My recent posts were all about next level or future HR – with AI mindset first, opportunities and wrong turns we could take in the coming probably more days than years – seeing the announcements from OpenAI, Google and Microsoft (and others) just this recent week makes you think that the AI wave is coming even quicker than we thought. It is amazing what is possible already, but we also must be sure to take off any pink glasses we might wear. We are very much still in the early days and AI is not the solution for everything. Despite the fact that every company and every VC is now heavily running towards it and pushing it (Goodbye NFTs and Metaverse). This will end up in many many failed start-ups (if they actually make it after SVBs failure – the question is how they will be able to get funding – but this is a different story). We are at the beginning of the AI hype-cycle – still an important one, a historic moment in time, like when Steve Jobs showed off the first iPhone (which did not take off then, but it took some time and the App store).
Do we get it wrong?
When talking about AI, Google, Microsoft and OpenAI it is often talked about a war around search and the end-user internet. Even Satya Nadella has shared that view in a by now very famous and for sure historic interview with Nilay from the Verge (watch the video) “I want people to know that we made them (Google) dance”. And yes, of course search is one of the biggest markets out there where just a 1% share increase means many Millions of $s. But I would argue that we get that wrong – not that this is a fight and that this might lead to more search market competitiveness, but that this is the interesting fight to watch.
What is interesting is that it very much looks like Google and mostly Microsoft will win not only the AI, but the Business AI war. Both are already actively pushing applications into the enterprise world, into their enterprise solutions. This is the best approach to make money and get quick traction – and it could be a journey to overthrow the current leaders in HR enterprise technology. I mean, look at Oracle’s webpage, look at SuccessFactors or ServiceNow – they all have one thing in common: Absence of AI mentions on their homepages. Only Workday is actively marketing this area. They have AI on their webpage and during their Innovation Summit they announced that they invest in AI and have a roadmap (read more here from Josh). – but also let’s be clear, they all have missed the first boat and now need to quickly catch up or become obsolete. And the problem is that even if they think AI, they don’t think “AI first mindset“. They try to “upgrade” their solutions with a little bit of AI here and there. This will not lead to a winning position (happy to talk to you if you believe I got this wrong), or as Oren Harari famously said “The electric light did not come from the continuous improvement of candles”. If at Google there was panic and chaos when Microsoft announced Bing with ChatGPT, I do hope that there is hell at Workday, SAP, Oracle and ServiceNow seeing how Microsoft and Google push AI into the enterprise market. Interestingly I haven’t seen or heard anything like that, which is telling.
The new wave of HCM
Their products today are “digital first” at best – some of them have last upgraded their UX/UI years ago and don’t even look & feel current anymore. And looking under the hood, they continue to be dumb transaction focused almost ancient machines despite all the marketing nonsense. They need to reimagine themselves quickly – or acquire AI knowledge and capability to overhaul their core. This is now an unexpected point in time where the latest Gartner Magic Quadrant from 2022 is more than outdated. A new playing field has been established with new rules. Who will win? – and to have a chance to win, who will actually show up on the playing field? Stop trying to fix your current product, start from scratch is your only chance.
Google and Microsoft (and other AI players) are there and Microsoft has more than enough enterprise experience and HR technology experience to get into a new leading position if they wanted to. The time is up for what was great in 2022 – it is a new era that is starting and everything has to be rethought with an AI mindset first – and, and it would not be this post from me if I would not mention it, EX first. These are the two new leading aspirations. Build a new system that is thought of AI first with an EX goal. This is a massive task of course and it won’t happen quickly. But we might see a new era of HR systems. – remember, it took SuccessFactors and Workday years from existence to full functional scope to eradicate SAP HCM. And it will take another decade before the new winner is at the top – but the foundation for this winner is laid out now, today.
I think it is the most exciting times now to be in HR and especially HR Technology and Experience. It is so wild to watch but also be part of it. Let’s let the game begin! – and if you are building one of the new exciting AI first HR systems I would love to talk to you!
Chief HR Officer 