Cornerstone OnDemand is a large pure-play vendor of talent management software, with more than 1,700 clients, more than 14.5 million users and more than 60 percent growth in revenue over the past 12 months. At the company’s annual customer conference this year, CEO Adam Miller talked about a trend in the market of talent management applications going beyond automating a series of processes to help engage employees within organizations. I agree with this analysis and would extend the trend to cover the full range of human capital management (HCM) applications.

vr_bti_br_whats_important_in_choosing_technology_updatedFrom our benchmark research and discussions with vendors in this market, I see four main fronts vendors like Cornerstone must focus on. These are usability (and accessibility) of the applications, collaboration among users, the value of a suite over a collection of individual products, and advanced analytics. Considering the first, usability is the top criterion for technology product selection in our business technology innovation benchmark research and also in our two most recent HCM research projects, on payroll management and human capital analytics. The second, collaboration, is the area in which most research participants want improvement by vendors of human capital analytics.

Cornerstone’s recent product announcements indicate recent investments in advancing usability and the value of the suite. At the conference, it announced two new products: Cornerstone Onboarding and Cornerstone Marketplace. Both connect parts of the Cornerstone Talent Management platform and provide the framework for extending the platform. Onboarding links its recruiting, learning and performance management products, providing a more seamless experience for users as well as including standard capabilities for onboarding new hires, such as forms automation and task management. Marketplace provides a framework for purchasing and working with Cornerstone’s partners, whose products and services supplement the suite, and it makes integration and management of partner products easier for customers to manage.

The company also announced an update to the suite that includes several enhancements to improve usability. Specifically, the June ’14 Product Release improves the user interface for Cornerstone Learning and streamlines the performance review system of Cornerstone Performance. The release also adds a high-volume hiring capability to Cornerstone Recruiting. Together these enhancements show Cornerstone investing in building a talent management system that promotes employee engagement.

In addition, in the past year or so Cornerstone integrated collaborative and mobile capabilities into the suite; these are competitive with what others have done, as I have written.  Nevertheless, there are still more areas where Cornerstone should work to create a complete system that impacts employee engagement.

vr_HCA_02_key_benefits_of_human_capital_analyticsSpecifically it should invest in analytics and its Universal Profile, which provides a substitute for a human resources management system (HRMS). Our benchmark research on human capital analytics finds that the benefit organizations realize from these products second-most often in over half of organizations (52%) is better engagement and retention of the workforce. Toward that end, Cornerstone said it is developing analytics that it will release later this year as a stand-alone product. That should fill some of its gap in analytics, though there is still more to do.

Cornerstone Universal Profile has some strong capabilities, but in my view the market favors having an integrated HRMS in a suite as do Oracle, SuccessFactors an SAP company, SumTotal Systems, Workday as well as others, which competes with Cornerstone on learning management. All these vendors have strong talent management products to go with an integrated HRMS.

Another trend that may affect Cornerstone is the entry into talent management of vendors that are strong in HRMS and payroll. Among them are Ceridian and Ultimate Software, both of which I have written about recently. While presently these vendors don’t have talent management products to equal Cornerstone’s, both are well-funded and have started to invest strongly in this area.

I think Cornerstone’s management understands what is required to provide a talent management system that supports employee engagement. The product enhancements released over the past year show a consistent focus on areas needing improvement to achieve that goal. But competitors are also releasing products that offer the same value proposition. Cornerstone will need to continue to execute well to maintain its leading position in the talent management market. I recommend that if your organization is evaluating talent management products it should consider Cornerstone’s.

Regards,

Stephan Millard

VP & Research Director

vr_Payroll_Management_02_motivation_for_payroll_investmentOur recently released benchmark research on optimizing payroll management assesses how organizations use payroll information, processes and technology. It finds that most of them still need to improve. Our analysis compared the forces motivating investment in payroll management systems to broader strategic drivers for human capital management (HCM) that I previously outlined and found substantial agreement. Three of the five leading factors – demand for higher employee productivity (48%), limited alignment between pay and performance (36%), and inconsistent execution of performance goals (24%) – are part of a broader HCM agenda as seen in previous research projects and discussions with clients. But apart from that the research found a disconnect between what motivates companies and what they actually are doing.

While organizations generally are accomplished at managing their core payroll processes, not many are making investments in technology tools to help achieve their HCM objectives. Specifically, in the Technology dimension of our Performance Index analysis, half rank at the two lowest of four performance levels. A key reason for this is that many have not integrated payroll management with other HCM proces­ses. While organizations long ago auto­mated their basic payroll processes, the Performance Index analysis in this research places only one in five organizations at the top Innovative level of overall performance; they have taken steps to integrate their payroll processes with other HCM systems.

