Why aren't there more “global” core HR tech vendors?

This stuff is complicated.

I’m not sure who Zack is, but his takes on living in Germany as an American immigrant are almost always spot on, and often very funny.

Most vendors who build core HR systems start with one country in mind, usually their home country. After local success, they assume that they can expand internationally, and this often leads to a rather expensive learning and unlearning curve. It is not just figuring out the compliance obligations, it often forces major architectural rewrites. It takes a lot of time, money and patience to figure this all out. Replacing incumbent isn’t easy either. There is a lot more PeopleSoft and on-prem SAP in productive deployment today than we first imagine. We are probably just hitting cloud / on-prem parity now. There is a lot of surface cloud and on-prem in the basement.

So when vendors that have been successful in one or two countries announce ‘global enterprise’ products I’m generally sceptical. I’m also sceptical when vendors who have been successful in an adjacent HR component announce that they are building a core global HR system. Success as a performance management vendor or as an EOR provider doesn’t necessarily mean you have the chops to build out a core HR system, never mind a payroll. Being part of the team that built out Employee Central at SAP SuccessFactors, I know how building and maintaining a core HR system is a far heavier engineering and architecture effort than building and maintaining talent management software is.

I’m pretty convinced that the SME market will remain national and regional. I explore that in an earlier post (nifty new feature from Substack enables this embedding thing).

Generally, what what works in SME fails in the Enterprise, and the other way around.

I’m so wondering what will happen in the enterprise over the next couple of years. he big players have been around for a while, and I’m asking if there is a going to be a fundamentally new way to build HR Tech for the large enterprise.

I’m super interested to find those founders that are fundamentally rethinking how global organizations should deliver their HR processes. Will we see a model that challenges dominant SaaS design of centralised data models that made Workday, SuccessFactors and Oracle successful?

Will AI make understanding complex local rules a doddle, will new coding techniques lower the cost of engineering, will newer integration and workflow technologies enable companies to stitch local solutions together themselves? Will an established company from outside the space disrupt the status quo? Will SaaS remain the dominant delivery model, or will there be new business models? Who’s rethinking ERP?

I don’t have the answers, but I have lots of questions. This is part of what makes this job so much fun.

As I usually do, I’ll leave you with a tune. Wilco’s impossible Germany.