SumTotal’s elixHR Platform Can Ease HR’s Pain

May 20, 2013 in Business Analytics, Human Capital Management, Social Media | Tags: , , , , , | by | Leave a comment

One of the most important ongoing challenges in human capital management is to do master data management (MDM) of core human resources information more effectively. This challenge is often most complex for large organizations that have operations spread around the globe and HR management systems in each country or each operating division. To address this issue, SumTotal Systems recently announced the release of elixHR Platform at its TotalConnection user conference. This is the latest evolution of SumTotal’s core HR management system and is targeting this challenge of MDM for HR data. ElixHR system is one of SumTotal’s larger offering of human capital management products; others include talent management, workforce management and payroll management as well. SumTotal also has mobile and social products for HCM, which my colleague Mark Smith assessed on their release last October.

In elixHR Platform, SumTotal provides a conventional HR management system with added features that will enable customers create what the company calls a “virtual system of record.” The product includes a set of predeveloped batch or more timely connectors to the HRMSs of other large vendors Oracle, PeopleSoft, Salesforce, SAP and Workday. The connectors enable elixHR Platform to aggregate all employee records without requiring the customer to migrate from its other source HR systems. Thus it can provide customers a virtual centralized employee record within the existing software environment. As a result, SumTotal’s product provides a possible cost-effective approach to master data management of HR records spread across multiple systems.

Two-thirds (67%) of organizations in our benchmark vr_infomgt_barriers_to_information_managementresearch on information management said they have data spread across too many applications and systems. The capabilities of elixHR Platform can help them address this problem cost-effectively through use of a single product that does not disrupt their installed systems.

Along with features from its previous HRMS offering, SumTotal  adds new core platform services in elixHR Platform. These include a Microsoft SharePoint portal interface through which to present all HR profile and related information; a competency model; a talent profile that can extend personal information on employees; a job profile framework; a development planning tool to map competency gaps and create development plans for employees; access to some information on mobile devices; a set of social tools with which employees can interact with co-workers; and embedded analytics that work with the IBM Cognos platform. Taken together with the core capabilities, the total offering makes SumTotal’s elixHR product a competitive HR management system for companies that need a way to manage multiple sources of HR records in one place. In much of our research, as in the larger market, analytics comes up as one of the most important applications for human resources information. This priority toward analytics shows up in our recent work on next-generation workforce management where three in five respondents (61%) said they are planning to improve their workforce analytics capabilities. And according to our benchmark research on workforce analytics, the number-one source that businesses use to generate workforce analytics is their HRMS; this is true most often for larger corporations.

vr_nextgenworkforce_planning_to_improve_workforce_analyticsWhile SumTotal’s approach can help businesses solve expensive problems of master data management across human resources information in multiple systems, it does not relieve some other costs, the primary one being managing systems and data integration between multiple HRMSs. In that regard, customers still have to maintain data integrity across all the systems that are connected to elixHR Platform, and as any of the downstream HRMSs get upgraded, they will have to check that the SumTotal connectors are still fully compatible. This risk is not unique to SumTotal’s product. As vendors introduce “cloud connectors” and similar data and process integration services, issues like this will accompany the benefits the products bring.

The elixHR release is part of SumTotal’s larger strategy. Recently the company has made efforts to reposition its human capital management suite to increase its exposure in the market and represent its products more effectively in evaluations. ElixHR should help to differentiate SumTotal’s HR management system to customers. SumTotal is a market leader in learning management products and has several other strong offerings; with these additional investments in marketing and sales efforts, they may be able to increase their presence in the HRMS market. As one of the few vendors that have a complete human capital management offering, it is worth evaluating.

Regards,

Stephan Millard

VP & Research Director

Ceridian Launches HCM Portfolio for Managing Workforces Effectively

May 6, 2013 in Human Capital Management, Cloud Computing, Social Media, Business and Social Collaboration | Tags: , , , , , , | by | Leave a comment

I attended the 2013 Ceridian’s analyst day in Chicago to hear about and evaluate the progress the company has made over the last year and see the latest updates to its products since our firmVR_leadershipwinner last commented on them. Last September my colleague Mark Smith assessed Ceridian’s workforce management product Dayforce. As well we selected Ceridian’s customer Guitar Center for the 2013 Ventana Research Leadership Award for Overall Business Leadership.

The analyst day started with a review of news highlights and financial progress for Ceridian over the past year. Ceridian generated overall revenue of $1.5 billion in 2102 (which was relatively flat against 2011 revenues, representing about 3% growth) and EBITDA of $448 million (11% growth over 2012’s $402 million result); Ceridian’s human capital management (HCM) business represents 63 percent of all revenue with $950 million and $197 million in EBITDA. Ceridian has more than 100,000 customers, most of which are midsize businesses; Ceridian’s primary target market is companies with up to 10,000 employees.

VR_2012_TechAward_Winner_LogoCeridian made strong progress on the product front last year and was a winner of the 2012 Ventana Research Technology Innovation Award for Human Capital Management. David Ossip, CEO for Ceridian HCM, demonstrated the current release of Dayforce HCM during the event. The user interface of the new release is easy to navigate, and it integrates all of the HCM applications – payroll management, tax filing, workforce management and human resources –into one system. In addition, a powerful capability is the real-time calculation and rules engine that underpins the entire system. Using the engine customers can immediately see the broad effects of any changes, as the system calculates their impact (such as changes to pay rates or tax implications of an address change in HR) on the entire system as well as the individual employee’s pay. In addition, Dayforce HCM includes in-line analytics and reporting that help payroll managers and administrators track and audit payroll activities in real time within the system without having to print information or export it to ay third-party application.

