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Trends in

HR-technology

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Trends in HR Technology

Raf Degens

13/10/2011 p. 2

Agenda

1. The trends you have all seen before

2. The trends analysed

2.1 Functional dimension

2.2 Technical dimension

2.3 Maturity dimension

3. The trends deconstructed: make or buy?

4. Wrap up



Raf Degens

13/10/2011 p. 3

Agenda







4. Wrap up



Raf Degens

13/10/2011

Trends in HRM

p. 4

Business stakeholders require best-of-breed functionality. While the notion of a fully integrated suite of

HRM applications, from core HR payroll to strategic TM, is appealing, business process owners often reject

integrated components from one vendor on the basis of not meeting requirements - Forrester

Speaking at Oracal OpenWorld, Larry Ellison said that the computer industry is more fashion-driven than women's fashion

and cloud computing is simply the latest fashion. - Wall Street Journal (quote Oracle CEO's)

Increased competition and growing solution overlap rises between comprehensive HCM solution providers and

Talent Management suite vendors - Gartner

SaaS adoption will become the direction of choice for many large and small companies. Application flexibility, cost

predictability, and ease-of-use make SaaS very attractive - Forrester

SaaS compared to ERP remains a relatively small proportion of the overall market (approximately 6% in 2009), but

within some ERP segments, such as human capital management, it is a rapidly becoming a significant contributor to the

market - Deloitte



Raf Degens

13/10/2011 p. 5

The trends you have all seen before

Consumers Business



Raf Degens

13/10/2011 p. 6

Agenda







4. Wrap up



Raf Degens

13/10/2011 p. 7

The trends analysed

We will give you an overview of the key elements in the trends.

Also we will provide you with an objective set of criteria on which you can base your decision

whether or not to follow the trends.

To do this we will break down the trends in three dimensions and represent them on a clear graph.

We will walk you through our analysis step by step so it will be very easy to go through the same

logic afterwards for your specific company and needs.

Location dimension

Functional

dimension

Maturity

dimension



Raf Degens

13/10/2011 p. 8

Agenda

1. The trends you have all seen beforea






4. Wrap up



Raf Degens

13/10/2011 p. 9

The four pillars of strategic HCM

Source: Forrester Research

Planning & analysis

Competency Management

HRMS transaction system

Recruitment Learning Performance Compensation



Raf Degens

13/10/2011 p. 10

Point solution are striving towards End-to-End

Talent Management offerings

Core

HRM

Recruitment

& Staffing

Learning

Management

Performance

Management

Competency

Management

Compensation

Management

Succession

Planning

ERP Solution Vendors

Finance

Supply

Chain

CRM

...

HCM Suite Vendors

Talent Management Suite Vendors

Talent Management Suite Vendors

Single Point

Solution

Vendor

Single Point

Solution

Vendor



Raf Degens

13/10/2011 p. 11

The trends analysed - Functional

Definition Examples (*)

Point Solution

ERP Solution

Provider Type

HCM Suite

Talent Suite

• Support for Non-HCM

• Support for HCM, including Recruitment,

Learning, Compensation, Succession,

etc.

• Support for HCM, including Recruitment,

Learning, Compensation, Succession,

etc.

• Support for Learning, Performance,

Succession, etc. designed to work on top

of an existing core HRMS solution.

• Support for a particular HR / Talent

Management function/process.

* examples given are purely indicative, this is not an exhaustive list, some vendors offer more than one model



Raf Degens

13/10/2011 p. 12


When put on a graph this looks like this(*):


ERP solutions SAP, Oracle

Single point solutions

HCM suitesWorkday

Talent Management suites Lumesse

SuccessFactors

Saba

People Click

ClickSoftware

Process Coverage

Vertical movement via

organic growth &

acquisitions

Niche players focusing more

on industry

ERP Solutions

offering Single

point solutions

as part of their

product

portfolio1

2

3



Raf Degens

13/10/2011 p. 13

* examples given are purely indicative, this is not an exhaustive list.




Raf Degens

13/10/2011 p. 14

Agenda







4. Wrap up



Raf Degens

13/10/2011 p. 15

The trends analysed - Technical

Within the field of HRM applications we can distinguish between software based on technical

criteria:

This leads to four main technical types of HRM applications

On Premise software

Installed software

Hosted software

Software as a Service

Location

vs.

Setup

vs.

Code

vs.

1

2

3

4



Raf Degens

13/10/2011 p. 16


On Premise software

Having your on premise software within your company is a bit like a factory

that has his own power station.

• You own the infrastructure and your run it yourself.

• You decide how the infrastructure is implemented. (wind, water, coal, ...)

• You can fully adapt the infrastructure to your needs.

• You need to know the technical details of the infrastructure to run it.

• Whether you use all of the energy generated or not, you still pay for the full infrastructure.

• You do not share your installation. Economy of scale is not realised.

