As the first decade of ubiquitous HR outsourcing gives way to the second, the pursuit of the killer app is arguably giving way to a period of consolidation and hybridization, with Software-as-a-Service requiring a constant give-and-take to achieve optimal results.
HRO TODAY:âIn the past couple of years, SaaS has evolved into the market-dominant model. Where are the risks in our rapid move to cloud computing?
Sanjay Sathe: We’re big believers in Software-as-a-Service. We currently have one SaaS offering, SmartRedeploy, for internal reassignment of workers, and we will introduce additional SaaS offerings over time. There are no special risks inherent to SaaS. Security is a concern that is often brought up, but this needn’t be an issue if the transition is handled properly. Cloud computing is as safe or safer than most on-premises systems. The only risk in making a “rapid move” to SaaS is poor planning and preparation. If something is worth doing, it’s worth taking the time to do it right. The other thing I would add is that SaaS is not a cure-all for a sub-par IT function; sooner or later, an organization’s core information management issues must be addressed.
Tibor Beles: If you look at the SaaS benefits-versus-risks equation, you could see—on one side—benefits such as opex, time-to-benefit, and possibly lower short-term cost. On the other side, you would see a lack of proven scalability, performance, service level agreement compliance, security, and also vague indemnification and privacy terms and conditions that SaaS vendors usually offer. The magic word here is hybrid. Our customers are combining outsourced service with on-premise processes, on-premise functionality with hosted, multi-tenant applications. In the near future, I would expect to see hybrid deployments accelerating, as they offer the cost advantages and time-to-benefit advantages of niche SaaS vendors, but coupled with the power of an integrated technology stack—with the benefits of consistent services and with a path to convergence that niche vendors simply aren’t able to offer.
Tom Fisher: We believe the market adoption of SaaS coincides with customers accepting that there is little risk in deploying solutions in the cloud. SuccessFactors has been, and continues to be, an early pioneer in cloud computing and has demonstrated time and again that there are fewer risks in deploying our software in the cloud than deploying a comparable solution on premise. We’ve taken this pioneering approach by further expanding our traditional market to incorporate business execution, or what we call BizX for short—the ability to tie a company’s business strategy to its results. Any hurdles in making the switch to cloud-based software are easily overcome by the benefits of the functionality delivered by the solution, the low cost for getting started, and the low ongoing costs. It is far easier to meet increasing global demands for applications with a cloud-based solution than depending on an already overburdened IT staff to prioritize and juggle business requirements against their many other priorities.
Yvette Cameron: There are no risks. The fears raised in the past around going SaaS, such as security, ability to customize, and managing integrations, for example, are addressed in today’s leading SaaS solutions. Security, for example, is highly standardized—companies that in the past would never have considered putting their HR data in the cloud can do so today with the assurance that indeed their data is safeguarded from the eyes of others who are part of multi-tenant deployment. Customization is often raised as an issue—or, rather, the lack of ability to customize a SaaS offering—but is this a bad thing? What’s really desired here is not customization, of course, but the ability to support the business needs, and to this end customers will find that the leading SaaS providers offer a high degree of configurability on top of robust solutions to meet business requirements. Integration has also been greatly simplified in the cloud as robust application program interface tools have evolved to streamline this process. Having just viewed the results of an industry survey that shows 33 percent of surveyed HR executives would sacrifice functionality for integration, I think the experience and tools delivered by SaaS can make the tradeoff unnecessary.
HRO TODAY: Talent management means one thing in one setting and another elsewhere. What do you think the basic components of a talent management platform should include?
Sathe: Talent management encompasses acquisition, performance and compensation management, and outplacement. Leadership development, career planning, the development of high-potential employees, succession planning, training, and professional development are all important elements of talent management. Having said that, this doesn’t mean that vendors should be in a race to offer integrated platforms featuring all of these elements; that’s just a formula for putting a lot of mediocre product on the market. In RiseSmart’s case, we focus on the two most critical talent transition points—those are recruiting and outplacement—using a common platform to deliver these solutions. We don’t believe it’s necessary to try to be all things to all people.
Fisher: In the world of SuccessFactors, talent management has a broad definition. We believe what sets us apart is that all our modules are built on a single platform, which makes data and application integration much easier. Together, SuccessFactors’ integrated modules make up the BizX Suite. In the domain of human resources we define talent management as a process that includes various components: the earliest contact with a prospective employee and hiring in the recruiting process; setting employees’ goals; measuring employee performance; tying compensation to performance; and ensuring career development. Another critical component is to link goals and performance with hard metrics so that business strategy can be seen through to actual execution. Finally, we believe that an important part of talent management is the integration of social networking and collaboration. Working with people is innately a social process. With the increasing role of online social networking in various aspects of talent management, we’ve put an emphasis on developing to make the most of it, both internally and externally.