This contrast shows up in several areas of the research. For example, four out of five organizations said that their payroll processing system is accurate (61%) or very accurate (21%); only 1 percent said theirs is not accurate. Yet seven in 10 participants reported that their organization uses spreadsheets universally or regularly to track payroll management functions or compliance activities, and 39 percent said reliance on them has made it difficult to manage payroll efficiently. More importantly, only half of participants said they have a human resources management system (HRMS); these systems track and report on information needed for compliance with state and federal employment requirements.

vr_Payroll_Management_03_integration_of_system_lagsElsewhere the research shows that only 8 percent have integrated payroll management with their talent management system; while 22 percent said they plan to do that in the next 12 to 18 months, fully half have no such plan. Similarly, 29 percent have a dedicated workforce management system, but only one in five have integrated their payroll management system with it; nearly half (48%) export data from the time and attendance system and import it into payroll manually. The research shows benefits in more systematic operations. Among organizations that have integrated workforce management and payroll management, 62 percent said they have reduced their payroll error rate, which is one of the top five metrics used to measure payroll process effectiveness. So while organizations are focused on improving efficiencies within payroll itself, most are not yet investing in the areas where broader gains can be made.

vr_Payroll_Management_01_integrated_payroll_management_provides_valueTo attain greater workforce productivity, which is the second-highest priority found in our research, organizations need to connect payroll management to other processes such as performance management, goals and benefits. In the research three in four (77%) of those that have integrated their payroll and talent management systems reported having an effective or very effective payroll management process, compared to 62 percent of organizations that do not integrate these systems. Additionally, two-thirds of companies reported better alignment between incentive compensation and performance after integrating their payroll and pay-for-performance systems.

In the next year, as the employer mandate of the Affordable Care Act takes effect, it is likely that one part of this integration will get more attention and I have assessed – integrating workforce management and payroll. Businesses will need to make sure that the actual hours that employees work match precisely with what is reported in their time and attendance and workforce scheduling systems. Beyond that we urge companies to evaluate broader integrations to achieve the goals that lead them to invest in payroll management to start with – demand for higher productivity, greater alignment between pay and performance and inconsistent execution in performance.

Regards,

Stephan Millard

VP & Research Director

Ultimate Software is one of the larger players in the market for human capital management (HCM) software, with roots in providing human resources and payroll management products. Recently I attended its annual Connections conference. Last year the company focused attention on expansion of its global capabilities, which I analyzed, while this year it highlighted broadening and modernizing of the product suite.

A major effort in modernizing the suite was to improve the user experience for UltiPro, its HCM suite. This update reduces the number of clicks it takes to execute any task in and makes the applications visually more intuitive. In addition, the home portal design elements now resemble some that other vendors have introduced which provides pictures of a user’s team members. The user interface team, led by Patañjali Chary, VP of user experience, used advanced application design approaches such as eye-tracking models to provide information on the screen in places users expect to find it. The result feels lighter and provides visual cues to guide the user through the product’s features.

Also as part of the redesign of their user experience, Ultimate used HTML 5 to enable mobile access to  UltiPro. During the event company representatives described its approach to mobility as “responsive design.” Essentially that means the application can automatically detect the device being used and deliver a user experience designed for that device. This is an evolving capability we are seeing as more vendors strive to provide compelling user interfaces.  However, using responsive design and HTML5 to develop for mobile devices still produces some application screens that do not render cleanly for all mobile devices. I find developing native mobile applications to be a better approach, at least for the present. However, this capability should improve over time.

vr_Payroll_Management_06_what_to_integrate_with_payroll_managementUltimate’s speakers showcased three new products which expand the breadth of the suite, two of them in talent management. There is a new compensation module called UltiPro Compensation Management. This is a necessary addition for Ultimate. Our recent benchmark research in payroll management optimization shows that compensation management is a very important application to integrate with payroll management for nearly half (45%) of organizations. Ultimate’s product enters a segment in which many mature products are available; it is likely to find most use for midsize companies that already use UltiPro and have basic compensation planning needs. This addition enhances Ultimate’s expansion from a payroll and HR management vendor to providing a more complete human capital management suite.

The second major module recently released is UltiPro Recruiting, which provides applicant tracking capabilities to current UltiPro customers and follows other HCM platform vendors that have released a recruiting product in the last 12 months. I recently wrote about growth in the recruiting market.

The third new announcement expands the functionality of the core product through a time-capture device, UltiPro Touchbase. Based on technology from the company’s acquisition of EmployTouch in 2013, it is a hybrid device that users can unplug and use like a tablet as well as meeting all the needs of a standard time clock with employee punch-in and -out methods. It also adds features designed to avoid “buddy punching,” such as photo verification. This addition should help Ultimate stay competitive in the workforce management and payroll management markets where others vendors also have introduced their own time-capture devices.

Following last year’s emphasis at Connections, Ultimate has continued to expand UltiPro’s global capabilities. It released the product in three additional languages and continues a partnership with Celergo to provide international payroll capabilities. As Ultimate tries to compete in more deals for organizations that have an international presence, I believe it must invest more rapidly in this area to catch up with other vendors that have strong international capabilities, such as Oracle and SAP.

vr_Payroll_Management_01_integrated_payroll_management_provides_valueIt is clear that Ultimate Software is making significant investments in its products. In 2014 the company plans to invest more than US$100 million in product development, which represents approximately one-quarter of its total revenue for 2013. This effort should benefit its customers and perhaps win new ones. Our research in payroll management optimization finds that companies that invest in integrating their payroll and talent management functions end up with more effective core payroll processes than those that keep them separate.

