Human Capital Management

Workday: Getting Smarter and Smarter

Enter the Age of Intelligence

In a recent Mint Jutras report, “How Smart Are Your Enterprise Applications?” we outlined some of the different ways solution providers are adding a new level of intelligence to their offerings… or not. While “intelligence” has become the holy grail of enterprise applications of late, not all vendors are delivering on the promise of smarter applications. For some, it’s just the latest buzzword added to their marketing collateral and some are simply playing catch up to current next generation applications. Others are taking their first baby steps, but a select few are truly entering the “age of intelligence.”

Where is Workday along this progression? Since its inception in 2005, it has never been a company that over-inflated its capabilities with bravado and marketing spin. Born in the cloud and built on a next-generation platform that continues to evolve, Workday also never had to play catch-up. And the first steps it took in moving into the age of intelligence were not baby steps, but instead bold ones, including some strategic acquisitions.

Workday’s acquisition of Identified in 2014 was an important step in incorporating predictive analytics and machine learning into its portfolio. In 2015 it acquired Gridcraft and last year it acquired Platfora. With both of these acquisitions, Workday sought to build insights [read intelligence] directly into its applications. More recently its benchmarking capabilities take insight and intelligence to another whole level by putting Data as a Service (DaaS) in the context of your business performance, in comparison to your peers. And Workday has opened the doors to more innovation from a broader community by making its Workday Cloud Platform available beyond its own development team.

It is clear Workday is getting smarter and smarter with each new release.

Smart, Smarter, Smartest

So, what does it take to make an enterprise application smart? In our previous report we distinguished different levels of intelligence:

  • Smart: We concluded any enterprise application is smart in that it’s not dumb. It can follow instructions – instructions like, IF <this condition> THEN <do this> ELSE <do that>. Business applications have been built on IF THEN ELSE statements since the earliest computer programs were developed. Workday applications are no exception and indeed, they can now go beyond simply following specific instructions. They are starting to learn to take some simple rule-based actions on their own. For example, the recruiting module is smart enough to decline any outstanding applicants once a position is filled, and yet keep them on file to review when other vacancies open up.
  • Smarter: To make an application smarter, you need to make it easier to use and better at communicating. Progressive releases of Workday have made the user experience very compelling while also adding more and more insights. Workday has also borrowed concepts from consumer technology, putting more power in the hands of users using mobile devices, not only alerting managers to exceptions, issues and required approvals, but allowing them to take immediate action. Workday Talk provides a “chat” capability modeled after social media. Participants can follow conversations attached to business objects like sales orders, customers or products. Groups and teams can be assembled to foster collaboration. When people are better informed, they can make more intelligent decisions, faster.
  • Smartest: But the smartest applications today combine the pattern recognition capabilities of machine learning to produce artificial intelligence (AI) and predict the future. The highest level of intelligence will be achieved in combining a variety of technologies together: AI, deep machine learning, Natural Language Processing (NLP), image recognition and predictive analytics are all at the forefront of this movement. And Workday has all these technologies in its kit bag. It has already taken some initial steps in leveraging them. For example, it has embedded machine learning capabilities into its Talent Insights to identify retention risk. Look for more use cases to be delivered using data from both inside and outside of Workday.

It is quite clear that Workday’s Human Capital Management (HCM), Financial Management, Student Management and Planning solutions are smarter than your average enterprise applications. Let’s dig a little deeper into some ways they will get even smarter.

Building Insights In: Prism Analytics

Good reporting is a necessary backbone of applications like HCM and financial management. Reports provide a historical perspective, help you assess your current position and answer questions you have about your performance. But analytics provide a deeper level of understanding and help you ask the right questions. Analytics are iterative by nature. You start with a question, issue or problem: Sales are down. Reports might tell you what regions or products are problematic, but you won’t really know why until you drill down, and you are never quite sure what path you need to take until you find out more. And you won’t even be prompted to investigate until you already have a problem.

Predictive analytics help you anticipate conditions, prompting you to investigate a situation before the problem rears its head. You would like to be able to conduct this kind of investigative work right in the familiar environment of the solution running your business. But it is even more powerful when you can look beyond the structured data that resides within your enterprise applications. Workday has woven the technology acquired from Platfora, into the fabric of its solution, rather than bolting on components. And yet Workday Prism Analytics will not be limited to Workday data, but will also bring in non-Workday data, which can then be presented through Workday reports, scorecards, and dashboards for analysis.

Typically this type of mix of data requires data preparation to be done by a data administrator with the technical skills needed to load the external data, cleanse and prepare it and then create reports, queries and/or dashboards. This activity doesn’t go away with Workday Prism Analytics, but it is simplified enough for a technical business user to perform – and perform quickly enough to be of value. And the data can be blended with, transformed and enriched by your transactional system of record (Workday data). In doing so Workday has struck a nice balance between having a super powerful tool on the back end but also super easy to use on the front end, avoiding the usual trade-offs.

