In the last month the Human Capital Management market has consolidated with Authoria picking up Peopleclick and SuccessFactors acquiring Inform. Both acquisitions add product functionality with little or no product overlap. But this doesn’t mean integration will be easy. There are plenty of challenges ahead.

Let’s start with Authoria and Peopleclick. Authoria was taken over by Bedford Funding, a private equity firm about 18 months ago. During most of those 18 months Authoria has been very quiet. Competitors have not seen them in deals and customers have wondered if Authoria had lost its edge. Now Bedford, a firm with deep pockets adds to their HCM booty with the Peopleclick acquisition. Billed as a complementary acquisition, Peopleclick focuses on talent acquisition and management while Authoria concentrates on performance and talent management. The combined company boasts that it is the largest private company in the niche space that includes vendors like SuccessFactors, Taleo and Kenexa.  But size doesn’t mean quality. While it’s true that except for some overlap in recruiting, the Peopleclick Authoria merger gives the combined company broad offerings, integration will be key. The name itself — Peopleclick Authoria — sounds like two separate companies running parallel. Executive reasoning for the name is to assure customers that the combined company will continue to support all existing products. While this may be fine for now, customers will want to see how the two vendors will integrate their offerings to enable a seamless experience from recruiting to succession planning to compensation.  This is a challenge Peopleclick Authoria must move on quickly in order to return to prominence on customers’ Talent Management radar screen.  Also I wonder what Bedford’s next move might be — they are lacking a learning management system in the Peopleclick Authoria HCM suite offering. I bet they’d like Plateau Systems if CEO Paul Sparta would entertain such a thought.

Now for SuccessFactors – acquiring Inform is the first acquisition for SuccessFactors.  That means they are in new territory with no previous experience. The executives acknowledge this fact and are preparing by hiring an integration expert, asking a lot of questions, and planning carefully. But customers will want to see a seamless integration of these products too.  SuccessFactors’ acquisition of Inform brings together two very different cultures, which is a challenge. Because the products are complementary, the Inform staff is coming over including sales and marketing. These people are critical to success in selling the analytics product within the new company.  With all the challenges, I think the move to integrate an analytics/workforce planning company with a talent management company is a brilliant move for SuccessFactors and really gives them an edge on the market — as long as they can do it while continuing to drive the momentum they have in the market — and help customers see the value and use a complicated analytics product — no easy task!