please feel free to take out your virtual pen and rant away (that is, before HR takes it away from you, paying far more for it than they should ...)

- Jason Busch