Workday is in the early stages of delivering this, and also has plans down the road for data discovery. Data discovery typically goes after big data in search of patterns that may not be intuitively obvious. Using the right visualization tools, it helps you understand which data is most relevant to your problem, even if you don’t know exactly what to ask for.

Benchmarking Performance with Data as a Service (DaaS)

It takes a different kind of intelligence gathering to understand your business performance in relation to others in similar roles or industries. As a multi-tenant SaaS solution provider, Workday is in a unique position to provide you with access to this kind of comparative data. But of course, you must be willing to give, in order to receive. Workday needs permission to use this data, but paraphrasing the words of Workday leadership: We don’t take customers’ data. They give it to us.

Workday sits on a large volume of data collected from hundreds of customers subscribing to its software. This is data that can be invaluable to the entire Workday community for benchmarking against peers. Customers must opt in to contribute secured aggregated data. In turn, they receive benchmarks. Today this Data as a Service (DaaS) is available for customers to explore Workday usage and HCM results, including workforce composition, diversity, turnover, etc. Financial management data is coming soon. Within the first three weeks of this service being available, Workday reported 100 customers had opted in and contributed data. Obviously, as this number grows, so will the value of the data.

Expect more from Workday along these lines in the future, including data from other sources (private and public) not included in Workday.

Machine Learning and AI

Of course the availability of a growing volume and diversity of data opens the door for machine learning and therefore artificial intelligence. Workday’s acquisition of Identified in 2014 was an important step in incorporating predictive analytics and machine learning into its repertoire of capabilities. Identified’s patented SYMAN (Systematic Mass Normalization) technology mines Facebook for social data and then uses artificial intelligence to transform that data into professional intelligence. The “learning” comes from continued use, validating predictions with outcomes from Workday employee data on performance and retention.

Workday released Workday Talent Insights in 2015, identifying retention risk and delivering a talent scorecard. Through this introduction Workday learned that customers prefer an embedded experience, not a standalone application and that the overall user experience is paramount, along with access to data for training algorithms.

The Power of a Platform

Since it was founded in 2005, Workday has always insisted it was (and is) an applications company, rather than a technology company. It has always offered cloud-based business solutions. While it built these applications on a solid and modern platform, it always resisted the urging of pundits and industry observers to become a “platform” company. Until now.

The Next Chapter for Workday

Now it will be both a “platform” player as well as a business solution provider. The Workday Cloud Platform was soft launched a few months ago with selected service partners. Built on the principles of openness, Workday will provide the tools needed to manage the complete application life cycle, with data modeling and a single Application Programming Interface (API) point of integration.

So how does this make Workday applications smarter? Of course there are no guarantees, but by opening up the platform, along with all the presentation services, conversation services, and analytics Workday uses to make its solutions smarter, the level of intelligence is more likely to deepen. The Platform will include both Workday Talk (NLP) and BOT for anomaly detection.

So, what are developers building on the platform? Here are a few examples:

  • Talent Mobility, allowing employees to visualize career opportunities and connect with employees across globe.
  • ID Services to manage security badges
  • Supplier requisitioning that allows suppliers to directly populate data in Workday
  • Safety services management

Summary

The Innovation Keynote at the 2017 Workday Rising Event was entitled “The Age of Intelligence.” The Keynote was presented by Mike McNamara, the CEO of one of Workday’s largest customers, Flex (a contract manufacturer formerly known as Flextronics). In his opening remarks, Mr. McNamara summed up this new age by saying, “Today it’s not about controlling land and resources, but rather about applying intelligence.”

In many ways, intelligence is a new currency in the global, digital economy. And yet, when most solution providers today talk about intelligent applications, they often simply mean new ways of interacting with the solution and analytics that help you derive more and better insights from the data. But this is the minimum you should expect today. Workday has aggressively taken steps towards real intelligence, through acquisition and its own development efforts. Workday Prism Analytics, Benchmarking and DaaS, machine learning, natural language processing and the Workday Cloud Platform all combine to provide powerful insights and intelligence, not through separate bolt-on tools, but embedded in a single solution.

If your current solutions are not headed down the path towards intelligent applications, if you are starting to look for new, smarter ones, Workday is a good place to start.

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Elysian Field Software will Broaden Epiphany’s Reach

Robust Field Service and HR/HCM Cloud Solutions

The launch of any new company is exciting, but even more so when it is launching from a foundation that is already stable, well-built and primed for growth. Epiphany, an early pioneer in Software as a Service (SaaS), founded in 2002, is a well-established NetSuite value added reseller that offers both NetSuite’s Enterprise Resource Planning (ERP) solution as well as its own comprehensive solutions for field service and human resource/human capital management (HR/HCM). At the December JRocket Marketing Winter 2014 Analyst Roadshow, Epiphany announced plans to launch a new company, Elysian Field Software.

This announcement represents far more than just a name change and rebranding effort. Epiphany will become a division of the newly formed enterprise, Elysian Field Software. While Epiphany will continue to serve the NetSuite community with an integrated suite approach, a brand new sister division, Elysian Field Services wil serve a broader market. Taking a “best-of-breed” approach it will offer comprehensive, affordable, cloud-based solutions to those running other ERP solutions, but suffering from gaps so often found in field service and HR/HCM functionality.

