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

Human capital will continue to be an organization’s largest investment in 2014 and if productive will be one of its most valuable assets and differentiators. It also continues to rank as top priority by CEOs across the industry. We anticipate that businesses that take advantage of the innovative technology now available for human capital management (HCM) will gain a competitive advantage. Ventana Research will track these technological advances and how they are put to use by organizations that deploy them.

Technology vendors in the HCM market will continue to integrate applications into comprehensive suites as they have done in recent years. We expect to see more HCM platforms combine core functionsVentana_Research_Benchmark_Research_Logo such as HR and payroll management to create a single, accurate record of hours worked in order to comply with the Affordable Care Act (ACA). Vendors also will focus more on the new generation of technologies, particularly mobile, social media, business collaboration, big data and analytics, some of which have evolved from consumer products. To attract and retain talent vendors are responding to the business imperative of engaging the workforce more fully, and these technologies supply capabilities demanded by today’s workforce. Our benchmark research continues to find a disconnect between the adoption of technology for HCM and the challenges to transition to utilize the innovative advancements.

I’ve designed my 2014 human capital management research agenda to explore the most significant business and technology issues and opportunities organizations face in this area. This research will help HR professionals, managers and executives understand how to address human capital problems so they can achieve maximum competitiveness while applying best practices to practical HR issues. This year our HCM practice will cover three main areas: the role of mobile and social collaboration technologies in transforming activities in the workforce; how organizations can optimize HR activities through better use of technology; and how companies can implement change in human capital management.

In the first area, we will assess how social collaboration can help engage managers and workers more effectively across the organization. We also will examine the relationship between learning and social collaboration in efforts to increase workforce productivity and performance. To support this focus we will start the year by conducting benchmark research on social learning, including how organizations use these techniques and technologies and the challenges they face. Drawing on our completed benchmark research on social collaboration and HCM, we will investigate social platforms that are evolving to serve several important core processes in HCM. Such needs like recognition and rewards that can use the gamification techniques as well as context-aware collaboration to advance HCM processes like recruiting and onboarding.

In addition, we will study how mobile and social technologies change organizations’ talent management processes like those that operate on smartphones and tablets. No longer are online forms and workflow engines sufficient to address the performance needs of businesses and workers. Now workers want real-time, relevant tools that they already use in other areas. We see from our social collaboration and HCM research that organizations have taken the first steps in this shift, with more than half (58%) having open social media and networking policies. In the second half of the year we will explore this trend further in benchmark research on performance management.

The second area we will focus on in 2014 is how managers and workers can better use technology organizations to optimize their HR-related activities. Over the past decade new technologies have helped companies streamline or reinvent many HR processes. As examples, the recruiting process has gained new dimensions with social media, while mobile technologies enable employees to access information such as their HR profile without being in the office. Organizations have invested heavily in such areas over the past several years. We will search out instances in which such investments are paying off.

vr_HCA_01_issues_driving_human_capital_analytics_investmentBuilding on our benchmark research on next-generation human capital analytics, we will focus on the impact of analytics across the spectrum of HR processes to improve the performance of human capital across the enterprise. Our research finds that improving efficiency and productivity are critical to almost two thirds of organizations. Ventana Research also will introduce a Value Index that evaluates next-generation human capital analytics software to determine who is best for your needs.

Another important development in HCM analytics is the introduction of predictive analytics, a technology that in this area helps organizations plan their future workforce needs for both near-term scheduling and long-term global workforce planning. This year Ventana Research will launch new benchmark research on workforce planning to assess the best practices and adoption patterns of organizations as well as the maturity of current market offerings. In our research on human capital analytics, we found growth in adoption of dedicated human capital analytics tools. Increasingly these products offer predictive analytics, which more than half of respondents (54%) in the research said is important.

Another HCM process innovation we will research in 2014 is task and activity tracking. For several years this has been offered in some workforce management products, with activity tracking in schedulingVI_Workforcemanagement and time and attendance applications. We identified this growing need in our next generation workforce management benchmark and part of the recent release of Value Index in workforce management where I have assessed the vendors and products that I have summarized. Now this functionality is  increasingly included in broader social HCM platforms, making it possible for employees and managers to track individual goals more effectively. We will cover this as part of our benchmark research on core and next-generation HR technologies and the social capabilities emerging  in these products. But even managing to have the most productive employees in these activities is no easy feat, and advancements in techniques to engage employees is required to be successful through layering on collaborative technology that finds knowledge sharing as the top benefit. Also, making sure the wellness of employees needs to be considered and is now part of using a new generation of mobile or wearable technology that can track activities and related health of individuals.

