BlogERP: Jim Holincheck's HCM Software Blog

Next Practices: Crowdsourcing Talent

This is the first in a series of posts of what I call “Next Practices”.  These are practices that look beyond today’s conventional HR approaches to achieve improved business outcomes.

Business Situation:  In a slow growth economy, it is difficult to get approval to hire new employees.  However, there is a strong desire by CEOs to grow the business and innovate.  How can HR help the organization with conflicting goals of controlling costs, yet innovate and return to growth?

Practice: Crowdsourcing – This is not a new idea.  It is explored in great detail in books like “Crowdsourcing: Why the Power of the Crowd Is Driving the Future of Business” “Wikinomics: How Mass Collaboration Changes Everything”, and “The Wisdom of Crowds”.  However, it is not a practice that is in the typical talent management toolkit of most HR/Recruiting organizations.  Crowdsourcing allows you to leverage talent that is not part of your organization to achieve your objectives.

Examples

TopCoder – Here is a description from their site:

Our business brings clients into the TopCoder community to get their work done in a new way. These projects range across the full spectrum of software and digital work. They engage our community in a range of disciplines: creative design, software engineering, and analytics. These projects are focused on innovating and implementing new products, releases, and features. At the core of this work is competition – each task is completed by members competing with each other to be the best at that task.

We believe that customers should be able to focus on what they want to build and create, not on measuring how many hours someone spent on a task. We believe engineers and designers should be free to chose when and if they work on a project or task, and be rewarded based on the quality of the results they produce. Empowering individuals to make their own decisions generates the most value for all parties.

When customers and members are brought together in a community and a market based approach is used to getting work done, there is no limit to what they can accomplish.

TopCoder has more than 300,000 people in the community.  That talent pool is significantly broader than one employer could build on its own. LendingTree uses it as a virtual software factory on an ongoing bases to supplement its own website development efforts, for example.

InnoCentive – InnoCentive also provides a platform for what it calls “challenge driven innovation”.  In that sense, it is similar to TopCoder, but is used for a broader problem set.  Here is an example from its website:

Roche’s challenge was to find a means of better measuring the quality and amount of a clinical specimen as it is passed through one of its automated chemistry analyzers. Both Roche and its partners had been wrestling with the challenge for fifteen years. So the company devised a test. It posted the challenge on InnoCentive.com, and through the power of crowdsourcing, exposed the challenge to a diverse, global, and open network of problem solvers. Within two months of posting the challenge, nearly 1,000 unique solvers from around the globe had signed on to the project, and a total of 113 proposals were submitted to Roche.

The result? Roche solved a challenge that had been plaguing it for fifteen years in sixty days. And interestingly, the submitted proposals replicated the entire history of Roche’s research and development program into this particular challenge. In other words, all of the solutions Roche had tried over a fifteen-year period had come in.

Think about that for a minute from a talent perspective.  Roche was able to find nearly 1,000 people for two months to work on its business challenge.  The prize for the winning solution was $20,000.  That was a pretty cost-effective source of talent.

Of course, crowdsourcing is not appropriate for every talent need.  However, HR needs to get outside of the box that says that talent is limited to just employees or contractors.

How many sourcing professionals in your HR/recruiting organization are leading the charge in working with these kinds of solutions (especially if you are not hiring anyone right now)?

Trip Report: Peopleclick Authoria Global Customer Conference

This week I attended the Peopleclick Authoria (PCA) Global Customer Conference (#GCC2010).  I gave a couple of presentations at the conference on Talent Management market trends which is always fun.  In contrast to my usual practice of attending customer case study sessions, I used a different strategy at this conference.  I attended the “big tent” sessions where PCA’s relatively new CEO, Joe Licata, laid out their positioning.  One interesting tidbit included investment in R&D of $23.4 million expected in 2010 which is comparable to the spend of SuccessFactors in 2009.  The clear message was that PCA was investing in growing the business both organically in addition to acquisitions (by parent Bedford Funding). 