Ultimate Software’s strategy is further evidence of the continuing trend of vendors of HR and payroll management software broadening their product offerings toward complete suites of human capital management applications. In recent years ADP and Ceridian have invested in this strategy, as Oracle and SAP did earlier by acquiring Taleo and SuccessFactors, respectively. While specialized stand-alone products will continue to drive innovation in segments of HCM, the move toward integrated suites is coming to dominate. This is happening for reasons on each side of the relationship. As organizations struggle to make their array of human capital management applications work together, having fewer vendors to support and more consistent product release cycles to manage can provide hard cost benefits and softer benefits of better communications between customer and vendor. From the vendor perspective it is much less expensive to cross-sell to an existing customer than it is to find and sell to new ones.

Ultimate’s investments in expanding and modernizing its products make sense, and the company is proceeding in a logical fashion. The new individual products provide expanded coverage, and the improved user experience should please customers. For organizations, especially midsize ones, that are evaluating HCM platforms and have not looked recently at Ultimate’s I recommend including them in the evaluation process.

Regards,

Stephan Millard

VP and Research Director

At Saba’s recent global customer conference executives discussed the company’s latest product enhancements, progress made during the past year and plans for the future. Saba provides a talent management suite that includes all capabilities except compensation management and is a leading vendor of corporate learning management systems. The majority of its 2,200 customers and 31 million users in 195 countries use the learning system, Learning@Work.

vr_HCA_06_technology_for_human_capital_analytics_improvementIn conjunction with the customer conference, Saba announced the spring release of its talent management suite, Saba Cloud. It has added predictive analytics to help with candidate selection, improved the Web conferencing application with peer-to-peer high-definition video and added mobile goals management to the performance management application. Our benchmark research shows that organizations are seeking improvements in these areas. For example, in our research on human capital analytics the three areas in which the most companies seek improvement are collaboration, big data and cloud computing.  Among its investments in these areas, Saba has improved collaboration in Web conferencing, in big data with new predictive capabilities and more generally for cloud computing with their release of Saba Cloud.

Presenters also demonstrated a recently released recruiting system, Recruiting@Work. This component is a necessary part of a complete talent management suite and should be welcome to Saba’s existing customers. Combining the recruiting product with the learning management system could accelerate onboarding and training of new employees and reduce their time to productivity, which is a compelling value proposition for the software. The heart of Recruiting@Work is applicant tracking, but Saba is using technology partnerships in its Saba Marketplace to add functionality in key areas such as talent sourcing, provided by Simply Hired and TalentBin. The recruiting product also has embedded mobile and social capabilities that could help it compete in the market. Recruiting@Work is one of several such products introduced in the past year; I recently analyzed growth in the recruiting market.

vr_HCA_05_capabilities_sought_in_human_capital_analyticsAt the conference Saba executives emphasized the in-line predictive capability of Saba Cloud, called The Intelligent Mentor (TIM). Currently it is included in the new recruiting product and the succession planning and learning management systems. TIM enables managers and administrators to take actions based on the information it gleans from the applications. Our human capital analytics research finds that taking action based on outcomes is the most important capability for analytics systems.

Presenters offered an example of this functionality within the learning management system, where TIM provides a recommendation engine for choosing courses based on information about the user such as courses signed up for and taken or topics expressed interest in. This is useful for the end user, who can find useful learning content, and for administrators, who can upload course libraries without having to index the courses in the system, which can be a time-consuming process. This predictive capability enables the learning management application to track users’ behavior and information and eventually make recommendations based on their profiles.

Also at the conference Saba announced plans for releasing two new modules: compensation management, to round out the talent management suite, and a benchmarking capability that helps customers compare themselves to their peers in a variety of areas of human capital management. This will be the second compensation management application for Saba; several years ago it released one that it eventually discontinued. I will track these products as they are released.

Overall, Saba is broadening the functionality of its suite, adding predictive capabilities, enhancing collaborative and mobile capabilities and more generally moving the applications to the cloud. These steps should help it remain competitive in the human capital management market. However, Saba faces challenges with its financial management from years past and resulting management changes. As a result of these setbacks, Saba has had challenges in its growth while having the products and services readily available. It is competing in a crowded market and to be successful Saba needs to grow with more new customers and continued retention and cross-sales of new products to existing customers. Despite these business and financial challenges we recommend to organizations looking to update their talent management systems especially with a focus in learning and collaboration examine Saba’s latest products.

Regards,

Stephan Millard

VP and Research Director

Learning is an integral component of human capital management, and a new generation of learning management systems advances learning in organizations around the world. These systems have evolved over the years from a classroom scheduling tool that facilitated instructor-led and classroom training into an array of enterprise applications that deliver and track various types of training. Recently new technologies, such as business analytics, cloud computing, social collaboration, and mobile technology have become part of the learning management process. To assess the impacts of this ongoing shift, Ventana Research is conducting benchmark research on how organizations are implementing and using this new generation of systems.