Cameron: Most platforms endeavor to offer what they consider a “complete suite”—including learning, performance, succession, compensation, and workforce planning. Many are also working to unify these applications so that the business process flow is seamless—a significant challenge for some who are doing this across several different platforms that have been acquired. One critical component that many overlook is ensuring that your people management platform takes the end-user into consideration—how the platform makes it easier for people to access the solutions within the context of their business process and ultimately, to work better, together with others across their enterprise. The platform should enable people to work when, where, and how they prefer to work. One example is delivering talent processes via tools people use every day, such as email, enterprise portals, or mobile devices, to drive user engagement and ultimately a high-performance organization. More specifically, key components must include collaboration capabilities that enable employees to share knowledge, seek experts and mentors, engage in the community (both on a work and personal level), form and re-form teams dynamically to solve issues, and help grow employee and organizational success. Foundational to those capabilities must be core processes spanning development, career and succession support, performance feedback that is continuous, and analytics to help everyone—from individuals and teams to C-suite executives—measure and anticipate the health of the organization.
HRO TODAY: How will HR evolve as a result of the massive introduction of social media tools into the organization?
Sathe: At its core, HR is a people business; it only makes sense that we should take full advantage of social networks and tools. In fact, we should be at the forefront of using them. Unfortunately, when most workers think of HR and social networks, the first thing that usually comes to mind is restrictive social media policies. That perception needs to change. As we look to the future, I can tell you that at RiseSmart, we think about social media every day. With the newest release of our Transition Concierge outplacement solution, Twitter, LinkedIn, and Facebook are all highly integrated, and we are spending more and more time looking at the “social” opportunities in all of our offerings.
Fisher: We have embraced social media as part of everything in our product suite and beyond. We believe that social media, and more specifically social networking, finds its highest adoption when incorporated with, and by, the HR team. Social networking solutions, like our own CubeTree, represent a wonderful way to enable collaboration without risking your business’s critical information. As an HR professional, you need to insist that any social networking solution adhere to the strict standards that your IT partners might require. SuccessFactors vetted its solution to ensure that those requirements are met or exceeded. In addition, we believe that collaboration is a critical part of every part of the talent management process. To that end, we intend to incorporate the same collaborative capabilities found in CubeTree into the modules in our solution that lend themselves to team and management collaboration—goals, performance, compensation, etc.
Cameron: Evolve it will—it must. Embracing the opportunities that come from enterprise business networking enables HR to move from a role of administration and enforcement to one of enablement and influence. Embracing the new social media tools enables individuals to connect, collaborate, and engage in the right conversations that can and will drive business results. HR can and should be the driver of the adoption of these technologies. At the same time, it will need to take on a role of education around these new social tools. Concerns over possible drops in productivity and legal considerations will self-correct before they have time to cross the radar, but HR departments will need to demonstrate leadership in an environment of higher transparency where informal networks and user-generated content creation reach new levels of importance.
HRO TODAY: What is the one high-value element of tech marketing that no one is paying attention to?
Sathe: If it’s possible for a $3 billion industry to be ignored, I think the outplacement industry clearly fits that category. Outplacement is rarely covered in the HR trades. I think too many large companies have long-term relationships with outplacement firms that they haven’t scrutinized very carefully—and this is costing them hundreds of thousands of dollars with every reduction in force (RIF), in some cases. Most of the services offered by the industry’s major players are shockingly low-tech and do not deliver measurable results. We’re working to change that.
Fisher: If you’re asking what the one thing is that no one is focused on—I would say the convergence of user experiences. Bringing together the “at-home” user experience and the “business” experience. I can’t tell you how many times we hear, “Why can’t I get the same productivity out of my business applications as I do out of the applications I use at home?” I can tell you that this is an area of focus for us at SuccessFactors, but it’s a lot easier said than done! Also, I believe you should keep your eye on the application functionality—in the end, it’s what the user experiences that’s most important and not the technology it’s built on top of.
Cameron: Video and web conferencing. Video is quickly becoming the preferred method of learning. Content from web conferencing is a powerful way to onboard, close competency gaps, and share knowledge.
HRO TODAY: Apps (single point solutions) or integrated platforms, where are we headed?
