BlogERP: Jim Holincheck's HCM Software Blog

links for 2006-08-31

• Talentism: Want to Reduce Turnover? Turn your Employees into Brand Talent!
  A good post with references to other information about leveraging top talent.
  (tags: talentmanagement E-Recruitment)
• Canadian Management Centre's Training Blog: Survey: The Costs of Bad Hires Are Very High
  Some good data on the cost of turnover.
  (tags: retention E-Recruitment talentmanagement)
• Four Ways to Improve Recruiting - Articles - ERE
  A good article about ways to avoid getting too many unqualified responses to job postings.
  (tags: E-Recruitment)
• systematicHR - Human Resources Strategy and Human Resources Technology » SaaS: Focus on Results
  The hype of SaaS can sometimes get ahead of the reality. This post busts the myth that SaaS implementations focus more on results than on premise.
  (tags: SaaS)
• Accounting, Economic Experts Call Expensing Stock Options Improper Accounting - 18 Aug 2006
  Just when you thought the issue of expensing stock options had been closed, it looks like the controversy will continue.
• RadioShack uses e-mail to fire employees
  The headline is a little flammatory because employees knew in advance that they would be notified electronically. However, it does say something about changes in how we communicate.
  (tags: talentmanagement)

Guiding Principles for Next Generation HCM Solutions

In my post from yesterday, I critiqued a post on ERE from Dr. John Sullivan and Master Burnett about guiding principles for improving HCM solutions.  I promised that I would post today my own vision for next generation HCM systems.

I will not provide all of the details here (I have to save some of that for Gartner clients), but I will provide a high level overview here.  I find it useful to think about this in terms of the three main buidling blocks for systems: Roles, Processes, and Data.

Roles

One might ask, what is new about roles?  There are plenty of role-based solutions in the market today.  That is true.  However, they are generic roles (manager, employee, recruiter, etc.).  Roles need to be more specific (e.g., store manager in retail) and recognize that people will be in multiple roles.  Applications have been more focused on functions and to a lesser extent processes.  There needs to be more user-centricity based on role.  Roles are not just about application access and provisioning of functionality.  Next generation HCM applications require content and data should be provided, in context, by role.  Portals get us part of the way there, but the user experience still needs to be optimized for the role.

Processes

Geoffrey Moore in "Living on the Fault Line" does a good job of discussing the notion of "core" vs. "context" processes.  Core processes is all of the things a business does that is strategic and provides competitive differentiation.  Context processes are everything else.  In addition, over time, Core processes often become Context processes as best/leading edge practices become standard practices. 

Next generation systems need to allow for both extreme flexibility and standardization.  Core processes need extreme flexibility.  You want to be able to change Core processes easily to keep ahead of the competition.  For example, if I am a company in the Oil and Gas industry, I want extreme flexibility in my processes for hiring key talent (e.g., geophysicists, engineers, etc.).  Context processes should become more and more standardized.  Variation of Context processes should be avoided (unless it is for a regulatory or contractual obligation).  At the extreme of standardization is outsourcing (it is so standard many companies can do that process the same way).  In the Oil and Gas example, the hiring process for administrative workers at headquarters should be very standardized because they are not key talent in the business. 

Today, I can implement a single system that automates different processes for key talent and non-key talent.  That is straigthforward.  What is difficult is to change that process as market conditions change for key talent.  To stay ahead of the compeition for "A" players, companies need their technology to keep up with changing recruiting strategy.  Sometimes existing systems do not have the needed capabilities.  For key talent, companies cannot wait for the next release, they need to react now.

Data

I have already published research on this for Gartner.  I am working on a case study that will be published soon.  I would just highlight here that next generation HCM applications will do more than just provide standard reports, ad-hoc reporting tools, multi-dimensional analysis (with drill-down), and dashboards.  These are all good things (especially if used by properly skilled HR professionals).  However, next generation HCM solutions will have additional tools that will enable HR professionals to advise managers and executives on how to get the most from their investment in human capital.

You will note that I did not use buzzwords like SOA or SaaS.  They are incredibly important concepts and enablers of the change to come.  However, focusing on them obscures what fundamentally needs to change in the systems themselves.  Hopefully, I have provided a glimpse into what needs to change to make HCM solutions more effective.  Were you expecting more?  Did I miss anything important?  Is this an evolution or revolution?  Comments welcome.

