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As the HR technology market heats up, it's also been consolidating, as large vendors acquire independent leaders to broaden their human capital management (HCM) offerings. Although such deals undoubtedly benefit megavendors and their clients, customers of the acquired company might suddenly become small fish in a greatly expanded pond. Some Taleo customers are feeling that pain since Oracle acquired the talent management vendor in February 2012.
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Sydney Verd, recruiting supervisor at Portland, Ore.-based Custom Decorators Inc. and a Taleo user for three years, said she has experienced a sharp decline in the level of customer support. "Their support has significantly changed, and I think for the worse," she said. Verd explained that since it's harder to contact Oracle representatives than it was with Taleo, "we've been relying more on other users and LinkedIn groups for troubleshooting issues, rather than trying to get a hold of Oracle." But Verd also testified to a reduction in system outages, which she estimated would happen once per quarter when Taleo was still independent.
Thomas Otter, research vice president at Stamford, Conn.-based Gartner Inc., has heard similar sentiments from some Taleo customers.
"I've had people phone and say, 'We miss Taleo; we much prefer dealing with Taleo than dealing with Oracle,'" he said, noting that the sentiment is typical of most large-scale acquisitions.
But while a certain amount of disruption is normal in any acquisition and integration between products can be slow, a clearly defined roadmap and open communication can help quell customer concerns. In this respect, Otter said Oracle has done well.
"It takes time with any acquisition to figure out exactly what you want to do, and I think Oracle's done quite a good job of planning out that integration," he said. "I think sometimes [the] message doesn't always get through to the customers correctly, but Oracle's been good at laying out what the options are. Yes, I'd like to see them move quicker on the development side, but actually, they've done a good job of communicating what they're doing and when."
Ann Hansen, HCM product manager at a large health insurance company and the executive vice president of the Oracle HCM Users Group based in Chicago, expressed a similar opinion regarding the planned integration. "I feel they've been very forthcoming," she said.
Tricky contract renewals spring from Oracle Taleo convergence
The Gartner report Oracle Fusion HCM and Oracle Taleo Cloud Service Options Increase User Choice, Complexity, co-authored by Otter, identifies contract negotiation as a pain point that Oracle Taleo users have reported since the acquisition. Customers accustomed to Taleo's flexibility with contract renewals that are now dealing with Oracle's more rigid process have "expressed concern," the report states. It also notes that Taleo customers say the "Oracle legal department has been awkward and slow to respond during the renewal process," especially if the customer does not run Oracle HCM.
Otter advised Taleo customers to allot extra time for renewals in light of this fact. "Make sure your renewals are well-defined beforehand," he said. "What's tougher now is you're dealing with a bigger entity, so it's less flexible. Whereas with a smaller vendor you might've been able to do things over a handshake, when you deal with bigger vendors it's important that you define any agreements robustly and on paper."
While Verd said support has worsened, others point to improvements.
Hansen said the fact that Taleo support is more systematic is a positive development. "What I've seen change thus far [since the acquisition] are operational things like support and contracting, and seeing those become integrated as one Oracle support and contracting process," Hansen, a Taleo and PeopleSoft user, said. "That's been beneficial to me in that I'm doing one set of processes across the HCM suite versus two separate sets of processes." She added that since a group of people is typically involved in HCM support issues at her company, having one consistent, streamlined process saves time.
Otter said that from his perspective, support has not taken a severe hit. "I think there are some cases where people feel they're not getting the same support, but I wouldn't say it's an epidemic."
Oracle Taleo integration steadily progressing
In any acquisition, integration between products doesn't happen overnight, and at just more than a year since the Oracle-Taleo deal was announced, Otter said Oracle is seemingly on track. "Oracle's laid out a pretty clear roadmap of what's going to happen, and I think they're following that, so I don't see [any] significant issues in terms of the integration," he said.
As a PeopleSoft customer, Hansen said she appreciates that Oracle is taking the time to engineer quality integration between Taleo and other Oracle HCM products. "Within my company, we have a lot to gain by the PeopleSoft HCM product and Taleo recruitment being integrated, and we want it done in the right way," she said. "From that perspective, I feel they're managing it very well."
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And as the integration progresses, Otter said Oracle has the opportunity to make the Oracle-Taleo connection a valuable selling point. "Over time, Oracle has to make the case for the better-together story, and they have to deliver integration and compelling innovation that would create that business value," he said. "That is a work in progress."
But Otter cautioned that HCM customers should always look for the products that suit their unique business needs, rather than just signing on with one vendor.
"One of the worst things I hear from customers is, 'We have an Oracle, SAP or IBM strategy.' Basically, what that means is you've abdicated your strategy to your vendor, and that's not good," he said. "Just because Oracle bought Taleo doesn't suddenly mean that Taleo customers need to buy Oracle or the other way around. Set your own HR IT strategy and define what integration means to you [and] what functionality and usability you want. Don't sit back and let vendors set your strategy."
Emma Snider is the associate site editor for SearchFinancialApplications.com. Follow her on Twitter: @emmajs24.