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LookingAhead:KeyTrendsShapingtheHCMVendorLandscapeJimHolincheckVP–HCMApplicationsSeptember26,2007HCMSoftwareHypeCycleWarehouseLaborManagementSystemsTechnologyTriggerPeakofInflatedExpectationsTroughofDisillusionmentSlopeofEnlightenmentPlateauofProductivitytimevisibilityYearstomainstreamadoption:lessthan2years2to5years5to10yearsmorethan10yearsobsoletebeforeplateauAsofAugust2007HRMSEmployeeSelf-Service(HCM)E-RecruitmentCompensationManagement(CompensationProfessional)Manager
Self-Service
(HCM)WorkforceAnalyticsTimeandLaborManagementEmployeePerformanceManagementSuccessionManagementCompensationManagement
(LineManagers)TalentManagement
ApplicationSuitesWorkforcePlanningWorkforceDecisionSupportComprehensiveHumanResourcesBPOPayrollOutsourcingBenefitsAdministration
OutsourcingCORPORATEOVERVIEW2KeyIssuesWhatarethetrendshappeningrightnowthanwillimpactthefuturedirectionofHCMsoftware?WhatisthefuturedirectionofHCMsoftware?CORPORATEOVERVIEW3WhataretheKeyStrategicHCMDriversTodayandTomorrow?Attract/RetainTalentKeyC-LevelExecutiveIssueFocusrequiredonKey/CriticalTalentWhatattractstalentmaynotbethesamethingsthatretaintalentDevelopNextGenLeadersIdentifyHiPosandReadinessDefineAppropriateDevelopmentPlansUnderstandrisksandcraftretentionstrategiesPayforPerformanceLinkindividualGoalstoCorporateGoalsSpendScarceCompensationDollarsWiselyEncouragedesiredactionsandbehaviorsLinkHCMtoBusResultsUnderstandcorrelation/causalityofHRinitiativesandbusinessmetricsProactivelyplanforfutureworkforceneedsbasedonbusinessdriversCORPORATEOVERVIEW4WorkforceandHRChallengesGrowinComplexityWorkforceDemographicsAgingWorkforceGenerationalDifferencesintheWorkforceGlobalizationofWorkWorkforceChallengesEmployeeEngagementLeveragingContingentLaborDealingwithChangeIncreasingTechnologySophisticationHRChallengesCredibilityBusinessAcumenCORPORATEOVERVIEW5Reporting/AnalyticsPortal/Self-ServicePersonnel,payroll
andbenefitsIntegratedCoreHRMSE-LearningSuccessionManagementContingentWorkforceManagementCompensationManagementPerformanceManagementE-RecruitmentTimeandAttendanceLaborSchedulingOnPremiseHosted/SaaSSingle-ProcessOutsourcingMultiprocessBPOHumanCapitalManagementSystemsLandscape TalentManagementWorkforceManagementCORPORATEOVERVIEW6TheFutureofHCMApplicationsAutomateEnablePartnerKeyEnablersProductFocusPersonnelAdminBenefitsAdminPayrollApplicantTrackingE-RecruitmentPerformanceMgt.E-LearningCompensationMgt.SuccessionMgt.DecisionSupportPlanningTalentProcessManagementCollaborationNon-RoutineSelf-ServiceEndUserReportingSaaSCompetencyMgt.BusinessIntelligence/DashboardsBPOSOA/Web2.0IntegratedTMAppsSocialSoftwareAnalysis/ForecastingTools2011TypeBTypeATypeC2007TypeATypeCTypeBA=Earlyadopter,B=Mainstream,C=LateadopterCORPORATEOVERVIEW7EvolvingApproachestoDevelopingandDeliveringSoftwareServices:TheNewDeliveryModel