Epiphany: A Great Starting Point

Epiphany’s business will not change; it will continue to resell NetSuite’s ERP and serve the broader NetSuite community with tightly integrated, “best-of-breed” extensions. With 114 NetSuite deployments to date, Epiphany is one of the larger channel partners of NetSuite. The two companies have evolved over the years, as have their products. Looking at the NetSuite product through the eyes of their customers, Epiphany found some gaps in terms of field services and HCM. Using the NetSuite development platform Epiphany filled those gaps, and not just in a superficial way.

These extensions to NetSuite have grown into very comprehensive suites for field service and for human capital management that rival the most robust packages in comparable markets today. Typically these types of robust solutions are outside the budgets of small to medium size businesses, but Epiphany has been making these solutions affordable to even small customers since the early NetSuite days when most customers were just graduating from QuickBooks. Of course the average NetSuite customer has grown substantially over time, but Epiphany still serves the lower end of the spectrum (as well as larger companies) with products that could rival many of those sold into much larger enterprises.

About a year ago NetSuite acquired TribeHR, which brings a unique approach to the recruiting process and is integrated with NetSuite ERP in that it adds and provisions the employee upon hire. However, there is no natively built full HR/HCM solution. That’s what Epiphany brings to the table.

Human Resources/Human Capital Management Modules
These modules are currently sold as Epiphany products. While they will be re-branded under the Elysian Field Software label, they will also continue to be sold by Epiphany, along with NetSuite ERP.

  • Applicant Tracking: this is a comprehensive module that supports the entire process from Job description and requisitioning of positions, through screening and applicant processing, selection, employee record creation and on-boarding checklists.
  • Human Capital Management: supports “one click” hire process for setting up new employees, change management, separation, EEO data capture and organization charting.
  • Benefits: includes paid time off (PTO) management, Family and Medical Leave Act (FMLA) tracking, health insurance management and COBRA event management.
  • PTO: “Leave” management includes overview calendaring for all staff with group/subsidiary/location selections, including customizable color-coding, supervisor views, graphical portlets and dashboards.
  • Performance Management: Goals determination and tracking can include cascading goals, supervisor/employee synergies, Lominger Competencies assignment and performance review rating calculation methodology.
  • Compensation Management: Salary ranges, job grade assignments, employee change tracking and compensation conformance.
  • Manager Self Service: includes employee data, PTO requests, review/update employee qualifications, job description/requirement definition, open applicant management, selection of applicants and property distribution management.
  • Employee Self Service: for qualifications, certifications, skills, licenses, leave and PTO requests, performance review participation and goal management.
  • Third-Party Integration: Integration to career sites, compensation planning, organizational modeling, payroll, resume parsing, etc.
  • Customized Report/Search Templates: Pre-screening, scoring, posting success rates, time to fill analysis, cost per hire analysis and more.

 

Customers can choose to use TribeHR along with Epiphany’s modules, or rely exclusively on Epiphany for HR/HCM functionality.

Business Expertise to Get the Job Done: Mantra Teams

However human resources and HCM projects, particularly in smaller companies, are challenged in a rather unique way, beyond the typical budgetary constraints. Seldom can small companies afford to hire a seasoned veteran with experience in implementing comprehensive HCM solutions, leaving the implementation in the hands of younger workers with little experience in driving an implementation to completion. And of course when staffed with younger workers, companies may experience a higher degree of turnover in the position. And even if a small company can afford and attract a seasoned veteran, this HR leader must wear many hats and is often consumed by overseeing compliance requirements and handling the occasional personnel crisis, causing the implementation to stall.

After spending 12 years deploying enterprise cloud solutions at other firms, Epiphany CEO Brenda Brinkley observed many incomplete or functionally deficient solutions, as well as inadequate resources to take full advantage of more robust solutions, even when available. To address this she came up with a concept of what she calls “Mantra Teams.” Rather than leaving the implementation to full-time employees, these teams will be available on demand, on a contract basis.

The Elysian Field Mantra Teams will be largely full time consultants and/or retired HR/HCM professionals who are experts in the field, but available for as long or short an engagement as required. These experts will be:

  • Screened and vetted by Elysian Field Software for their expertise and understanding of HR/HCM best practices
  • Trained on how to use the software
  • Affordable because they will be contracted directly by the customer with no middle man mark up
  • Motivated by the customer’s priorities but able to advise on how best to leverage the solution quickly and efficiently

In other words, this is a team of experts that customers can bring in simply to get the job done expeditiously.

Addressing the Complexities of Field Service

While HR/HCM modules are a big part of Epiphany’s business, remember it also provides a comprehensive suite of field services management modules as well. NetSuite’s early successes centered on professional services businesses, then moved into distribution and light manufacturing. It has been very successful in attracting manufacturers of consumer products, but has more recently targeted manufacturing of more industrial products. With this move, repair and maintenance of manufactured products becomes more complex. And again, Epiphany filled a functional gap with a robust, integrated suite of Field Service Management Modules.

