BlogERP: Jim Holincheck's HCM Software Blog

Some Recent Gartner HCM Research For Your Consideration

I wanted to make you aware of some of my more recent HCM research (Gartner subscription required).  For those wanting to know about Service-Oriented Architecture (SOA) and its impact on HCM software, the two notes below will be a good starting point.  In addition, the note on the leveraging business application suites should also be thought-provoking.  Enjoy.

The Impact of SOA on HCM Applications
29 July 2008
James Holincheck

Service-oriented architecture-based solutions promise to address some of the key challenges of developing, implementing and maintaining traditional human capital management applications.

New SOA-Based HCM Applications Emerge
29 July 2008
James Holincheck

New applications from Lawson, SAP and Workday give human capital management customers a glimpse into the potential of service-oriented-architecture-based solutions.

ERP, SCM and CRM: Suites Define the Packaged Application Market
25 July 2008
Yvonne Genovese   Jeff Woods   James Holincheck   Nigel Rayner   Michael Maoz

Users searching for ERP are often looking for the level of integration provided by ERP, but for functionality that extends well beyond ERP. Understanding suites and leveraging their value is important to a successful application strategy.

Platforms and HCM Applications

Jason Corsello has a post about platforms with a HCM lens (based on a post from Marc Andreessen about three levels of internet platforms).  Jason points out that HCM applications are at the first platform level (Access APIs).  I think there is a simple answer to this though.  HCM application providers have not tried to be platform providers.  We may see that happen down the road.  However, I think what will be more interesting in the short-term is how new and existing vendors leverage level 2 (Plug-In APIs) and level 3 (Apps Run Inside the Platform Itself).  I imagine that we will see numerous Facebook plug-ins emerge (Jobster for example has already created one).  I expect that we will also see someone build serious HCM applications on the Salesforce.com Force.com (used to be Apex and before that AppExchange) platform.  CODA, a financial software vendor, announced this week that it is building financial apps on the platform (see Dennis Howlett's post on this).  It is only a matter if time for HCM for the reasons Andreessen outlines about level 3 platforms.

The Importance of Ecosystems

We have published a lot of research at Gartner (here is a research note that describes criteria for evaluating innovation from ecosystem partners that links to some of the other research) on the concept of Ecosystems and how the big enterprise application vendors are starting to build them.  Phil Wainewright at ZDNet did a good post identifying the constituencies that are trying to get into the Ecosystem game. 

We have not seen too many HCM vendors jump on the Ecosystem bandwagon yet, but if some of the early vendors have success, it may spur more movement to align with a specific ecosystem providers.  Keep track of which vendors have become ecosystem partners as you make decisions about new HR technology.  In addition, dig under the covers to find out if the vendor has just a marketing relationship with the ecosystem provider or if they have really created deep product integration (including standardizing on the ecosystem vendor technology platform/architecture).  Not all partners make the same level of commitment to a particular ecosystem.

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)?

Why Home Entertainment Furniture Reminds Me of Talent Management Applications

I live in a vintage condo with relatively small rooms. I have been looking to upgrade the TV in our den to something larger and more modern. There are many options for TVs out there, but it is hard to find good furniture to house it, especially if you have strict limitations on the size of that furniture. Large TVs are not a new concept. They have been around for several years. Yet, furniture makers have not seemed to wake up to this fact. Most of the Entertainment Armoires out there are made for traditional TVs up to 36" diagonal. There is little furniture available for the larger TVs and what is available tends to be oversized (sized so it can accomodate up to a 60" TV). There are not good options in between. Rant over.

So, you are probably wondering what this has to do with HCM. Good question. I'm getting there. I had done some posts last week about future trends in HCM. These are important things to keep an eye on. However, unless you want to be an early adopter, they are not things that you need to act on today (other than getting your feet wet with them). There is still plenty to do in the here and now. Take talent management for example. Talent management applications are not new. They have been around awhile -- like home entertainment furniture (see I told you I would get there). We can automate of talent management processes pretty well today. That is good. However, how well do they support how your organization wants to manage talent? Could the fit be better?