GrowthofGranularityinSoftware:Drivenbydemandformoregranularbusinessprocessesandincreasedenterpriseagility.EnabledbyService-OrientedArchitecture,BusinessProcessManagement,compositeapplications,reuse,metadata,etc.ShiftstoWell-Defined,AtomicFunctionalComponentsandProcessesApplicationMonolithsOpaqueBoxesNext–Event-DrivenArchitecture:EventsandservicesStateheldinstorageLong-chainedbusinessprocessesSoftwareasServiceSubscriptionmodelRemotedeliveryBusinessServicesJIT/PayperuseBusiness-process-focusedSoftwareasProductLicensemodelCustomizationrequiredManagedbyServiceProvider:Customerbuysaccesstoapplication.ServicesProvisionedbyServiceProvider:Customerbuysaservicewithnoawarenessofapplication.ManagedbyCustomer:Customerbuysapplication.CORPORATEOVERVIEW8Businessagilityrequirestheabilitytoaddressallkindsofbusinessproblemsatamuchhigherlevelofgranularitythanhasbeenpossibleinthepast.Mostbusinessapplicationsaremonolithic,meaningtheirlogicisnotexternallyaccessibleinmodularform.Service-orientedarchitectures(SOAs)enablethereuseoflogicanddatainmultiplecontexts,exposingaccesstosmallercomponentsorservicesandsupportingneedsunanticipatedbytheoriginalcreator.By2011,mainstreamenterpriseswillcombinetheclient/serverSOAwithanevent-drivenarchitecture.Eventsarebasedonnotification—decoupledcommunicationthatismorescalableandflexiblethanthecoupledinteractionsofmonolithicorSOAarchitectures.
Thebusinessmodelbywhichsoftware(andincreasinglyhardware)isdeliveredisalsoevolvinginthreekeyareas—whomanagestheapplication,whereandhowitisdeliveredandhowitispaidfor.Thesoftwarecanbemanagedbythecustomer,bythesoftwaredeveloperorbyanotherexternalserviceprovider.Thesoftwarecanbedeliveredon-siteorremotely(network-based)andasaperpetuallicense,bothofftheshelformodified,orasarenewableservice.Thesoftwarecanbepaidforonetimeorovertime,anditcanbevisibleorinvisible,asinthecaseofabusinessprocessprovider.ActionItem:Driveincreasedbusinessagilitythroughunderlyingadvancesinsoftwarearchitectureanddeliverymodels.CORPORATEOVERVIEW9Web2.0DefiningCharacteristicsTechnologyPrinciples:WOA,data-driven,syndicatedcontent,richsemantics,mashable,richclient,buildbyexampleAspects:Architecture&PlatformsCommunityPrinciples:Participation,collaboration,
social,transparentAspects:People,Interaction,DataBusinessPrinciples:Long-tail,continuousinnovation,collaborativeofferings,openbusinessmodelsAspects:"Ecosystem,"process,valuemodelsCORPORATEOVERVIEW10TechnologyAspects:WOA(e.g.,IFaP,REST,POX,WS*,modular,embeddable,distributable),Data-Driven(e.g.,XML,BPEL),Syndicationofcontent(RSS/ATOM),RichSemantics(eRDF,RDFa,microformats,SemanticWeb,SemanticReconciliation,Metadata),MashableApplications(Remixandscripting,PHP,JavaScript),Buildbyexample(showsource,cloning),RichClient(justfastenoughjustintime,Ajax,OfflineAjax,Flex,Microsoft,etc.),PersistentWeb(Caching,streaming,managedclient,"Webonclient")WebPlatforms:Capabilities-basedecosystem,exposecontent/logic/interface/modelviaWS*,POX,REST,remixmodelforcompositeapplications,softwareasaservice(techaspect),RSS.CommunityAspects:People:Blogs/podcasts,wikis,personalmashups.Interaction:Open-sourcedevelopment,socialnetworks,communityratings,collectiveintelligence,Communityserviceandsupport,collaborativecontentcreation.Data:Tagging,"folksonomies,"user-createdcontent,dataaboutusers.BusinessAspects:Ecosystem:Deliveringbusinessprocessasaservicetoberemixed(thebusinesssideofmashup),viralmarketing,syndication.ProcessModels:Customer/communitydependencies,businessofremix,informationreplacesrelationshipsaskeyingredient.ValueModels:Pricingmodels(usage,subscription,derivative/commission,revenuesharing),micropayments,advertisingmodels(impression,intent,conversion).CORPORATEOVERVIEW11InvertingWorldviews—