Until now learning management systems have been designed to take defined content from a few instructional sources and instructors and distribute it through an organization according to a defined process flow. While that approach will always have a place to accomplish some basic learning objectives, customers are now seeking to apply to learning new tools that enable collaboration in the learning process, access through mobile devices and embedded advanced analytics that help evaluate effectiveness of learning programs.

The previous generations of learning management systems were limited in flexibility. They could use only a few types of content and lacked the ability to share knowledge widely and easily. In addition, providing access to learning content only through a Web browser limits access to content to those with laptops and network access. This excludes employees and managers who travel frequently from having convenient access to learning content and related tasks. Now advances in mobile technology for learning management are coming to market.

Other processes in human capital management also are affected vr_HCA_06_technology_for_human_capital_analytics_improvementby these next-generation technologies, as several instances of our benchmark research show. In our social collaboration research more than half (57%) of participants said social tools are important in recruiting. In research on human capital analytics, collaboration is the most sought-after technology enhancement, by more than half of organizations. This also is the case in our next-generation workforce management research. It is clear that business is making collaboration a priority for HCM in general, and learning management will adopt it as well. Social collaboration provides several ways for employees to engage with others, empowering contact with knowledge sources, tracking activity streams, broadcasting information and using video for live or recorded sharing. Even newer methods measure outcomes through gamification techniques that rate individuals’ activity and provide rewards that enhance their stature in the organization. These approaches can augment more formal learning and encourage people to embrace it more.

vr_HCA_07_ease_of_collecting_data_adds_to_satisfactionIn addition, our human capital analytics benchmark shows that organizations are employing more complex learning metrics using advanced analytics tools within learning systems. The learning metrics that most companies are tracking today are performance after learning has occurred (which 64% do) and retention rates, which correlate learning to retention of workers (39%). These and other sophisticated metrics require the ability to combine data from other systems with learning management data. The research shows that companies that have human capital analytics systems to facilitate collection of data from multiple systems are more satisfied (86%) with their system than are those whose system lacks such capabilities.

The objectives of our new learning management benchmark research will include interest levels in the different next-generation technologies, rates of adoption and specific organizational areas where more investment is occurring or desired. It also will explore how different segments rate and use this technology, comparing employees to managers and executives, companies of various sizes and industry sectors. It will assess intentions for integrating next-generation learning management with other HCM applications, particularly talent and workforce management, and how that may change from past learning management efforts. Learning plays an integral role from onboarding new employees through career development and in compliance to policies and regulations. Evaluating these and other related questions can reveal where adopters may find the greatest return on investment in advanced learning management.

Overall this benchmark research will provide valuable insights for organizations using or planning to use advanced learning management systems. The early insights this research uncovers into best practices and benefits will help organizations save time and resources and make shrewd technology investments. With the global economy growing and companies competing for the best available talent, understanding how advanced learning management systems can help retain talent, share knowledge more effectively and increase productivity can be a competitive differentiator. Please look here for my analysis of advancements and key insights from this benchmark research.

Regards,

Stephan Millard

VP & Research Director

In the past year Kronos announced a major release of its Workforce Central suite and more recently, made an announcement regarding a major investment that should help keep the company well capitalized. Kronos is one of the largest vendors of workforce management systems, providing time and attendance, labor scheduling, absence management, HR management, payroll and recruiting applications. In 2013 the company grew to almost US$1 billion in revenue, selling to companies around the globe and having users in more than 100 countries. Kronos offers two product lines based on the sizes of companies. Workforce Ready serves small and some midsize companies, and Workforce Central serves companies from the upper midsize through the very large. A while ago my colleague Mark Smith discussed several major enhancements to Kronos’ products, and there have been notable events since then.

In February Kronos announced that it has entered into a definitive agreement for $750 million of investment by venture capitalists Blackstone Group and GIC of Singapore. This support should help Kronos invest further in its growth and workforce management products. In addition, since being taken private in 2007, Kronos’ revenueVI_Hot_Vendor_2014 has grown 45 percent, which shows not only its effective execution as a business, but the strength of the market for workforce management products.

Kronos already showed strong performance in its products in the past year. Workforce Central took the top spot in our 2014 Next-Generation Workforce Management Value Index.  In 2013 its Mobile Solution won one of our Technology Innovation Awards. Recently the company announced Release 7 of Workforce Central. Here is my analysis of the most significant enhancements to the suite.

VentanaResearch_TechInnovation_Award_Winner_2013There is a new addition to the Workforce Central suite – Kronos Workforce Collaboration, a module that enables managers and employees to share relevant workforce information using popular social tools including user profiles, wall posting and polling. Kronos Workforce Collaboration is sold as an add-on to Workforce Timekeeper, one of the applications in Workforce Central, and is powered by Tibbr, Tibco’s enterprise social networking platform. For example, this set of capabilities will help managers address scheduling issues by understanding how employees feel about their schedules; accommodating them better can help improve retention and engagement. Our next-generation workforce management benchmark research shows that collaboration is the most wanted improvement in workforce management technologies, as more than two out of three (70%) participants said it is important, so this addition may be well received.

