HR software vendor turning to the channel for implementation help

As Taleo Corp. transitions from a purely e-recruiting software provider to a performance management software vendor, the company plans to rely more heavily on the channel to help it implement its on demand human resources solutions.

The San Francisco-based vendor, with a substantial research and development presence in Quebec, told attendees at its Taleo World 2007 conference here last month it considers managing an employee’s performance with the company, and employee retention, to be as important as the recruiting and hiring process itself.

To that end, Taleo used the conference to launch Taleo Performance, a new on demand software offering in the performance management space that will see the company begin to compete more heavily with larger ERP vendors such as Oracle and SAP.

Taleo president and CEO Michael Gregoire said as the company expands into this new market, it sees implementation becoming a challenge.

“Our ability to sell the product will rapidly outstrip our ability to implement, so we’re actively recruiting partners to help with implementation,” said Gregoire.

In an interview, Taleo’s vice-president of global alliances, Fred Harding, confirmed the company will be looking to the systems integrator community to help it fill that gap, and will be making implementation primarily a channel play.

Today, while Taleo does have a channel program, its partners are mainly large human resources outsourcing companies such as IBM, Accenture, Fidelity and EDS. Harding said pure software deals are typically done by Taleo direct, while deals where the decision is to buy a service with the software built into it typically moves through this channel.

“The service provider typically needs a software to power or enable their services, and so from a channel perspective they’ll either bring us in as a referral partner and we’ll jointly sell, or they’ll resell Taleo as part of their services,” said Harding. “It’s a strategy for getting at a type of deal and an element of revenue that our direct sales team couldn’t get at.”

Where there’s going to be greater down-channel opportunity in the future is, as Gregoire hinted, around implementation. Currently, Taleo’s services team does 80 per cent of the implementation work and relies on partners for 20 per cent. Harding said he’d like to flip that figure.

“If we want to really grow the way we want to grow, software revenue is what powers the company,” said Harding. “We generally do services in order to make the software successful, we don’t do services standalone, so part of the strategy is to switch that around.”

It’s a vision, said Harding, they’re not there yet it’s where they’re heading.

“The idea is we’ll bring in more implementation partners and more systems integration partners, either very large-sized, mid-sized or boutique ones depending on the customer engagement, to deliver the services,” said Harding. “We’re going to grow our partner ecosystem.”

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Jeff Jedras
Jeff Jedras
A veteran technology and business journalist, Jeff Jedras began his career in technology journalism in the late 1990s, covering the booming (and later busting) Ottawa technology sector for Silicon Valley North and the Ottawa Business Journal, as well as everything from municipal politics to real estate. He later covered the technology scene in Vancouver before joining IT World Canada in Toronto in 2005, covering enterprise IT for ComputerWorld Canada. He would go on to cover the channel as an assistant editor with CDN. His writing has appeared in the Vancouver Sun, the Ottawa Citizen and a wide range of industry trade publications.

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