The third main area we will address in 2014 is how companies can implement change in human capital management. As organizations continue to adopt next-generation technologies and re-engineer core HR processes, change is inevitable. For many the challenge goes beyond the ability to implement technology; it also involves people and processes adapting to the capabilities the new technology brings. The Ventana Research benchmark research model and its Maturity Index are built to identify issues in people, processes, information and technology and their interconnections. We expect many organizations to update their core HR processes and link them to their broader talent management efforts. And with the employer mandate provisions of the Affordable Care Act poised to go into effect at the beginning of next year, this will likely be even more of a focus because many companies will have to update their HR processes, information and technology capabilities to comply with the law.

vr_Payroll_Management_06_what_to_integrate_with_payroll_managementThere is still much work to be done in other areas of human capital management. In our last benchmark research on total compensation management and its integration with talent management more than half (52%) of organizations had no plans to integrate their compensation and talent management systems. We also have just completed new research on payroll management and current level of efficiency but also as it finds compensating management is critical system to integrate in 45 percent of organizations.  We will revisit this area with an updated Value Index on compensation management to help examine the latest advancements in products. We will also examine where the core and next-generation HR technologies are helping transform how employees work and are productive in any organization.

In 2014 the trends that have shaped HCM over the past several years will continue to evolve but with a stronger focus on engaging the latest generation of employees. Companies that embrace new HCM technologies can apply them in ways that yield business results. Doing so will require more in-depth partnership with the business and the finance organization to justify and help fund the investments. Social media and mobile applications within specific HCM processes will increase engagement and reach. In addition, less touted but equally valuable investments in the integration of core processes like HR, payroll and talent management will improve the quality and visibility of human capital information across the organization. In contrast, businesses that choose to stay with older technologies and processes may find themselves less competitive because they lack access to the information and tools they need to attract and retain a high-quality workforce. The advancements in cloud computing have facilitated the timeliness of deploying new applications and get off of the outdated technologies and to meet new generation of HCM needs.

Please download and read the full research agenda. I look forward eagerly to sharing the new insights we discover this year and how I can interact with you as a client or casually across social media to improve human capital management.

Regards,

Stephan Millard

VP & Research Director

Ventana Research recently released our Value Index on Workforce Management for 2014. VI_WorkforcemanagementWe define workforce management as the set of processes by which organizations manage their hourly and salaried employees to maximize productivity. It involves not only tracking time worked and providing compensation for it but also aligning that work to the objectives of the organization and to the individual employee’s needs. Our Value Indexes are informed by more than a decade of analysis of how well technology suppliers and their products satisfy specific business and IT needs. For each we perform a detailed evaluation of product functionality and suitability to task in five categories as well as of the effectiveness of vendor support for the buying process and customer assurance. In this case the resulting index gauges the value offered by each vendor and its products in supporting workforce management, which is necessary for running an organization efficiently and effectively.

Part of efforts to optimize workforce management is a focus on aligning the workforce to the organization’s goals and objectives. But more than half (52%) of businesses today use desktop spreadsheets for workforce management. Instead we believe that businesses should adopt dedicated workforce management systems, which are much more reliable and capable, to execute this important set of processes.

Our benchmark research reveals that over the past few years technology innovations have changed workforce management. New technologies have been embedded in elements of its core processes. These next-generation innovations include mobility, cloud computing, advanced analytics and business collaboration. Vendors and businesses have incorporated these technologies at different rates. For example, mobility has elicited response from many vendors and is in demand among customers; in our next-generation workforce management benchmark research, two-thirds of organizations said they have deployed smartphones to their workforce, and 28 percent said they have deployed tablets.

Using our benchmark research methodology Ventana Research evaluated how companies use workforce management, including exploring their maturity in core processes such as time and attendance and scheduling as well as adoption of next-generation technologies. The research shows that organizations are maturing at an uneven rates and that they are relatively immature overall in terms of adopting the next generation of systems. It also shows that overall nearly three in five organizations rank at the lowest two of the four levels of our maturity hierarchy; they have work to do in updating their use of people, processes, information and technology to manage their workforces.

