trends in hr-technology the “make or buy” decision · trends in hr technology raf degens...
TRANSCRIPT
+ tips regarding
the “make or
buy” decision
Trends in
HR-technology
www.kluweropleidingen.be
Trends in HR Technology
Raf Degens
13/10/2011 p. 2
Agenda
1. The trends you have all seen before
2. The trends analysed
2.1 Functional dimension
2.2 Technical dimension
2.3 Maturity dimension
3. The trends deconstructed: make or buy?
4. Wrap up
www.kluweropleidingen.be
Trends in HR Technology
Raf Degens
13/10/2011 p. 3
Agenda
1. The trends you have all seen before
2. The trends analysed
2.1 Functional dimension
2.2 Technical dimension
2.3 Maturity dimension
3. The trends deconstructed: make or buy?
4. Wrap up
www.kluweropleidingen.be
Trends in HR Technology
Raf Degens
13/10/2011
Trends in HRM
p. 4
Business stakeholders require best-of-breed functionality. While the notion of a fully integrated suite of
HRM applications, from core HR payroll to strategic TM, is appealing, business process owners often reject
integrated components from one vendor on the basis of not meeting requirements - Forrester
Speaking at Oracal OpenWorld, Larry Ellison said that the computer industry is more fashion-driven than women's fashion
and cloud computing is simply the latest fashion. - Wall Street Journal (quote Oracle CEO's)
Increased competition and growing solution overlap rises between comprehensive HCM solution providers and
Talent Management suite vendors - Gartner
SaaS adoption will become the direction of choice for many large and small companies. Application flexibility, cost
predictability, and ease-of-use make SaaS very attractive - Forrester
SaaS compared to ERP remains a relatively small proportion of the overall market (approximately 6% in 2009), but
within some ERP segments, such as human capital management, it is a rapidly becoming a significant contributor to the
market - Deloitte
www.kluweropleidingen.be
Trends in HR Technology
Raf Degens
13/10/2011 p. 5
The trends you have all seen before
Consumers Business
www.kluweropleidingen.be
Trends in HR Technology
Raf Degens
13/10/2011 p. 6
Agenda
1. The trends you have all seen before
2. The trends analysed
2.1 Functional dimension
2.2 Technical dimension
2.3 Maturity dimension
3. The trends deconstructed: make or buy?
4. Wrap up
www.kluweropleidingen.be
Trends in HR Technology
Raf Degens
13/10/2011 p. 7
The trends analysed
We will give you an overview of the key elements in the trends.
Also we will provide you with an objective set of criteria on which you can base your decision
whether or not to follow the trends.
To do this we will break down the trends in three dimensions and represent them on a clear graph.
We will walk you through our analysis step by step so it will be very easy to go through the same
logic afterwards for your specific company and needs.
Location dimension
Functional
dimension
Maturity
dimension
www.kluweropleidingen.be
Trends in HR Technology
Raf Degens
13/10/2011 p. 8
Agenda
1. The trends you have all seen beforea
2. The trends analysed
2.1 Functional dimension
2.2 Technical dimension
2.3 Maturity dimension
3. The trends deconstructed: make or buy?
4. Wrap up
www.kluweropleidingen.be
Trends in HR Technology
Raf Degens
13/10/2011 p. 9
The four pillars of strategic HCM
Source: Forrester Research
Planning & analysis
Competency Management
HRMS transaction system
Recruitment Learning Performance Compensation
www.kluweropleidingen.be
Trends in HR Technology
Raf Degens
13/10/2011 p. 10
Point solution are striving towards End-to-End
Talent Management offerings
Core
HRM
Recruitment
& Staffing
Learning
Management
Performance
Management
Competency
Management
Compensation
Management
Succession
Planning
ERP Solution Vendors
Finance
Supply
Chain
CRM
...
HCM Suite Vendors
Talent Management Suite Vendors
Talent Management Suite Vendors
Single Point
Solution
Vendor
Single Point
Solution
Vendor
www.kluweropleidingen.be
Trends in HR Technology
Raf Degens
13/10/2011 p. 11
The trends analysed - Functional
Definition Examples (*)
Point Solution
ERP Solution
Provider Type
HCM Suite
Talent Suite
• Support for Non-HCM
• Support for HCM, including Recruitment,
Learning, Compensation, Succession,
etc.
• Support for HCM, including Recruitment,
Learning, Compensation, Succession,
etc.
• Support for Learning, Performance,
Succession, etc. designed to work on top
of an existing core HRMS solution.
• Support for a particular HR / Talent
Management function/process.
