NetSuite folds TribeHR into its cloud ERP

Profile picture for user pwainewright By Phil Wainewright October 22, 2013
Summary:
Cloud ERP vendor NetSuite surprises with expansion into HCM, acquiring its partner TribeHR

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Looks like I should have paid more attention during Evan Goldberg's day 2 keynote at SuiteWorld this May when TribeHR demonstrated its HR application. Today NetSuite announced a deal to acquire its partner, "to create the first integrated cloud ERP and HCM software suite for small and mid-sized businesses."

The announcement comes somewhat out of left-field in that industry watchers were not expecting an imminent move by NetSuite into HCM. The timing is especially interesting in that it comes in the week that SAP has repositioned (or perhaps totally canned, the messaging is still unclear) its rival package to NetSuite, Business ByDesign.

The SAP offering was always conceived as a soup-to-nuts business automation platform for small businesses. With today's announcement, NetSuite conveniently adds the important HCM piece to fill out its own offering, just in time to step into the gap that SAP appears to be formally forsaking with the retirement of its only pureplay cloud product.

The NetSuite move feels like a big switch in strategy given that the last time the vendor said anything about HCM was in June, when it announced a "strategic alliance" with Oracle and Deloitte "to deliver integrated HCM and ERP Cloud Services for mid-size customers." Though that was an extraordinary week during which Oracle shared the love with a diverse clutch of partners.

NetSuite already has form for hooking up with partners, having acquired point-of-sale specialist Retail Anywhere in January this year. But other HCM partners in its ecosystem, most notably SilkRoad and Ascentis, will likely be miffed by the move.

The Oracle HCM relationship likely remains less affected as TribeHR appeals to smaller businesses or to departments and subsidiaries of larger corporations that may use the Oracle software at head office. ZDNet's Larry Dignan highlights this extension of NetSuite's 'two-tier' ERP model into the HCM space:

NetSuite appears to be pitching a two-tier HCM model that matches its ERP go-to-market strategy. Look for NetSuite to package TribeHR for subsidiaries and global operations and then connect them to the likes of Oracle and SAP at large company headquarters.

In addition, NetSuite is bolstering its appeal to SMBs that want to avoid what CEO Zach Nelson likes to call the "hairball" of integration between disparate applications. The TribeHR acquisition allows NetSuite customers to bring HCM into the same integration-free universe as financials, ecommerce and CRM. Alhough the crossover with Workday customers is minimal (though that won't stop some commentators talking up the competition between the two vendors in the coming days) it's also an interesting validation of that Workday's line that finance and HR functions should work more closely together.

No doubt we'll have more to say on this once NetSuite has spoken about the acquisition on its earnings call later this week. In the meantime, here's a summary of TribeHR functionality as presented in NetSuite's press release today:

  • Core HRIS (Human Resource Information System) to manage essential employee information individually and in aggregate, featuring employee administration, employee profile, employee history, compensation tracking, reporting for compliance, organizational charts, company directory, employee self-service, manager self-service, employee and recourse document storage, and employee time-off tracking.
  • Recruiting capabilities including a social applicant tracking system (ATS) with integrations to LinkedIn and Facebook, a must for modern human resources organizations with plans for rapid growth.
  • Talent Management functionality featuring 360-degree feedback tools, goal management, performance appraisals, skills tracking, and values and culture tracking.
  • Social HR overlays all the functionality of the system, providing commenting, collaboration, and peer and public recognition tools that span the entire company.
  • Mobile support for iOS devices so employees can collaborate and connect no matter where they are.

Disclosure: Oracle, SAP and Workday are diginomica premium partners. NetSuite paid the author's T&E to attend the SuiteWorld conference in May.

Image credit: courtesy of TribeHR.