Our Workforce Management Value Index for 2014 evaluates suites of software products that take a comprehensive approach to workforce management. For employees who have to use more than one module of these products, having a suite usually makes it easier to become proficient in the modules than having to learn separate products from different vendors. In addition, the administrative effort can often be lessened with a suite that centralizes these functions, which can reduce overhead for both IT and HR. And total cost of ownership (TCO) may less for a suite than for a collection of individual products.

In assessing the capabilities of workforce management suites we thus are evaluating a broad array of functionality. All of the suites we considered handle the core capabilities of workforce management, but some have other capabilities, such as complete absence management, task management for retail environments, retail demand scheduling and dashboard analytics with which managers track and manage to metrics and KPIs.

As noted, the results of our research indicate that several next-generation technologies are of key importance to creating a complete workforce management suite. We therefore included evaluations of collaboration, mobility and social networking in the scoring criteria. We believe that organizations in many industries and of many sizes – especially those with more than 100 employees –need workforce management systems with more capabilities than just time and attendance and workforce scheduling. We therefore have based our evaluations on a broad array of functionality, even though some organizations may be looking only for basic capabilities.

The value index assesses the broad set of workforce management NGWFM_VI_Weighted_Overallneeds for an organization but also the next-generation of capabilities including analytics, collaboration, cloud computing and mobile technologies that for some organizations are essential for evaluating and selecting their next vendor and set of products. The top vendor is Kronos, followed closely by Ceridian and Infor; all of these vendors received the Hot Vendor rating. They are followed in order by Oracle, WorkForce Software, ADP, SumTotal Systems, SAP, Empower and Workplace, which earned the Warm Vendor rating. The differences in the scores reflect the completeness of the workforce management offerings, such as the strength of their scheduling and absence management capabilities or the degree to which they provide next-generation capabilities. Because we rate vendors across a spectrum of business categories, differences in scores are affected by these categories as well.

In terms of users, at the low end of the workforce management market are organizations that limit themselves to basic time and attendance capabilities installed on their own premises. However, workforce management is an application with which younger workers interact often, and employers and vendors that embrace next-generation technologies can communicate better with this segment of the workforce, particularly through mobility and social collaboration. Moreover, the next-generation technologies of cloud computing and advanced analytics can improve the total cost of ownership through lower overall support costs and less costly access to key business analytics, as the system is embedded within the application. If your business lags in workforce management, I recommend taking a look at the newer capabilities the next generation of applications offer. It could help you manage and retain your workforce to better results. Download a copy of the executive summary and learn more about the vendors and products for workforce management.

Regards,

Stephan Millard

VP & Research Director

Much has happened for SuccessFactors in the past year as it became more a part of SAP, which acquired it in 2012.  One of the most notable changes was the departure of its founder, Lars Delgaard, who set the culture of the company, and the selection of Shawn Price as president. The changes in leadership have come as SuccessFactors shifts away from its position in “business execution” software toward a HR and talent management suite, which aligns it more with what SAP has. (For background, see my colleague Mark Smith’s report shortly after the acquisition.) Since then, SuccessFactors and SAP have worked at strengthening several parts of their human capital management product by connecting it with its new payroll software and more recently its HANA in-memory processing platform. The products, however, remain separate. These advances should be well received by both existing customers and those considering either its new payroll system or SuccessFactors’ HR management and talent management systems.

The biggest announcement of this kind was made at the 2013 SuccessConnect event in October, where Price revealed that SuccessFactors applications will be running on SAP HANA, which now runs almost all of SAP’s enterprise applications. Mark wrote about SAP HANA following the 2013 SAP SAPPHIRE conference. Since the SuccessConnect event, SuccessFactors has made some progress toward putting the release into production. Specifically, as of the release SuccessFactors designates August 1308, its Talent suite has been tested on HANA and is now available to beta customers. The company plans soon to launch its workforce analytics product on HANA as well.

In addition Employee Central, SuccessFactors’ HR management product, and SAP payroll products now work together more. As most HR management systems are well established, Employee Central is a relative newcomer, and SuccessFactors has continued to enhance the product over the year or so it has been on the market. The simplicity and user experience of Employee Central is worth seeing how the face to applications and information is changing for SAP. While users of SAP Payroll still have to perform many activities in the older standard SAP user interface, Employee Central users can handle some common payroll tasks directly within the more intuitive Employee Central interface. That said, this is probably where some of the greatest complexity lies in integrating SAP and SuccessFactors applications. Although there is a shipping product that is somewhat integrated, I still advise due diligence for customers, which often have complex and custom requirements for both HR and payroll functions. Making sure you understand how the application addresses configuration requirements in the new integrated environment is important to a successful implementation.