Yes, it could be better and it will get better. Unlike furniture makers, software vendors are good at making the fit better over time. As more customers use the products, vendors get more feedback on what is needed and add it to the product. This is a good virtuous cycle. However, there is a dark side. The way those features get incorporated into products is by adding more and more configuration options and tables. This increases the flexibility of the product, but also the complexity. That is what has happened with ERP/HRMS solutions. It takes a lot of expertise (i.e., expensive consulting resources) to understand how to configure the applications so they fit your needs. I worry that talent management applications may also end up evolving that way. Flexibility is definitely needed, but not at the expense of simplicity. There is some hope on the horizon: service-oriented architecture. I will not go into all of the technical details in this post (that will be some future Gartner research). Suffice to say for now, ask your vendors what steps they are taking to keep their products simple to use and configure as the demand for greater flexibility and better fit increases. Hopefully, they will have better answers than the furniture makers.

Technorati Tags: Human Capital Management, HCM, Talent Management, Service-Oriented Architecture, SOA

My Upcoming Gartner HCM Research (Nov. 2005)

In addition to the update to the U.S. Midmarket HRMS Magic Quadrant (A Reminder from Gartner's US Midmarket HRMS Research), I am working on a number of other research notes including:

- MarketScope for Retail Time and Labor Management Software
- Five Key Considerations for Global
- Sole Sourcing for Global Payroll Outsourcing
- Market Landscape for Contingent Workforce Management Solutions

These research notes are at various degrees of completeness. In addition, I have some additional topics that I am looking to cover in 2006 including:

- The Verticalization of HR Software
- HR BPO and the Importance of the Underlying Technology
- Service Oriented Architecture and its Impact on HR Applications
- MarketScope for North American Government Administrative Applications
- The Impact of Software-as-a-Service/On Demand Model on HR Software

I am planning on updating the following MarketScopes/Magic Quadrants next year:

- Employee Performance Management Software
- E-Recruitment Software
- Large Enterprise HRMS

In addition, I am thinking about creating a MarketScope on Talent Management Application Suites. Any feedback on this would be greatly appreciated (as would comments on what topics would be important for 2006).

Technorati Tags: HR, HCM, Software, Research, HR BPO, ASP

Gartner Research on Service-Oriented Architecture and Business Apps

Introduction to Service-Oriented Architecture

Driven by Web services momentum, service-oriented architecture moves from leading-edge software projects to the mainstream. However, most enterprises are confused about its benefits and don't understand its risks.

Service-Oriented Architecture Scenario

Attempted SOA will cause great successes and great failures of software projects. Understanding its role and meaning, beyond the simplistic hype, is the imperative for every enterprise software architect.

Positions 2005: Service-Oriented Architecture Adds Flexibility to Business Processes 

Through 2015, service-oriented architecture will transform software from an inhibitor to an enabler of business change, but you must increase investment to achieve this goal. SOA will shift revenue from packaged software to subscription services and from monolithic suites to composite applications.

SOA Will Demand Re-engineering of Business Applications

Service-oriented architectures and service-oriented business applications are beginning to affect companies' IT strategies. The potential benefits are real, but they will demand that changes be made to installed applications.

Flexibility Drives the Emergence of the Business Process Platform

As enterprises emphasize business processes, they need to establish a business process platform, specific to their needs, to enable business process creation, deployment and monitoring using service-enabled applications.

NetWeaver Positions SAP as a Business Process Platform Enabler

NetWeaver is redefining SAP's role in the technology market from a pure business application vendor to a vendor that enables business process composition. Key to SAP's transformation is user acceptance of a service-oriented architecture.

Oracle Emphasizes SOA and BPM in Fusion Architecture

Oracle Fusion Architecture incorporates business process management (BPM) and service-oriented architecture (SOA), in a clear declaration of Oracle's mainstream intentions for its future application architecture.