This article was originally published in The Global Recruiter, APAC Issue 7
TECHNOLOGY – Cutting edge recruitment technology creates value but choosing “open vendors” creates more argues Sergei Makhmodov, CEO Asia, Daxtra Technologies.
Closed system challenges
On the other side of the equation, a closed system offers a sealed universe, requiring clients to operate within its well-defined borders. If a recruitment agency would wish to integrate a cutting edge solution into the closed ATS/CRM system, they have to ask that closed system to create that particular solution for them, or simply do without. Closed systems simply lack the agility woven into the DNA of systems that support open APIs. Forward-looking improvisation and tweak-as-you-go improvement simply isn’t possible in a closed universe.
In my work I often encounter the punishing effects of closed systems on clients. For example, a top recruitment agency may know that it would benefit immensely from our search technology. Or they know our CV parsing solution would improve workflow efficiencies, reduce costs, and help the firm source better candidates. But their closed ATS vendor won’t let DaXtra plug in. The door is shut. And the difficulty of ditching a closed ATS vendor – in which the recruiter is already fully entrenched – is too much to contemplate.
So the agency stumbles on, unable to benefit from new solutions on offer in the market, and locked in a hamster wheel development trap, incapable of innovating in a forward-looking fashion and suffering from the costs of relying on the bad data in their databases. The potential for wasted opportunities is staggering.
Meanwhile, internally, employees at the recruitment agency are growing frustrated by their own workplace inefficiencies. They know there are better solutions on the market, and they are at pains to understand why they can’t benefit from them while their competitors can. Pretty soon they start jumping ship and joining more flexible and innovative organisations. Thus, the closed system bites on both ends, externally and internally: simultaneously hampering innovation and business growth, while also demoralising staff.
Another challenge is awareness. One major problem I encounter is that recruitment firms and HR departments will sometimes fail to give the slightest thought to the differences between open and closed systems. Some have never heard of APIs. All they know is the most popular software vendor brands, some of which are closed. Seduced by the high-profile software brand, they choose a closed system, unaware that their choice locks their company into a marriage demanding technological monogamy – which can only come to an end via painful and costly divorce.
Of course, there are a number of closed systems that deliver the goods. Think Apple, or Bloomberg, or LinkedIn. Steve Jobs famously said, “Open systems don’t always win.” And some would say he was right: Apple created one of the most appealing closed technology universes in existence. Many consumers are willing to embrace the limitations of these closed systems because they are either incredibly attractive, or so influential that to not belong would potentially damage business development. These systems are so dominant that they don’t need to play nice and collaborate.
In fact, to wield enough market influence to remain confidently closed is the aspiration of many companies. That is, to become so powerful and so dominant that you can force clients and customers to operate on your terms. In that position, pricing power and market share come quite easily.
From a purely commercial point of view, that sounds pretty appealing, right? Maybe so, but only in the short-term.
Why? It’s a cliché to quote Lord Acton, but the Englishman’s famous expression is applicable here: “Power tends to corrupt, and absolute power corrupts absolutely.” Put simply, over time many top-of-the-market closed software vendors may become seduced by their own power and turn complacent. Eventually they will struggle to innovate as they attempt to remain closed and in control. Meanwhile, the outside world is quickly moving on, and open systems are innovating and providing the value and services clients need. In just a few years, today’s leaders can turn into tomorrow’s laggards.
There’s an old adage: no man is an island. Let’s extend that to recruitment technology: no CRM, ATS, or job board vendor is an island. There is no total solution – and recruiters will be best positioned to realise that sooner rather than later. In the long run, software solutions that support open APIs are far more effective for businesses, employees and clients – and will likely remain better suited for our tech-driven future.
*This article was originally published in The Global Recruiter, APAC Issue 7