Why I Feel Sorry for IBM

Feel sorry for IBM? What an absurd notion. Perhaps the first great tech company ever! Respected and doing business everywhere in the world! Nobody ever got fired for buying IBM. Fact is IBM’s effort to become an enterprise-applications software vendor, especially now in HCM, has sometimes been a struggle.

- Advertisement -

IBM may be the first great tech company ever. Endless patents, generations of innovation, more than a century of history, best company slogan “THINK” and certainly a leader of corporate HR practices.

Before anyone talked about corporate culture, IBM had a strong one; expressed in the long-gone uniform of white shirt, blue pinstriped suit and rep tie. All the employees I know–both past and present–won’t tolerate a word of criticism about the company, particularly those active during its halcyon “no-layoff” years.

So “don’t cry for me, Argentina,” right? Yes, except when it comes to enterprise-software applications. As opposed to infrastructure, data and system applications, you have to feel a little sorry for IBM with all of the fits and starts it’s made in this area over the past 20 years.

Kenexa is simply the latest example of that challenge. IBM has been thrashing around with it for more than three years (since the December 2012 acquisition), which makes its latest attempt at repurposing its assets all the more worth paying attention to.

We don’t need to take the way-back machine too far to find other examples of some rough sledding in the applications arena. Only to 1993, when–as a former IBM executive still remembers–after selling a very old ERP vendor to Marcam, IBM said it was leaving the applications-software business. Only two years later, it pivoted like a nimble start-up to buy the Lotus Corp.

- Advertisement -

Anyone working in the ‘80s will remember Lotus made the original IBM PC a hot ticket with its industry-creating spreadsheet, Lotus 1-2-3. You may also recall that Lotus later tried to compete with Microsoft for an integrated office suite, but lost out to Microsoft Office.

IBM, however, had a smarter target in mind: Lotus Notes, the first social, collaborative software ever written, which it acquired with Lotus in 1995, well before the Internet was part of all our lives. You’d be amazed at how many companies are still running on this pioneering enterprise application (now called IBM Connections), despite its once much-maligned email system.

IBM went on to write an LMS on Notes, sold it to customers and even talked about this HCM application at the HR Tech Conference. But then IBM tried and failed in 2008 to buy Saba for its LMS. Instead, it purchased a load of on-premise licenses to resell, in a rather unique reseller agreement. Later it sunsetted the Notes LMS and migrated all its users to Saba, effectively leaving the HR-enterprise-applications business.

Enter Kenexa, a business Rudy Karsan built by acquiring about 37 other organizations. Like so many companies built that way, Kenexa’s pieces were not terribly well-integrated, and worked and played well with each other to varying degrees. So it was only inevitable that it would present IBM with some significant headaches.

In its attempt to address these, the company unveiled its IBM Kenexa Talent Suite in January 2014, a year after the acquisition. As GM Debbie Landers, who was not in charge at the time, said, “It had the piece parts but no integration. It was included in some suite software selections, but not winning.” The business unit, now known as IBM Kenexa Smarter Workforce, started over.

Landers, a long-time IBMer, said she decided to focus only on what Kenexa had been really good at, and I think she’s made smart choices along the way. But you have to wonder, after watching the talent-management suite under construction for 10 years, whether HR will be willing to buy best-of-breed applications again when other apps still need to be integrated into them to make a fully functioning system.

At least IBM has created a “Unified Talent Record,” eliminating the old vexing question when putting together pieces about which vendor’s employee profile to use.

First up is what IBM calls “workforce science,” which Kenexa used to call simply Lincoln (as in Nebraska). There, near the former home of its major competitor Gallup, Kenexa has for years had more than 100 OD professionals producing custom employee surveys for the world’s largest companies.

Yes, those traditional surveys: three months to write, three months to gather, six months to analyze and distribute the results. IBM now appropriately calls them Census Surveys. And everyone is saying no one wants them anymore!

Well, with the current hysteria about low employee-engagement levels (though they’ve been low for a decade), it turns out larger companies still do want them, apparently more than ever, according to IBM’s Zahir Ladhani.

So while IBM is in the middle of creating a new product called Employee Voice–with all the ad hoc pulse surveys, self-service and analytics continuously available to managers that start-ups have been hawking for three years–Lincoln is still evidently harvesting a lot of that traditional corn.

The OD pros also had a second job: doing huge custom performance-management projects. But apparently, demand for that is not what it was–so they are now being repurposed to become HR-data analysts and consultants for clients, while IBM sells a third vendor’s more off-the-shelf performance module white label.

I hope no one needs to strain to remember that Taleo and BrassRing once ruled the roost in talent acquisition. Oracle bought Taleo; Kenexa and then IBM bought BrassRing. During the six years Kenexa owned it (2006 to 2012), BrassRing software upgrades focused on high-volume hiring (translation: functionality for hourly workers who quit frequently) and meeting other recruiting requirements of the largest companies.

Now using IBM Commerce (specifically the SilverPop application), BrassRing is getting what it always needed: candidate (rather than applicant) functionality with candidate-relationship management (CRM) with email marketing campaigns, mobile capability, a new user experience, digital analytics (still in beta) and a marketplace of partners with pre-written integrations.

The most significant partnership is with SAP SuccessFactors so IBM clients can easily use its Core HR system, Employee Central.

While Kenexa and IBM were improving, Oracle was selling. When independent,Taleo and BrassRing used to run neck-and-neck as the choice for large customers. Now, Taleo has about 1,500 customers, and BrassRing has about 500.

But BrassRing will soon have amazing new career-page functionality built in. The digital analytics will allow companies to track completely candidates who arrive on the page and know exactly where they came from and on what devices they used. They also will know everything they have clicked on or even moused over. As well as where they left the career page before finishing, which considerably more than half of visitors typically do.

I believe this ability to fine tune the career page to attract candidates, rather than repel them (as most actually do), is unique in a big system, maybe offered separately. Plus, IBM hopes to leapfrog industry leader Avature at CRM with all the latest consumer-marketing tools for managing leads.

IBM will offer an LMS that Kenexa acquired from Outstart, which–like all new major LMSs–incorporates video, offers a recommendation engine to sort through that mountain of outside material (based on IBM Watson, of course) and leverages partnerships, again notably with the SAP SuccessFactors LMS to connect IBM’s own learning-content-management system.

Of course, there is also IBM Connections for social networking inside the company, and IBM Watson will be used in every imaginable (and, planned to be, prescriptive) way for talent analytics and data integration without a warehouse or data mart.

Basically, that’s the whole package Landers is taking to market to customers with 10,000 employees or more via vertical industries. While IBM calls it the “Kenexa Open HR” initiative and offers lots of whiz-bang new integration help, it seems awfully like the best-of-breed approach that all but the largest customers abandoned once the talent-management suites got fully built out.

But customers don’t have to rip and replace anything, and let’s not forget that no one ever got fired for buying IBM.

Bill Kutik
HR Technology columnist Bill Kutik, as chairman emeritus, is at the 22nd Annual HR Technology Conference & Exposition® in Las Vegas, Oct. 1-4, 2019. Watch Kim Billeter, the new Americas Lead for EY HR advisory group (PAS), discuss the question: Why is Cloud adoption taking so long? Just six minutes for the current video episode of Firing Line with Bill Kutik®. Bill can be reached at [email protected]