Field Services Management Modules
These modules are currently sold as Epiphany products. While they will be re-branded under the Elysian Field Software label, they will also continue to be sold by Epiphany, along with NetSuite ERP.

  • Work Order Management: technician/equipment assignments, time/expense/part tracking, rapid billing and mobile management
  • Rentals Management: pricing rates, equipment repair, pick-up/return, route delivery management, time utilization of rental assets, financial utilization of rental assets, fleet age and apportionment, inventory management
  • Depot Repair: Parts/returns/repair, advanced replacement, warranty visibility, repair orders with equipment tracking and inventory availability
  • Job Costing: job profitability, work in progress, cost and profitability reporting
  • Contract & Warranty Management: auto-create and renew contracts, manage service contracts, co-terminate multiple contracts, revenue and profitability tracking, manufacturer and custom warranty tracking, convert warranty to contract, bill warranty overages
  • Scheduling & Dispatch: dispatch center, drag and drop technician scheduling, non-sequential work order scheduling, team scheduling, PTO, schedule by skill and availability
  • Technician Skill Management: skills, licenses, education & certifications, qualifications, tied to HR
  • Mobile Tech: offline and online, calendar view, daily & weekly expenses, signature capabilities, attachments, complete view of configuration, tasks, contracts, notes, photos, time, expenses, etc.

 

Field service solution implementations also have the potential of suffering from lack of fully functional solutions and also lack of attention. Not only has Epiphany made a robust solution to a complex problem quite affordable, but it also wants to address what might be a “commitment issue.” While a good field service department is likely to have deep and broad expertise, the very nature of the job means the customer is always the first priority. This makes a software implementation even more challenging. As a result, Elysian Field also intends to add Mantra Teams for Field Service deployments.

And these teams of seasoned experts will also pave the way for introducing more leading edge technologies into the field. Elysian Field intends to aggressively pursue “machine to machine” capabilities, supporting the concept of the “internet of things (IoT)” and new technologies such as 3D printing and mobile wearable devices. While these types of technologies might seem like “pie in the sky” overkill for some industries, they are particularly relevant for field service. Think what a portable 3D printer could do to supply repair parts in the field. Think about the value of providing diagnostics or schematics built right into safety glasses, leaving the technicians’ hands free to trouble shoot and repair. Think about the possibilities of remote diagnostics by tapping into machine data.

Beyond NetSuite

While all these existing products and new plans are potentially exciting for NetSuite customers, Elysian Field Software would like to bring these exciting capabilities to a broader audience – hence the new sister division to Epiphany. This could spell a huge opportunity for the newly formed umbrella company. While the HR/HCM modules could be a good fit for virtually any NetSuite customer, today the Field Service Management modules are a better fit for NetSuite’s target manufacturing customer, rather than its current installed base. Making these modules ERP-agnostic represents a huge opportunity for Elysian Field Software.

However, it also represents a technical and development investment. Currently Epiphany’s solutions are built with the NetSuite development platform. It is very likely that Elysian Field Software will need to re-architect these solutions on a different platform to best meet its goals. Will this be Salesforce’s Force.com platform? Will it remain on NetSuite’s? Will it use another, different platform? Right now, Elysian Field Services is evaluating all different possibilities and has not ruled any out.

But given the effort involved, is it worth it? Is there sufficient market, beyond the NetSuite base to merit such an investment? Mint Jutras believes it is, provided Elysian Field Services chooses wisely and brings the new product to market fairly rapidly. New technology and rapid application development tools will be key, as the market will not patiently wait. The vast majority of companies have a strong preference for an integrated end-to-end solution. However, for every company that has an overriding preference for a tightly integrated solution from a single company, two will not sacrifice functionality for ease of integration or dealing with a single vendor (Figure 1). The best of both worlds obviously will be robust functionality that is easily and seamless integrated.

Figure 1: Preferences for a Suite?

Elysian fig 1Source: Mint Jutras 2014 ERP Solution Study

Both field service and HR/HCM functions have historically been underserved in smaller companies. The Mint Jutras solution study found only a 42% adoption rate of any kind of after market service functionality installed in manufacturing companies, and where installed, it was twice as likely to be a separate application that was loosely integrated or not integrated at all (28%) versus embedded or tightly integrated (14%).

HR capabilities were more pervasive at 66%, but this adoption rate did not distinguish between a robust suite and marginal HR capabilities, but still those not well integrated by a wide margin.

2015: A Year of Transition

As talent management, both in house and in the field continues to grow in importance, if Elysian Field Services can fill those gaps, and also provide seamless integration, not just to NetSuite’s ERP, but to other players in the small to midsize market, it should be a winning combination. Watch for some important milestones in 2015, including an official launch of Elysian Field Software in the second quarter, followed by the choice of a new independent platform.

