looking ahead: key trends shaping the hcm vendor landscape
TRANSCRIPT
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Looking Ahead: Key Trends Shaping the HCM Vendor Landscape
Jim HolincheckVP – HCM [email protected] 26, 2007
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© 2007 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.
HCM Software Hype Cycle
Warehouse Labor Management Systems
Technology Trigger
Peak ofInflated
Expectations
Trough of Disillusionment Slope of Enlightenment Plateau of
Productivity
time
visibility
Years to mainstream adoption:
less than 2 years 2 to 5 years 5 to 10 years more than 10 yearsobsoletebefore plateau
As of August 2007
HRMS
Employee Self-Service (HCM)
E-Recruitment
Compensation Management (Compensation Professional)
Manager Self-Service (HCM)
Workforce Analytics
Time and Labor Management
Employee Performance Management
Succession Management
Compensation Management (Line Managers)
Talent Management Application Suites
Workforce PlanningWorkforce Decision Support
Comprehensive Human Resources BPO
Payroll Outsourcing Benefits Administration Outsourcing
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Key Issues
• What are the trends happening right now than will impact the future direction of HCM software?
• What is the future direction of HCM software?
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© 2007 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.
Key Issues
• What are the trends happening right now than will impact the future direction of HCM software?
• What is the future direction of HCM software?
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© 2007 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.
What are the Key Strategic HCM Drivers Today and Tomorrow?
Attract/Retain Talent• Key C-Level Executive
Issue• Focus required on
Key/Critical Talent• What attracts talent may not
be the same things that retain talent
Develop Next Gen Leaders• Identify HiPos and
Readiness• Define Appropriate
Development Plans• Understand risks and craft
retention strategies
Pay for Performance• Link individual Goals to
Corporate Goals• Spend Scarce
Compensation Dollars Wisely
• Encourage desired actions and behaviors
Link HCM to Bus Results• Understand
correlation/causality of HR initiatives and business metrics
• Proactively plan for future workforce needs based on business drivers
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Workforce and HR Challenges Grow in Complexity
Workforce Demographics• Aging Workforce• Generational Differences in the
Workforce• Globalization of Work
Workforce Challenges• Employee Engagement• Leveraging Contingent Labor• Dealing with Change• Increasing Technology
Sophistication
HR Challenges• Credibility• Business Acumen
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Reporting/Analytics
Portal/Self-Service
Personnel, payrolland benefits
Integrated Core HRMS
E-Learning
SuccessionManagement
ContingentWorkforce
Management
CompensationManagement
PerformanceManagement
E-Recruitment
Time andAttendance
LaborScheduling
On Premise Hosted/SaaS
Single-ProcessOutsourcing
MultiprocessBPO
Human Capital Management Systems Landscape
TalentManagement
WorkforceManagement
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© 2007 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.
Key Issues
• What are the trends happening right now than will impact the future direction of HCM software?
• What is the future direction of HCM software
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© 2007 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.
The Future of HCM Applications
Automate Enable Partner
Key Enablers
ProductFocus
Personnel Admin Benefits Admin Payroll Applicant
Tracking
E-Recruitment Performance Mgt. E-Learning Compensation Mgt. Succession Mgt.
Decision Support Planning Talent Process
Management Collaboration Non-Routine
Self-Service End User
Reporting
SaaS Competency Mgt. Business
Intelligence/ Dashboards
BPO
SOA/Web 2.0 Integrated TM
Apps Social Software Analysis/
Forecasting Tools
2011 Type B Type AType C
2007 Type AType C Type B
A=Early adopter, B=Mainstream,C= Late adopter
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Evolving Approaches to Developing and Delivering Software
Services: The New Delivery Model
Growth of Granularity in Software:
• Driven by demand for more granular business processes and increased enterprise agility.
• Enabled by Service-Oriented Architecture, Business Process Management, composite applications, reuse, metadata, etc.
Shifts to
Well-Defined, Atomic Functional Components and Processes
ApplicationMonoliths
OpaqueBoxes
Next – Event-Driven Architecture: Events and services
State held in storage
Long-chained business processes
Software as Service Subscription model Remote delivery
Business Services JIT/Pay per use Business-process-focused
Software as Product License model Customization required
Managed by Service Provider: Customer buys access to application.
Services Provisioned by Service Provider: Customer buys a service with no awareness of application.
Managed by Customer: Customer buys application.
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Web 2.0 Defining CharacteristicsTechnology
• Principles: WOA, data-driven, syndicated content, rich semantics, mashable, rich client, build by example
• Aspects: Architecture & Platforms
Community
• Principles: Participation, collaboration, social, transparent
• Aspects: People, Interaction, Data
Business
• Principles: Long-tail, continuous innovation, collaborative offerings, open business models
• Aspects: "Ecosystem," process, value models
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Inverting Worldviews — How Do You See the World?
