IBM Buys Cognos – What will Happen to HR Analytics

For those of you technical people, read on.  Before I entered the world of training and talent management, I spent almost ten years of my career in the analytics and data warehousing business.  At that time (1980s and early 1990s) the market for “business intelligence” software was wild.  There were dozens of companies selling pc-based analytics tools to help business people build reports and mine data from their corporate relational databases.

Over the years, with the advent of the web and more internet connectivity, this market became very large (everyone with a web browser now needs to analyze data from their corporate applications).  In fact, when I was at DigitalThink, one of the projects we spearheaded was the development of an integrated data warehouse and reporting system for our e-learning clients.  It became one of the most exciting and widely used part of the DigitalThink (now Convergys) platform.

Well today this market enters the era of “consolidated.”  SAP now owns Business Objects (who purchased Crystal), Oracle owns Hyperion (who purchased Arbor and Brio), and IBM owns Cognos.  This means that many billions of dollars of business intelligence and reporting software is now consolidated into the hands of the three largest enterprise software companies.  The unfortunate part of this is that most business applications still suffer mightily from their reporting and analytics interfaces.   Those of you with corporate reporting and data warehouse systems will now be forced to do business with one of your ERP vendors in this area.

There are still many exciting new startups in this area, which I hope will “re-emerge” as a growth segment as IBM, SAP, and Oracle lose interest in this market.  What this means to HRIT people is that your business intelligence strategy will be as complex as ever, and you will be asking your ERP vendor to help you with the software and tools to build such systems. 

In the area of talent management systems, as many of you know, the software architectures are very immature and rapidly changing.  Most of our research clients have at least 3 or 4 HR systems (payroll, HRMS, and one or more talent management applications).  There is no “obvious” way to bring together all the employee profile data you need to make decisions without a data warehouse or the use of a system like InfoHRM (a very innovative company we think has tremendous potential). 

Anyway, let us hope that these three companies continue to focus on the R&D to build application-based solutions from their tools.  We will stay tuned….