In addition, the new release includes integrated employee self-service features that could increase employee satisfaction and reduce support questions to payroll administration. Among these features presenters demonstrated online employee pay statements, employee pay cards (for those without checking accounts) and direct integration to Ceridian’s HR and scheduling applications; this enables employees to make changes to their schedules and profiles that are directly updated into payroll. All of these features use the rules and calculation engine, so changes that affect an employee’s pay, such as bonuses, are immediately reflected in the online pay statement.

Our most recent benchmark on compensation management vr_totalcompbusiness_compensation_isnt_integratedrevealed that many organizations are still not integrating their compensation and talent management systems but also that a growing number are beginning to plan for this; as the chart shows, those that have it today or are planning it over the next year add up to 40 percent of all organizations desiring an integrated system. We expect that such unified systems will continue to be more common.

In conjunction with the new release of Dayforce HCM, Ceridian reported a dramatic increase in implementations done by its professional services team. A speaker said the team is completing 40 to 50 implementations per month on the new platform and called this a tenfold increase over the four or five monthly implementations of last year. The reason Ceridian gave for this impressive increase was the design of the Dayforce HCM product, specifically its centralized nature, which simplifies setup. We will watch as Ceridian engages clients at this much increased volume how well the quality of product and customer service is maintained.

Ceridian also showed three applications scheduled for release in 2013. The first is released already, the Dayforce Touch time clock. This new device incorporates various features of competitive time-capture devices, such as RFID, a touch screen and biometric capabilities. It also offers photo capture at punch-in to validate the identity of the person and prevent “buddy punching.”

A second product, called Engage, takes social collaboration into workforce management and is an add-on to the Dayforce HCM vr_nextgenworkforce_critical_workforce_technology_areasplatform.  Its user experience works like the Facebook wall, showing activity streams of discussion on general topics, but it also has a rules engine that ties directly into the Dayforce HCM platform so users can perform tasks such as post shifts they want to trade with other employees and have the results take effect in the system. I think Engage could be an effective add-on product for Ceridian over time. In our research on next-generation workforce management the technology area in which most participants (70%) want new functionality for workforce management is collaboration. For more on this, read Mark Smith’s evaluation of the top priorities for the next generation of workforce management to learn other new innovations on the horizon for the future of workforce management.

Ceridian’s other product announcement was an upgrade of its recruiting product, scheduled for October. Speakers at the event said that recruiting is the strongest market need among Ceridian’s talent management customers. (It’s interesting that HR software provider Ultimate Software said the same about potential market opportunities in talent management.) This product upgrade was still in its early stages but will include a revised user experience for recruiters and functionality for applicant tracking in Dayforce HCM.

Having seen the company’s evolving situation, I conclude that faces Ceridian’s two large challenges in the coming year. First is to continue competing effectively with workforce management and many of the HR and talent management software vendors that many offer mature systems to the same market of less than 10,000 employees as Ceridian. Second is to continue the bookings and revenue growth to pace faster than competition for helping fund further innovation. After much internal change over the past year or so, including the acquisition of Dayforce, rebuilding the core product suite and adding several key members to the management team, Ceridian is now in a strong position with new product releases and early evidence on deployments and sales growth; its task is to keep on gaining momentum.

Organizations that are looking for a single solution for payroll management, human resources management, workforce management, benefits management and tax and payment services may find Ceridian’s offerings a good match. Ceridian has deep experience in this space, and its product direction shows promise in the coming year. If you have not looked at Ceridian or Dayforce HCM, we recommend doing so.

Regards,

Stephan Millard

VP & Research Director

Equifax Anticipates Need for Better Technology in Healthcare Compliance

April 17, 2013 in Business Analytics, Human Capital Management | Tags: , , , , , , , , | by | Leave a comment

As most employers are aware, the Patient Protection and Affordable Care Act (PPACA or Affordable Care Act) goes into effect in January 2014 which I recently assessed the need to be technology ready. The new law was signed into law on March 23rd 2010 and with the Supreme Court decision in June of 2012 which upheld the law and the re-election of President Obama in November, the law complex regulatory requirements that businesses need to understand before then. Those that don’t prepare may incur substantial expenses, such as fines known as Employer Shared Responsibility – payments of roughly $2,000 for every employee after the first 30. Many companies already worry about such issues. Our benchmark research on governance, risk and compliance found that the top two reasons organizations fail to deal with issues of governance, risk and compliance are high costs and lack of resources. In the case of the Affordable Care Act, the costs of inaction are likely to be greater than the cost of planning ahead.

While the act has many parts, to satisfy the employer mandate, it gives organizations two options: Provide qualifying health insurance options to their employees or pay a penalty to the government for not doing so – it’s sort of a play or pay decision. To determine the better course, employers should model the costs of each. Having the right analytic tools and access to relevant information can help them visualize the costs of each choice and make better decisions for the business and its employees.

