IT vendor consolidation means major changes ahead for HR - HR Update News That Works - Brief Article

HR Magazine, Jan, 2002 by Julie Britt

Human resource professionals should pay attention to forecasts that information technology (IT) vendors will continue to fall victim to the nation's economic troubles, a veteran IT industry consultant warns.

"The disappearance of mainstream IT vendors could be potentially catastrophic for HRIS [HR information systems], since so many of the vendor packages we use today are really collections of capabilities from a variety of vendors," says Robert Stambaugh, president of Kapa'a Associates, a consulting firm in Kekaha, Hawaii.

Half of the well-known IT vendors either will go out of business or will be swallowed up in mergers over the next three years, according to Michael Fleisher, chairman and CEO of Gartner Inc., an IT research and consulting firm in Stamford, Conn.

Stambaugh agrees. "When the big-time players start to disappear, HR won't see an immediate impact: Current systems will still be operational," he says. "But the stream of upgrades and the problem-solving skills that defined the old vendor company will probably be severely downgraded or altogether absent. Even worse, when these vendors have been partners in our long-term planning, we may be forced to completely rethink strategy, investment rationale and training goals."

HR practitioners can protect themselves from upheaval in the technology industry, says Stambaugh, who has more than 30 years' experience in HR and HR systems development and also serves on the board of SHRM's HR Technology X-Change Professional Emphasis Group. "I think we have to make sure we know who all our vendors are--not just who IT talks to at headquarters, but the entire 'family' of networked users and suppliers and consultants," he says.

Stambaugh also suggests that HR professionals attend HRIS expos and trade shows to keep up with industry changes. "In fact, in the near future, we'll probably see people going to those events not to 'kick the tires' of new software, but to develop new information sources regarding such alliances. In the longer term, I think we'll also see users of a vendor's software band together and form mutual assistance alliances, just in case some of these failures hit them at a vulnerable time or place."