OFB: Next Generation HR Systems

This is another in a series of "Observation from the Blogosphere" posts.  Dr. John Sullivan and Master Burnett posted "Paradigm Paralysis in HR Technology, Part 2" today.  I had commented on Part 1 in a post last week.  I was a little bit disappointed.  There was some good advice, but I had hoped for more vision on the future of HR technology.  Dr. Sullivan and Master Burnett offered 12 points of guidance to help change the mindset from efficiency to effectiveness.  Below is my take:

1. Technology by itself is not the answer -- No argument here.  As it was drilled into me early on in my consulting career, it is the combination of people, process, technology aligned with strategy that matters.  Sometimes we do focus too much on the technology and not enough on the other pieces.
2. Start with an understanding of what decisions/actions you need to enable, and what data is needed and in what form to accomplish that -  This is an interesting point of guidance.  From an efficiency (administration) perspective, there is more and more parity of functionality (especially in recruitment solutions -- which was the focus of the posting).  This is good advice.
3. Impact of speed is dramatic -- In this post, the authors discuss how speed is impacting all areas of business and how slow time to hire can impact the organization.  No argument here on that.  However, this is where a holistic view of talent management makes a difference.  The fastest way to fill a resource a need is to allocate an existing resource in the organization (zero time to hire).  The second fastest way to fill a resource need, typically, is to bring in a contingent worker.  I think the authors meant to focus on this after these other avenues had been pursued, but I think it is still worth pointing out.
4. Labor markets have changed -- Workforce demographics clearly point to the market shifting from employer-driven to employee-driven (another reason why talent management is so important)
5. Candidate visibility has changed -- No argument on this one at all.  Candidate information is available in all kinds of places.  Candidate relationship management appears to be poised to be the next big automation area in recruitment.
6. Major solution-providers are strapped -- Yes and no.  Certainly solution providers do not have limitless resources.  They have to prioritize.  It is always easier to automate data capture and improve flexibility by adding more tables to the systems.  However, if customers want something different from the long list of questionably valuable incremental enhancements to existing functionality, they need to speak up.  The vendors have to balance investment to address customer concerns with innovation.
7. Current staff is a barrier -- Unfortunately, this is true in many organizations.  Current staff can be a barrier to change.
8. Start small and build later -- Starting small and showing value can be a smart strategy.
9. Select technology to enable your process, not technology that dictates process -- We are going to differ a little on this one.  I think you have to do some of both.  I think if you are hiring administrative assistants (no offense to administrative assistants -- mine is of great help to me), one can use a relatively standard process that is dictated by the technology.  However, for key talent in the organization, the system needs to be flexible enough to allow the organization to perform the process exactly how they want to do it.  Key talent provides competitive advantage to the business.
10. Stop forcing candidates to experience your administration -- I agree with the focus on the candidate experience and using it more as a sales and marketing tool than a data capture tool, but customers also have to walk before they run.  Candidates do get value from functionality like job agents and application status notifications.  Is it perfect yet?  No, but it is better than sending in a paper resume and never getting a call back.
11. Bind your vendors through implementation -- I agree with the sentiment.  The hard part is in the details.  The expression of "it takes two to tango" applies here.  The vendor certainly needs to be accountable for its role in implementation success.  However, projects can be derailed just as easily by customers (e.g., scope creep, inadequate resources, delays in decision-making, etc.) as by the vendors.  All parties need to have accountability for success.
12. Hire a pro -- A good systems architect can be helpful, but ... First, if you are a larger organization, you probably already have some of these.  Before looking outside, look inside.  Second, building a custom system can sound attractive, but maintaining the systems as requirements/best practices change can be difficult and expensive.  It takes a strong, ongoing commitment.  There are few companies that have the wherewithal.  In most cases, packaged application as the foundation with custom add-ons makes more sense.

These are good points of guidance, but there is little advice on the direction packaged systems need to grow to help recruitment, and more broadly HR, move from its focus on administration to business partner.  I will tackle that in a post tomorrow.

OFB: Enterprise 2.0 and Wikipedia: Why all the fuss?

This is another "Observations from the Blogosphere" post.  There has been a lot of teeth-gnashing recently about Wikipedia's decision to delete the new entry for the term "Enterprise 2.0".  You can get a sense of it here.  The term was originated by Harvard Business School Associate Professor Andrew McAfee in the MIT Sloan Management Review article called "Enterprise 2.0: The Dawn of Emergent Collaboration". 

The Wikipedians have a set of rules that govern entries in Wikipedia (WP for short).  The entry for "Enterprise 2.0" was deemed not to meet the rules.  I do not have much of a problem with that.  It is their enterprise and they can manage it how they want it (if you do not like, you can start your own with your publishing standards -- open source is a great thing from that perspective).

I think there is a lot more fuss about this than there needs to be -- at this point.  There is a lot more work to do to flesh out what is meant by "Enterprise 2.0".  I do not think the focus should be on a WP entry (it is not the like the WP entry for "Web 2.0" adds much to its discussion  of Web 2.0 anyway).  The focus should be on defining the principles for "Enterprise 2.0". 

On a side note, I am getting tired of all of the "2.0s" -- Web 2.0, Office 2.0, now Enterprise 2.0.  It is gaining ground on new TLAs (three-letter acronyms) for existing markets in terms of annoyance.