Release 7 of Workforce Central also enhances Workforce Scheduling with the ability to schedule workers according to their skills. This capability can be useful in industries that require special competencies, such as clinical healthcare or manufacturing. Kronos also enhanced notification capabilities of the suite, providing alerts that are easy for users to see on the main page of the application and that also can be sent to mobile devices. This could help staffing and HR managers, for whom multitasking is a daily reality, reduce the time spent trying to manage information.

Despite such investments into the product line, we see other areas in need of improvement. For instance, the Workforce HR and Payroll products could use expanded mobility that provides self-service for both employees and managers. And since Kronos has a global emphasis in its customer base, it should extend Workforce Payroll and HR to meet international requirements such as multiple display languages, currency formats and conversion capabilities and support for local regulatory requirements. Also improvement in Workforce Activities more integration with recognition and rewards functionality would be recommended, and retail clients using Workforce Scheduling could benefit from a more robust demand engine to speed the ability of customers that have large, complex workforces to generate schedules.

Considering the workforce management market on the whole, the investments vendors are making in their products, as well as the capital investments by private equity firms, show that these products are becoming more essential to businesses. Specifically, they are moving beyond just improving efficiencies to provide new ways for managers to make decisions that improve key activities like employee engagement and the quality of products and services delivered. As well as Kronos, other vendors of workforce management suites such as ADP, Ceridian and Infor have introduced both collaboration and mobile capabilities.

Another new technology, analytics, has been a focus in workforce vr_Payroll_Management_03_integration_of_system_lagsmanagement providers for several years. These capabilities help companies more effectively meet both labor cost objectives and product and service improvements. Employers in the United States now need more accurate ways to track and predict time and labor information so they can comply with the Affordable Care Act and manage their healthcare benefits strategically. However, our recent benchmark research on payroll management shows that organizations need to focus on integrating time and attendance information with payroll data (only 20 percent have integrated these systems) to minimize errors in the data, which will be used to determine eligibility under the Affordable Care Act.

According to our research more than half (54%) of organizations do not have a dedicated workforce management system; for those organizations and others that have only a partial workforce management system, complete suites like Kronos Workforce Central can automate and connect the separate workforce management processes in one system. Beyond improving process efficiency, they can help align workforce efforts to the company’s business objectives, which is the most important priority companies in our research have for workforce management. The improvements Kronos has made in Release 7 can help them attain these larger business benefits. If your organization is evaluating workforce management suites and has not looked at Kronos’ products lately, we recommend including them in your evaluation.

Regards,

Stephan Millard

VP & Research Director

At its recent 2014 analyst day Ceridian showed the progress it has made on its Ceridian and Dayforce human capital management (HCM) platform since last year’s launch of its broader HCM portfolio. Ceridian’s overall HCM business, which the company says had revenue of $950 million in 2013 and now has more than 100,000 customers, consists largely of payroll-related products and services such as tax filing and payroll cards, but also benefits, Untitledhuman resources and workforce management products.

In recent years Ceridian has made investments in its Dayforce HCM product line, which provides cloud-based payroll, HR, benefits and workforce management and recently added talent management capabilities with now over 900 customers.  The company also sells employee assistance products called LifeWorks, which have approximately 50,000 users. Since last year’s analyst day, we evaluated Ceridian in our Workforce Management Value Index, where Dayforce Workforce Management was awarded our Hot Vendor or top level classification. Recently it has also expanded its Dayforce Touch that is used for time capture and self-service HR needs and has expanded significantly to support a range of identity and validation options.

At this year’s event Ceridian discussed its overall progress during the past year and reported growth in its Dayforce HCM user base, which includes customers in North America and 50 other countries. According to the company, the Dayforce HCM business is growing enough to cover the attrition of legacy customers. In addition, Ceridian says it continues to provide support for its other payroll and HR management products, as the majority of its customers today use core HR management and payroll products other than Dayforce HCM. The company will also continue to offer a conversion program to manage the transition of customers using older products to Dayforce HCM. This is wise, as Ceridian continues to generate a substantial portion of its total HCM revenue from these users.

The company also previewed several new capabilities throughout the analyst day. First it announced the release of Dayforce Recruiting, which was made available with the 6.42 release of Dayforce HCM and targets existing customers. As I recently wrote, other HCM suite vendors also are launching new recruiting products. For Ceridian, this product continues the Dayforce HCM strategy of providing all products on one platform and database and as one cloud-based system for its applications. The unified design makes information across the system available in Recruiting, including job descriptions to populate requisitions taken from the HR management system. Recruiting, which focuses on providing applicant tracking functionality, offers an easy-to-navigate user interface for recruiters and hiring managers and includes most of the standard features of applicant tracking, such as job requisition libraries imported from the Ceridian HR management system, configurable workflows for requisitions and candidates, candidate profiles that take data from both online applications and LinkedIn, and candidate search capabilities. Where the recruiting product does not provide recruitment capabilities directly, Ceridian has formed partnerships to fill those gaps, including agreements with Jobvite for recruitment marketing capabilities, HireRight for background check capabilities, and Sovren for resume parsing. This expansion of the Dayforce HCM suite is well timed as many companies look to expand their workforces.

