Is Cloud The Way To Go?

So I had to upgrade my cell phone contract.  I used to be on this thing where I had a bucket of minutes and text messages to use, and now I’m on exactly the opposite.  I have unlimited phone and text and about 10 GB of data I can use every month.  It really points to a shift in how we as users of wireless devices are working.  Less and less of our days are spent actually talking to each other, and more of our days are spent collaborating through various mechanisms that involve data.  I will admit to spending an exceptional amount of time browsing news on my phone, looking through facebook updates to keep tabs on people, and using my phone for work emails.  Nobody calls me anymore, and if they do, I get my voicemails through data (I read my VM, have not listened to one in years).

One of the big questions these days is about SaaS and Cloud.  Should we do it?  Should we stay on PeopleSoft or SAP HCM?

The answer for SaaS is a definitive Yes.

At some point, be it this year, next or in 5 years, you are going to move to the cloud.  I’m not an opinion about your current on-premise strategy, and I’m not making a judgment of you if you disagree.  I’m simply stating a fact.  Let’s tale a look at the facts:

  • ADP: The actual development of the Enterprise HRMS client server product is probably severely limited.  I don’t even know if they sell it anymore.  We do know that ADP Vantage is what they are selling and developing.
  • Oracle / PeopleSoft:  We’ve all heard about applications unlimited, but for those who thing that in 2020 we’ll still be going to a PeopleSoft Track at OpenWorld, I think you really have to evaluate your reality.  The developers are all on Fusion.  Let’s say you are right and there is still a PeopleSoft product in 2020.  How long do you think it will have been since your last major product enhancement?
  • SAP: Well, there’s HAHA, and there’s SuccessFactors.  Either way, SAP kind of knows that they are pouring development resources into the cloud.  Same conclusion as with PeopleSoft – it will be around for a while, but that’s not the whole reality.
  • Workday:  It’s already in the cloud from the start – no discussion here.
  • Talent Management: It does not really matter if you bought Taleo, SuccessFactors, Cornerstone, PeopleFluent, (I’m going to get in trouble for leaving out 50 companies), you bought into the cloud long ago for TM.

I’m not really trying to change your mind on the cloud here.  It really does not matter.  If you are an HR technology buyer, you simply don’t have a choice.  The vendors and the industry are in the midst of choosing for you.  In just a few short years, all of your premise based HR technologies are going to cease or significantly slow their development efforts and fully shift to the cloud.  If you want to be on a product that will be continuously developed, that is where it will be.

Just in the same way I really don’t have a choice to stay on my old cell phone plan, the world is moving on when it comes to HR applications.  It’s time to move with it.

Systems Deployment for the 99%

Believe it or not, when it comes to personal technology, I’m not in the 1%.  Come to think of it, I’m pretty darn sure I’m not in any 1%, but that’s not quite the point.  I finally got a new phone after sitting around on my last phone for 2 years – it was ancient.  I’m quite pleased with my new phone.  My last charge lasted me 41 hours (weekday standard use), and I got 43 hours before that.  Last week on Friday, I got 26 hours out of a single charge that included 3 hours of a Google Hangout (video conference on the phone).  All in all I think it’s going pretty well.  I’m a Motorola guy – I like the build quality, I think Motorola has the best antennas in the industry, and I happen to be a Google everything type of guy making Android work well for me.  Basically, I can make calls on my phone, I can drop my phone, and I can use it all day.  What I’m not is the guy who complains about a phone not having 2 gigs of RAM, my -ability to custom ROM (completely modify the OS on the phone), and have a 2% better screen quality than the next guy.

When I go out and read the message boards about phones (as I did extensively when I was researching what to buy), the total amount of complaining about fringe functionality shocked me.  I mean, is it really more important to have a phone that you can fully customize than one that does not drop calls?  Do you really have to have 2 gigs of RAM on a phone that might be 5% faster for it, but you have to charge up every 8 hours?  I guess we all have our priorities, but I’m pretty sure that the guys who complain about this stuff are the 1%.  Most of us just want to not drop a call, not have to charge our phone every couple hours, and for the rest, if we can do 80 to 90% of every other phone, we’re pretty pleased.

This is the exact same problem when we select new technologies for HR.  There are just some people who seem to scream the loudest, and because of that, we happen to pay attention to them.  Rather than figuring out exactly what we need to be successful 99% of the time, we’re left chasing the minority exceptions.  And because those exceptions are screaming madly at us, we think they become part of the core requirement.  When it comes down to decisions about this or that, and whatever tradeoffs we have, we’ve often been led to think that 1% is a bit more important and urgent than it really is.