Equifax is a software vendor that plays in this market. Its Equifax Workforce Solutions division helps organizations address workforce governance, risk and compliance, which my colleague Mark Smith has discussed. Recently Equifax released Healthcare Reform Impact Analysis. Based on the modeling and analytics engine Equifax gained with its acquisition of eThority in October 2011, the product packages capabilities to help users model and understand potential costs under the Affordable Care Act, including formulas and calculations for key variables employers need to evaluate. The software lets users create what-if scenarios to compare possible costs of different decisions. Also, if Equifax manages the customer’s employee pay records, it can load employee-level data into the system, so users can work with actual employee records. Healthcare Reform Impact Analysis also includes standard compliance reports to meet specific needs, such as reporting on health insurance coverage (IRC 6056), as well as more general internal dashboards and reports to help managers  be sure that they comply with the law.

vr_grc_reasons_for_concern_about_grcIn our recent research on compliance we found that by far the number-one objective of organizations was to reduce their overall risk exposure (51%), and second was to reduce the risk of noncompliance with laws or regulations (25%). The same research also found that while satisfaction with technology solutions for risk and compliance vary among organizations, only 40 percent were satisfied or very satisfied with the tools they use for managing risk and compliance. Improving information, technology and processes to understand the risks an organization can address better both compliance with the Affordable Care Act and overall risk. The release of Equifax Workforce Solutions’ new product is well timed as many organizations anticipate these needs.

Regards,

Stephan Millard
VP & Research Director

Is Your Organization Technology Ready for the Affordable Care Act?

April 15, 2013 in Business Analytics, Human Capital Management | Tags: , , , , , , | by | Leave a comment

To comply with the Patient Protection and Affordable Care Act (PPACA or Affordable Care Act), vr_grc_worried_about_grcwhich survived a Supreme Court test and a presidential election, all employers with more than 50 full-time employees must be ready by January 2014 to deal with the lion’s share of the law’s employer mandate requirements. Our recent benchmark research on governance, risk and compliance indicates that many of those employers have significant concerns about compliance issues: 53 percent of participants said they are concerned about them, and 42 percent said they are very concerned. Indeed, the Affordable Care Act is today the most pressing governance and compliance issue for most businesses.

Looking at your organization in terms of its people, processes, information and technology, you can develop a basic framework to assess how well prepared you are to handle its various requirements.

First consider the people aspect: Does your staff have the expertise to understand and track the different parts of the new law? Can you train your staff on what they will need to know about the employer mandate? With only about eight months until the mandate goes into effect, assessing, training and acquiring the talent to execute these functions must be an organizational imperative.

Evaluating the effectiveness of your existing HR and compliance processes is another necessity. Some, potentially including benefits enrollment, onboarding and compensation management, will need to be modified for the new conditions. Re-engineer processes to ensure that you track the right information to both demonstrate compliance with the Affordable Care Act and enable the business to make intelligent, cost-effective decisions in managing its healthcare expenditures.

The Affordable Care Act is based on information. It requires employers to track a number of categories of information, and employers will want to track other kinds also to ensure they are making the right decisions for their businesses. For example, the organization must know how many full-time and part-time employees it has, how many are offered a qualified health plan under the law, and whether that number meets the 95 percent requirement of the law. Tracking this information, as well as the potential costs of healthcare plans for employees and the potential liability for fines if the organization does not sponsor a plan, will require time and likely modification to current HR systems as well.

To pull the information and the processes together, organizations need effective technology. Those that do not have strong systems risk relying on existing systems that will prove inadequate to the taskvr_ss21_spreadsheet_maintenance_is_a_burden of tracking critical compliance information; spreadsheets will be especially inadequate, we believe. As my colleague Robert Kugel recently wrote, spreadsheets are good tools for personal productivity but not for collaborative enterprise-wide tasks, and modeling and tracking compliance with the Affordable Care Act is definitely that. Our most recent benchmark research on spreadsheets shows that spreadsheet maintenance is a burden that requires even casual users to spend more than one full day per month on it, and power users to spend 18 hours a month on maintenance. Using spreadsheets for complex reporting, modeling or enterprise-wide compliance with the Affordable Care Act will be a bad choice. Organizations also should evaluate core HR management and benefits systems to ensure that they have the correct fields and business logic built into them, as well as reports to both collect information required to show compliance and to help the business understand the effectiveness of the decisions it makes.

At this point I will make three recommendations. First, after evaluating the business from the people, process, information and technology dimensions and coming up with a list of what you need to do, act on it soon; don’t wait. With the clock ticking, you have little time to gain the expertise required, re-engineer required processes, look at information management and upgrade your technology. Second, do the work to understand and model the costs of the choices you will make under this law. Since employers can choose to play or pay, so to speak, they must understand the complete cost implications of both of these options. Finally, don’t be afraid to look at new software vendors if you find you have functional gaps. Specifically, if you have serious gaps in your ability to gather and track the information required in your HR systems, several vendors have developed products and services to help you address the requirements of this new law. Among them is Equifax Workforce Solutions, which I will be writing about soon; its product is crafted to help businesses model and track all the costs of compliance with the law. Another is Ceridian, whose new HR management and payroll systems are designed to help businesses track all the employee-level data needed to comply with the law. There are other vendors as well; it will be worth your while to investigate the market and determine which may suit your particular needs. And keep in touch with Ventana Research as we continue to track the options for managing the Affordable Care Act and locating technology to make it easier and more certain to be in compliance.

