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ATS Market Basics X
(February 18, 2004) - So, what does a successful ATS Enterprise installation look like?
To some extent, the fundamental question is customer maturity. From here, it looks like there are four basic types of customers in the Enterprise Market:
ATS systems are often procured as simple liability protection tools. In those cases, the value (hence the price point) is exactly equal to the cost of liability insurance to protect the firm against the worst case EEO lawsuit and fines. Customers desiring liability protection should shop for inexpensive tools that have an implicit guarantee that they won't work coupled with easy access to data input just prior to an audit. These customers (Class IV) are not in the market for Recruiting tools. A good installation is probably a project that, while relatively inexpensive, never actually reaches completion. Being able to blame the vendor is a good way to avoid the initial round of penalties.
Class III customers need systems that reduce the logistics complexity of the hiring process. Accountability and scheduling management are the key issues for this type of organization. Hiring, in a complex organization, involves large numbers of overlapping teams who have varying degrees of input in the actual hiring decision. While they require the basic liability protection, they actually hope to make the workload manageable and predictable. They will be interested in Workforce management solutions but will hesitate about the link between hiring, retention and performance management. The objective in these customers is a non muss, no fuss overlay on their current processes. Class III customers are the hardest to serve because the cost of automation is vastly exceeded by detailed customization requirements. These are the target customers for massive outsourcing projects.
A fair number of Enterprise customers hope to incrementally improve the quality of their output at the same time that they are installing new tools. These Class II customers share the problems of liability protection and administrative management. They can also see the potential of improving the net productivity of the firm by increasing the quality of the people that they hire. They have probably experimented with one or more approaches to measuring and understanding relative performance trends in their organization and compared to "industry norms". They will have a sophisticated compensation management system tied directly to their performance management approach. They use outsourcing to effectively keep costs in check
Despite all of the rhetoric, there are few companies who actually focus on "people as our greatest asset". Class I customers are no more than 20% of the total enterprise market. They are as likely to be international as American. They understand outsourcing as a way to maintain focus on core competencies and recruit aggressively to maintain and improve their talent stock. They want accountability in their compliance/regulatory systems because they view the approach as an essential strength. They are the users of advanced talent pool development tools. For them, Recruiting really is a marketing function. Recruiting objectives are directly and consistently tied to corporate strategy.
As you might imagine, each class of customer buys a different product to meet its perceived needs. Acceptable definitions of success vary
widely. The reason that Peoplesoft installations (unused and worthless) are acceptable to Class I customers, for example, is that being able to say "We're waiting for the vendor" is an acceptable solution to a pure liability problem. It kicks the issue down the road to the second audit. From an IT
budgeting and management perspective, reserves can be maintained until a crisis demands their expenditure.
John SumserPrevious Articles on the ATS Market Basics Series:
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