Whatever we end up calling it, there is clearly a convergence of forces that are reshaping business applications (in no particular order):

• Consumerization of IT (e.g., Office 2.0 -- see I can use the buzzwords effectively)
• Software-as-a-Service
• Business Process Outsourcing
• Service-Oriented Architecture and Business Process Platforms
• Offshoring/Globalization
• User Angst at the Flexibility and Cost of their Business Applications

just to name a few.  So, I am not going to continue to talk about what is wrong, I will give my $0.02 on the guilding principles:

• Improve end-to-end business processes - break down silos and include system and manual activities while
• Increasing user-centricity - I should write a whole post on this, but in a nutshell, applications started out as a way to automate functions that were manual.  Companies were organized around those functions so the target users were associated with those functions.  Over time, as Business Process Reengineering (BPR) came into vogue, companies tried to break down the functional silos.  To some extent there was success, but more often than not functional organizations remained intact and the systems tried to improve coordination of those silos.  The end result was that an individual ended up needing to participate in many formal and ad-hoc processes that were automated in many different systems and with many different user interfaces.  The processes may have improved, but the user experience (and productivity) was, and is, far from optimal.  Portals, with single sign-on, have been a step in the right direction, but combining portals with user-controlled mashups/composite applications will be a next step.  As the next generation enters the workforce, they will have different expectations from their exposure to consumer applications and will want much more control over their work environment. 
• Enhance Flexibility While Still Allowing Standardization -- In all of the rush to talk about the goodness of SOA and its ability to improve the flexibility to change applications as business needs change, many forget that standardization is also important.  It is pretty simple to think about -- I should strive for flexibility for processes that are strategic (key to the success of the business) and I should strive for standardization of processes that are tactical (they are a cost of doing business).  At its most extreme, standardization leads to outsourcing (multiple companies can use the same standard process).  Enterprise 2.0 has to address the reality that needs change over time.  What is strategic today may be tactical tomorrow.  In addition, it needs to support a variety of different models for business process and technology delivery (e.g., on-premise, SaaS, BPO).  Most organizations are going to have a mixed bag.  That is why Gartner's research on Business Process Platform is so important (I know it is a shameless plug).  Customers need to take control of their platform to manage this balancing act.
• Innovation on Business Models -- One of the lessons from the consumer world is that there are opportunities for vendors to create new business models to monetize their technology.  Google connected the dots between the vast information it was collecting in its search business and advertising revenue.  For enterprise applications, subscription-based pricing has been a big change, but probably only the beginning.  I expect that in "Enterprise 2.0" we will see vendors emerge that have very different business models from the traditional license model.  I have some ideas on potential models, but I do not want some VC snapping it up without getting some sort of royalty :).

Ok, that is my starter set (I do not have more time to brainstorm at this point).  In the ZDNet post linked to at the beginning of this post, there were a number of other takes on this.  What would you add (or take off the list)?

links for 2006-08-25

• » "Enterprise 2.0" as the example that proves the rule | Enterprise Web 2.0 | ZDNet.com
  Good post on the emerging concept of "Enterprise 2.0". I do not like the move to call everything 2.0, but we should get caught up in the terminology as much as the principles underlying it (which are important).
  (tags: enterprise2.0 Web2.0)
• » Enterprise mashups: More about processes and less about services? | Enterprise Web 2.0 | ZDNet.com
  Excellent post on the importance of process and user control to the next generation of business applications.
  (tags: enterprise2.0 mashups web2.0 soa)

links for 2006-08-22

• Toolkit: Follow Seven Best Practices to Build an Outsourcing Contract
  Subscription Required: This research note focuses on best practices for an IT outsourcing contract, but it would be also relevant to HRO contracts.
  (tags: HRO)
• deal architect : Office 1.0 + ERP 1.0 does not equal Enterprise 2.0
  Vinnie does a nice job the intersection of office productivity applications and enterprise applications.
  (tags: SaaS)
• deal architect : What to look for in a SaaS vendor
  I commented on Vinnie's blog about the functionality evaluation (there are very sophisticated SaaS applications in HCM). This is a good list of considerations.
  (tags: SaaS)

Observations from the Blogosphere - August 21, 2006

This is the inaugural "Observations from the Blogosphere" post.  I hope to do one post per week that brings together insights from different parts of the blogosphere to inform readers.

There were two posts that really stood out to me today as approaching the same problem from very different perspectives.  Dr. John Sullivan and Master Burnett posted "Paradigm Paralysis in HR Technology - Part 1" (I am very much looking forward to Part 2) and Vinnie Mirchandani posted "The Bionic Enterprise Software 2.0". 