They also had Jack Welch (@jack_welch), former CEO of General Electric, as a keynote speaker.  PCA Chairman (and Bedford Funding CEO) Charles Jones interviewed Welch.  The interview covered a wide range of topics (see the Twitterstream at #GCC2010 to see more details).  Welch is definitely a strong advocate for HR’s role in leadership development.  GE’s goal during his tenure was to be able replace someone in a key position within 24 hours.  To do this requires a significant investment in readiness and having adequate bench strength (it also explains why GE has been a furtile ground to find executive talent).  There were many great one-liners, but it was an analogy that resonated with me the most.  It was around the importance of HR vs. Finance. My apologies in advance to my colleagues that focus on the Finance organization, but the example he used was a professional baseball team.  Whose advice should the President of baseball operations (substitute our favorite sport) trust in making a decision on making an offer to a player: the CFO or the Director of Player Personnel?  Who is going to know best how to allocate that budget to achieve the best results?  It is pretty obvious in this context, but given that people-related costs are anywhere from 20-70% of total costs in most organizations, it makes sense that CEOs should view HR leaders as vital to their success.  However, good Directors of Player Personnel bring a lot of player performance data to the table to help the organization make good decisions.  HR leaders that do not bring something to the discussion will likely not be heard.

I also enjoyed the other keynote session, a panel discussion with Elaine Orler from Talent Function, Brad Smart from Smart & Associates (best known for TopGrading, a practice developed and used at GE), Kim Seals from Mercer, and Gerry Crispin from CareerXroads.  Again, you can check out the Twitterstream for more details on the discussion, but to me the most interesting part of the discussion was around performance vs. potential.  Kim was of the opinion that you promote based on potential (assuming at least adequate performance), but reward based on performance.  Gerry has the viewpoint that performance is more important.  High performers should be given the opportunity to show potential in new roles if it aligns with their career aspirations (assuming at least adequate potential for the new role).  I am not sure there is one right answer.  To me, a lot of the answer depends on how well your organization can judge performance and potential and your promotion track record.  Examining your own data around this will be illuminating.  It may also highlight changes you need to make to make in how you do performance appraisals and talent reviews.  From a technology perspective, remember garbage in = garbage out.  I can have the best succession planning process and best technology supporting it, but if I am not looking at the right attributes of performance and potential, it is all for naught.

Ok, back to the change in my conference routine, instead of going to customer case study sessions (though I did have some good conversations at meals with customers), I went to sessions led by thought leaders I admire and who I rarely get to see present.  Gerry Crispin (@GerryCrispin) did a session on candidate experience that was very thought-provoking.  For those not familiar with Gerry, he does the most in-depth research on this topic of anyone I know.  For more than a decade, he has “mystery shopped” as a “candidate” at all of the Fortune’s 100 Best Companies to Work For. 

Near the beginning of his presentation, Gerry asked the audience a simple question: how do you define a candidate?  Needless to say, the audience definitions were all over the place.  I thought he had an interesting taxonomy for thinking about this in terms of customer experience.  In his view, a candidate was someone who has applied for a job (an applicant being someone who is a qualified candidate for a job).  Prior to applying for a job, the person was a prospect.  Gerry points out that experience needs to be different for prospects, candidates, and applicants (and new hires).  Once someone becomes at least a candidate, they have affirmatively expressed interest in your organization.  If they are treated poorly through the rest of their experience, there can be repercussions not only for your employment brand, but also your customer brand because in many cases candidates/applicants may also be customers and/or influence other customers.  That taxonomy also got me thinking about the parallels with Customer Relationship Management.  Many large employers already have people responsible for just candidate sourcing this is akin to the role of Marketing in CRM.  Marketing is responsible for generating leads that turn into qualified prospects.  Sourcers are responsible for finding prospects and converting them into candidates (I am simplifying here a little to make the analogy, but stay with me).  Sales is responsible for taking qualified prospects and converting them into paying customers.  Recruiters are responsible for determining qualified candidates (applicants) and facilitating the process to hire the best one.  So far so good, there is nothing terribly new in this line of thought.  What I had not thought about previously was the third pillar of CRM, Customer Service.  In the CRM context, Customer Service helps ensure a customer is happy (based on customer satisfaction, net promoter scores, etc.) as well as to find additional cross-sell and up-sell opportunities (in some cases).  It was not so much finding the analog for recruiting (or more broadly talent management for the new hire), but that it made start to think about why we do not have a group responsible for candidate (and applicant) service.  If organizations really want to take the candidate experience seriously, it needs to do more than just design a candidate-friendly, employer brand reinforcing, self-service web site.  Why shouldn’t a candidate/applicant be able to interact with your organization in a variety of channels as they go through the process.  Yes, it can be more expensive to provide this level of service, but for many organizations, especially with the viral nature of social media, it may be more expensive in the long run not to offer a high level of service.