It is noteworthy that Employee Central vr_ngbi_br_importance_of_bi_technology_considerationsuses metrics from its SuccessFactors Workforce Analytics product. This is one of the best HR analytics offerings on the market today because of its usability. Unlike many analytics systems, which provide dashboards with visualization or metrics in a report and then leave it to the user to understand much of the data, the SuccessFactors analytics product provides a plain English interpretation of many of the results it shows and includes an interpretation guide within the system to help users understand common HR terms and the purpose of the analysis. It was so forward thinking that it won the 2012 Ventana Research Technology Innovation Award for overall business innovation. Our benchmark research on next-generation business intelligence shows that the most important technology consideration is usability, which more than three out of five participants (63%) selected, and SuccessFactors offers that.

SAP Jam is another product that has been tied into SuccessFactors’ HCM suite and thereby advanced its business collaboration vr_socialcollab_supports_talent_managementcapabilities. SuccessFactors has worked to develop collaboration capabilities of SAP Jam and expose those capabilities to other products within the SuccessFactors suite, most notably Employee Central and Learning Management. In both of these cases, several collaboration features from Jam are embedded within the products, making social collaboration stronger for both the suite and the core SAP Jam. Picking core HR Management and Learning Management as the initial integration points for SAP Jam matches well to our benchmark research on social media and HCM, which shows that knowledge sharing and learning are among the top five goals of social collaboration.

One area in which SuccessFactors and SAP both are lacking is a competitive workforce management product. However, last year they filled the gap by announcing a partnership with Kronos to integrate its Workforce Central product. Our 2014 Workforce Management Value Index provides in-depth reviews and comparisons of the vendors and products in the workforce management market, and I recommend consulting it to see how SAP shapes up.

As SuccessFactors continues the process of migrating into SAP, it has strong products in many segments of HCM, though the messaging it now uses to describe their value seems to less aggressive than before. However, its completed and planned integrations as well as the recent Kronos partnership strengthen its position in the HCM market. As 2014 gets under way, we will get into the details of several SuccessFactors products, with a more in-depth look at its compensation management, analytics and payroll products as we launch Value Indexes in each of these areas. SuccessFactors’ improvements over the past year are worth checking out as you look to determine what HCM systems will work best for your specific needs.

Regards,

Stephan Millard
VP & Research Director

2013 was a big year for the annual HR Technology conference, as its well-known co-founder and leader for the past 16 years, Bill Kutik, stepped down, passing leadership of the event to Steve Boese, another familiar name in the community. Beyond the change in leadership, at this year’s show were a large number of vendors that have invested in new technology to advance human capital management (HCM). Overall I noted several interesting trends, some that were similar to those I written about earlier in the year and others that reflect the evolution of innovations seen at last year’s show, specifically expanding the use of mobile access within applications and further extending business collaboration into HCM platforms. In addition, there were other advances driven by market factors such as growth in new recruiting technologies.

There were many newer vendors at the show, and updates to existing products focused on helping companies better manage different parts of the employee recruitment process, a growth spurt that likely corresponds to the ongoing economic recovery. These vendors included Jibe, which showed new recruiting analytics that can help organizations gain visibility into their recruiting activities via features such as improved location analytics and recruiting stage analytics showing where candidates are coming from and where they are dropping off in the process. Another vendor was Zao, which created technology using social media to make the referral management process a more effective part of the recruitment funnel for candidate sourcing. In addition, several others small and large made announcements, such as Ultimate Software, which announced a redesigned recruiting offering; Oracle, which announced several recruitment-related products at OpenWorld; and Talemetry, which partners with many of the larger vendors in the market and continues to invest in its market-leading recruitment product. All of these vendors and others in the recruitment market are making products that have changed what’s possible with recruiting software. It used to be largely about applicant-tracking automation and streamlining, but now it is includes effective recruitment marketing and analytics, as well as more effective matching through big data.

