HCM systems are moving into the Cloud as a new generation of technology refreshes gets underway – that’s the unmistakable conclusion from a new global survey from HR consulting firm Tower Watson.
The study – which polled 444 HR managers in Canada, the US, Europe, Africa and Asia-Pacific – cited the recessionary pressures of budget cutting as one driver for the move towards the Cloud’s promised cost-arbitrage, but there’s also a renewed emphasis being placed on putting strategic goals first.
A majority of respondents (62%) say they have undertaken initiatives to reengineer key HR processes while 43% is working to redefine the roles of HR business partners, and more than a third (37%) is implementing new or leveraging existing self-service functions. Seen as a whole, Towers Watson considers that these initiatives enable HR to rethink its own role in providing greater value to the business.
And Cloud – or software as a service (SaaS) is very much on the rise. More than half (54%) of the organisations surveyed
are either using or planning to implement a
SaaS solution. With nearly a quarter of respondents that plan
to implement a new HRMS still evaluating new options, the consulting firm speculates that there is a significant migration toward newer HCM technologies.
The Towers Watson study notes: “We are seeing a shift from organisations throwing old technology at problems to looking at flexible new technologies that leverage self-service and shared services functions, deliver more streamlined capabilities and robust analytics, and organize existing systems around enhancing HR service delivery more broadly. In essence, it’s about taking a holistic look at the organisation’s approach to service delivery and technology, and making decisions and investments that support loftier goals.
“Once-discretionary HR technology spending is now a needed-to-play expenditure and far less subject to reduction when the economy turns. Organisations now rely heavily on the benefits that technology provides and are much more thoughtful in ensuring that technology resources stay sound. For the short term, this is evidenced by a wave of planned human resource management system (HRMS) upgrades and new system implementations for the next year.”
Quick implementation, better functionality and ease of ongoing management
were the main benefits reported by users of Cloud HCM systems as well as lower and more predictable ongoing and up-front costs, and no need to upgrade. Among those who have not moved to the loud, inability to customize, lack of data ownership and data security were cited as the main barriers to adoption.
The nature of Cloud HCM solutions on offer has also evolved, empowering greater user adoption in turn. Towers Watson notes: “When SaaS solutions first arrived on the scene several years ago, they were niche tools looking to fit into siloed HR system designs. But SaaS has never stood still — it has continued to develop, and its acceptance, by both the HR function and IT organizations, has grown. For the last two years, Workday, a broadly integrated SaaS solution, has been one of the top two HR systems of choice for those companies buying new HR systems.
“Workday’s ascendance is another indication that HR and IT have reached a comfort level with new technologies, including SaaS solutions. Organisations that are ready and willing to take advantage of the expanded range of HR capabilities and enhanced user experience offered by new technologies are moving toward the HR function of the future to help their businesses succeed.”
New developments
This renewed interest in a new breed of Cloud HCM systems is well in evidence at the 14th Annual HR Technology Conference in Las Vegas this week. ADP introduced ADP Vantage HCM, a Cloud-based HCM offering which the veteran payroll services provider calls : “a unified, fully-integrated platform combining the pillars of human capital management: HR, payroll, benefits, talent management and time & attendance”.
"ADP Vantage HCM is the realization of years of working with and listening to our clients," said Regina Lee, President, ADP National Account Services, Major Account Services, GlobalView and ADP Canada. "At ADP, we place immense value on services that drive improved business outcomes for our clients. With ADP Vantage HCM, we can now help large organizations realize the benefits of a single, unified approach to managing multiple HR functions. We believe that this approach can help clients achieve new efficiencies and reach business objectives that go beyond traditional enterprise resource planning projects."
Meanwhile SuccessFactors introduced a new user experience that gives managers the ability to efficiently deliver higher quality performance reviews that are aligned with business strategy and improve business results, as well as SuccessFactors Jam, its social collaboration and learning software with rich media capabilities.
SuccessFactors Jam, which combines the social collaboration of CubeTree with the video and learning capabilities from Jambok to “empower employees to explore and improve their own knowledge set in the context of their everyday work”, says the company.
The new user interface provides a smoother process for performance reviews, making it easier for managers to write higher quality reviews and prepare for the conversation with key data at hand, such as an employee’s overall score, team rank and differences between manager and employee ratings.
Additionally, the new team view helps managers to ensure their reviews are consistent and fair across the team. Managers can request peer feedback from within the system, instead of emailing individual team members.
“Our customers are looking for every competitive advantage and we know this often comes down to getting the most out of their people. We address this by delivering innovative solutions in our BizX Suite that really impact the way people get things done,” said Dmitri Krakovsky, vice president of global product management, SuccessFactors.
“Performance reviews have been the Achilles heel of managers as the process can be cumbersome and lacks comprehensive social feedback. We have dramatically improved the process by breaking down the obstacles to high quality reviews, while also launching our new Jam product that allows companies to leverage the learning and knowledge transfer done outside the classroom. We are directly increasing the productivity of a company’s workforce and improving their ability to deliver on the BizX promise – bridging the gap between strategy and execution.”
With Oracle’s next generation Fusion HCM applications also set to be the focus of attention at that vendor’s OpenWorld conference in San Francisco this week, it looks increasingly likely that 2012 will be the year of the HCM systems refresh – and of increased competition in the market.
That should be good news for end users as vendors chase their business and enable customers to strike good deals. It should also – hopefully – results in a new generation of HCM applications that empower HRDs to achieve more in their day to day jobs.