Sathe: I would certainly say the trend is toward integrated platforms, but the best solution is different for every organization, and I think that will continue to be the case for the foreseeable future.
Beles: Let me share with you a recent customer story. One of our existing customers was not ready to upgrade their Oracle E-Business Suite instance of core HR and financials, and instead wanted to add a state-of-the-art performance management system. While they considered a SaaS pure player, they chose our BPO partner’s hybrid configuration of multi-tenant Oracle E-Business Suite 12.1-based performance management integrated with their existing HR/financial instance. In just a few weeks, they were live and in production with a subscription-based, full-service performance solution that uses the same data model and reporting tools as their core ERP, and with an open path to convergence to a single ERP instance. Whether convergence takes place on-premise or in a hosted/serviced environment remains to be seen.
Fisher: We believe that integrated solutions are key—you should not have to re-enter data, it should be populated automatically, and you should not have to migrate data—it should just be available. There’s too much logical sharing of information in a suite like ours to have customers working on multiple independent solutions. That doesn’t mean that a suite as comprehensive as ours doesn’t require some augmentation by partner solutions. What it does mean is that those solutions should have standard ways to integrate. We make sure it does not take an army of consultants to make that happen—instead customers can either do it themselves or we provide a simple approach. We also believe that applications, over time, are going to transform themselves—moving from the traditional forms-based solutions today to collaborative and highly measurable experiences. The linkage between collaboration and metrics is where we see the intersection of business execution software.
Cameron: We are clearly headed towards integrated platforms comprised of discrete units of value. The unified platform of yesterday was composed of a collection of large applications—performance, succession, recruiting, learning, et cetera. Tomorrow’s platform will be a collection of micro-applications of discrete business processes that can be assembled to provide the targeted experience and outcomes as desired by the end customer. Take as an example the traditional online performance review process. The traditional review elements can be broken into a series of discrete steps such as goal management, skills assessment, performance feedback, and development needs. When these are delivered as discrete business processes, and can be assembled in any order, in any number (all of the processes, or just one or two), you then begin to see the future of business applications. The future of integrated platforms will enable the delivery of these micro-applications and the rapid assembly of these processes into the desired configuration of the client—and in the desired device (corporate portal, mobile device, email, desktop, whether online or offline). Saba today is pioneering this next generation approach by delivering performance feedback as a discrete embeddable application that can be used stand-alone or embedded into the formal review process. We’ve applied this approach to manager approvals, search and launch learning, and other processes as well as we redefine business application delivery and the meaning of an integrated platform.
HRO TODAY: Has the conversation really changed from talent management to performance management? If you had to pick one of the two as a direction, which one would it be?
Sathe: As you mentioned earlier, there’s a lot of confusion about terminology, because there are no standard definitions. In my view, performance management is a subset of talent management. Others apply the term throughout the talent lifecycle —not just to appraisals, but beginning with the development of the job description and ending with the exit interview. Whatever term you use, it’s critical for organizations to assess their decisions based on how they affect their employees. That’s the bottom line.
Fisher: How about a third option: business execution. Performance management is a subset of talent management, so we can’t see it as an “either/ or” situation. Performance management is getting a lot of attention right now, but focusing on it at the expense of the other talent management components might very well be short sighted. We believe a comprehensive solution that encompasses all the pieces of Talent Management is the right long-term answer and for us, that’s BizX—the means to successful execution.
Cameron: Whatever term or direction you choose, just ensure it doesn’t have the word “management” in it! If you’re more focused on command and control than openness, you’re missing the boat. Fundamentally, we need to stop focusing solely on process automation and top-down processes, and increase focus on enabling people: engaging and mobilizing them, cultivating know-how and accelerating the flow of business. The emergence of a new class of business applications, called people systems, enable new forms of collaboration to power up individuals and teams, enable innovation and strategy to be driven from the bottom-up, provide insight into the networked profile of people—their formal profile of education and experience as well as their social profile—and make it easy for users to access solutions at work and on the road through the tools they use every day. The conversation is changing away from talent management and performance management, and is becoming one of people engagement and people performance.
As vice president and general manager of people management solutions at Saba, Yvette Cameron is responsible for driving the strategy and global execution of the firm’s people management solutions.
Sanjay Sathe is president and CEO of RiseSmart, a technology firm that provides next-generation outplacement and RPO solutions.
Tibor Beles heads up Oracle’s BPO practice as vice president of business process outsourcing.
Tom Fisher is vice president of cloud computing for SuccessFactors.