Regards,

Stephan Millard

VP & Research Director

Ultimate Software Takes HCM Global

March 22, 2013 in Big Data, Business Analytics, Cloud Computing, Human Capital Management | Tags: , , , , | by | Leave a comment

Ultimate Software held its annual global customer conference and analyst day  recently in Las Vegas, where more than 1,300 attendees got to hear about the company’s plans for 2013.  Ultimate, founded in 1990, is a human capital management (HCM) vendor that provides human resources management systems (HRMS), payroll management, talent management and workforce management products to organizations primarily in the United States and Canadian markets – though it is announcing an international expansion.  The majority of Ultimate’s customer base is in the HRMS and payroll management space – areas in which Ultimate offers strong products – and it has many customers who have been using these products for many years, both on premises and in the cloud, including Adobe Systems, Major League Baseball, The New York Yankees Baseball Team, Pep Boys and Texas Roadhouse.

Ultimate CTO Adam Rogers opened the conference with an overview of Ultimate software and made several announcements about initiatives designed to make Ultimate more competitive against key rivals such as Oracle and SAP.  Rogers discussed the size and growth of Ultimate’s customer base, which is now at 2,500, with a total of 10 million people in its payroll system.  He showed the company’s 2012 system availability statistics – 99.95 percent in 2012, up from 99.3 percent in 2011.  In Ventana Research’s next -generation workforce management benchmark research, organizations ranked reliability as the third most important item in their selection criteria for vendors.

Ultimate’s most important announcement was its plan for expanded global human capital management and payroll capabilities.  The plan comprises expanding the UltiPro product to support 28 additional country localizations in 2013 and a partnership with Celergo to process international payroll with its partner providers.  Ultimate will also make its payroll connector available to other payroll providers, so customers are not exclusively linked to one vendor for international payroll.  These additions should make the enterprise UltiPro offering stronger in the international market, especially for U.S. and Canadian organizations with international operations.  That said, the plan leaves out an important point for some customers, namely the opening of international datacenters.  Some international customers are likely to have concerns about having their employee data housed in the United States and Canada.  Ultimate is Safe Harbor-compliant and has said it will work with international customers on any issues, but likely some will still see this lack as a potential roadblock.

A second major announcement was an expansion of Ultimate’s alliance with Informatica to build out what they are billing as “Integration-as-a-Service.”  This expansion means UltiPro customers will have pre-created, configurable templates that let them use Informatica’s extract, transformation and load (ETL) cloud services to more easily move data from Ultimate’s HRMS and payroll systems to third-party benefit providers, international payroll providers (such as Celergo), technology partners (such as CertPoint, which provides learning management system (LMS) with Ultimate) and other third-party systems.  This service should let customers deal better with having multiple vendors that need to use human resources information.  Informatica will let Ultimate customers more effectively deal with master data management (MDM) around HR data and, as of Informatica’s April 2013 release, Informatica will also provide cloud data masking capability to help secure sensitive or confidential data. My colleague Mark Smith attended Informatica’s analyst summit and posted an update about what to expect from Informatica in the coming year.

While at the conference I got a briefing on Ultimate’s talent vr_totalcompbusiness_compensation_management_goalsand workforce management products.  The talent management offering has somewhat basic functionality by comparison to some vendors who specialize in that area, but it covers most areas, including performance management, development planning, succession management and recruiting (which Ultimate is expanding), and the company will add compensation planning this year.  The compensation planning product is scheduled to include global salary planning and multi-currency capabilities, and will integrate with the company’s current talent management products.  Our benchmark research on total compensation management found that improved efficiency was the top benefit of adopting a compensation management system, and that the top two systems that get integrated with compensation management are payroll (69%) and HRMS (56%). These factors should strengthen the case for current Ultimate customers looking at the new compensation product.

Ultimate showed several improvements to products within its talent management system.  One key improvement is the addition of a risk-of-loss score for employees within the succession planning product. The score, which is broken into three parts, is based on a calculated algorithm. Ultimate is also adding continuous goals and development planning to its development product.  In addition to these improvements to the talent management offering, Ultimate also demonstrated two improvements to the core UltiPro HRMS product. Customers can now add custom fields in the HRMS system via a configuration tool in the cloud product, and the fields persist through standard upgrades. The software also gets a full HTML 5 employee profile that displays well on tablets and other mobile devices and includes a nicely implemented Facebook-like timeline of all employee activities (hire date, performance reviews, raises, etc.). My upcoming next-generation payroll management benchmark research will outline some of the most compelling capabilities for HRMS and payroll systems.

Organizations that are looking for a single-platform solution and that do not require advanced functionality in talent management may find Ultimate’s integrated solution a good match.  Ultimate’s plans and announcements for 2013 move the company in the right direction to improve its competitive position.  However, given the capabilities of competitive products such as Oracle Fusion Global Human Resources and others, Ultimate must deliver on its current announcements and continue to innovate to maintain a strong market position.  Ultimate Software has solid experience and products worth looking at for organizations that need core HRMS, payroll, talent management and workforce management systems.

