SuccessFactors Lays down the Analytics Gauntlet: Acquires Inform (InfoHRM)

Today SuccessFactors announced plans to acquire InfoHRM (renamed Inform Business Impact) – a small but very well established leader in the area of HR and Talent Analytics and Workforce Planning.  We believe this acquisition is very significant for the talent and HR systems marketplace: it now establishes SuccessFactors as the emerging leader in the broad and important area of delivering actionable talent and HR measurement and analytics.

Consider some of the most important yet difficult questions all companies face: how many employees do I have on the payroll today? What is my retention rate for high-performers? Which managers are driving the highest levels of performance (or retention or leadership growth)? What are the characteristics of the most successful new hires we bring into the organization?

And consider some of the even more strategic workforce planning questions organizations have: what is the impact of the potential reorganization or merger we are considering? What are the biggest gaps in our talent pipeline as we move into China, Brazil, or another emerging market? How will the aging baby boomer affect our professional workforce in the next three years? Where in our talent mix do we have the greatest risk?

These questions, and many more, plague business leaders in all functional areas: CEO, Sales, Customer Service, Operations, and even internal groups like Finance and IT. Without easy answers to such questions most business leaders make decisions “on the fly” – and often with very imperfect information.

One of the biggest US manufacturers of industrial equipment is in the middle of a major product shift from automotive and transportation products to new products for emerging energy companies. I spent a few days with them and they are asking questions like: where do we have the deepest management pipeline to pick for new business units? Who are the individuals we can best send on expatriate assignments to build these businesses? How do we measure the effectiveness of our managers in the context of our new business strategy?

All these questions depend on information buried deep in a company’s human resources databases and other operational systems. And most companies have many of these systems – often linked together with a messy variety of data replication tools which make it very difficult to quickly frame questions and come up with answers. And when an organization embarks on workforce planning (a hot and emerging topic for strategic HR leaders), they have to pull this information together in a consistent and repeatable way.

InfoHRM was quietly and slowly answering these questions for its clients. The company was founded in 1982 by Peter Howes, an academic HR leader in Australia who originally built InfoHRM as a consulting company. Over the years the company branched out into benchmarking and then built a SaaS based HR data warehousing and analytics platform which was designed for extensive reporting, analytics, and workforce planning. We ran into InfoHRM about three years ago while we were expanding our research on learning measurement (read more about the Bersin & Associates Impact Measurement Model®) and found the company to be very successful and business focused.

Inform is a company with a consultative approach to selling its platform – rather than sell a measurement “tool,” Inform has always tried to help their clients focus their measurement and analysis needs on the particular business challenges they face.  Prior to the acquisition the company had about 150 customers and was growing slowly with a limited budget for sales and marketing.

In the last five years as HR managers evolved toward more interest in workforce planning, InfoHRM build out its modeling and scenario planning capability – so the platform not only aggregates data and lets managers run many important reports, it also lets users build scenarios about candidate growth, attrition, retirement, and other supply factors to look at the impact of different workforce planning scenarios. Such analysis is now considered what we call a “level 4” maturity in workforce planning and most large organizations are in great need of such a solution.

Prior to the acquisition InfoHRM sold its platform as a totally vendor-neutral solution which can capture data from virtually any talent management or HR system. In fact, InfoHRM had partnerships with many of SuccessFactors’ competitors and worked with them to build data connectors and business partnerships. Now, with the vast sales force of SuccessFactors, the company will try to maintain its open platform but will likely be positioned as a SuccessFactors solution designed to work with SuccessFactors software first.

(When I was at Sybase years ago we acquired a middleware company which had industry-leading connectivity to all database platforms. While the strategy was always to sell the middleware as a database-neutral solution, within a few years the reality of the business forced the product to become more and more “Sybase-centric.” I expect the same thing to happen here. While Inform will continue to be sold as an open platform, over time SuccessFactors is going to build strong integrations with its own platform which will encourage customers to buy the SuccessFactors suite along with Inform.)

The market for such analytics solutions is very large and very underpenetrated. Today companies like KnowledgeAdvisors, Hewitt, IBM, Mercer, OrcaEyes, Aruspex, Vemo, and all the talent management and HR software companies sell software platforms designed to help organizations take people-related data and make it highly actionable. The problem is quite complex – because data of interest to an HR manager may be quite different than the data of interest to a CEO or VP of Sales. Ultimately an integrated solution like Inform, coupled with the engineering resources and sales expertise of SuccessFactors, will light a fire under this market and force other platform vendors to increase their focus and investment in this area.

I applaud SuccessFactors for their vision – as the company rolls this new solution out to the market, we are going to see an increased focus on integrated, business-driven talent measurement as a fundamental part of success in human resources. And as SuccessFactors likes to put it, this is all part of excellent business execution as well.