I’ve actually been an advocate for a while of forgoing the requirements gathering process and just having a set of use cases.  What is it exactly that we need to get done, what are the outcomes we need to achieve, and how do we measure that we have achieved them?  Sure there are going to be little things in there that need to be considered, but if we have a set of systems that gets us to an outcome instead of a set of requirements, then we can move on and figure out which system provides that outcome in the best way.  Often, we’ll realize that of the three systems that achieve the outcome, our next selection criteria is not the field and functional capability, but the user experience that is next in importance.  Really, outcomes don’t matter if users don’t use.  Then after all is said and done, if there’s still room for negotiation between a couple systems, the nitty gritty details come in, but only after we’ve decided that the system actually gets us to the right end state.

I don’t know about you guys, but my end state goal is to be able to make a call without dropping.  As a Verizon / Motorola guy, I have not dropped a call in probably 2 years, and I’m pretty sure I hit more cities and states than most of you.  All I’m saying is that I don’t need to chase the stuff that some people think is really cool.  My phone is there for a very specific purpose and if I can get that done 100% of the time, then I’m good to go.  Isn’t HR technology the same?

The Cloud

Seven years ago, we started talking about social media in HR.  I remember this at a conference and nobody got it.  In fact, pretty much all the HR people said that it was a bad idea, it was not for the workplace, and it would just get us into trouble.  The concerns may have been justified at the time, and it was worth taking a less risky stance.

Five years ago, at another conference, social media was the big thing.  People talked about what we could do, how we would implement, and how we could network the organization and bring everyone closer.  But we never did it.

Today, we might finally have networks in most of our organizations.  There is the easy ability to look someone up on the directory and chat or just connect with someone in another part of the organization, but we are not really using any of the functionality for HR.  After all this time, we’re less excited only because nobody ever came to the plate and presented us with a technology option that just worked.

Here’s the thing – I’m really excited about all this interconnectedness because I start thinking about all the ways we could and should be applying the technology.  I’m sick of only talking about Yammer and Rypple (now for performance feedback.  Let’s do it real time, and let’s actually do it.  We thumbs up and down people (or their posts) all the time, but we as employees live in complete fear that negative feedback is going to screw one of our friendly relationships.  Let me tell you something, when someone is great, everyone knows it.  And when someone underperforms, that is also known.  But instead of the same conclusion the manager will reach during the traditional performace review, let’s pretend the employee had the opportunity to get positive and negative feedback throughout the year.  Let’s say that the employee had a chance to take corrective actions.

For the history of HR technology, we have not had the core capabilities to use social in HR.  Trying to plant social on top of SAP or Oracle was probably not going to lead us to success.  But everyone has new core foundations that can really enable this stuff, and I’m seeing that finally, HR technology has caught up with HR expectations.  Five years ago we were ready, but our foundational technologies just needed some time.  We were in contracts, or we just needed a few years to implement.  Now we’re there and the next generation of HR applications that are based on cloud and social can actually happen.


Leveling the Playing Field

I’ve always wondered about the benefits of doping in professional sports.  Once, I read about a journalist who decided to dope just to find out if it really was that dramatic at providing performance increases, and not only was he stronger, have significantly more endurance, but he also seemed to start reverse aging (age spots on his skin started to disappear).  Indeed, the reported benefits of doping are staggering.  Even an average guy like me could probably ride my bike over 100 miles a day for days in a row without real problems.

Lance Armstrong is once again in the news for doping.  Many of us have been pretty sure that he’s been a doper all along, but the man “has never failed a drug test” so we just let it go.  For the particular drugs we’re talking about, there is no real way to test if the drug is in someone’s system.  Instead, they test for other indicators.  In the case of EPO, they test for a blood hemocrit level above 5.0 (whatever that means).  Basically, if you tested every professional racer, there is a good chance that 90% of them have hemocrit levels at 4.8 or 4.9.  Their argument is that they are not cheating, even though they are cheating, just doing it below the level that they would get called out for it.  Instead, they argue that they are just keeping themselves level with the rest of the playing field.

A few years ago I’m sure I argued that core HR was dead, and talent management was dying with nothing to take their places.  Let’s face it – core HR functionality has not changed in a decade and Talent has been a bit of a bust because all we’ve done is automated the old crappy stuff.  Today, I’m not going to argue that HR technology is dead.  I’m going to argue that the playing field is now level.  Now I want to see who is going to perform, and who is going to get left behind.

If we look around the HR marketplace, there is really good reason to be excited.  I’m not talking about new functionality in core or talent, but I’m talking about how everyone is creating new user experience, and doing it in different ways.  If we look at Fusion versus Workday versus SAP/SF Employee Central versus ADP Vantage versus (all the vendors who are pissed they got left off al already too long list), the theory and design of the experience is totally different.  What we assume about our company’s employees and managers will drive a selection, not what functionality works for us.