Regards,

Stephan Millard

VP & Research Director

Saba Doubles Down on Dedication to Empower People and Collaboration in 2013

March 14, 2013 in Business and Social Collaboration, Cloud Computing, Human Capital Management, Mobile Technology, Social Media | Tags: , , , , , | by | Leave a comment

Saba held its annual People 2013 customer and analyst conference recently in San Francisco, with approximately 700 customers in attendance.  At the conference the company provided analysts a perspective on its progress over the last year and its product roadmap.  My colleague Mark Smith wrote about Saba’s acquisition of Human Concepts vr_socialcollab_factors_driving_use_of_social_medialast year; today Saba says it has 31 million users and 2,100 customers, including names such as Yum Brands, ADP, Proctor & Gamble,  Intel and Five Guys Burgers and Fries. The analyst event featured speakers from NetApp and Kaspersky Labs, who discussed how their use of Saba products helps their companies achieve their development and business objectives.

The conference launched with several presentations by key executives discussing Saba’s vision and direction for 2013.  Interim CEO Shawn Farshchi discussed the changing nature of work and technology. He said the next generation of employees is a learn-by-doing generation, and, being native to social technologies, wants to use social technologies seamlessly throughout their workday.  Our benchmark research on social collaboration and human capital management found that the top two ways organizations are using social media are for identifying new talent pools (81%) and improving their competitive advantage (75%).

Shawn Farshchi and Jeff Carr, president of Saba global field operations, closed by described the three key elements of Saba’s technology vision: the People Profile, a single source of information for employees; People Process, the different processes that make up standard HCM activities; and People Engagement, the social tools across the platform that engage people at every step to be more collaborative.

Saba’s product strategy for 2013 focuses on a new cloud-based social learning and talent management platform called People Cloud, whose core elements are learning management, performance management, development planning and succession planning.  People Cloud also includes one the industry’s more advanced sets of learning and development social tools, which interoperates with each of the applications to help users collaborate with one another.  Saba’s social tools won our 2012 Technology Innovation Award for Business Collaboration. To compete with other human capital management offerings, Saba has developed technology and reseller partnerships with several vendors.  Specifically, Saba has a certified cloud connector to Workday Release 18, which lets People Cloud interoperate with Workday’s HR management and payroll system, and a reseller agreement with Kronos, which enables the company to offer a workforce management solution as part of its solution.

Saba rounded out the session with an announcement of a major new release of its enterprise learning and talent management product.  Improved capabilities in Release 7 include a new user experience across the application, a mobile learning app (detailed in one their blog posts) and an improved testing and assessment engine.  In the discussion surrounding this release at the conference, Saba reiterated its commitment to support enterprise customers who use this platform for 2013 and beyond.

While at the conference I got a demonstration of People Cloud.  The product has most of the same capabilities as enterprise learning and performance product, with well-thought-out social collaboration capabilities. For instance, a Facebook-like wall lets users vr_socialcollab_supports_talent_management“follow” coworkers and see all the content they contribute.  A feature called People Quotient scores each user based on how often content that user posted is forwarded and commented on by others in the system;  those who have content commented on or forwarded more frequently are scored higher.  Other features include a help system that guides users step by step through to the process of executing a given task, as opposed to just listing the steps out in help documentation.  This could scale much better for system training in some cases than the classic training offered for many enterprise systems.  Other features include Google-like predictive search that covers social and structured content and allows users to share items they find with other users.  Overall, Saba’s People Cloud product includes a strong set of social features which, combined with the core learning and talent management capabilities, make it a strong offering. These advancements are part of unifying social collaboration with talent management which our research finds that the value is knowledge sharing (49%), collaboration (37%) and learning management (34%).

Saba faces some operational challenges despite its strengths in product and innovation.  The first of these came to a head on March 1 when Saba announced a change in leadership. Saba’s CEO and founder Bobby Yazdani stepped down, and COO Shawn Farshchi stepping in as interim CEO, likely as a result of the financial restatements of the prior period results currently underway.  This is a hard chapter for all involved. Yazdani helped foster a culture of innovation, and Shawn Farshchi will now try to move Saba’s people and products toward a strong future.

Overall, Saba Software provides one of the human capital management industry’s leading learning and talent management products blending in social collaboration as part of the applications. Its plan for 2013 focuses on areas where it can differentiate the company from other vendors.  Its challenge is to continue to advance its product roadmap and educate new customers while addressing the operational challenges that the next few months will bring.  Saba’s products and new technologies are well worth evaluating as organizations look at human capital management systems to help them achieve their business goals.

Regards,

Stephan Millard
VP & Research Director

OrcaEyes Delivers a Whale of Workforce Analytics and Planning

March 5, 2013 in Business Analytics, Cloud Computing, Human Capital Management | Tags: , , , , | by | Leave a comment

Human capital analytics used to be simple. It focused on compliance reporting, showed basic information and was an afterthought in most applications.  Today analytics is the centerpiece of many human capital management applications and involves many sophisticated tools, because it delivers some of the greatest value of any process in all HCM.  Our next-generation workforce management benchmark research found that 61 percent of companies surveyed are planning to invest in improving their workforce analytics capabilities.