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Infor Acquires PeopleAnswers: New Twist to Continuing Trend in ERP and HCM

Big Data, Predictive Talent Analytics Drive Performance

On January 8, 2014, Infor announced it had acquired PeopleAnswers,  a pioneer in cloud-based predictive talent analytics. This continues a trend of large Enterprise Resource Planning (ERP) vendor acquisitions in the realm of performance management and recruiting. But unlike other acquisitions, this one adds quite a unique new value proposition to its broadening footprint of Human Capital Management (HCM) solutions. Its software as a service (SaaS) talent analytics capabilities add a measure of data-driven behavioral science to an otherwise “soft” discipline.

Adding Talent Management to ERP

For decades in the world of Enterprise Resource Planning (ERP), human resource management (HRM) was little more than an afterthought. For many years, the perceived requirements were rudimentary at best and Human Resource Management modules often were just repositories for employee data. They didn’t really manage anything. ERP continued to expand functionality around the transactional system of record of the business. And apart from payroll transactions, which might or might not be included in the HR landscape, HCM really didn’t involve the transactions that fueled trade. Integration didn’t have to be “tight,” leaving a world of opportunity for separate add-on applications.

A Developing Market

This left plenty of room in the market for a lot of smaller HR specialists to seize the opportunity and grab a niche. The overall software category of HRM became broader, turning into human capital management (HCM) and several different “specialty” categories emerged: talent management, including recruiting, performance management (reviews), incentive compensation, as well as skills development and learning, workforce planning and analytics and time tracking. Sometimes payroll was included, sometimes not.

The number of players in the market proliferated.  Because few took the full suite approach, new HCM software vendors could grasp a foothold and gain traction even with a relatively small footprint.  The success of these new vendors proved to the market just how big the demand was (and is) for this type of software.

Customers and ERP Vendors Respond

Today, not only are customers more demanding and less willing to subject employees to the hassle and confusion of multiple systems, but also the big ERP players are no longer content to leave that opportunity on the table. The result: A big round of consolidation has begun. The year 2012 saw SAP’s acquisition of SuccessFactors and Oracle’s acquisition of Taleo. Last year NetSuite announced its intention to acquire TribeHR. All three of these are cloud-based, software as a service (SaaS) solutions in the talent management arena. So Infor’s announcement was the fourth major ERP vendor to announce an acquisition of a talent management solution, and a cloud-based one as well.

This is not Infor’s first venture into the realm of HCM however. It already has quite a comprehensive offering across the HCM landscape, offered either on-premise or SaaS. Its acquisition of Lawson back in 2011 was a major step forward, particularly in satisfying the human capital needs of certain industries, including healthcare, retail and hospitality. Coincidentally, all three of these industries are human capital-intensive. It later rounded out its offering with its acquisition of CertPoint, which filled an important gap in learning management. Now it is seeking further differentiation through PeopleAnswers’ decade-long investment in “big data” and its unique approach of including behavioral science.

How is PeopleAnswers Unique?

Some areas of HCM categories might struggle to produce hard data that supports evidence of return on investment (ROI). After all human resource management is a relatively “soft” discipline. Manufacturing can accurately produce hard measurements such as production output, lead times, and quality metrics. Sales can measure bookings and revenue against quota. Marketing can count leads captured and converted. Finance can measure discounts lost, days sales outstanding, earnings and profits. But capturing human capital metrics related to performance and employee engagement are indeed softer and harder to measure.

Yet the metric PeopleAnswers attacks most directly is much more firm and definitive. Although its product can legitimately be characterized as both performance management (employee assessments) and recruiting, the real metric that drives ROI is turnover. The premise: By accurately assessing the performance of individuals, you improve your ability to hire the right people. By hiring the right people you improve overall performance and retention. Customers routinely report reduction in turnover by 40%, and even higher returns in reducing involuntary turnover.

How does it do that?

PeopleAnswers uses a data-driven scientific approach to objectively tie individualized performance metrics to the key behaviors of its customers’ best employees. This is not a fluffy, feel-good approach to performance management, but patent-pending scientific research. PeopleAnswers has a science team, including 10 individuals with PhDs in behavioral science.

Through its research, this team has determined that skills alone are not predictive of the future performance of a new hire. The team developed a list of 39 attributes that correlate most directly with performance, including ambition, discipline, energy, acceptance of authority, attention to detail, flexibility, conscientiousness, and empathy. Good hiring managers have been subjectively evaluating these traits for decades. PeopleAnswers takes the subjectivity out and puts consistency in.

The implementation process starts by developing customized Performance Profiles™ from employee assessments, focusing specifically on characteristics and behaviors of top performers and weighting the 39 attributes differently for different jobs and perhaps even geographies. These Performance Profiles become the benchmark for selection, development, and succession planning.

Candidates are required to fill out a questionnaire uniquely tailored to the company and the position. This is used to construct what PeopleAnswers calls the Behavioral DNA™ of the candidate. It then compares that against the Performance Profiles of top performers and “scores” the candidates to help identify future superstars.

