Last year, you convinced your leadership team to purchase Taleo’s talent management suite to streamline hiring, onboarding, performance review and learning management across every department. You were just getting productive with it when–surprise!–it was announced last week that Taleo was acquired by Oracle.
And you’re not alone. In December, another large ERP vendor, SAP, acquired talent management software provider SuccessFactors. While an acquisition in and of itself may not be cause for concern, how it impacts your organization is something leadership expects you to manage with care.
Your executives will be coming to you with questions. You need to be prepared with some answers. To lend you a hand, I’ve put together some suggestions on managing the uncertainty that is often associated with acquisitions like these.
1. Take a Deep Breath
Before you hit that panic button, rest assured that very little is going to change in the near-term. Your vendor will continue operating as an independent entity until the dust has settled.
As Dan Finnigan, CEO of Jobvite, points out: “Everything will be frozen until the deal is done.”
In the longer-run, though, things can go either way. It’s possible that SAP and Oracle will flex their financial muscles and tap their vast development resources to significantly improve SuccessFactors’ and Taleo’s already solid products. It’s also possible that the level of customer service you were accustomed to will change–for better or worse–because now you’re working with a behemoth instead of a smaller company. The point is, something will change, but it’s too early to tell what.
2. Review Your Contract
SAP and Oracle may eventually adjust pricing, term length, service levels, and other aspects of your current contract when it’s time to renew. Even if this won’t happen anytime soon, some higher-up in your organization is bound to ask you some questions about this now. So be proactive and review your contract. When is it up for renewal? Are there contingencies in the event of acquisition? Is your pricing model frozen during the remaining contract term?
The reflexive response is often to extend your term to avoid increases in rates a year from now, but Roy Altman, CEO & Founder Peopleserv, suggests you’ll want as much flexibility as possible. “Experts are going to say, ‘Lock in the long-term–the rates are going up.’ I say, do the opposite!” The way Altman sees it, you don’t want to rush in and overcommit, just to avoid a potential rise in rates. Rather, leave your options open, as it’ll be easier to make decisions when changes actually start rolling out. If you’re looking to keep financial impact at a minimum, that flexibility could prove more valuable in the long run.
3. Touch Base with Your Account Manager
In times of change, maintaining an open line of communication is key. To that end, stay in regular touch with your Account Manager. Feel empowered to voice your concerns and ask direct questions about changes in product direction, service or support that are on the horizon. However, be sympathetic to the fact that he or she might be in the dark, and understandably as anxious about changes as you are. Be patient.
4. Identify your Dependencies
There may be a part of your talent management process where software is essential to its success. For instance, performance management might be the most important part of your process, and you rely heavily on SuccessFactors for that function. The worst time to realize that dependency is after something you rely upon has changed. If SAP or Oracle makes a product change that breaks your custom workflows or configurations–which often happens unintentionally–you'll want to have a workaround in place.
“You have to pinpoint what you can’t make compromises on,” says Altman. “If there’s one piece you’re unsure of, isolate it, and minimize the risk of impact.”
Identify the areas where you rely most heavily on your software, and decide whether that dependence would put you at a disadvantage if that functionality changed. Then, once the new product management team has been formed (it will probably be a mix of staffers from the acquiring and acquired companies), give them your feedback and ask them pointed questions about the elements of their product roadmap that matter the most to you. They might not have all the answers right away, but if they don't know what's important to you, they can't address your dependencies.
5. Leverage the Open API
Many people feel like they will be forced to accept all product changes. It’s thus not uncommon to see people jump ship at the first sign of trouble. But both Finnigan and Altman agree the client is not as helpless in these situations as they sometimes feel.
“The fact of the matter is, with Cloud computing you’re not stuck with a product like you are with traditional system,” says Finnigan.
Rather than replacing your entire talent management system simply because you’re afraid of a change in, say, the software’s recruiting and onboarding functionality, there is another option to consider: extending your existing product capabilities by integrating other point solutions via an open API (in tech speak: application programming interface).
Most (if not all) talent management software providers have an open API, which can be leveraged to improve on any areas where your needs aren’t being met. SAP and Oracle have world-class Services organizations that might be able to help you customize or extend your existing capabilities through custom code or integration with point solutions.
Altman suggests, “Take advantage of a SaaS (software as a service) platform, and gear toward agility. Build into your strategy a method of adding in software that works. If you need a best of breed solution to pick up some slack, you should be able to do that.”
Master Your Domain
It’s easy to be intimidated when your vendor is acquired. Change can be painful. But remember that you’re not a helpless bystander. As Finnigan points out, “You need to understand the leverage you have as a paying customer. You’re the master of your domain.” After all, at the end of the day, neither SAP nor Oracle win if they start hemorrhaging customers from companies they paid a hefty price to acquire.
Also keep in mind that if you’re ultimately not happy with what the new direction the vendors take, there are always other options available to you, both in the form of best-of-breeds and full talent management suites.