This was a surprise to the extent that Salesforce.com’s chief executive Marc Benioff had previously been resolute in his intent to ‘stick to the firm’s knitting’ of customer relationship management and sales force automation applications rather than venture into the back office, preferring to partner instead with the likes of HR and payroll system vendor, Workday.

But other voices suggest that the purchase was totally predictable, given that only days earlier arch-enemy SAP had taken the market by surprise by snapping up SuccessFactors – another firm with which Salesforce.com has enjoyed a somewhat turbulent relationship. A hangover of that tension can perhaps be seen in the somewhat cheeky decision to rename Rypple as SuccessForce.

Whatever worldview you subscribe to, the reality is that Salesforce.com, that champion of the CRM Software-as-a-Service world, now has a stake in the SaaS-based human capital management market – and is looking increasingly competitive against the likes of SAP, Oracle and Workday as they also make serious attempts to offer customers so-called ‘next generation’ alternatives to ageing (Oracle) PeopleSoft installations.

But in many respects, the Rypple acquisition is an extension of the vendor’s Social Enterprise mantra, which can be boiled down to: ‘why don’t all business applications look like Facebook and why aren’t they as easy-to use?’ In this context, Rypple’s social media capabilities are just as appealing as its HCM software. Indeed, the HCM aspect may not even be the priority.

 

 

Yvette Cameron, an analyst at Next Gen Insights, explains: “This acquisition does not address the core elements of HCM such as basic employee information management, payroll, benefits and rewards; these are not areas of immediate priority for Salesforce. While highly commoditised and readily outsourced, these are areas that competitors such as Workday and SAP address today and hence provide potential advantage to such players.”
 
Moreover, Cameron does not believe that the supplier’s interest in the market is any kind of validation of talk that social, SaaS-based HCM systems are starting to move into the mainstream. “The adoption of social processes within the enterprise has been steadily growing over recent years, yet the adoption by HR departments has lagged,” she notes.

 

Interestingly, Cameron adds, however: “In recent months, Rypple has seen more and more HR-driven interest in their solutions, indicating that HR buyers are ready for these new people-centric approaches to traditional HCM processes. Now, as part of the larger Salesforce suite, these social HCM processes are positioned for more rapid acceptance in the enterprise.”

 

As a result, the SaaS supplier’s purchase should act as “a call to action for all strategic HCM vendors that people-centric, not HR-centric, processes are the future of work”, Cameron believes.
 
And it is in the people-centric arena that Rypple’s social capabilities really do come to the fore, while the notion of taking social concepts and applying them to HCM is entirely in keeping with Salesforce.com’s Social Enterprise strategy.

 

Thomas Otter, a research vice president at Gartner Research, says:“[It’s] betting that the societal shift enabled by the internet and social media will transform organisations from a command-and-control style to a more networked style.”

 

Today’s HCM systems were designed with a command-and-control model in mind and so are conceptually based on organisational, job and position hierarchies, he explains.

 

 

On the one hand, therefore, Otter expects Salesforce.com to expand into new aspects of talent management such as recruiting, career development and learning “where social capabilities can be transformative”. On the other, he anticipates that, over the longer-term, the vendor will “develop a new kind of HCM system of record that has at its heart the social graph, rather than organisation or job/position hierarchies”.

And this should be possible due to the fact that Rypple’s employee performance management applications exploit game mechanics. This means, for example, that the system awards workers with badges in order to encourage them to provide feedback and recognition to others and to collaborate on creating goals, activities that are, in turn, fed into formal performance appraisals.

How long it will take for the product’s ‘gamification’ aspects to take hold in the enterprise market remains a key question. But Richard Absalom, an analyst at research house Ovum believes that it might not take too long, predicting that gamification will start to make its mark on a number of employee-facing processes this year, even if many observers still see it as a gimmick.

“Gamification techniques have taken off in the consumer-focused marketing sphere, as product designers and marketers aim to improve brand engagement and incentivise consumer behaviour without necessarily resorting to financial incentives,” he says.

 

Although primarily targeted at the social networking and gaming generation, techniques normally associated with gaming such as point acquisition, levelling up, goals, reward badges and competitions with leader boards are used to increase traffic and engagement and, ultimately, to boost revenues.

 

But Absalom says: “Businesses are beginning to realize the potential for these same techniques to be used to improve engagement and productivity among employees” too.
 

With this in mind, he sees Salesforce.com’s Rypple gambit as a sign that vendors are beginning to take gamification ideas seriously. “The primary potential of gamification in the enterprise is to act as a tool for HR,” Absalom explains. “Rypple’s value proposition has been to replace ‘traditional’ employee performance reviews with real-time feedback, coaching, and recognition of both success and under-performance.”

 

The idea is that, combining social and gaming tools and techniques with enterprise applications such as CRM should make it easier for managers to gauge individual productivity quickly so that over-performers can be rewarded, while under-performers can be helped to improve.

 

“It also meets demand from employees to use the kind of tools at work with which they are familiar in their personal lives, providing social functionality, ease-of-use and tangible real-time results,” Absalom says.

But he cautions that organisational acceptance of such tools and techniques has yet to be proven and much, in a Salesforce.com context at least, will hang on how well the vendor executes its plan.

 

Interestingly, however, Absalom also believes that the rate at which SuccessForce is adopted among Salesforce.com’s huge and varied customer base will act as a gauge of how organisations across different vertical markets and geographies view the concept of gamification in and itself.

 

“Will they see it simply as a cool gimmick that has been plucked from the consumer marketing world, just a re-hashing of existing ideas and practices? Or will they believe that it could genuinely improve HR and wider business practices through better employee engagement?” he muses.