OrcaEyes, founded in 2007 and vr_nextgenworkforce_planning_to_improve_workforce_analyticsbased in Texas, is a company that focuses exclusively on delivering workforce planning and analytics solutions for enterprise and mid-market customers.  OrcaEyes has many Fortune 500 companies as clients demonstrating its enterprise class capabilities. In 2012 OrcaEyes gained several new customers for a product in the healthcare market.  OrcaEyes offers three products: SonarVision Insights, a labor market statistics product; SonarVision Enterprise, an enterprise workforce planning product; and SonarVision OnDemand, a basic version of the workforce planning product.  All the products are deployed and delivered via SaaS.

One of the main challenges organizations face in successfully launching a workforce planning and analytics system and keeping it running is quickly and easily mapping all their data sources into the system.  OrcaEyes solves this for customers by doing much of the data extraction, transformation and loading (ETL) and setup for data normalization on the vendor side.  This saves customers time and effort.  To speed the process, OrcaEyes has a set of tools that help with most basic data conversion needs.  Solving this basic need helps customers improve the time-to-value for their investment.

Recently I got a demonstration of the latest release of the SonarVision Enterprise product with Brad Hilbert, chief technology officer for OrcaEyes providing insight to the latest capabilities found in it is version 3 release that came out in 2012.  It’s a powerful interactive application that helps organizations handle both the labor demand and labor supply side of workforce planning effectively.  The overall application has a nice user experience, which came up as the most important technology consideration for respondents in our workforce analytics benchmark. SonarVision Enterprise also includes rich historical labor trending and slicing and dicing capabilities that provide users valuable insights into the major factors that are contributing to the supply side of the workforce planning equation.  On the labor demand side SonarVision Enterprise offers a good set of modeling functions (including some by industry) which give organizations the ability to calculate labor demand based what is important to most customers.  The application also presents this information (labor demand, supply, predicted gap) in nice charts that makes it easy for users to consume and understand it.

In addition to labor supply and demand modeling, SonarVision Enterprise includes several features to help organizations create and implement workforce plans.  These include easy-to-use what-if tools that let users calculate future labor supply by changing factors such as turnover, retirement and number of hires per year and then quickly seeing the results the changes have on future labor supply.  In addition, it includes a one-click auto-fit function that automatically adjusts labor plan variables to meet required demand.  The application also lets users see, in a simple spreadsheet view, the total cost breakdown for their specific workforce staffing plans. OrcaEyes also recently released new modules that contain analytics and metrics across talent management activities.

OrcaEyes has many strengths, but it also faces some challenges.  While it includes a strong set of features, it is largely built on a customized platform.  As the product grows in success this may cause issues, and prospects should be aware of this in their evaluation process.  In addition, OrcaEyes is not well-known in the market, but spending more on marketing, branding and awareness will likely help make organizations aware of the value of the products and services the company has to offer.  OrcaEyes should also articulate the benefits of its applications to finance who will gain value from its workforce planning capabilities and also have the metrics to benchmark its human capital potential.

If you have not looked at OrcaEyes’ workforce planning or analytics products recently, you may like the latest release and some of the company’s recent wins validate that customers find value in the software.  In addition, I believe that dedicated applications for workforce analytics and planning such as these ultimately serve customers’ needs more effectively than generalized BI tools.  We found similar results in our workforce analytics benchmark, which found that the top two reasons businesses stated they were going to change the way they conducted analytics were to improve the quality of the business process and to improve decision-making.  Ventana Research will be releasing key findings from our human capital analytics benchmark research, which will show how the market for human capital analytics is evolving and how solutions such as workforce planning are being used today. To learn more about this, see my blog post Turning the Spotlight on Human Capital Analytics.

Regards,

Stephan Millard – VP & Research Director

Cornerstone Making Talent Management Simpler to Use

February 26, 2013 in Cloud Computing, Human Capital Management, Social Media | Tags: , , , , , , | by | Leave a comment

Improving how employees and managers can improve talent management activities through changes in process, technology and better access to information is both a theme of my research agenda this year. It is also what the key technology vendors in this space have been focused on developing products to do.  Cornerstone OnDemand is one of those vendors that has been in the talent management space since 1999, when it launched its original CyberU learning management product, and now offers a broad range of talent management applications. It is growing at a strong rate relative to many of the other companies in the market. Cornerstone’s products now span learning management, learning extended enterprise (learning extended to partners and customers), performance management, compensation management, succession management and recruiting management. Cornerstone has always sold its products in a cloud-deployment-only model, a decision that has served it well. Today Cornerstone enjoys a strong customer base for a standalone talent management company, with a reported 1,237 customers and 10.5 million users across 189 countries.

Cornerstone made two interesting announcements this month. First, it reported another strong year of growth for fiscal year 2012. Cornerstone’s 2012 results showed 56 percent growth for the year and revenues of $117M. Cornerstone has a strong cross-sell story to tell customers who have purchased only one or two of its products, because its products tie similar talent management processes together, and because all Cornerstone products are cloud-based, so rolling out additional products to existing customers is relatively easy, compared to the process for companies with on-premises software.

Our research on social collaboration and human capital managementvr_socialcollab_source_of_funding_for_social_collab shows that 45 percent of all budgets for social collaboration technologies in organizations are held by the human resources department. Since many of the new releases of products in the human capital management market include a strong social dimension to them, understanding how the social features in these products help employees collaborate better can help managers fund new initiatives.