* examples given are purely indicative, this is not an exhaustive list, some vendors offer more than one model
www.kluweropleidingen.be
Trends in HR Technology
Raf Degens
13/10/2011 p. 12
The trends analysed - Functional
When put on a graph this looks like this(*):
* examples given are purely indicative, this is not an exhaustive list, some vendors offer more than one model
ERP solutions SAP, Oracle
Single point solutions
HCM suitesWorkday
Talent Management suites Lumesse
SuccessFactors
Saba
People Click
ClickSoftware
Process Coverage
Vertical movement via
organic growth &
acquisitions
Niche players focusing more
on industry
ERP Solutions
offering Single
point solutions
as part of their
product
portfolio1
2
3
www.kluweropleidingen.be
Trends in HR Technology
Raf Degens
13/10/2011 p. 13
* examples given are purely indicative, this is not an exhaustive list.
The trends analysed - Functional
www.kluweropleidingen.be
Trends in HR Technology
Raf Degens
13/10/2011 p. 14
Agenda
1. The trends you have all seen beforea
2. The trends analysed
2.1 Functional dimension
2.2 Technical dimension
2.3 Maturity dimension
3. The trends deconstructed: make or buy?
4. Wrap up
www.kluweropleidingen.be
Trends in HR Technology
Raf Degens
13/10/2011 p. 15
The trends analysed - Technical
Within the field of HRM applications we can distinguish between software based on technical
criteria:
This leads to four main technical types of HRM applications
On Premise software
Installed software
Hosted software
Software as a Service
Location
vs.
Setup
vs.
Code
vs.
1
2
3
4
www.kluweropleidingen.be
Trends in HR Technology
Raf Degens
13/10/2011 p. 16
The trends analysed - Technical
On Premise software
Having your on premise software within your company is a bit like a factory
that has his own power station.
• You own the infrastructure and your run it yourself.
• You decide how the infrastructure is implemented. (wind, water, coal, ...)
• You can fully adapt the infrastructure to your needs.
• You need to know the technical details of the infrastructure to run it.
• Whether you use all of the energy generated or not, you still pay for the full infrastructure.
• You do not share your installation. Economy of scale is not realised.
1
www.kluweropleidingen.be
Trends in HR Technology
Raf Degens
13/10/2011 p. 17
The trends analysed - Technical
Installed software
Such a system could be compared with buying solar panels to put on the
company roof:
• The panels might be maintained and run by somebody else
• You might not fully know the internal workings of the solar panels, however they belong to
you
• There is a fair chance that you do need to know some technical details to use the energy
• Upgrades or repairs to the solar panels are at your expense
• Whether you use all of the energy generated or not, you still pay for the full solar panels
• You do not share the solar panels
2
www.kluweropleidingen.be
Trends in HR Technology
Raf Degens
13/10/2011 p. 18
The trends analysed - Technical
Hosted software
Such a system could be compared with partaking in a solar panel farm:
• The farm is maintained and run by somebody else
• The solar panels themselves however belong to you and any damage might be at your expense
• You do not need to know the technical details to use the electricity
• You use the electricity as you go, paying for what you actually use
• Others use the same energy grid you are using, but they do not share solar panels
• Upgrades or repairs to the solar panels are at your expense and economy of scale is not fully
realized
3
www.kluweropleidingen.be
Trends in HR Technology
Raf Degens
13/10/2011 p. 19
The trends analysed - Technical
Software as a service
Such a system could be compared with buying “green” energy from an
energy company.
• The farm is maintained and run by somebody else who decides whether the electricity
comes from windmills, water turbines or solar panels
• You immediately enjoy the impact of technical improvements
• You do not need to know the technical details to use the energy
• You use the energy as you go, paying for what you actually use
• Others also buy their energy from the same provider thus, using economy of scale, the
provider can offer you a lower price
4
www.kluweropleidingen.be
Trends in HR Technology
Raf Degens
13/10/2011 p. 20
The trends analysed - Technical
What was that about the cloud?
Well, the definition of “cloud computing “ is:
The cloud is a collection of internet-based services providing users with scalable, abstracted IT
capabilities including software, development platforms and hardware.
It is important to note that this not only describes HR Software as a Service!
Software-as-a-Service (SaaS) Platform-as-a-Service (PaaS) Infrastructure-as-a-Service (IaaS)
As-a-service delivery of applications targeted
at private users (e.g. social networking,
micro-blogging) and business users (e.g. ERP,
CRM)
As-a-service delivery of tools for
development, testing, deployment, hosting
and application maintenance
As-a-service delivery of servers, network
equipment, memory, CPU, disk space and
data center facilities
Cloud
www.kluweropleidingen.be
Trends in HR Technology
Raf Degens
13/10/2011 p. 21
Wrap up - Technical
• On Premise
• Installed
• Hosted
• SaaS • Variable expense
• Highly abstracted
• Immediately scalable
• Multi-tenant
• Variable expense
• Abstracted software
• Rented hardware
• Hosted
• Variable expense
• Abstracted software
• Owned hardware
• On site
• Fixed expense
• Owned software
• Owned hardware
• On site
www.kluweropleidingen.be
Trends in HR Technology
Raf Degens
13/10/2011 p. 22
The trends analysed - Functional
When put on a graph this looks like this(*):
* examples given are purely indicative, this is not an exhaustive list, some vendors offer more than one model