I also attended a session conducted by Dr. John Sullivan and his associate Master Burnett (@masterburnett).  Dr. Sullivan is always provocative and expresses a strong point of view.  His topic was the important of contingent labor on workforce planning.  He cited a study of 200 companies where they looked at the workforce-related spend and found that only about 36% of the spend was on regular employees, the rest was for various forms on contingent labor.  That is an eye popping statistic and should give any HR leader heartburn.  It means that the vast majority of HR leaders have ignored how their organizations recruit, manage, develop, and separate from a significant part of its workforce.  In fact, it is even worse than that.  If organizations are actively managing it all, it is driven by procurement whose role it is to help negotiate contracts and manage vendors.  This is one of Dr. Sullivan’s arguments for why Workforce Planning is so important.  Organizations need to make intelligent decisions about where they source the most appropriate talent based not just on cost, but on agility (the ability to scale up and scale down the workforce), speed (how fast are the capabilities needed if we do not have them internally) and how long the capabilities are required (for example, is it just for a project or is there an ongoing need).  We have published a number of research notes on Workforce Planning and Analysis this year, but we still find a relatively small number of clients focused on either contingent workforce management or workforce planning.  This should be a wake up call to HR leaders and the IT organizations that support them.

Trip Report: SuccessConnect 2010 – San Francisco

For the past two days I attended SuccessFactors’ SuccessConnect event in San Francisco.  This was the second in a series of user conferences that SuccessFactors will hold around the world.  The first was in New York City last week.  Jason Corsello did a nice job highlighting the key announcements and product updates from New York and San Francisco in his blog post.  I want to take a different tack with this post.

I had the opportunity to listen to a number of customers ranging from Coca Cola Enterprises (Consumer Products) to Lincoln Financial Group (Financial Services) to Williams Corp (Energy) to Stanford University Medical Center (Healthcare) to Ryan Corp (Professional Services) to tell the story of their journey with SuccessFactors or the recently acquired Inform.  As you can see, these customer span a variety of industries, but struggle with many similar talent-related challenges.  Common threads included aligning pay with performance, developing leaders for critical roles in the organization, and leveraging data to make better talent decisions.  I tried to document the key details for these customer stories via Twitter (here is a link to an archive of SuccessConnect tweets) so I will not repeat the observations in this post.

An interesting element of these stories was the impact of culture on the change management required to implement their solutions.  It is certainly accepted wisdom that change management is crucial to success, but the nuances of what works and does not work in different cultures was interesting to see.  It also started me thinking about the SuccessFactors culture.

Here are a few random observations about the SuccessFactors culture:

• Energy and Enthusiasm is Important – They had a lot of people attending the opening keynotes.  The employees went crazy, yelling and cheering, when Lars Dalgaard, the CEO, was introduced.  That kind of energy is rarely seen at events like these.
• They Play to Win – During the first day, SuccessFactor held a session for analysts (financial and industry) with the senior leadership.  They are a very competitive bunch.  One of the things that struck me (not a new thought, but it struck me again) is something Brian Sommer once told me (and I am paraphrasing) – all really successful software companies have four strong players in the following key roles – the Visionary, the Geek, the Financials guy, and the Salesman.  Lars plays the visionary as he is definitely the public face of the organization delivering the message of what SuccessFactors is all about.  Aaron Au is definitely the Geek.  He was a co-founder and designed and built their technology platform (Tom Fisher also was there and as VP of Cloud Computing will likely play a role here going forward as well).  Bruce Felt, the CFO, keeps tight reins on the financial model for SuccessFactors.  Jay Larson is definitely the salesman.
• They are Not Afraid to Make the Future – SuccessFactors was one of the early vendors offering performance appraisal solutions.  With the acquisition of Inform and CubeTree, SuccessFactors is showing that it is prepared to do the heavy lifting to try to grow emerging HCM (and potentially broader) market opportunities.  Social HCM and workforce planning and analysis are two emerging HCM market segments I believe will be important categories over the next several years.

