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ATS vs. CRM: Where the ATS Went Wrong

Posted by Colin Kingsbury

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Feb 23, 2006 8:15:00 PM

A comment attached to a recent post on ERExchange finally convinced me to plant my flag on this debate.

It started when someone posted a message asking for vendors for a "Global ATS," specifically one that could be deployed in China. One person responded with a fairly detailed list of vendors and issues to consider. Jeremy Langhans replied simply:
Jeremy may not have been the first person to suggest that CRM systems are an alternative to applicant tracking, but he is one of the loudest advocates of this school of thought. Nor is he alone- a month back Jeff Hunter posted a comment on the Human Capitalist blog saying that he was starting to use Salesforce.com as a "sourcing/pre-ATS module."

Jeff and Jeremy are two of the smarter guys in this business so when they're both saying the same thing it's probably worth paying attention to. Jeremy says,
I believe, in our hunt for passive high-end & high-demand Talent, that the ATS is a dead technology. CRM is what will enable us to apply a true sales lifecycle to our acquisition methodology.
The fact that Jeff's company happens to be on Jeremy's client list only strengthens my sense that there's something important going on here.

Considering that I am an ATS vendor you might reasonably expect me to dismiss Jeremy's suggestion with prejudice, or offer an OCD-ish point-by-point rebuttal. In fact, I'm going to agree with them and say that the ATS as we know it is broken

It's too expensive for what it does. Let's face it: the typical tasks performed by an ATS are not rocket science. It doesn't need to scale to support thousands or millions of users, and it interfaces with one, maybe two other systems. And yet even mid-market tools are often priced at two to five times the cost of upper-tier CRM packages which at first glance offer a lot more features. The productivity gains do not match the price, which explains why even 5-person companies often have CRM systems while 1000-person companies often don't use an ATS.

It's too focused on automating bureaucracy. How often have you been told to do things completely backwards in a software system because "that's the only way it will accept it?" Systems which begin their life as tools to automate bureaucratic processes often end up as enforcers of corporate "blue laws." There is nothing worse than being stuck with a clumsy process because the tool--rather than the business--requires it. A leaner process will beat a bigger filing cabinet every day of the week.

It creates too much overhead for primary users. I'm shocked by the amount of data entry and mouse-clicking most ATSs still require. Quite a few require candidate contact info to be entered manually for every candidate, or charge big bucks to parse this automatically. Similarly, many systems force users through 3-5 interface pages to accomplish everyday tasks. This is not tolerated in the CRM business because managers understand that every minute spent in the software is a minute not spent on the phone making money. This should be just as true for recruiting (which is really a sales function) but since HR's seat is often at the kids' table it gets ignored in favor of policy-following functionality that works against the P&L.

In part 2, I'll explore what this means for the ATS industry, and why CRM isn't a silver bullet.