Another significant highlight at this year’s show was how mobile access has become table stakes in most human capital applications. While mobility was an important trend at last year’s show, this year it is not a secondary application but a core part of the application design of many leading systems across HCM segments. Hunite presented an extreme example of how far a vendor can go with mobility in human capital at HR Tech’s Awesome New Technologies session. Its mobile technology helps users gain unified read/write access to all of their HR systems, regardless of vendor, on their mobile phones. And with the fall 2013 release of its system, SumTotal centers on the mobile user, making its entire system fully mobile and optimized for touch screens, and has deepened the platform’s social capabilities to extend across multiple parts of its product line. Cornerstone OnDemand, as I discussed earlier this year and again in the September 2013 release, built core mobile capabilities that are becoming the foundation of its application. Also, Workday has made strong investments in its mobile applications in releases 18 and 19, which I wrote about.

It is worth noting that not just the smaller or best-of-breed vr_nextgenworkforce_mobile_device_deployments_increasingvendors have reached this tipping point. Large ERP vendors Infor, Oracle and SAP have also successfully released mobile capabilities within their HCM applications. Oracle has completely mobility-enabled its current release of Oracle Human Capital Management Cloud with HTML5 and released a full-featured version of Oracle Tap, its native mobile device application. SAP SuccessFactors also has mobility-enabled most parts of its HCM application, giving managers and end users easy-to-use tools. Infor has started to release mobile applications that are integrated with different parts of its HCM offering. The trend toward mobility in human capital applications has been reflected several times in our benchmark research, which shows that in the workforce management segment more than half of organizations have already deployed smartphones and tablets. And this is a growing priority, with approximately one-third presently using these devices and 18 percent planning to deploy more of them.

Another trend that is approaching a tipping point is business collaboration functionality embedded in HCM applications, a topic we discussed last year as well. While not as mature as the evolution of mobility within HCM, business collaboration is powerful. In past years business collaboration has existed mostly in the recruiting and learning segments of HCM products. However, vendors have now extended it into other processes within HCM, and deeper within those products. In the best-of-breed category Peoplefluent, which received this year’s Ventana Research Technology Innovation Award for Business Collaboration, has embedded business collaboration capabilities and real-time communication capabilities across its product suite. SumTotal Systems and Cornerstone OnDemand also extended business collaboration outside learning and recruiting, though both historically are learning system vendors embedding business collaboration capabilities in performance management, core HR management and other application areas. TribeHR, which is being acquired by NetSuite, provides core business collaboration capabilities that span its suite of HCM products for small and midsize businesses. Vendors including Oracle, SAP and Infor similarly have started to embed business collaboration in core processes of their HCM suites. SAP is using the SAP Jam product to build business collaboration across most of its HR processes such as performance, learning, onboarding and HR management. Similarly, Oracle uses its Oracle Social Cloud infrastructure to provide business collaboration capabilities across its HCM applications. Also, Infor has created Infor Ming.le, a business collaboration product that embeds business collaboration capabilities directly into the company’s HCM suite. Other and not as well known providers like Newsgator provide a social collaboration platform that can integrate to other HCM offerings like Oracle and SAP and can be used as an employee portal and also accessed via mobile technology. Another great example is RoundPegg that takes the context of culture and uses collaboration to engage employees on the mission, values and goals of an organization.

vr_nextgenworkforce_which_collaboration_technology_capabilitiesAlso new this year are more extensive business collaboration capabilities in workforce management systems. Several vendors, including market leaders ADP, Ceridian, Infor, and Kronos have increased workforce scheduling efficiencies with Twitter-like broadcast capabilities and Facebook-like wall posting to help workers find shifts they want and help managers fill them more effectively. According to our benchmark research on next-generation workforce management, these are in the top five most popular business collaboration capabilities. Our upcoming Next-Generation Workforce Management Value Index will evaluate leading vendors in this area of business collaboration.

The growth and evolution of recruiting, mobile access and business collaboration in HCM are trends that benefit HR leaders by helping them meet their ultimate business goals more effectively. Such investments by vendors are also making the user experience more compelling and will therefore improve usability, which our benchmark research shows is the most important factor in evaluating technology products. So take a look at these new and updated products if your business is going to be conducting an evaluation in the coming months. Used correctly this next generation of products can improve the way your processes flow, the quality of your information and the way your people interact.

Regards,

Stephan Millard

VP & Research Director

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