Ceridian’s team previewed several other capabilities and changes that will make their way into Dayforce HCM in the coming year. Highlights included a change in the design of the user experience to make the application more closely match how consumer social media applications work and a demonstration of new capabilities that strengthen analytics embedded in the suite. Presenters also discussed plans to enable the HR management application to handle global requirements, a new document management capability to handle HR documents within the system and long-term plans to add more talent management functionality to the Dayforce suite.

vr_nextgenworkforce_critical_workforce_technology_areas_updatedCeridian demonstrated an early version of its new user interface that moves Dayforce toward a more social and collaborative approach. The main page for users runs on an activity stream, much like a Facebook wall, letting users see and post on specific activities that are relevant to them – for example, whether they like their schedule or want to swap shifts with other users. Ceridian also is redesigning the product’s management functions to work on the same social application design concept. Indeed, including collaborative and social design elements into the interface aligns with our benchmark research on workforce management, which shows that the most desired technology enhancement is collaboration capabilities, cited by 70 percent of participants. Today’s new generation of employees are likely to be pleased that it works like the social media applications they are accustomed to.

However, one possible challenge of Ceridian’s new design is that it is based entirely on HTML5. Since the new user interface must work on mobile devices as well as PCs, the HTML-only design may be an issue: Native device applications are more likely to render and operate correctly on mobile devices. While the company’s management team said HTML5 is the direction for the new user interface,  I think it should further expand and support native applications for the major mobile devices as well that our research finds are important for deployment.

Ceridian also demonstrated enhanced analytics capabilities expected in its 6.44 release later this year. The new version will include richer visualization capabilities, the ability to search existing data with natural language, and features to help managers take action more easily on that information. These enhancements follow a trend among other HCM suite providers toward including complete analytics functionality within their products. It is also in line with our recent benchmark research on human capital analytics, which shows that dedicated reporting and analytics tools embedded in HCM suites is one of the fastest-growing segments of human capital analytics, with nearly two out of five (38%) companies planning to take this approach in the future.

The new human capital analytics capabilities or what they call vr_HCA_05_capabilities_sought_in_human_capital_analyticsbusiness intelligence includes several new capabilities, but a few stood out. One is the ability to export data and charts from the system and insert them into PowerPoint or other presentation media, which enables business users to share relevant information and take action based on outcomes from the analytics more efficiently. This aligns with two of the five most sought-after capabilities for human capital analytics: the abilities to take action based on outcomes and to present data visually. The enhancement Ceridian demonstrated that lets users search for existing data using natural language matches another of the five capabilities research participants seek most. Specifically users can type relatively free-form questions into the search bar and the system will dynamically parse and then build analytics, including visualizations, to show the results. These and other more general improvements will enable Dayforce users to do more with the system and help them make better decisions with the information.

Finally, Ceridian discussed its product roadmap for 2014.  Beyond its human capital analytics enhancements, the company plans to release many advancements for global HR management. It also intends to continue enhancing Dayforce’s talent management capabilities, which should serve customers well and help keep the HCM suite competitive. Our analysis of best practices in customer deployments in 2013 identified Guitar Center who uses Dayforce HCM and received our prestigious overall business leadership award. Ceridian approach to engage and support their customers is done through what they call their XOXO program that has a team of seasoned industry professional with over 100 years of HCM experience.

In the HCM market overall, Ceridian’s latest investments are further evidence of a trend by workforce management, payroll and HR software vendors like ADP, Ultimate Software and Workday to offer more complete HCM and talent management suites. For customers this evolution can result in fewer vendors to manage and generally lower HCM costs. If your organization is presently evaluating HR, payroll or HCM products including workforce management, Ceridian’s Dayforce is worth examining with its current available HCM portfolio and a continued expansion in its product portfolio.

Regards,

Stephan Millard

VP & Research Director

At its recent Connect 2014 event IBM announced IBM Kenexa Talent Suite, an integrated talent management suite. The release strengthens its Smarter Workforce initiative by combining IBM and Kenexa products and services in one human capital management (HCM) offering. IBM Kenexa Talent Suite also addresses increasing efforts by human resources organizations to optimize their activities through more effective use of technology, a topic covered in our 2014 HCM research agenda. Specifically, the release integrates talent management process automation capabilities with collaboration and also can be complemented with its workforce analytics to help organizations be more efficient and productive; our benchmark research shows these are the leading benefits of using human capital analytics systems.

The new suite provides a direction for IBM’s HCM products and strengthens its market position, as it combines IBM’s strongest talent vr_HCA_06_technology_for_human_capital_analytics_improvementmanagement applications with platform-level collaboration services, analytics and big data functionality – all of which IBM does well – in a centralized, role-based portal environment. Our research shows that collaboration and big data technologies are the top choices for improving analytics and that such capabilities are increasingly being used by executives and managers to make decisions, and IBM seems on track with these needs in this new release.