We are no longer in the era of “do I want PeopleSoft position management, or SAP’s?”  I actually get to make a decision that is based on my culture and how I think they will best use the application.  Do I have a bunch of engineers, or do I have a bunch of management consultants?  Do I have machinists or perhaps finance guys?  I’m finally at the point where customers and culture are the things that are important.  I finally get to make decisions based on company strategy, workforce and culture.

Functionality is dead because it is a level playing field – but HR technology is one of the most exciting places to be in a really long time.


Back to Basics

It seems to me that there has been a renewed focus on core HR.  Now I need to tell the truth, I really thought core HR was dead.  I mean, it will always be around, but with the whole industry moving on to cooler things like analytics and talent management, who cares about core HR anyway?  Seriously, core HR is core HR, how many ways can you present an employee transfer or termination process?  How many different vendors can effectively pitch OSHA functionality and expect to win?  Within reason, all the core HR vendors are pretty much on an equal playing field, for one reason or another that I won’t bother going into.

So the industry if focused on talent and analytics.  The problem is that nothing seems to work if you messed up core HR.  People deployed a nice, automated performance process 3 years ago, and they got themselves away from paper.  But at the same time, the industry told them that they didn’t get where they needed to go, and a number of reasons went into this.  First, deploying a talent process just wasn’t enough, and the vendors are madly working on the next level of functionality that will actually help us manage talent as opposed to automating a process.  Secondly however, talent management did not work the first time because we implemented it assuming our core HR systems were already healthy, and they were not.

First, Job.  There seems to be a renewed effort around job these days.  I think we’ve realized that even with all the focus on competencies as a foundational building block of talent, job is still the foundational building block of HR.  Without job, nothing else seems to work.  The problem was that we’ve been neglecting job for eons.  Ok, so that’s a stretch, but it’s certainly not uncommon for many of our organizations to have 5 times as many jobs as we need.  They are not standardized, they are redundant, and they have mismatched naming conventions.  They appear differently from country to country and business unit to business unit.  At the end of the day, a corporate organization can’t make any sense our of our jobs.  So we’ve gone back over the last few years and tried to start tightening up our job tables, which will in turn enable tighter competencies, performance, recruiting, succession, etc…  Not to mention that your analytics are worthless if you can’t use Job as one of your core dimensions in your datamarts.

Second, Organization.  We don’t often think about how we think about org.  Is it a financial hierarchy? Operational? HR? People manager?  When we first implemented organization in core HR years ago, we may have tied it tightly to the payroll engine, and cost centers were the priority at the sacrifice of supervisor chains.  Or we decided that an operaitonal structure made better sense and we sacrificed how HR generalists needed to interact with employees in the structure.  Whatever the tradeoff we made, we didn’t realize that a couple years later, this thing called talent management was going to assume that core HR could provide a clean structure to talent.  I’ve been to organizations where the performance, compensation, succession, and hiring managers were all different.  Who the hell was going to think of that 5 years ago?  huh?  The point is, that we’ve needed to go back to core HR and make some sense of our initial implementations.  And oh yeah, if you’re org is not clean enough to be a dimension in your datamarts – worthless again.

So the moral of the story is this:  if you’re late the the game and just getting to talent now, learn from those before you – fix core HR.  If you are not late to the game, but have not fixed core HR, go do it now.

Core HR is not a Hub

I came across this quite a few years ago as we started to tinker around with core HR systems needing to integrate with more systems than just payroll and benefits, and as analytics engines started to take off en masse.  Back in the first part of the millenium as talent applications started to get a serious look from the industry, the idea was that core HR applications could be the system of record for everything.  While some philosophical disputes existed back then (and continue to be pervasive), I think we fairly successfully resolved that core HR should not be the system of record for everything.

The easy stuff is around transactional systems.  We would never assume that core HR would be the system of record for things like employee taxes or benefit deductions.  It’s unlikely (assuming point solutions) that you’d want anything but the talent systems to be the master of performance and scores since the transactions take place outside of core HR.  We’ve pretty much determined that the core transactional system is going to be the system of record for almost all data elements, and I think this is a good thing.

The problem is that early in the day, we had it easy from an integration standpoint.  We really didn’t have that many systems, and so you really had core HR data going outbound to payroll and benefits, and you might have had recruiting inbound.  There was little doubt that Payroll had the outbound file to the GL and all the other payroll “stuff” like NACHA and taxes.  Clearly, integration has gotten a bit more complex over the years.  Rather than the obvious choices we had a decade ago, I now get to hear little debates about whether all the data from TM should be sent back so that you can run reports, and so that all data can be interfaced to other areas from core HR.  The answer is a big strong “NO!”