HowDoYouSeetheWorld?People'sbehaviorsareartifactsofthetransactionalprocesstheyparticipateinOrTransactionsareartifactsofwayspeopleadduniquevalueBusinessGoalsTechnologyInvestmentAreasTransform
NewRulesEffectiveness(Non-routine)ProductivityandCostOperationsandHygieneEnterpriseTransactionalSystemsSocial
ProcessSupportPersonal
ToolsSustainingInvestmentsCORPORATEOVERVIEW12ThetraditionalITworldviewcomesfromthenotionsofprocessautomationanddatamanipulation.Ithasevolvedtobeprimarilyfocusedontransactionalbusinessprocessplatforms.Thetransactionalworldview(representedbythefourorderlycoloredboxesconnectedbyarrows,above)treatsmostofwhatpeopledoasartifactsofthetransactionalprocesstheyareparticipatingin.ThealternateworldviewhasbeenemergingsinceearlyexperimentsattheUniversityofIllinoisinthe1970s(Platoproject),butastheInternetexplodedandthenumberof"digitalnatives"hasgrownexponentially(digitalnativesarepeoplewho'vegrownupwitheasyInternetaccessandeasytouseWebtechnologies),networkeffectshaveoccurredsotheoriginalintentoftheWorldWideWeb(ofknowledge)hasmorphedtoincludeYouTube,Facebook,MySpace,SecondLife,millionsofcommunitiesandadhocsocialgroupsandothersocialphenomena.Thethornyproblemwithdealingwiththeworldviewwheretransactionsareartifactsofthewayspeopleadduniquevalue(andamajorfocusforITisinsupportofsocialprocesses)isthatitrequiresadifferentmindset,adifferentskillsetandadifferenttoolsettobesuccessful.Andthose,inturn,requireadifferentsetofmanagementattitudes.Thisisnolongerjustaboutbuildingoutanenterprisenetworkandgivingeveryonetightlymanagede-mailsystems.Indeed,traditionale-mailmaybeanartifactofatransactionalviewoftheworldanditmaybereplacedbymoreintimate,morepersonalandmorepersistentwaysofcommunicatingandcollaborating(e.g.,blogs,RSSandAtomfeeds,andsubscriptionstovarioustagconfigurations).ActionItem:Evaluatewhetheryourorganizationhasthemanagementperspective,mindset,skillsetandtoolsetnecessarytodiagnose,proscribeandsupportsocialprocesses,particularlyaroundnon-routineactivities.CORPORATEOVERVIEW13WhatRoleDoesTechnologyPlayinBusinessTransformationsLikeP&G's?P&G'stransformedinnovationstrategyenabledittomorethandoubleitsmarketcapitalizationMovedfromresearchanddeveloptoconnectanddevelopInternalresearchnolongersufficientforgrowth.Newgoal:50%ofinnovationsfromoutside(CEOLafley)Outsiders(firmsandindividuals)willingtosellandbuyideasExploitthe200timesasmanyresearchersoutsideP>hisisnotoutsourcinginnovation:collaborateandleverage
internalskillsProprietarynetworksandtechnologyentrepreneursContentminingthroughface-to-facetradefairsCo-createwithtopsuppliers'50,000engineersleveragedbyP&G's7500Opennetworks:NineSigma,InnoCentive,YourEncore,InternalideaexchangesWebcommunity-basedmarketresearchITisagreatenablerCORPORATEOVERVIEW14AspubliclydiscussedintheMarch2006issueof"HarvardBusinessReview,"ProcterandGamble(P&G)hasradicallytransformeditsinnovationprocess,effectivelymorethandoublingitsmarketcaptoover$200billiondollars.Itrealized:itsgloballynetworkedinternalmodel(designedinthelate1980s)couldnolongersustainthegrowthitneededtostayontopofitsbusinessifitreliedoninternalprocesses;foreveryresearcherinsideP&G,therewereatleast200wellqualifiedresearchersoutsideP&G;innovationwasincreasinglybeingdoneatsmallandmidsizeentrepreneurialcompanies;thosefirms(andindividuals)wereeagertolicenseandselltheirintellectualproperty;universitiesandgovernmentlabswereseekingindustrypartnerships