Skills Software Is Booming. Do You Have the Data Foundation to Use It?

Skills software is everywhere right now. Talent marketplaces, intelligent learning platforms, artificial intelligence (AI)-powered upskilling tools—the market is saturated with promises of personalized growth, agile workforce planning and dynamic career pathing. And to be clear: the vision is compelling. The idea of surfacing internal talent, guiding career development and aligning skills to business needs is exactly where we should be headed. Earlier this year, ISG published the HCM Suites Buyers Guides, where skills intelligence and skills mapping were among the capabilities evaluated for both HCM and Talent Suites.

But here’s the question too many organizations aren’t asking before they sign the contract: Do we actually have the data foundation to make this work? 

The reality is that most organizations rushing into skills software adoption don’t have a unified skills strategy—let alone reliable skills data. What they have is a mix of outdated job descriptions, inconsistent role naming, ad hoc competency libraries and spreadsheets that no one’s updated in years. And without structured, trusted and business-aligned data, even the most advanced platform won’t deliver on its promise.

That’s not a software problem. That’s a readiness problem.

By 2028, I assert that one-half of enterprises will make AI-enabled skills management and mapping one of their top provider criteria when evaluating learning and talent platforms. Not because it’s a flashy capability, but because enterprises will realize they need a shared foundation before any of these systems can deliver value.

Here’s what I see happening far too often: an organization buys into the idea of a skills-based platform. They envision a beautiful interface where employees are matched to gigs, upskilling pathways are generated automatically and managers can search for skills like they would keywords in a search bar. But then implementation begins—and reality hits. The job architecture is broken. The skills library doesn’t reflect actual work. There’s no connection between learning content and business priorities. And the system, while technically functional, doesn’t resonate. Because there’s no foundation to support the intelligence it promises to deliver.

That disconnect is frustrating for everyone. HR feels the pressure of underutilized software. Employees experience confusion or disengagement. And business leaders, initially excited, start to doubt whether the investment was worth it.

Here’s the hard truth: implementing a skills-based platform without skills alignment is like building a smart home on an unstable foundation. The automation may work—for a while—but eventually the cracks show. Processes don’t align. Users lose confidence. And IT teams are left patching a system that was never anchored to reality in the first place.

One common misunderstanding is conflating “skills data” with a “skills framework.” It’s one thing to collect skills—through assessments, employee profiles or surveys. But without a structured framework that defines how skills relate to jobs, performance, career movement and learning content, that data floats. It’s disconnected. It becomes more noise than signal.

Another frequent challenge is leadership misalignment. A skills-based approach to talent management doesn’t live solely in HR—it cuts across learning, recruiting, performance and workforce planning. When business leaders aren't aligned on what skills matter, how they’re defined or where they live in the organizational structure, progress stalls. One function invests, another resists. Systems go live, but adoption never takes root.

This is where strategy has to meet structure. Before you adopt any skills-based software, ask yourself a few questions:

• Have we defined what “skills” actually means in our organization?

• Do we have a central, accessible and actively managed skills library?

• Are our job descriptions structured around capabilities, not just responsibilities?

• Is our learning content mapped to those capabilities in a meaningful way?
• Do managers and employees understand how skills growth links to career movement?
  
  

If the answer to most of those questions is “not really,” then the right next step isn’t software—it’s structure. It’s investing time and attention into building a shared skills framework that reflects the current and future state of work in your business.

This doesn’t mean waiting five years to get it perfect. It means getting intentional. Start small. Choose a segment of the business and pilot a structured approach to skills definition and governance. Align your HR, L&D, and business partners around what success looks like. Use the findings to inform—not delay—your HCM roadmap.

Because skills software isn’t a magic wand. It doesn’t create clarity—it amplifies what’s already there. If what’s there is confusion, you’ll get automated confusion at scale. The organizations that are getting this right aren’t the ones with the fanciest tools—they’re the ones treating their skills data as a core asset. They’re governing it. They’re updating it. They’re aligning it to business strategy. And only then are they plugging in systems that can extend that clarity into talent mobility, performance and development.

As interest in skills-based everything continues to surge, the temptation will be to act fast—especially as providers tout rapid deployment timelines, AI-driven engines and integrations that sound turnkey. But without the foundational work, you’re not building a skills strategy. You’re just buying software.

So before you get swept up in the latest skills-based software launch or provider pitch, pause. Audit your foundation. Ask whether your data, structure and strategy can support the promise being made. Because without that, what you’re really buying isn’t a transformation—it’s a beautifully packaged reminder of everything you still need to do.

Regards,

Matthew Brown