PeopleAnswers is also unique in how it charges for its service. It is not unusual to charge on a per-use basis (per assessment and/or per applicant) in this category of software, and PeopleAnswers certainly can accurately measure this. However it prefers to eliminate any excuse for delaying, reducing, or skipping the assessment process in order to save money. To get the most value from the solution, you need to assess every employee and every candidate that applies for a job.  So PeopleAnswers doesn’t charge based on the number of assessments but rather a flat, all-inclusive fixed fee that includes unlimited assessments.

Data Needed

This eliminates any (valid) excuse for not entering an assessment and makes the calculation of ROI that much easier. Of course any customer needs to start the implementation with some clear baseline metrics. Figure out your current turnover and estimate the cost of losing an employee. This might be different for voluntary and involuntary turnover, but even a single estimate will provide a good starting point. From these two numbers you can figure out what turnover is costing you today. If you, like other PeopleAnswers customers, can reduce turnover by 40%, the software will probably pay for itself pretty quickly.

But apart from simplifying the math, providing incentives to collect as much data as possible only makes sense. This is particularly important since without data, the model is useless. In fact without a lot of data, it would seem the model is useless. The more employees you have, the more recruiting you do for the same or similar positions, the more value can be derived directly from the tool. So this may not have the same value proposition for small companies, as it will for large companies. And human capital-intensive industries will benefit more. So a small manufacturer operating in a highly automated plant might not gain the same ROI as perhaps a large healthcare facility staffed with hundreds of nurses, or a retail environment with thousands of in-store personnel.

Who Will Benefit?

Infor’s installed base of customers includes all of these different profiles. At the time of the announcement, Infor and PeopleAnswers have 80 joint customers. About 70% of this customer overlap is from prior Lawson customers, which are most likely to fit the “human capital-intensive” bill. So that will be the first order of business as Infor starts the integration process. The goal is to deeply integrate the PeopleAnswers’ Behavioral DNA into the current Infor Talent Management suite, starting with the Lawson product. If the Lawson acquisition is an indicator of success, this first wave of integration should take about 120 days. Note, this time frame is the current plan and is reflective of past performance, but many factors can impact development plans. So this should not be interpreted as a hard commitment. The timing of future releases and Infor’s development plans remain at the sole discretion of Infor.

This effort will also include bringing Infor 10x enabling technology to the PeopleAnswers products, including Infor ION (light weight middleware), Infor Ming.le (a centralized platform for social collaboration, business process improvement, and contextual analytics) and Infor Motion (mobility).

At the same time, it will be making the Infor Enwisen HR Service Delivery platform more “behavioral.” Infor will then move on to integrating PeopleAnswers to the Infinium product line.

What Does the Future Hold?

While this new addition to the Infor family of products may not be uniformly applicable to its entire installed base of 70,000 customers, it certainly adds clear and measurable value to the subset that operates in human capital-intensive industries where making the right (or wrong) hiring decisions can make (or break) a company. But the potential value might not stop there.

Acquisitive companies typically look to improving bottom line performance by eliminating redundancies between the merged companies. This is an effective approach when those redundancies are limited to back office administration. But when staff reductions start to hit the development team, it can become counter-productive. Infor recognizes this and tends to not only protect the acquired development staff, but also add to it.

The first order of business after the acquisition is completed will be to integrate PeopleAnswers with selected Infor products (Lawson S3). Infor intends to preserve the PeopleAnswers team in order to expedite this. But at the same time it will bring Infor10x technology to the PeopleAnswers product. It is not out of the realm of possibility that Infor will actually add development staff to do this. While at other acquisitive companies an acquisition may trigger layoffs, at Infor it is just as likely to trigger hiring.

As big data and analytics continue to make their way to the forefront of employee and business performance management, it will be interesting to see what other results the addition of a “science team” can produce at Infor. And as the combined Infor and PeopleAnswers teams start to work more cooperatively together, who knows what other value behavioral science can bring to a whole host of other activities beyond recruiting.

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NetSuite Jumps on the Cloud HCM Bandwagon with TribeHR

Last month NetSuite announced its intention to acquire TribeHR, a cloud-based provider of an integrated suite of human capital management (HCM) solutions. HCM solutions are pretty “hot” these days and cloud-based HCM is even hotter. Some make the mistake of thinking interest (and growth) in the HCM market is a very recent phenomenon.  SAP’s acquisition of SuccessFactors and Oracle’s acquisition of Taleo (both cloud-based, by the way) only served to fuel that assumption. After all, if the “big guys” are jumping in, it must be the next “big thing.” Right? Yes and no.

Obviously HCM is “big” right now, but that didn’t happen overnight. I have been following HCM solutions since 2006, some years more closely than others. I actually think this HCM market started heating up back in the 2005 – 2006 timeframe. But it wasn’t the big guys that were making it happen. Instead, a lot of smaller HCM specialists saw the opportunity and jumped in. Most grabbed a niche – talent management, recruiting, performance management (reviews), incentive compensation or just plain HRIS. Very few took the full suite approach and that left the market with lots of players, but very fragmented.

In the early stages of this market growth, human resource management was still an afterthought in the world of ERP. For many years, the perceived requirements were rudimentary at best and Human Resource Management modules often were just repositories for employee data. They didn’t really manage anything. So what changed?