Cornerstone’s second announcement of the month is the launch of Cornerstone for Salesforce, a learning management system that will work for any current Salesforce.com customer. This is a smart addition to the company’s product line, as it will increase the market for Cornerstone to include companies that use the Salesforce platform and want a learning management system that runs within it.

Cornerstone for Salesforce provides accesses to learning and development capabilities that span classic learning management features and social and mobile learning capabilities. Highlights of the classic learning capabilities include support for instructor-led training and virtual training, and handling of development plans that tie to skill gap analysis to help sales and partner team members find specific training to fill knowledge gaps. Cornerstone can also handle certification and compliance workflow to help sales professionals become certified for their product and services knowledge. The application includes basic social collaboration capabilities, which enable better peer-to-peer learning, and the ability to run on any mobile device.

Cornerstone for Salesforce also integrates with two of the most popular HR and collaboration applications. Salesforce Chatter complements Cornerstone’s formal training with informal social collaboration, knowledge sharing and social recognition capabilities, as well as peer-to-peer learning, which is often how sales teams learn. In addition, Cornerstone aligns closely with Salesforce Work, a performance and goal management application. Working closely with these two applications makes Cornerstone’s application a stronger offering for Salesforce customers. Having a complete performance and learning process tied to sales objectives, all in the Salesforce platform, is a value add for customers, as is improved usability and accessibility for sales teams who are often remote and don’t need another system to deal with. All of these factors can help sales and customer service teams successfully implement talent management.

All of the Cornerstone’s products are offered only via cloud deployment, and almost all have been developed in-house, which should give customers a more unified user experience than if they were acquired. The exception is Cornerstone Small Business (CSB); in March 2012 Cornerstone acquired Sonar Limited and rebranded its software as the CSB product which they target for medium-sized business which is fine though it is only one of many applications needed for an organization.

While Cornerstone has many strengths, it also faces some challenges. One is the lack of products that larger competitors such as Oracle, SAP and SumTotal Systems have – namely workforce management, payroll and an HR system included within the platform. Cornerstone’s technology partnership with Workday may address part of this issue by enabling customers to purchase an HR and payroll system through Workday, but this also “breaks” some of the value of having a system provided by one vendor. The other challenge is Cornerstone’s approach to the market as an “organically grown platform.”  This can become a double-edged sword for customers; eventually, Cornerstone will need to deal with integrations from mergers and acquisitions. Focusing on the values customer derive from the organic platform, such as ease of use, streamlining talent management processes and improving the quality of information to make better decisions, will provide a more lasting value propositions for customers.

Cornerstone’s recent announcements strengthen its offerings and show its success selling products in the market. 2013 will likely see continued expansion in the talent management market. Despite the likely implementation of the U.S. government’s “sequester,” which may stop growth across the public sector, Cornerstone should see growth with its products. If you have not looked at Cornerstone OnDemand, or Cornerstone for Salesforce for sales or customer service organizations, you may like what you see.

Regards

Stephan Millard – VP & Research Director

The Evolution of Social Learning for Human Capital Management

February 14, 2013 in Human Capital Management, Social Media | Tags: , , , , , , | by | Leave a comment

Learning management software (LMS) has evolved over the past 25-plus years from a classroom scheduling tool that helped streamline instructor-led and classroom training to a rich, integrated enterprise application that delivers and tracks training across an entire organization. These applications are effective at enabling organizations to share knowledge and track the knowledge-sharing process. Typically they use a top-down model involving classic instructor-led training and online courseware. This model works well for uses such as compliance tracking for a wide variety of industries, training related to employee performance gaps, sales training for product knowledge and training external dealer networks on products and services, to name a couple.  In these as well as other areas, classic learning management systems have grown to be a crucial human capital business process, and one that that provides demonstrable business and economic value to many organizations around the globe.

In recent years, though, the social revolution that has swept the enterprise application market has changed the way organizations look at the learning process, shifting the focus away from that classic top down model to collaborative, peer-to-peer knowledge sharing.  This has important implications for how learning will be conducted across the organization. Today, learning management integrates with the broader universe of human capital management (HCM), an area that spans talent management, workforce management, human resources management and payroll. As these broad platforms evolve, each application within them becomes part of a unified system. Multiple software providers offer different options, from single stand-alone learning systems to ones that are part of a unified talent management platform, where learning management empowers strategic leadership development and employee engagement initiatives to support HCM across the enterprise or within a line of business.

However, that social revolution has now brought us to a tipping point. Employees increasingly think of every application they touch in terms of social interaction, and this includes their learning management system and processes. Even for older employees, this increasing interest in social-enabled applications is evident – consider a June 2012 report from the Pew Internet & American Life Project that reported that the number of older adults (65 and older) signing up and using Facebook increased 150 percent from 2009 to 2011.

Even with such strong adoption in all segments of the workforce, vr_socialcollab_supports_talent_managementthough, most organizations still report very poor ability to engage their employees with the social tools they have. Our benchmark research on social collaboration and human capital management shows that 50 percent of organizations do not manage informal social collaboration and learning well. In the same research we found that knowledge-sharing (49%), collaborating (37%) and learning (34%) were the top three ways in vr_nextgenworkforce_which_collaboration_technology_capabilitieswhich internal social media software helps organizations achieve their talent management goals, and that the learning and training group uses social media second-most in the organization. In our benchmark research on next-generation workforce management, organizations said that discussion forums (30%) and broadcast or Twitter-like capabilities (29%) are the two most-needed social collaboration capabilities.