,andallwerehungryforwaystomonetizetheirresearch.ItalsorealizedtheInternethadopenedupaccesstotalentmarketsthroughouttheworld.Andafewforward-lookingcompanies,likeIBMandEliLilly,werebeginningtoexperimentwiththenewconceptofopeninnovation,leveragingoneanother's(evencompetitors')innovationassets—products,intellectualpropertyandpeople.Technologywasnotthedriverinthisbusinesstransformation.Itwas,however,anessentialingredienttomanyoftheelementsinitsnewenterprise-without-wallscollaborativeinnovationstrategy.CORPORATEOVERVIEW15Non-RoutineBehaviors—
FiveKeyWordsBusinessGoalsTechnologyInvestmentAreasTransform
NewRulesEffectiveness(Non-routine)ProductivityandCostOperationsandHygieneEnterpriseTransactionalSystemsSocial
ProcessSupportPersonal
ToolsSustainingInvestmentsBehaviorCategoryExampleTechnology'sRole—Augment,notAutomateDiscoverThreatsandopportunitiesSimulation,communications,search,predictiveanalytics,BI,modelingtools(Excel),surveys…InnovateNewprocesses,products,services,segments…Automaticcontextualsearch,agents,professionalcommunities…TeamFindtherightpeople,brainstorm,norm,bond,orchestrate,…Socialsoftware,expertiselocation,socialnetworkanalysis,brainstorming,ideatracking,informalprojectmanagement,…LeadExecutechangeplan,manageunstructuredprocessWebconferencing,groupprojectmanagement,employeeperformancemanagementLearnFromexperienceE-learningsuites,…CORPORATEOVERVIEW16Evenifweautomatedalltheroutineprocessesintheorganization,therewouldstillbeaplaceleftforpeople.It'sthenon-routinethingsthatwouldbeleftoverforallofustodo.Whattechnologycanhelpustoisaugmentpeoples'abilitytoperformnon-routineactivities.Bydoingso,wemakepeoplemoreeffective.Wehavecomeupwithfivekeywordsthatcharacterizemostnon-routineactivitiesthatpeopleengagein,activitiesthatareunderservedbyITtoday.(Thatneednotbethecase.Theissueisoneofalackofunderstandingandfocus.)Forexample,webelievethatITorganizationsneedtobetterunderstandhowtohelpemployees(andecosystemmembers)betterdiscoveropportunitiesandthreats.Detectingapreviouslyunrecognizedopportunityisnotsomethingthatcanbealgorithmicallydefined.Butwecanhelppeopledetectapreviouslyunrecognizedopportunitybyprovidingthemwithpredictiveanalytics,researchtools(suchassurveys)andhigherlevelprograms(suchascompetitiveintelligence).Theissueishelpingpeopleaccomplishthegoal(discovering,forexample,majornewmarketopportunities);notjustpushingtoolsatthem.Similarly,whiletheremightbetoolstoautomatetheprocessofmanaginganinnovationbudget(whichfallintotheproductivityandoperationscolumns),therearealsoprocessesandconcepts(likeInnoCentive'sprogramforoffering"outsiders"thechancetotakeonanimportantinternalproject,oneofthemechanismsthatP&Ginvestedin).Thisisn'taboutthetools,it'saboutfocusinginonthebehaviors(suchasinnovating)andhelpingtheenterprisecomeupwithastrategyformaximizingeffectivenesswhileexploiting—whereappropriate—–technologiesthataideinthatprocess.Similarly,teaming,leadingandlearningarekeybehaviorsincreatingcompetitiveadvantage—andtheycan'tbeautomated,buttechnologies(suchassocialcomputingandinformalprojectmanagement)canhelppeopleperformbetter).CORPORATEOVERVIEW17CorporateChallengesGoldcorp$575,000prizeofferExposedallgeologicalinformation.Thousandscontributed,includingstudents,consultants,soldiers,physicistsandmathematicians.Fiftyfivenewtargets,80%providedsignificantyield:billionsofdollarsofgoldidentified.Marketcapitalizationgrewmorethantwentytimes.Prizesnotnewincommerce1714Longitudesolutionprize(£20,000about$5milliontoday).Newtonthoughttheanswerlayinastronomy.Harrison