Dr. Sullivan and Master Burnett lament that technology designed to help the HR function has become more of a barrier than an enabler.  "Time and time again HR leaders have turned to technology to help reconcile the increasing demands of senior leadership, customers, shareholders, and government regulators, only to be let down by "solutions" that over-promise and under-deliver."  The bar is certainly high for HCM technology and though it has had some success in automating manual processes, there is certainly much unfulfilled potential.

Vinnie talks about promise of next generation of business applications.  "Gentlemen, we can rebuild him. We have the technology. We have the capability to build the world's first bionic man. Steve Austin will be that man. Better than he was before. Better, stronger, faster."

There is a fundamental opportunity to leverage the new technology to create more flexible, user-centric solutions.  These are solutions, not just business applications.  Customers need the right combination of technology and domain expertise to solve their people-related business problems.  Unfortunately, what I see today in the HCM domain is that vendors are using the new technologies to re-automate what has already been automated.  We have discussed in a previous post some of the opportunities to leverage technology to rethink basic business processes.  Automation focuses on improving the quality, velocity, and access to data.  Quality in this context means that the data does not contain errors.  It does not really address the quality of the data per se.  This is the problem with the traditional approach to applications. 

Today's systems do not help me with entering quality content into the systems.  Recruitment systems do not typically help me write an attractive job posting.  Employee performance management systems do not typically help me write good SMART goals.  There are many other examples I could cite, but the point is that to effectively manage human capital, systems cannot just capture data. 

Systems leveraging the new technology should help coach managers so that they can be more effective.  They need to help employees understand opportunities and direct their own career development.  They should provide HR professionals with the insight necessary to partner with business.  We have spent more than 40 years developing HCM systems that automate data capture.  They have served HR organizations well by reducing the administrative burden and easing compliance responsibilities.  Newer talent management applications address more strategic HCM processes, but still suffer from the data capture/workflow centricity of administrative applications.

The "Enterprise 2.0" discussion has largely been a vendor-driven phenomenon.  It has been about applying the lessons from the consumer domain to enterprise business applications.  This is good.  As Vinnie points out, it is also about taking the opportunity to rethink the whole value chain of solution delivery.  I would add that it is about learning the right lessons.  What is it about Amazon.com that makes it so valuable a resource?  It is the content that they provide and the intelligence in the system that coaches customers about what things they might like.  Why has eBay been so successful?  It took an existing process and reimagined it based on the new technology.

I wish that I could say that I can see this level of innovation happening in HCM technology.  There are certainly innovations happening at the fringes.  I am encouraged by some of the developments in workforce planning and analytics.  However, I still do not see a fundamental rethinking of HCM processes and the underlying supporting technology in terms of effectiveness (user-centricity, if you like) and business impact.

Am I being too harsh (or not harsh enough)?  What do you think?

Some Changes Are Happening On the Blog

There is good news and bad news.  The good news is that you will see some changes coming on the blog.  Gartner management and I have agreed to making this a corporate-sanctioned blog and available through Gartner.com.  This is good news (I believe) because it will expose the blog to a wider audience.  I am not sure about the timetable for changes at this point.

Gartner management liked many of things about the blog (which is why they want it under the corporate fold).  The one thing that they did not like -- and this is the bad news -- is the weekly "What Are Clients Asking About?" feature.  The reason they did not like it is the same reason that many of the readers like it.  It is really useful information.  So useful, in fact, that Gartner does not want me to give it away for free.  I am going to continue to track the information and as the blog evolves, I am hoping that I will be able to start posting this information again to Gartner clients.

Instead of the weekly "What Are Clients Asking About" posting, I am going to start to do a synthesis post called  "Observations from the Blogosphere".  Be on the lookout.  It will be coming out soon.

links for 2006-08-19

• Attracting top performers without paying top dollar - BostonWorks Hiring Hub: The HR Blog
  Some good suggestions for attracting "A" players.
  (tags: talentmanagement)
• Canadian Management Centre's Training Blog: The Role of Chief HR Officers Changes
  A good summary of key points from a Deloitte CHRO study.
  (tags: HCM talentmanagement)
• systematicHR - Human Resources Strategy and Human Resources Technology » HR Function Commoditization – The Future of HR
  This is an interesting perspective on commoditization of HR processes over time. The extra comment I would make is the end result of process commoditization is outsourcing.
  (tags: hr)
• Businesspundit: Competitive Advantage As a Moving Target
  Truer words were never spoken. What is today's best practice tomorrow becomes a standard practice. It is the same with technology. As a market matures, there is less and less functional differentiation.

No More Meebo for Now

You may have noticed that I have removed the IM Jim section of the blog.  Sometimes things do not work out the way you expect.  I had thought that Meebo would notify me when I get a message and I am not in the application.  It is too inconvenient to keep checking the web page.  So, no IM for now.  If you know of other alternatives, please let me know.