• People's behaviors are artifacts of the transactional process they participate in
Or
• Transactions are artifacts of ways people add unique value
Business Goals
Transform Transform New RulesNew Rules
EffectivenessEffectiveness(Non-routine)(Non-routine)
Productivity and Productivity and CostCost
Operations and Operations and Hygiene Hygiene
Enterprise Transactional Systems
Social Process Support
Personal Tools
Sustaining Investments
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What Role Does Technology Play in Business Transformations Like P&G's?
P&G's transformed innovation strategy enabled it to more than double its market capitalization
• Moved from research and develop to connect and develop- Internal research no longer sufficient for growth. New goal: 50% of innovations
from outside (CEO Lafley)- Outsiders (firms and individuals) willing to sell and buy ideas- Exploit the 200 times as many researchers outside P&G
• This is not outsourcing innovation: collaborate and leverage internal skills
• Proprietary networks and technology entrepreneurs- Content mining through face-to-face trade fairs- Co-create with top suppliers' 50,000 engineers leveraged by P&G's 7500
• Open networks: NineSigma, InnoCentive, YourEncore, yet2.com• Internal idea exchanges • Web community-based market research
IT is a great enabler
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Non-Routine Behaviors — Five Key Words
Business Goals
Transform Transform New RulesNew Rules
EffectivenessEffectiveness(Non-routine)(Non-routine)
Productivity and Productivity and CostCost
Operations and Operations and Hygiene Hygiene
Enterprise Transactional Systems
Social Process Support
Personal Tools
Sustaining Investments
Behavior Category
Example Technology's Role — Augment, not Automate
Discover Threats and opportunities
Simulation, communications, search, predictive analytics, BI, modeling tools (Excel), surveys…
Innovate New processes, products, services, segments …
Automatic contextual search, agents, professional communities…
Team Find the right people, brainstorm, norm, bond, orchestrate, …
Social software, expertise location, social network analysis, brainstorming, idea tracking, informal project management, …
Lead Execute change plan, manage unstructured process
Web conferencing, group project management, employee performance management
Learn From experience E-learning suites, …
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Corporate Challenges• Goldcorp $575,000 prize offer
- Exposed all geological information.- Thousands contributed, including students, consultants, soldiers, physicists and
mathematicians.- Fifty five new targets, 80% provided significant yield: billions of dollars of gold identified. - Market capitalization grew more than twenty times.
• Prizes not new in commerce- 1714 Longitude solution prize (£20,000 about $5 million today). Newton thought the
answer lay in astronomy. Harrison(a joiner) won with a clock.
- 1919 Orteig prize for New York to Paris nonstop flight ($25,000) won in 1927.
- 2002 Ansari X Prize — SpaceShipOne.
• X Prize Foundation: Revolution through competition
• DARPA Urban Challenge:- $2 million, $1 million and $500,000 prizes
Image © 2005, TMAustin
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A Model for Workforce Analytics
DecisionSupport
ExecutiveReporting
OperationalReporting
AdministrativeReporting
Roles
HR Analytics Professionals
Executives
Line Managers
HR Professionals
TypesWorkforce Decisions• Interventions• Opportunities• Planning
Workforce in Contextof Business (e.g., Balanced Scorecard)
Workforce-Specific (e.g., headcount)
Application-Specific• Regulatory Reports• Ad-Hoc Reports• Inquiry
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Proactive Workforce Planning Highlights Emerging Issues
Source: Vemo
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Reaching the Promise: Integrating Talent Management and Workforce Analytics
EO = Expected OutliersUO = Unexpected OutliersTD = Targeted DevelopmentTR = Targeted Retention
Case Example: Improving Sales Leadership Performance at a Pharmaceutical Company Approach
• Correlated behaviors with sales performance.• Identified seven differentiating behaviors.• Develop profile for top performers.• Determined ROI.Results• Top performers contributed 25%-50% more than
others.• Found correlation between a few key behaviors
and high performance.• 5% improvement in key behaviors translated into
$40 million increase in sales.Actions• Modified interviewing process and tools to hire
sales leaders with strength in critical behaviors.• Changed promotion criteria.• Integrated critical behaviors with assessment
process.• Revised training and development program.• Job descriptions rewritten for all sales positions.• Used communication and accountability to
facilitate development.
EO
TR
TD
UO
Source: viaPeople
360-Degree Feedback Behavior Ratings
3210-1-2-3
Sales Contribution
2,000,000
1,000,000
0
-1,000,000
UO EO
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Making an Impact on the Bottom LineCase Example: Improving Controllable Contribution at a Retailer
Approach• Created a conceptual linkage model between
employee experience (tenure), employee perceptions, employee behavior, and business outcomes
• Tested the model to see which variables were correlated to higher CC
• Determined the impact of changes in variables on CC• Defined actions to take to make improvements in
variableResults• Aggressive case: 1 standard deviation improvement in
variables would lead to a $210 million improvement in CC
• Worthy case: ¼ standard deviation improvement would lead to a $50 million improvement
Actions• Managers target workgroup engagement behaviors to
ensure high employee engagement• Identify optimal level of store manager time in position• Assess competitiveness of total pay vs. market
Employee
Experience
Employee
Perceptions
Employee
Behavior
Business
Outcomes
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“Skate to where the puck will be” – Wayne Gretzky