I believe there are three different forces converging here.

  1. The work force has changed
  2. All these smaller players demonstrated there was a real demand
  3. ERP vendors are more aggressive about expanding their footprints

The Changing Workforce

The workforce has actually been changing quite dramatically (at the very least) for the past two decades.  The combination of automation and outsourcing to countries where labor is cheap has resulted in the blue-collar and hourly workforce shrinking enormously. When the work force was made up largely of these types of roles, nobody really worried about “employee engagement” or managing an inventory of skills. Employees were hired for a particular job that might or might not require special skills. Companies advertised job openings, even for salaried workers. Potential employees filled out applications on paper and resumes came through the mail. Benefits came in standard packages where one size fit all, whether they really fit or not. There was no “self-service.” Reviews were paper-based and recognition might (or might not) come with a length of service award announced at the company Christmas party.

We live in a very different work world today where the hourly worker has largely been replaced with the knowledge worker. When companies today say, “Our employees are our greatest asset” they really mean it. The way we recruit and hire is different. No place is the “social” aspect more prevalent than in managing human capital.

The Demand for Solutions is Real

The proliferation of smaller HCM vendors has proven there is a real demand for solutions to help manage this changing workforce. Until these vendors came on the market with solutions for everything from applicant tracking to hiring and onboarding to managing performance, benefits and incentive compensation, human resource professionals managed with paper and spreadsheets. Of course some, particularly in smaller companies, still do. But that only serves to increase the market potential and the cloud helps make these solutions much more affordable for smaller companies.

Even these smaller HCM niche vendors have tended to focus their efforts on larger companies, always measured by numbers of employees. As ERP vendors that serve small and medium size businesses bring these options to their existing customers, that could change very dramatically and market growth could accelerate even more quickly.

The Expanding Footprint of ERP

I have been saying for the past few years that the footprint of ERP has expanded to the point where it is getting more and more difficult to tell where ERP ends and other applications begin. This obviously is by the design of the ERP vendors. An ERP vendor can grow in several ways. Obviously it can grow by acquiring new customers (e.g. one ERP swallowing up another). It can grow by selling one new customer at a time. And it can grow by increasing its share of its customer’s wallet. This means cross-selling and up-selling existing customers. And an ERP vendor can either develop its own solutions to sell to existing customers, or it can acquire them. Most growing ERP vendors today will combine these growth strategies.

In this case, NetSuite has chosen the shorter route to market by acquiring a suite of HCM solutions. With such an acquisition I always caution customers and potential customers of the vendors to look closely at integration. Just because a vendor acquires a complementary solution doesn’t mean that solution is integrated and if not, there may be no additional value delivered than was available prior to the acquisition. In the case of NetSuite’s acquisition of TribeHR this is not a concern.

Earlier this year TribeHR joined NetSuite’s SuiteCloud Developer Network (SDN) and has already created TribeHR SuiteApp, integrating the two solutions. The integrated solution is already available on NetSuite’s Marketplace. Joint customers have the added advantage of a pre-configured and integrated solution. Start the recruiting process in TribeHR and when you make the hire, it also sets up and automatically provisions the employee in NetSuite’s ERP. Yes, there is some redundancy but the transfer is “touch-less” and the data is synchronized in real-time. So far, about 30 out of the 450 TribeHR customers are also NetSuite customers.

The Opportunity

So where is the opportunity for growth in merging the two companies? It seems the biggest opportunity will be in up-selling the NetSuite installed base. Those NetSuite customers already running NetSuite Payroll have the highest probability of also wanting to buy HCM, but there are only about 100 of them, all US based. TribeHR is already deployed in more than 50 countries, but NetSuite’s Payroll supports US businesses only. But there should also be added opportunity for those small to mid-size businesses that have not yet invested in an HCM suite or even any HCM solutions. For the large enterprise, NetSuite will continue to partner with Oracle with Oracle HCM at the corporate level. But TribeHR might also be a viable alternative for two-tier deployments in smaller subsidiaries or divisions.

It is much more likely an existing NetSuite customer will extend its ERP solution with HCM than it will for a TribeHR customer to purchase an ERP, unless of course a new purchase of ERP was in the cards already.  According to Mark Gally, previously Chief Revenue Officer at TribeHR and now HCM, Vice President of Sales and Marketing at NetSuite and ric Gerstein, Sr. Business Development Manager, HCM at NetSuite, TribeHR will continue to be sold as a stand-alone solution. The real question will be whether the NetSuite brand will help or hurt in that sale.

NetSuite Poised to Compete

The bottom line: this acquisition positions NetSuite to compete in the expanded ERP market, where prospects are looking for their ERP vendor to satisfy are larger percentage of their enterprise needs. Because managing human capital is becoming more critical to the continued success and to market differentiation, this category has become more important and will likely continue to gain in importance. Those ERP vendors that can’t fill this need will be at a competitive disadvantage.  Acquiring a suite of HCM solutions is the fastest time to market and with all the recent acquisitions, the candidates for acquisition are shrinking quite quickly. Fortunately for NetSuite, it made its move with what appears to be an excellent choice, while the market is hot.