There are a couple things at play here.  Let’s talk about analytics first.  The idea in today’s world is that you’re supposed to have a data warehouse.  Sure, this was aspirational for many of you 3-5 years ago, but if you don’t have one today, you’re flat out lagging the adoption curve.  A data warehouse usually has this thing called an ETL tool which assumes you are going to bring data into the warehouse environment from many sources.  Bringing data into the core HR system and then into the data warehouse is simply counter intuitive.  You don’t need to do it.  Certainly I have no objection to bringing in small amounts of data that may be meaningful for HR transactions in core HR, but bringing overt data in large quantities is really unnecessary.

Second, let’s talk about integration to other systems.  I’ll be the first to admit that if you have SOA up and running, you are ahead of the curve.  In fact, if you are in HR, you are at least 2 years of the curve, and maybe 3-5 years ahead of mass adoption.  The simple idea remains that integration should continue to grow simpler over time and not require the level of strenuous effort that is took in the past when we managed dozens of flat files.  However, I have a philosophical problem with trying to manage integration out of core HR.  The fact is simply that you are distributing information which core HR may not own.  The management and quality of the data cannot be guaranteed in a non-system of record, and your data owners for the element cannot be expected to manage data quality in 2 separate systems.

The whole idea of core HR as a data hub keeps popping up, and I see the whole discussion as problematic.  It stinks from a governance perspective, and it stinks from a technology perspective.  Well, now you know where I stand at least.

Bill Kutik and the Direction of HR Technology

A recent Bill Kutik Radio Show featured Tom Keebler of Towers Watson.  Tom is the Global Practice Leader of the TW HR Service Delivery Practice, and each year they run an HR Technology Survey that is probably the second largest in the industry (Lexy’s from CedarCrestone is significantly larger this year).  The TW survey is sometimes hard to get a hand on since it is distributed probably only to survey participants and Towers clients.  However, Bill gave us a brief look into some of the more interesting results of the survey, and for me, most of them happened to be in the vendor space.

While it’s no surprise that PeopleSoft has the most installs for core HR, it might come as a surprise that SAP has about a 20% market share.  This seems to be reflected in my own consulting as the number of SAP related projects or the number of core HR selections that involve SAP seems to be on the upswing.  The reasons for this seem to be simple.  In the large employer space, the number of companies who own SAP ERP far outstrips Oracle in any flavor including PeopleSoft.  All this means is that most of these large organizations already own SAP HR for free.  If you think about either SAP or PeopleSoft licensing when you get to 50k or 100k employees, you could really be talking about $5M to $20M annual software maintenance, so if you’re going to get HR for free, there seems to be some benefit to implement it.  That said, the integration that exists from a data and workflow perspective within SAP is hands down the best in the industry.  SAP flows transactions between ERP components like nobody’s business in real time.  Since PeopleSoft does not have nearly the same traction in other ERP modules (like supply chain, finance or CRM) they can’t boast the same thing.  There are of course tradeoffs in functionality or usability, but SAP seems to be catching up in the space.

What comes up as more of a surprise is that trailing PeopleSoft and SAP was ADP in 3rd place.  While I don’t know what the breakdown of ADP subscriptions is for small, medium and large employers, it’s probably safe to say that most of the subscriptions occurred in the TW small to medium space – that is under 20k employees.  What this does say about ADP is that they are getting lost of traction where organizations are still finding significant value in outsourcing payroll.  My thoughts on this is that 5 years ago when we were all excited about multi-threaded HRO, organizations are pulling back and looking at the ADP and Ceridian’s of the world to do single function outsourcing.  So while ADP’s Enterprise HRMS (v5?) is gaining momentum, I’m guessing that ADP’s GlobalView partnership with SAP is also doing well.  There are not that many organizations that can do global outsourced payroll like ADP can, and so companies with a major geographic footprint only have one place to go if they want a single vendor scenario.  (Single vendor yes, but lets remember than SAP and Cornerstone OnDemand are also part of the mix)

Last up on the list of interesting points was who the up-and-comers are.  This list seems to be based on who companies are planning to select or will be implementing in the next year.  On this list were Workday and SAP.  Again, the SAP is described above, but Workday has gained such traction in such a short amount of time that you have to be interested if they can keep up with the demand.  Certainly as the first true SaaS core HRMS, they have the ability for now to roll out functionality enhancements in the way that first generation Talent Management vendors were in the early days.  Second of all, their partnership for implementation with the Jeitosa’s and Towers Watson’s of the world should give them a bit of breathing space should the volume be larger than Workday can staff for internally.

It is a bit surprising to me that core HR seems to be changing at the pace that it is.  Usually when a market reaches a point of maturity, the vendor space settles down.  However, with the increasing viability of SaaS and the changing attitudes towards HR outsourcing, we continue to see an evolution of buying habits.  Here’s to core HR and keeping it fresh.

Note:  Sorry about the badge Bill, I’m just jealous I didn’t get a banner that looked like that.