The greatest impact of these acquisitions however may be the value they impart in talent management.  I made the argument here (Gartner subscription required) a few years ago that workforce analytics were crucial to effective talent management (think of talent management processes as levers business executives can use to achieve specific business outcomes – which levers to use and how requires data to determine).  BizX Insights, leveraging Inform, is a first step in that direction.

The talent profile in your typical talent management solution only tells a partial story about an individual.  It provides structured data around things the organization needs to know about the person for their current job (and maybe next job) plus some common data about all people.  However, most people have a wealth of experience that is not captured in this structured data.  One of the promises of social networking (both internal and external) is that it provides a much richer set of data about a person, but in a less structured format because it is provided as part of the interactions within the networks.  I see very interesting possibilities when you combine the structured talent data in SuccessFactors with the unstructured data captured in CubeTree leveraged by the analysis prowess brought to the table by Inform.

What are those possibilities?  I have been thinking about it a fair amount lately as I am doing a keynote presentation next week at the SilkRoad technologies Connections conference in Bonita Springs, FL.  I do not want to give away the plot, but I plan on discussing some of these opportunities live next week at the conference.  After that, I plan to do a series of blog posts discussing these potential futures.  So, stay tuned. 

Putting the Intelligence Back in BI

As an analyst, I get to see a lot of product demos (I started to count but it started to scare me how many I see in a year).  One of my growing pet peeves is around reporting and analysis.  Almost all that I see is what I call a “field of dreams” strategy.  If we build a solution that encompasses all of the data required, that calculates all of the potential metrics that users might want, and provides them the ability to drill down and around all of it, then users will flock to use the solution because they will gain so much insight.  I think that is why most BI solutions do not get used beyond a select set of users today.

At the end of the day, you analyze data to gain insight so that you can make better decisions and take appropriate actions.  The starting point should not be the data analysis, but should be the types of decisions and actions that a particular user needs to take.   Let’s look at an example.  Let’s say that I am a regional bank manager and I have twenty bank branches in my region.  What I might be concerned about are revenues, deposits, labor and facilities costs, profitability, customer satisfaction, etc..  These are business metrics that hopefully are tied to broader corporate objectives.  So far, this is relatively straightforward.  Let’s now say that customer satisfaction ratings have dropped below a particular target level.  I know as a regional branch manager that this drop could be a leading indicator to revenue and profitability (assuming I have a good corporate performance management solution, then I should know the correlation/causality).  That is not good.  It is getting close to the holiday season and if that metric does not improve, I might not get my holiday bonus.  I need to take action to bring customer satisfaction levels back up or I am toast.

This is a moment of truth for business intelligence.  What would that regional bank manager do?  At best, I might login to the system and see which branch(es) have the problem (or I might even get an alert that tells me).  However, do you think they are going to go into a Business Intelligence system and drill down through all of the data to find what might be the potential root cause of the issue?  Do you think that the business intelligence system will have drill down paths to all of the potential root cause data?  I do not.  This user does not have the time (remember, this person is overseeing 20 bank branches) even if they had the skills to do so.

Let’s move to my home turf, Human Capital Management, and assume that I know which branches have a customer satisfaction issue.  What employee-related factors might be causing this issue?  Most regional bank managers would do a different type of drill-down analysis to figure this out – pick up the phone and call the branch manager(s) in question and ask them what is going on (they might use more colorful language than that) that is causing the drop.  The actions taken based on these conversations are not likely very data-based and frequently may be inaccurate (or make the problem worse).  That is not good if I want to get my bonus.

In my idealized world, what a business intelligence solution should do is tell me which employee-related factors might be the likely cause of the problem.  Has employee engagement dropped?  Has 90/120 day voluntary turnover increased?  Do the branches have open headcount (are they understaffed)?  Has the number of part-time workers increased (maybe they are unhappy about not being able to work full-time)?  What is the tenure of the bank management (are they new)?  Do exit interviews show that management is a problem (if you saw “Undercover Boss” this week, you probably know what I am talking about)?  I think you get the drift.  There are many, many more questions that might highlight potential root causes. 

What I want the system to do is help me understand which ones are the most likely root causes in this situation.  Let me reemphasize this.  I do not want to have to do a lot of analysis to figure it out.  I do not want to have to call up HR to do some analysis (though that is better than doing it myself).  I want the system to do the leg work.  I want it to be intelligent enough to ask all of those different questions, look at the metrics associated with those questions and see if there is correlation/causation with customer satisfaction.  Then, I want it to present me the results so that I can see the most likely candidates.  