In addition, the suite that operates in cloud computing environment combines a set of applications spanning acquisition and optimization of talent through recruiting, skills assessment, performance management, succession planning and compensation along with social collaboration. Additionally, the suite can be complemented with IBM Watson Foundations, which provides for big data and information management capabilities. This in effect offers information optimization capabilities across human capital information. For more about IBM’s investments in the Watson business unit, see my colleague Mark Smith’s recent analysis. Using it organizations will be able to predict broader workforce trends, including insights based on social information gathered within the system. I would expect IBM to do even more with leveraging big data, analytics and planning into its applications especially with predictive analytics since it has a very in-depth set of software from the IBM portfolio. Talent Suite also incorporates capabilities from IBM SmartCloud Connections to provide collaboration services. The company says that adding social collaboration to learning will be added to the suite later in 2014 where it already provides learning on mobile technology.

This release should raise the bar on competition among the large vendors. With IBM, Oracle and SAP all offering parts of the core human capital management suite and strong next-generation capabilities, customers have more options to choose from. What’s most interesting about this latest round of suites is the power of the next-generation capabilities being announced from other large HCM vendors including collaboration and mobile with Oracle, and collaboration and analytics with SAP. These next-generation capabilities from the larger size HCM vendors, along with more from smaller vendors, offer customers more than just simple process automation benefits.

vr_HCA_02_key_benefits_of_human_capital_analyticsMany organizations today already have automated some of these talent management processes. So evaluating IBM’s release and the products of other large vendors is not primarily a question of getting new HR processes automated, though that may be the case. Rather, it is about looking at the advantages of having a full suite with next-generation capabilities. Integration centralizes the information, administrative tasks and the user experience, bringing less administration for HR and IT and more consistency for users. In addition, better analytical and collaboration capabilities can increase productivity (61%) or enable organizations to better engage and retain more of their workforce (52%), among several other benefits we saw in our research on human capital analytics. On the downside, organizations can lose some best-of-breed functionality in certain modules, and there are costs of implementation and training – critical considerations for most organization. Overall, however, if you have not looked at IBM recently, this new suite is worth considering, especially if your organization already uses any of its other talent management products.

Regards,

Stephan Millard

VP & Research Director

The market for human capital analytics is in flux, as companies begin to evaluate and adopt more capable tools and processes for this area of human capital management. A look at the tools organizationsVentanaResearchBenchmark_HumanCapitalAnalytics are using and plan to use for human capital analytics provides an example of this change. Our recently published benchmark research on human capital analytics shows that nearly nine in 10 (87%) organizations are still using spreadsheets for human capital analytics while fewer than two in five (37%) presently use a dedicated human capital analytics tool. However, it also shows the market’s greatest growth yet, as more than two in five (43%) organizations said they will implement dedicated tools in the future. And organizations are recognizing the imperative of making such an investment: Two-thirds of those in our research consider human capital analytics important or very important.

While much has evolved in workforce analytics since our last research, many of the core reasons organizations are choosing to invest in human capital analytics systems are the same. The top reasons are demand for higher productivity, according to three in five participants (63%), and lack of an analytical process, cited by more than two in five (41%). However, some expectations are different today, as several next-generation technologies become important. For example, a full two-thirds of organizations now use mobile technology to access human capital analytics, and organizations see collaboration and big data as important in efforts to improve their human capital analytics applications.

vr_HCA_05_capabilities_sought_in_human_capital_analyticsIn contrast to their interest in newer technology, users of human capital analytics are still focused on fundamental capabilities: They want their tools to produce actionable information and be easy to use. In our benchmark research, nearly four out of five (78%) participants said taking action based on outcomes is an important or very important capability for a human capital analytics system. And while many analytics systems can provide extremely complex representations of information, it is important to remember that the goal is to take action and save time, not just provide more data. Not surprisingly, the second-most sought-after capability is for a system to enable users to design metrics and measures easily. More generally, we correlate the desire for these specific capabilities with the most organizations (92%) citing usability as an important or very important product selection criterion.

Equally interesting when we look at the shortcomings organizations reported in human capital analytics systems, we find a need to make investments in time, people and systems to gain the most benefits. More than half (51%) of participants are not satisfied with their human capital analytics process. The leading reasons for this are that they lack readily accessible data and enough skilled people to manage the systems. Combine this with the finding that among the 87 percent of companies using spreadsheets for  human capital analytics, three in five (59%) said spreadsheets make it difficult to produce accurate and timely analytics. We  conclude that to achieve the kinds of benefits and key capabilities desired from human capital analytics organizations should adopt new technologies. To meet the requirements of next-generation applications, decision-makers in HR and IT should plan for enough time and resources to get the results they need.

The research shows that when businesses make the right investments, vr_HCA_02_key_benefits_of_human_capital_analyticsthey gain benefits from the use of human capital analytics. Specifically three in five (61%) participants said that human capital analytics has helped improve efficiency and productivity, and more than half (52%) reported better retention and engagement of employees. These and other benefits show that actionable, easy-to-use approaches make human capital analytics more valuable for executives and managers, enabling them to make better decisions.