We will be launching benchmark research on the topic of social learning management to look at best practices organizations can use to succeed with social learning. It will also look at social learning in the broader context of HCM, information and technology, evaluating how and where social learning “plugs in” to other HCM processes and technologies, such as performance management and recruiting. We will look at how organizations use and plan to use social tools in the context of learning management, and how the social facet changes who uses learning management within the organization, how it gets used and what capabilities are most important to users. We expect this research to inform suppliers and buyers, educate the market and gauge the receptiveness of participants to new technologies and products.

I will share here some of the most interesting insights the research uncovers on organizations’ priorities and issues and the key factors they use when evaluating social learning management. I will also assess providers’ offerings to see how they are maturing and how well they meet the needs of a broad range of organizations of differing sizes and in specific industries. If you use social learning management today, let me know as I would love to hear about your success and challenges in advancing HCM in your organization.

Regards,

Stephan Millard

VP & Research Director

Turning a Spotlight on Human Capital Analytics

February 5, 2013 in Business Analytics, Cloud Computing, Human Capital Management | Tags: , , , | by | Leave a comment

Human capital analytics is an area increasingly under discussion in businesses today as the linkages between employee performance and company success become increasingly clear, as do the roles analytics can play in maximizing that success. This intensified interest in analytics coincides with major changes in the processes of hiring, engaging, retaining and optimizing talent in the enterprise. It also reflects the impact of technology innovations such as cloud computing, the business use of mobile devices, social media and location-based information that offer new options for interacting with human capital and deploying relevant analytics.

vr_ngbi_br_mobile_device_deploymentsThese trends are reflected in several benchmarks we completed in 2012 that I outlined are part of our research agenda in human capital management. Our next-generation business intelligence benchmark research showed that 53 percent of companies are currently deploying or plan to deploy tablet computers to their analytics environment, while 60 percent of companies are deploying smartphones. Further, our next-generation workforce management benchmark research showed that the second most important technology to help improve operations and performance of the workforce was analytics, and 61 percent of companies are planning to invest in improving their workforce analytics capabilities.

This expanding use of human capital analytics stems from increased attention vr_nextgenworkforce_planning_to_improve_workforce_analyticsto performance management in human resources departments, particularly because of the light it can shed on employment and talent management processes. Lacking the right analytics capabilities, many HR-led performance management initiatives fail to live up to their potential. Companies have found that they measure the wrong things, or measure things in the wrong way, resulting in unintended and often negative consequences. That’s because business decisions almost always must be made in the context of limited resources, and virtually every important decision requires tradeoffs, such as salary against experience, for example. Analytics can point out these tradeoffs and provide guidance, facilitating the best choices and ensuring that the actions of individuals in all business units align with the company’s overall objectives.

Executives and managers need guidance on how to select the measures most useful for them to take, and need information about best practices and common mistakes in choosing human capital measures, metrics and key indicators. They also need reliable advice about integrating historical and predictive analytics into systems and processes so they can make better use of existing investments and plan new ones including the how big data might play a role to better understand information about the entire workforce. Having the right measures and metrics for human capital processes is essential because they enable good managers to make better decisions faster and more consistently. This dictum is just as true for new technologies in human capital management, such as social media, which has become important in the recruiting process of most companies. Our benchmark research on social collaboration for human capital management showed quality of hire, cultural fit and candidate experience were the most important metrics companies wanted to use when assessing the value of their social media investment.

vr_socialcollab_workforce_metricsAnalytics can work in conjunction with existing systems for talent management, learning, workforce management and human resources management to integrate them into the larger framework of human capital management. To understand how to approach these tasks and devise a comprehensive strategy, organizations need an in-depth understanding of the options available and the information technology requirements of each. But many prospective buyers lack an understanding of best practices and functional requirements for human capital analytics, and they often are unaware of deficiencies in their own software and data environment.

We are launching a benchmark research program on human capital analytics in this first quarter of the year. This research will identify, explore and quantify the ways in which organizations use human capital analytics. It will investigate what types of organizations are interested in making investments in analytics to improve their human capital management, why they are interested, who will make the purchase decision and in what time frame, and what selection criteria they use. It will explore the perceived value of more effective analytics processes, and it will assess the maturity of the analytics and the measures, metrics and indicators they use for human resources and administration. Ultimately, it will produce guidance in selecting the right analytics and identify best practices for using them with particular processes and related technologies.

Our human capital analytics benchmark research also will explore in detail how departments can improve their performance in this area, and thus benefit the company overall. It will examine the current means of access to and use of metrics and indicators for human capital management processes. For our clients, the benchmark research will deliver detailed insights into the thinking of company management in the area of human capital analytics. We expect this research program to inform suppliers and buyers, educate the market, deliver opportunities and gauge the receptiveness of participants to new technologies and products.

As the results become available in coming months, I will share here on my blog some of the most interesting insights the research uncovers on organizations’ priorities, issues and key factors when evaluating human capital analytics market. I will also assess providers’ offerings to see how they are maturing and how well they meet the needs of a broad range of organizations of differing sizes and in specific industries. Keep an eye on this space in the coming months to see what our research uncovers!

Regards,

Stephan Millard

VP & Research Director

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