Guess what, even at that point, I may not take action though.  I likely still will want to discuss the results with the branch manager(s) because the data may say one thing, but reality could still be something different.  Once I am comfortable that I know the root cause, then I need to figure out what action (or actions) to take.  Maybe the system can suggest potential actions.  Maybe there is an online community of senior level bank managers where I could get advice and insight (yes, there could be a social software angle here)?  Maybe I would talk to my HR business partner?  Maybe all of the above?  This is a discussion for another blog post.

The next time you watch a vendor demo of reporting and analysis.  You will likely see them do a drill down to find a root cause (in fact, the data is set up so that they will easily find a pre-determined root cause).  In reality, they are just applying the intelligence manually.  Vendors, consultants and HR professionals have the knowledge to know where to drill down, where the potential root causes may be.  Why can’t that knowledge be captured in a system?  Why can’t someone design a business intelligence system with actual intelligence about the business domain built-in? 

That is the end of the rant.  Am I being too harsh?  Am I asking for the impossible?  What do you think?

Oracle Fusion Applications: How Real Are They?

Dennis Howlett (@dahowlett) gave me a gentle reminder in Twitter that there has been a lot of praise out there for something that has not been officially released yet.  Again, this is my personal opinion, not the official Gartner position (as all blogging on the Gartner Blogging Network is), but his point reminded me of a blog post I did last year at the end of Oracle OpenWorld.  Here is an excerpt:

I could not help thinking during these sessions of a software joke told to me by Brian Sommer a long time ago.  It goes like this:

Think about the answer to two questions: "Can I see it?"  and "Does it exist"?

• If I can see it and it does exist, then it is Real.
• If I can see it, but it does not exist, then it is Virtual.
• If I cannot see it, but it does exist, then it is Transparent
• If cannot see it and it does not exist, then it is in the Next Release

So, let's ask these questions again about Fusion Applications now.  Can I see it?  Last year, I answered "yes, sort of".  Oracle did demo parts of the solution at OOW last year.  I have had the chance to see more since last year so I know there is more to it, but as I indicated in my earlier blog post, I have not seen the full HCM suite (or full suite of any Fusion Applications).  So, the answer is "yes, to some degree".

Does it Exist?  Last year, I said:

That is probably the more interesting question... Certainly there are "edge" applications such as Social CRM that do exist... However, based on the information provided to date, it is difficult to know exactly how much of the Fusion Application Suite is built.  

It is still difficult to know.  We know the planned scope at a broad brush, but the detailed feature/functions have still not been communicated.  Last year, I also said:

there was no firm commitment on delivery dates for the first release of the Suite or any indication of early customers that were implementing the Suite. 

There is a firmer delivery date (sometime in 2010).  We also know that some customers have been testing the solution.  However, testing parts of the solution is not the same as implementing it.  As I said last year, early customers that implement and go live are the real litmus test for "does it exist".  So, does the first release of the full suite of Fusion Applications exist?  Not yet.  Will it exist in 2010?  I think it will.  However, they need to start implementing early customers soon to make that a reality.  Hopefully, Oracle will provide more details soon about the detailed functionality that will be delivered in version 1.  Customers want and need this information to make informed decisions about their application strategy.

What do you think about Oracle Fusion Applications announcement?

Is the Real Secret Sauce of SaaS Discipline not Multi-tenant Architecture?

There is a prevailing view that I see in the press and blogging world that business application software is moving inexorably to the SaaS model.  It is true that you would be hard pressed to find a vendor who started in the HCM software market in the last five years that did not utilize the SaaS model.  However, does that mean that vendors that started with a single tenant, perpetual license, on-premise installed solution are tomorrow's legacy vendors?  No, not necessarily.  The implication has been that if those vendors do not rearchitect their solutions (or create next generation, multi-tenant solutions) they are going to be displaced.  I am not going to address this perception directly.  Instead, I want to try to make the case that a vendor can offer a hosted solution that delivers many of the same benefits if the vendor has the right discipline.