1



Raf Degens

13/10/2011 p. 17


Installed software

Such a system could be compared with buying solar panels to put on the

company roof:

• The panels might be maintained and run by somebody else

• You might not fully know the internal workings of the solar panels, however they belong to

you

• There is a fair chance that you do need to know some technical details to use the energy

• Upgrades or repairs to the solar panels are at your expense

• Whether you use all of the energy generated or not, you still pay for the full solar panels

• You do not share the solar panels

2



Raf Degens

13/10/2011 p. 18


Hosted software

Such a system could be compared with partaking in a solar panel farm:

• The farm is maintained and run by somebody else

• The solar panels themselves however belong to you and any damage might be at your expense

• You do not need to know the technical details to use the electricity

• You use the electricity as you go, paying for what you actually use

• Others use the same energy grid you are using, but they do not share solar panels

• Upgrades or repairs to the solar panels are at your expense and economy of scale is not fully

realized

3



Raf Degens

13/10/2011 p. 19


Software as a service

Such a system could be compared with buying “green” energy from an

energy company.

• The farm is maintained and run by somebody else who decides whether the electricity

comes from windmills, water turbines or solar panels

• You immediately enjoy the impact of technical improvements

• You do not need to know the technical details to use the energy

• You use the energy as you go, paying for what you actually use

• Others also buy their energy from the same provider thus, using economy of scale, the

provider can offer you a lower price

4



Raf Degens

13/10/2011 p. 20


What was that about the cloud?

Well, the definition of “cloud computing “ is:

The cloud is a collection of internet-based services providing users with scalable, abstracted IT

capabilities including software, development platforms and hardware.

It is important to note that this not only describes HR Software as a Service!

Software-as-a-Service (SaaS) Platform-as-a-Service (PaaS) Infrastructure-as-a-Service (IaaS)

As-a-service delivery of applications targeted

at private users (e.g. social networking,

micro-blogging) and business users (e.g. ERP,

CRM)

As-a-service delivery of tools for

development, testing, deployment, hosting

and application maintenance

As-a-service delivery of servers, network

equipment, memory, CPU, disk space and

data center facilities

Cloud



Raf Degens

13/10/2011 p. 21

Wrap up - Technical

• On Premise

• Installed

• Hosted

• SaaS • Variable expense

• Highly abstracted

• Immediately scalable

• Multi-tenant

• Variable expense

• Abstracted software

• Rented hardware

• Hosted

• Variable expense

• Abstracted software

• Owned hardware

• On site

• Fixed expense

• Owned software

• Owned hardware

• On site



Raf Degens

13/10/2011 p. 22


When put on a graph this looks like this(*):


ERP solutionsSAP, Oracle

Single point

solutions

HCM suitesWorkday

Talent

Management

suites

Lumesse

SuccessFactors

Saba

People Click

ClickSoftware

Process Coverage

SaaSHostedInstalledOn Premise



Raf Degens

13/10/2011 p. 23

Agenda







4. Wrap up



Raf Degens

13/10/2011 p. 24

Hype Cycle for HCM Software 2009

Source: Gartner (2009)



Raf Degens

13/10/2011 p. 25


Source: Gartner (2010)

Years to mainstream adoption : 5 to 10 years



Raf Degens

13/10/2011 p. 26


Compared to 2010:

Years to mainstream adoption : 2 to 5 years

Compared to 2010:

Status-qua

Years to

mainstream : 5-10

Compared to 2010:

NEW

Years to

mainstream : 2-5



Raf Degens

13/10/2011 p. 27

The trends analysed

Combining both the Functional, Techical and Market share dimension gives us:


ERP solutions

Single point

solutions

HCM suites

Talent

Management

suites

Today

Within 3-5 years



Raf Degens

13/10/2011 p. 28

Agenda







4. Wrap up



Raf Degens

13/10/2011 p. 29

The trends deconstructed : Make or Buy ?

The decision between make (on premise) or buy (SaaS) is determined by a

number of elements proper to your own organisation:

• The evolution of HR systems

• The Total Cost of Ownership discussion

• The Organisational Culture

• The HR vision and strategy

• The IT vision and strategy



Raf Degens

13/10/2011 p. 30


• Fully customizable

• Can fit current processes

• High cultural fit

• Flexible handling of

exceptions

• Maintained internally

• Staff and hardware needed

• Limited best practices

• Maintenance cost

• Longer implementation time

• Far less standardization

+

-

• Incorporates Best Practices

• Fast implementation timeline

• Relatively low cost

• Minimized internal staff needs

• No internal system support

• User Groups

• Fast user adoption (intuitive GUI)

• Not custom to current processes

• Possible overbuying

• Requires more attention to SLA

• Requires good requirements

+

-



Raf Degens

13/10/2011 p. 31


Taking both internal company elements and make-or-buy pros/cons into account,

the following key activities will guide you towards a successful long term

decision:

Build up a clear view on actual requirements (To be = „As is‟ + Area‟s of Improvements)

Actually learn from „lessons learned in the past (180 turn is not always paying off)

Create alignment between HR and IT (accept each others strategy)

Be directive and clear when reaching out to the market



Raf Degens

13/10/2011 p. 32

Agenda







4. Wrap up



Raf Degens

13/10/2011 p. 33

Wrap up


ERP solutions

Single point

solutions

HCM suites

Talent

Management

suites

Today

Within 3-5 years

1

2

3

4



Raf Degens

13/10/2011 p. 34

Build up a clear view on actual requirements

(To be = „As is‟ + Area‟s of Improvements)

Actually learn from „lessons learned in the past

(180 turn is not always paying off)

Create alignment between HR and IT

(accept each others strategy)

Be directive and clear when reaching out to the market

Wrap up

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