(ajoiner)wonwithaclock.1919OrteigprizeforNewYorktoParisnonstop
flight($25,000)wonin1927.2002AnsariXPrize—SpaceShipOne.XPrizeFoundation:
RevolutionthroughcompetitionDARPAUrbanChallenge:$2million,$1millionand$500,000prizesImage?2005,TMAustinCORPORATEOVERVIEW18TheGoldcorpstory,asrelatedinthebook"Wikinomics"byDonTapscott,sharessomemajorsimilaritiestoP&G.TheCEOofthisminingfirmdecidedthecompanyneededtobreakwithtraditionandquestionsomeofitsfundamentalassumptions.Hedecidedtomakeallofthe(proprietary)geologicalinformationaboutitspropertypublic,offeringarewardforthebestestimatesandmethodsforfindingnewgolddepositsonthelands.AlertedovertheInternet,thousandsofpeoplefromallwalksoflifeattackedtheproblem—students,consultants,soldiers,physicists,mathematiciansandothersresponded.Intheend,respondentsidentified55newtargets,morethan80%ofwhichyieldedsubstantialquantitiesofgold.Goldcorp's$575,000investmentyieldedbillionsofdollarsworthofgold.Theminingindustryistraditionallysecretive(aswasP&G).Byexploitingmoderncommunicationsandexposingitsdatatotheworld,Goldcorp"cashedin."InOctober2006,Netflixissuedanopenchallenge,offeringsumsfrom$50,000(annualprogressaward)to$1,000,000tothefirstentitytosubmitamethodthatwouldincreasetheaccuracyofitsmovierecommendationservice(Cinematch)by10%ormore.Itwillbeinterestingtowatchwhathappensthere.(Prizesaren'tnewtotheInternetera.Indeed,theInternetmakesitpossibletoinvolveverylargenumbersofpeopleveryquickly,short-circuitingtheprocessandamplifyingturnsovertime.)CORPORATEOVERVIEW19AModelforWorkforceAnalyticsDecision
SupportExecutive
ReportingOperational
ReportingAdministrative
ReportingRolesHRAnalytics
ProfessionalsExecutivesLineManagers
HRProfessionalsTypesWorkforceDecisionsInterventionsOpportunitiesPlanningWorkforceinContextofBusiness(e.g.,BalancedScorecard)Workforce-Specific(e.g.,headcount)Application-SpecificRegulatoryReportsAd-HocReportsInquiryCORPORATEOVERVIEW20ProactiveWorkforcePlanningHighlightsEmergingIssuesSource:VemoCORPORATEOVERVIEW21ReachingthePromise:IntegratingTalentManagementandWorkforceAnalyticsEO=ExpectedOutliersUO=UnexpectedOutliersTD=TargetedDevelopmentTR=TargetedRetention
CaseExample:ImprovingSalesLeadershipPerformanceataPharmaceuticalCompanyApproachCorrelatedbehaviorswithsalesperformance.Identifiedsevendifferentiatingbehaviors.Developprofilefortopperformers.DeterminedROI.ResultsTopperformerscontributed25%-50%morethanothers.Foundcorrelationbetweenafewkeybehaviorsandhighperformance.5%improvementinkeybehaviorstranslatedinto$40millionincreaseinsales.ActionsModifiedinterviewingprocessandtoolstohiresalesleaderswithstrengthincriticalbehaviors.Changedpromotioncriteria.Integratedcriticalbehaviorswithassessmentprocess.Revisedtraininganddevelopmentprogram.Jobdescriptionsrewrittenforallsalespositions.Usedcommunicationandaccountabilitytofacilitatedevelopment.EOTRTDUOSource:viaPeople360-DegreeFeedbackBehaviorRatings3210-1-2-3SalesContribution2,000,0001,000,0000-1,000,000UOEOCORPORATEOVERVIEW22KeyIssue:Howareorganizationsadoptingworkforceanalytics?TalentmanagementisoneofthehotareasintheHRwor
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