Let's take some of the key perceived benefits from SaaS and see how a hosted solution might meet those needs:

• Lower up front costs - There is nothing that would prevent a vendor from offering an on-premise or hosted single tenant solution with a subscription license (some vendors already do it)
• Easier upgrades - There are things that vendors with single tenant solutions can do to make upgrades easier for customers.  First, they can offer remote application management services to customers (some are doing this already) where they can apply patches, updates, and new releases for the customer at their site.  They can also host the solution for the customer and do those activities as well.  This does not deal with the difficulty of the upgrade (if there are many customizations or changes in the data model with the new release), but it can help.  There is no reason that vendors of single tenant solutions cannot work with customers the same way (at least moving forward) as SaaS vendors do - just do not allow customizations that impact the ability to upgrade.  If they host the solution, they can enforce that discipline
• More frequent new functionality delivered - There is no reason that traditional vendors cannot do this.  SAP has demonstrated that it can do it with its switch framework and enhancement packs (they started with enhancement packs every 3-4 months, but have scaled back to every ~9 months because SAP felt customers were having trouble adopting the new capabilities that quickly).  It becomes more of a question of resetting customer expectations and patterns.  SaaS sets this expectation and enforces the discipline, but that does not mean the discipline cannot be applied with a hosted solution.

I think you can see where I am going with this argument.  The effectiveness of SaaS is as much about the discipline it enforces in implementation and upgrade practices as it is about technical architecture. 

Now, I also know I am going to hear about the ability for vendors to cost effectively deliver this - SaaS has inherent advantages right?  There is truth there.  However, there are technologies that can help lower hosting costs.  Virtualization technology can make it easier to manage multiple instances (and keep them in sync in terms of release levels).  Grids and Blades can make the hardware environment less expensive and more scalable.  Cloud computing also can help make the compute services used more elastic (think development and test environments that do not use production data).

Does that mean a hosted, single tenant solution can match SaaS on economics?  Maybe not, but I am not sure it has to, it just needs to be in the neighborhood.  The real challenge is the discipline.  Can the vendor resist the temptation to allow customization and increase the tempo of new functionality delivered?

So, what am I missing?  I did not try to detail every benefit of SaaS, but is there a flaw in the logic?  Let me also mention that I am a big fan of SaaS as a delivery model (before the flames start to be thrown).  I just do not think it has to be the only game in town.  As far as I know, no single tenant solution vendor has ever tried to do hosted offering where they enforced these disciplines.  If you know one that has, please comment.

Innovation Around the Edges of HCM Software

Bill Kutik had a great article in HR Executive magazine about ongoing innovation in the E-Recruitment software market.  I agree with him.  We discussed a lot of the areas of innovation around the edges in recruiting in the Magic Quadrant for E-Recruitment Software (Gartner subscription required).  As Bill points out, there are new vendors popping up all of the time (even since we published our research).  There is always innovation occurring around the edges of established application areas.  E-Recruitment (formerly Applicant Tracking) solutions have been around for around 20 years.  It is clearly a well-established area. 

Yet, we have had profound changes driven by technology (the movement from applicant tracking to e-recruitment solutions driven by the internet and web-based solutions).  In addition, we have seen innovation because these solutions still have not solved all of the business challenges in the domain.  This is a common pattern that we see in many different business software application markets.

There are two implications from this.  First, there are a lot of new vendors that will pop up trying variations of the themes with a variety of different business models.  Most of these will not be successful (or will have limited success).  Few will change the world.  That is not necessarily bad, but it is important to make sure that you do not put all of your eggs in one basket (and make sure that you are easily able to end your relationships) as you try some of this innovation to solve your business challenges.  Second, once innovation starts to become accepted wisdom, it starts to get absorbed into the established solutions (either directly or through preferred partnerships with the "winning" vendors).  This cycle of assimilation occurs all of the time.  So, it becomes important to understand how your core/strategic vendors are moving related to innovations you find useful.

Remember your HCM application portfolio requires active management.  Technology will not solve all of your challenges today, but it is constantly evolving and you need to continually look at your priorities and what is possible to make sure you get the most from your investments, especially in these challenging economic times.

