Earlier this year I published a two part article on Front Office (FO) systems in SI Review. The first part talked about front office functionality trends and the second part talked about how to select an FO application and listed basic information about the off-the-shelf vendors. When I started the article I thought there would be about 20 or 30 vendors on the list and by the time I was done, there were 54!
FO software is typically marketed to contingent staffing companies. There is an adjacent market, Applicant Tracking System (ATS) software that is typically marketed to HR professionals for direct hiring. I counted 54 FO apps and there must be 3 or 4 times that in ATS software solutions.
One of my messages in the article was that I see the potential for FO/ATS convergence since the two feature sets and markets have so many similarities. My gut tells me that the overall market is not large enough to support all of these vendors. We've already seen a lot of M&A across ATS vendors; I am sure that we'll continue to see consolidation and convergence in the ATS and FO spaces.
Some vendors have crossed over and started to go after their complimentary market. For example, we see Taleo talk about going after the staffing market, Bond go after the HR space, and companies like HireDesk selling into both markets more or less equally.
When investigating your options at a high-level, it can be difficult to see the differences between FO and ATS. Some of those ATS options are becoming increasingly enticing. ATS is a larger market with greater competition, so features and technologies typically advance faster.
However, if you are using an ATS (not an FO) to support your contingent staffing processes, it is likely that you are seeing some real ATS shortcomings. These so-called shortcomings really stem from the fact that they focus on two different markets.
A few examples of ATS / FO differences:
- Hiring companies need workflow in the ATS to manage job requisition approval; staffing companies don't need that workflow - they assume the req was approved before it hit their desk.
- Staffing companies need to ensure hooks into their time & expense tracking and billing & invoicing applications (if they are separate). Hiring companies need to get the ATS data to their HRIS.
- Contingent staffing companies aim to place candidates on consecutive assignments, while HR departments have a totally different perspective on multiple assignments for a single candidate - they call it managing internal candidates.
As I stated in my article, if you are searching for an FO replacement it is important to take a look at adjacent markets, like ATS; just be sure to focus on enabling your business process and try not to be dazzled by the ATS market size, momentum and price points.
Comments