ERP solutionsSAP, Oracle
Single point
solutions
HCM suitesWorkday
Talent
Management
suites
Lumesse
SuccessFactors
Saba
People Click
ClickSoftware
Process Coverage
SaaSHostedInstalledOn Premise
www.kluweropleidingen.be
Trends in HR Technology
Raf Degens
13/10/2011 p. 23
Agenda
1. The trends you have all seen beforea
2. The trends analysed
2.1 Functional dimension
2.2 Technical dimension
2.3 Maturity dimension
3. The trends deconstructed: make or buy?
4. Wrap up
www.kluweropleidingen.be
Trends in HR Technology
Raf Degens
13/10/2011 p. 24
Hype Cycle for HCM Software 2009
Source: Gartner (2009)
www.kluweropleidingen.be
Trends in HR Technology
Raf Degens
13/10/2011 p. 25
Hype Cycle for HCM Software 2010
Source: Gartner (2010)
Years to mainstream adoption : 5 to 10 years
www.kluweropleidingen.be
Trends in HR Technology
Raf Degens
13/10/2011 p. 26
Hype Cycle for HCM Software 2011
Compared to 2010:
Years to mainstream adoption : 2 to 5 years
Compared to 2010:
Status-qua
Years to
mainstream : 5-10
Compared to 2010:
NEW
Years to
mainstream : 2-5
www.kluweropleidingen.be
Trends in HR Technology
Raf Degens
13/10/2011 p. 27
The trends analysed
Combining both the Functional, Techical and Market share dimension gives us:
SaaSHostedInstalledOn Premise
ERP solutions
Single point
solutions
HCM suites
Talent
Management
suites
Today
Within 3-5 years
www.kluweropleidingen.be
Trends in HR Technology
Raf Degens
13/10/2011 p. 28
Agenda
1. The trends you have all seen beforea
2. The trends analysed
2.1 Functional dimension
2.2 Technical dimension
2.3 Maturity dimension
3. The trends deconstructed: make or buy?
4. Wrap up
www.kluweropleidingen.be
Trends in HR Technology
Raf Degens
13/10/2011 p. 29
The trends deconstructed : Make or Buy ?
The decision between make (on premise) or buy (SaaS) is determined by a
number of elements proper to your own organisation:
• The evolution of HR systems
• The Total Cost of Ownership discussion
• The Organisational Culture
• The HR vision and strategy
• The IT vision and strategy
www.kluweropleidingen.be
Trends in HR Technology
Raf Degens
13/10/2011 p. 30
The trends deconstructed : Make or Buy ?
• Fully customizable
• Can fit current processes
• High cultural fit
• Flexible handling of
exceptions
• Maintained internally
• Staff and hardware needed
• Limited best practices
• Maintenance cost
• Longer implementation time
• Far less standardization
+
-
• Incorporates Best Practices
• Fast implementation timeline
• Relatively low cost
• Minimized internal staff needs
• No internal system support
• User Groups
• Fast user adoption (intuitive GUI)
• Not custom to current processes
• Possible overbuying
• Requires more attention to SLA
• Requires good requirements
+
-
www.kluweropleidingen.be
Trends in HR Technology
Raf Degens
13/10/2011 p. 31
The trends deconstructed : Make or Buy ?
Taking both internal company elements and make-or-buy pros/cons into account,
the following key activities will guide you towards a successful long term
decision:
Build up a clear view on actual requirements (To be = „As is‟ + Area‟s of Improvements)
Actually learn from „lessons learned in the past (180 turn is not always paying off)
Create alignment between HR and IT (accept each others strategy)
Be directive and clear when reaching out to the market
www.kluweropleidingen.be
Trends in HR Technology
Raf Degens
13/10/2011 p. 32
Agenda
1. The trends you have all seen beforea
2. The trends analysed
2.1 Functional dimension
2.2 Technical dimension
2.3 Maturity dimension
3. The trends deconstructed: make or buy?
4. Wrap up
www.kluweropleidingen.be
Trends in HR Technology
Raf Degens
13/10/2011 p. 33
Wrap up
SaaSHostedInstalledOn Premise
ERP solutions
Single point
solutions
HCM suites
Talent
Management
suites
Today
Within 3-5 years
1
2
3
4
www.kluweropleidingen.be
Trends in HR Technology
Raf Degens
13/10/2011 p. 34
Build up a clear view on actual requirements
(To be = „As is‟ + Area‟s of Improvements)
Actually learn from „lessons learned in the past
(180 turn is not always paying off)
Create alignment between HR and IT
(accept each others strategy)
Be directive and clear when reaching out to the market
Wrap up