All too often, I get an industry report to read and end up saying to my colleagues, “wow this is crap.” Case in point, at the end of 2012, I got a widely read industry report that rated a halfway decent HCM provider’s payroll engine to be better than one of the major payroll outsourcers. They stated that a vendor’s almost non-existent compensation functionality was a top pick. Each year, I go through the CedarCrestone HR Technology Survey, and hope there is something wickedly out of sync with conventional wisdom. Each year, Lexy proves why she is the queen bee of HR surveys and is meticulously above reproach. I just can’t stand it.
What’s great about this particular survey is that it’s not just gathering data and spitting it back out at you. I know we all care how many people are buying Workday versus Fusion versus Employee Central versus … this year. I know we all are interested how many of us are still on premise with our core HCM. That’s so not the point. What Lexy does is far more interesting. She takes all of this data and compares it to company profiles. What’s the correlation of profitable companies to those people who are running Software X or Technology Y? This makes up the part of the report I’d like to chat about. Lexy published 7 habits, and I’m going to summarize so you’ll just have to ask CedarCrestone for the report to read the whole thing.
The attributes that defined successful companies were pretty much higher than usual revenues per employee, profits per employee, operating income and return on equity. Pretty good measurements. I’m not sure if CedarCrestone evaluates which is causal, but they do evaluate correlations, so in that sense, go after what you can control, which in our case is the HR side.
- User Adoption – “If you build it, they will come.” What a load of crap – wasn’t that some baseball movie Kevin Costner was in? I don’t remember, but it certainly does not apply to HR technology. Instead, we have to implement ridiculous change management strategies just to get our managers and employees engaged with us. If not, we only hear from them when their payrolls are wrong, or to complain about the vacation policy. The reality is that organizations who successfully implemented solutions, had good change management programs resulting in high user adoption also ended up being among the more successful companies.
- Buying Habits and Governance – Governance always seems to play into things. I’ve found that the few organizations that are great at governance tend to be awesome places to work, make good decisions, and have high employee engagement. So I’m stretching Lexy’s observations here, but basically when I reflect on her finding that successful companies have more technology and spend less per employee, I almost immediately translate that into good governance. How do you get to better utilization of what you have, and only buying what you need after all?
- Technology Decisions – There was also a couple of themes that I translated into low maintenance overhead, but also the ability to use industry best practices. It kills me when I walk into a client that is so highly customized they really don’t know what they are doing anymore other than accepting new requests and implementing full time. Most of these organizations don’t even know why or what the business case is – they just do it. Successful companies are correlated to low customization, which is also correlated to SaaS purchases.
- Data – One would automatically think that successful companies are good with data. It seems obvious. The survey actually points out a couple of great tactical elements to get you there. The first one was integrated talent management with your core HCM product. Companies that were there tended to have a significant advantage than others. The second was the utilization of mature business intelligence models, along with the deployment of that data into manager’s hands where agile business decisions can be made.
At the end of the day, HR just wants to be heard. Interestingly enough, there are elements of shoring up our own house as well as focusing on outcomes here. If we make bad decisions and have crappy governance, well that’s problem number 1. But if we also have crappy user adoption and poor data, we’ve also lost the game.
Note – nowhere in this did we correlate functionality to success!