When we look at how organizations are using human capital analytics to gain these benefits, several important trends emerge, including a focus on talent management analytics. Nearly three-fourths of organizations (74%) said this is critical to their efforts, followed by core HR analytics (54%) and workforce management analytics (52%). Among specific analytics those being used most are in talent management: Two in five use performance modeling, one-third use leadership effectiveness, 31 percent use return on human capital, and more than one-quarter (28%) use tenure. This shows us that organizations are working to balance the needs to improve employee performance and to retain those who could have opportunities elsewhere.

Overall human capital analytics is becoming more important and more effective as businesses become adept at using these tools in decision-making processes. Organizations are going from tracking a few basic metrics to more sophisticated tracking of higher value metrics spanning the range of human capital management (HCM). This is happening in the best-performing organizations, which our research shows make up roughly half of the market. Further, leading organizations are striving to bring together HCM data and data from financial, sales and customer-related systems to track the business impact of HCM decisions on the bottom line. This will further enhance the benefits already achieved from human capital analytics systems, including improved productivity and better alignment, as companies can see evidence of impacts from their investments in people on specific parts of the business. Finally, we anticipate that big data will play an important role in human capital analytics. I’ve already written about how big data is brewing in HCM, but only some application areas – like recruiting, where there is a well-defined model and data set – are showing immediate success. We believe that human capital analytics is going to become a staple of human capital management. It has proved its value in business, and to be competitive organizations should make investments in it now. Otherwise, they will be at a disadvantage in the market and risk losing their best talent by mismanaging their largest competitive differentiator: their people.

Regards,

Stephan Millard

VP & Research Director

One strong sign of the economic recovery as manifested in the human capital management market is the recent spate of announcements of new recruiting applications from software companies that are not always considered for recruiting. Here are some of them. Ultimate Software announced the launch of UltiPro Recruiting. Saba Recently announced the release of Recruiting@Work. Workday announced the upcoming release of Workday Recruiting. And Ceridian announced release a recruiting application on its Dayforce platform scheduled for the first quarter of this year, which I covered. These recent investments by vendors in recruiting applications, as well as others I discussed after the most recent HR Technology Conference, demonstrate the increased emphasis on recruiting to support talent and workforce management processes in human capital management (HCM).

Analyzing the way most vendors are bringing these new vr_bti_br_whats_important_in_choosing_technology_updatedrecruiting applications to market reveals some trends: Most are being positioned as part of a larger platform; they are focused on usability in new ways; and they include social and collaborative functionality. In our benchmark research on business technology innovation usability is the top technology selection criterion: About two-thirds (64%) of participants said it is important. Vendors focusing on this seem to have gotten the message that users want software to accommodate the way the work, not vice versa as in the past. Adding next-generation capabilities for social and business collaboration and mobility aligns well with trends I identified in my HCM research agenda for 2014 and will follow during the year.

Let’s take a closer look at these trends. First, positioning them as add-on applications to be sold to the vendor’s existing customers makes the value of the recruiting application as much about its capabilities within the larger suite as about its stand-alone capabilities. For vendors such as Saba, which has a well-developed learning management product, this creates the value proposition of helping speed time to productivity by improving the process from recruitment to learning. Vendors that have a fully functional HRMS, such as Ceridian, Ultimate and Workday, can promote the value of streamlining onboarding and having a single employee record common to all the HCM modules.

Second is the movement to increased usability, in particular focusing the user experience not just on recruiters but also on candidates and hiring managers. For example, Ultimate’s UltiPro Recruiting provides  application tools to help candidates provide references and other information about themselves. As well as speeding up the process of collecting information, the objective here is to improve the employer’s brand by making the candidate’s experience more welcoming.

The third trend is to include next-generation technology capabilities in the applications. Workday, for example, says that Workday Recruiting will be designed from the start to run on mobile devices. For social capabilities Saba users can post to LinkedIn, and using Ultimate candidates can apply through LinkedIn. Both vendors also include internal business collaboration features to improve efficiency.  Saba’s Recruiting@Work helps interviewers’ rate candidates and share comments about them in a simple form that aggregates the comments and displays them in a matrix so employers can visualize which candidates are the best fit. Overall, use of social networking and collaboration in recruiting are being driven by measures such as quality of hire and cultural fit, and Saba offers new capabilities here.

vr_socialcollab_workforce_metrics_updatedFor the many organizations today that already have a recruiting application in place, the choice is between staying with that best-of-breed approach and consolidating applications behind fewer vendors or just one. This already is a trend in HCM. For businesses it is a means to simplify their internal support and negotiate better terms with the vendors they keep; on the other hand it can come at the cost of important functionality if the new vendor cannot provide best-of-breed capabilities. In the recruiting market, many vendors offer applicant tracking capabilities, for example, but most products lack some of the advanced capabilities in the best stand-alone applications, such as embedded video interviewing, recruitment marketing and advanced analytics. While many organizations don’t require these capabilities, it is still worth knowing what is available, perhaps to support new business priorities. I recommend investigating what is now available and will be soon; I’ll am tracking them all to help you understand this expanding market and what it means for your organization.

Regards,

Stephan Millard

VP & Research Director

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