The Changing Face (and Needs) of Enterprise Application Users

I did a presentation yesterday Gartner's Symposium/ITxpo about how to align IT with ERP, CRM, and SCM users.  I thought I made a pretty compelling case.  Most CIOs think that IT does not lacks the flexibility to respond to business change, that it could do more to deliver technology innovations needed by the business, and is not as effective as it could be in delivering against the enterprise strategy.  Enterprise applications are a root cause because they are often viewed as inhibitors to business change (lacking the flexibility to change as the business changes).  In addition, they often lack the decision support capabilities needed to ensure that the business is executing against the enterprise strategy.  This situation has a potential to get worse.  Users are increasingly blazing their own path.  They are not afraid to go find solutions to meet their needs.  These often take the form of Software as a Service and even consumer-grade software (the use of consumer grade software at work is surprisingly high compared to the expectations of both end users and IT -- we have done some survey work that highlights this result).   Add to that, there is new generation of workers coming into the business world that are tech savvy and have had their user experience expectations set by consumer-grade software.  The bar is defining moving higher for IT to meet enterprise application users needs.

I provided some context about how the user needs are changing and what they can do to better align with those needs.  The reaction of the audience was relatively subdued (I hope it was not my delivery!).  There were a few people who asked questions afterwards who seemed to feel this was an issue for them.  However, many, I think, felt that this was not that big a deal.  They were working with the users and understanding their needs.  I have seen enough self-service projects stumble to know that just dealing HR or Finance users is not enough, you have to reach the ultimate end users.  Am I overstating the importance meeting these more casual user needs?  Do you think IT is doing enough to understand these needs?

Oracle OpenWorld 2008 - Day 2

Thomas and I started Day 2 with a briefing on Oracle E-Business Suite (EBS) for the upcoming MQ for Employee Performance Management software.  Oracle continues to make progress filling in some of the functional gaps and the product remains quite good in areas such as compensation management.  The adoption rate is also quite good within the EBS installed base (especially for compensation management).

Thomas and I also had some briefings with the product strategy folks for both EBS (Anand Subbaram) and PeopleSoft (Tracy Martin along with Paco Aubrejuan the new GM of the PeopleSoft BU). From a PeopleSoft perspective, I admit I was actually pleasantly surprised.  Even though 9.1 is a little later than expected, they plan to add quite a bit of functionality including cascading goals in Performance Management as well as a new Succession Management capability (delivered with core HR -- so no additional licensing required).  In addition, Oracle is revamping compensation management in 9.1 (re-writing and adding to the existing capabilities and better integration to ePerformance), adding new Talent Management Dashboards to its Workforce Analytics product (the one based on OBIEE), and bringing out a new employee survey tool (tentatively called Workforce Connect) which leverages customer survey tools from the Siebel CRM solution.  Also, in terms of leveraging Siebel CRM, Oracle is creating what it termed "Fusion Edition" applications the first of which will be what is called Talent Pool Management (TPM).  Fusion Edition applications are edge applications meant to work with PeopleSoft, EBS, and Fusion.  The name is a bit of a misnomer as it is really focused on Candidate Relationship Management (marketing and communicating with passive candidates) not talent pool management as one would think of it in Succession Management.  The next Fusion Edition application expected is Talent Review (sometime in 2009).

Speaking of sometime, that is when PeopleSoft 9.1 is expected in 2009 (though indications were that it would not be the beginning or end of 2009 so expect it to be released over the course of Q2/Q3 for new customers).  However, some of the most interesting things going on were with PeopleTools.  PeopleTools 8.50 includes a number of noteworthy features, but the one with the most immediate impact is the new Ajax-based User Experience.  PeopleSoft 9.1 is built on PeopleTool 8.50, but it is backward compatible to previous application releases.  So, 8.9 and 9.0 customers that want to enhance the user experience can do just a PeopleTools upgrade to get the necessary capabilities.

For those EBS customers out there, things are a little more definitive.  Version 12.1 is coming in Q109.  It too will include new succession management functionality (as well as Profile Management based on the design from PeopleSoft 9.0).   There are a number of incremental enhancements across the rest of the product line from interview management in iRecruitment to setup enhancements and better market data integration in Compensation Workbench.

I also went to Gretchen Alarcon's presentation on Oracle's HCM vision.  She did a good job laying out the trends (thanks for the plug) and how Oracle is looking at opportunities around workforce planning and modeling and predictive analytics.  It was a pretty good size crowd and it was a little surprising to see no one was really doing anything with predictive analytics.  There is tremendous potential business value in the right applications of planning and analytics.  What do you think?  Will the hype around social software and HCM overshadow the emergence of workforce planning and analytics? 