 

 

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Oracle, NetSuite, And Deloitte Partner To Deliver Integrated HCM And ERP Cloud Services

Last week NetSuite, in conjunction with Oracle and Deloitte, announced a partnership to deliver integrated human capital management (HCM) and enterprise resource planning (ERP) cloud services for the mid-market. Each of the three companies will throw something into the pot: NetSuite brings ERP, Oracle contributes HCM and of course both will be delivered via the cloud as software as a service (SaaS).  Deloitte plans to work with the two companies to develop a practice with “highly skilled practitioners specializing in tools and implementation services to help customers adopt the soon to be integrated SaaS technologies faster and more seamlessly.” The “soon to be” qualifier implies a future deliverable, so Oracle and NetSuite will also have to work together on this integration.

The partnership between Oracle and NetSuite is not new, but until now was pretty much limited to the technology stack. However, as far back as June 26, 2001, Oracle announced its “small business suite”, which was in fact NetSuite. But applications from NetSuite and Oracle never came together in any kind of substantive way. After all, in some ways NetSuite’s solution competes against Oracle’s Business Suite, as well as the ERP solutions acquired along with JD Edwards.

But NetSuite never really built out HCM functionality, choosing instead to partner. In fact, it already has several HCM partners, but they tend to have different solutions for different parts of the world. One of the biggest challenges for HCM solutions has always been the different regulations around the world, both in terms of payroll and other compliance requirements. Laws in the United States are very different from those in Europe, and even from one country in Europe to the next – and on and on around the world. Most HCM solutions start out as country-specific and never make it into the big leagues to compete on an international basis. But Oracle’s HCM solution can.

There are also quite a few different sub-segments within HCM ranging from the traditional human resource information system (HRIS) to talent management (including recruiting) to benefits and compensation, etc. It is more common to find individual point solutions for each segment than to find a full, comprehensive suite covering all of them. Hence the market is quite fragmented. Oracle is one of the few solutions that has the breadth of functionality and also serves a global market. It not only acquired expertise early in the game from its acquisition of Peoplesoft, but also more recently acquired Taleo for talent management.

The Taleo product, which is also SaaS only (like NetSuite) fits right in. But because this is a “cloud only” solution, global HR will have to come from Oracle Fusion, not the Oracle Business Suite. Fusion is still a work in progress.

The nature of the relationship between NetSuite and Oracle could best be categorized as a “referral” agreement. Oracle doesn’t sell NetSuite products and NetSuite doesn’t sell Oracle products. However Oracle has a dedicated HCM team, which will engage with the NetSuite sales team to jointly sell into NetSuite customers. This makes sense because a NetSuite ERP customer is more likely to buy Oracle HCM. That’s not to say an existing Taleo customer might not be interested in NetSuite, but I am sure the Oracle sales team would prefer to sell them an Oracle ERP. An Oracle HR customer running Oracle Business Suite or JD Edwards is less likely to buy NetSuite. Even if they were willing to consider this, the Oracle sales team isn’t going to bring the NetSuite team in for a possible replacement.

While referral arrangements are quite easy to create, there is one inherent weakness. They are also easy to walk away from. As mentioned above, right now Oracle Fusion is a work in progress. When it is a complete ERP, will Oracle still be as interested in partnering with NetSuite? Probably. NetSuite has an installed based of over 14,000 customers, so it is quite a large field of opportunity.

But what about the role of Deloitte? According to Jim Moffatt, CEO of Deloitte Consulting LLP, “Mid-sized companies are looking for solutions that allow them to be nimble and respond quickly to market opportunities. This newly integrated solution will help these organizations deliver better service at a lower cost, ultimately giving them an edge in the war for talent and a true competitive edge.”

I agree that mid-size companies are primed and ready for low-cost solutions. HCM functions have historically been under-served by enterprise applications and therefore there is a great deal of pent-up demand, particularly in the mid-market. I’m just not sure mid-size companies are ready to pay the price of a consulting firm like Deloitte. I suspect many mid-size companies will prefer the “do it yourself” approach, whether they are capable or not. Those that recognize their own weaknesses might turn to consultants, but the mind-set of a mid-size company expects a consultant to get in quickly and out just as quickly. Consultants such as Deloitte tend to like long engagements. We’ll have to wait and see how many times they get invited to the party and how long they stay.

All told though, this seems like a smart move for NetSuite. Its footprint expands without a huge development effort. Processes and functions managed by HCM solutions are quite easily integrated into ERP since they are not too deeply embedded in transactional activity. That is, unless time and attendance transactions are collected through workforce management in HCM. Even in this case, the integration is quite clean and simple. The HCM solutions market has been heating up, and this means the NetSuite team, in conjunction with its Oracle counterpart can provide a more complete and competitive solution.

Oracle also benefits from that wide open market of NetSuite customers, which get a more complete, integrated solution. As to Deloitte… we’ll see.

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