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HRSEO Articles |
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Applicant Tracking Systems
Competing in the Applicant Tracking Systems Space
If you were to follow neoclassical economic theory, it could be argued that currently the Applicant Tracking Systems (ATS) market can be defined as a highly competitive one. Broadly speaking, highly competitive markets:
- Consist of large numbers of participants or vendors with products and services which are similar in features and client benefits
- Present relative low financial, technical and knowledge barriers to entering it (software, hardware and process expertise can be easily acquired even available for free – see http://www.catsone.com/products.php)
- Have high price-elasticity for their offerings (e.g. prices are significantly lower than a few years back and no changes expected due to increased supply of services) indicating a degree of commoditization.
Given the market pressures in this space, vendors have used marketing campaigns, designed commercial arrangements (e.g. alternative pricing structures) and added product features to create differentiating elements in order to make their situation more tenable. At the core of the offering however, the same functionality and service modules persist: resume funneling, applicant data, job/requisition information, document storage, and client management records; all overarched by general use utilities (search, scheduling, notifications, etc.)
If the ATS market landscape has been accurately depicted above, how can vendors aim to succeed servicing recruitment agencies or corporate HR departments?
One option is to exit the generalist ATS market and look for specialisation by leveraging off pockets of process/technology expertise or industry vertical knowledge within the organisation, or via acquisition and alliances. This can take the refocused organisation through alternative niche streams:
- Positioning themselves as a specialist vendor with deep knowledge within the overall candidate selection value chain. For example, organizations with valuable IP in applicant tracking could decide to focus on this niche.
- Participate in a specific recruitment sourcing verticals (graduate recruitment, blue collar selection and processing) using technologies suited to these spaces
- An alternative path (going up-market) consists of the incorporation of consulting and advisory services into the company’s portfolio. Rather than a marketing ploy, this extension is qualitatively different to other add-ons because it opens the opportunity for a deeper interaction with the client, thus affecting the vendor’s degree of competitiveness against other players. This is not dissimilar to what IBM did when its Global Services division was created by Lou Gerstner back in the 90’s.
As alternative options are considered to for evaluation, vendors in the ATS market interested in moving up the curve need to focus their efforts in understanding:
- The internal resources and capabilities required to refocus the organization into a new offering space. Critically reviewing market opportunities against the assets the company has to seize them will reveal possible gaps that need to be addressed
- The features and particulars of the new market to be entered, in order to avoid ‘jumping from the pot to the pan’. Ideally, the new market space will play better to the organisation’s current / future strengths thus avoiding the high-competition nature of the generalist ATS market
- The evolving and dynamic nature of the space they intend to address. Alternative markets may be of high appeal to flocking ATS players today. It will be critical to at least attempt to elucidate how future client demands, technologies, etc will shape the prospect market’s attractiveness.
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