Oracle OpenWorld 2008 - Day 1

Here are the headlines, in my mind, from the opening day of OpenWorld:

• Complete. Open. Integrated -- This is the main theme for the conference which I saw repeated in a number of presentations.  Here is my take on what Oracle intends it to mean:
  • Complete -- Oracle is very focused on industry solutions.  That is, providing a comprehensive footprint for specific target industries.  It used the Communications industry as an example and cited its footprint in 2004 and how it has done a number of acquisitions which it has integrated together since then to fill out its solution map (the solution map is not an original Oracle concept, but it has been put to good use)
  • Open -- Oracle has been pretty consistent in its support for a variety of standards and allowing customers to "plug and play" where possible.  It has created an abstraction layer in Oracle Fusion Middleware (OFM) that includes common business objects, web services, and reference process models that customers can use out of the box or adapt with the tools as necessary.
  • Integrated -- This is where Oracle's Application Integration Architecture (AIA) comes into play.  Oracle has taken industry standards along with a modern integration architecture (leveraging process model-driven integration with an enterprise service bus and standard integration definitions).  Oracle had a number of customers touting the benefits they thought they would achieve, but almost all were still in the process of implementing (this is not a new topic, it was hot for Oracle at the last OpenWorld).
• Delays
  • We knew this from pre-briefing prior to OpenWorld, but it pretty much is official now (and has been suspected for far longer).   There will be no suite of Oracle Fusion Applications delivered in 2008.  We published this (Gartner subscription required) in 2007 based on an interview with John Wookey about Fusion Applications.  Oracle had indicated at that time the first release of the suite would be in 2008.  Then, we published this (Gartner subscription required) when we started to have concerns about whether or not Oracle would deliver Fusion Applications in 2008 when John Wookey left Oracle.  The first phase will be edge applications, like the Social CRM applications, which have been delivered in 2008.
  • PeopleSoft Enterprise 9.1 will not be delivered in 2008.  I do not know if Oracle committed publicly to this date, but they had been indicating privately that 9.1 would be delivered in 2008, not 2009.  HCM is the first pillar to be delivered in 9.1 and given the scope of the release (including new applications such as Succession Management and a rewritten Compensation Management), it is understandable that it would take some time.  However, release 9.0 became generally available in December 2006 (see Oracle's Lifetime Support Policy for more details).  So, it is going to be well over two years before the next release.  In a market where new releases from Talent Management application vendors come out as frequently as monthly, that is a very long time.  More to come on version 9.1 in a later post.
• Social Software Strategy -- I am not going to discuss this too much now as I am still trying to understand Oracle's strategy here.  Suffice to say that there are a number of products out there including Oracle Collaboration Suite (been around for a long time), Beehive (announced today and prominently placed in the opening keynote), WebCenter (the UI for Fusion Applications that includes some elements of social software), and PeopleSoft Enterprise Portal (that also now has some elements of collaboration included with it).  As soon as I get to the bottom of it with some clarity, I will post again.
• Upgrades -- As I was communicating with my colleagues and attending sessions, it became clear that sessions which discussed Applications Unlimited (Oracle EBS, PeopleSoft, JDE, etc.) product vision/roadmaps and upgrades were among the most popular.  I think that supports what we have been seeing in our inquiries in terms of the primary concern for customers:  is this the right time to upgrade and if so, to which release should I upgrade?  There are some sessions on Wednesday around Fusion applications.  I would imagine they will be popular for similar reasons.

In closing, Thomas and I had a good chat with Charles D'Souza from Emirates Bank (HQ in Dubai).  It has implemented implemented core HRMS, self-service, learning management, performance management, some compensation management and succession management (which some of its own extensions to Oracle) on E-Business Suite R12.  It is also about to embark on an implementation of iRecruitment as well.  If you are an EBS customer looking for an understanding of what is possible (to support upgrade planning) in Talent Management on R12, this is a good customer reference.  

It is always good to get the customer viewpoint, I have a number of customer sessions on the agenda for tomorrow and Wednesday.  If you are an Oracle Applications customer, what do you think the highlights were for Day 1?