Workday Works Wonders on Platform for HCM

Enterprise resource planning (ERP) is a software category that includes an array of business applications that includes human resources and finance. Workday is a vendor at the center of a new generation of ERP. My colleague Robert Kugel recently covered that company’s advances in finance using cloud computing to operate its platform. And I recently attended Workday’s technology analyst summit, where I got a deeper view of the technology under its applications and its efforts to perfect its processing potential. The company’s platform can support a broad range of applications, and it is advancing its efforts in analytics, collaboration and business planning. Today, however, only Workday itself is allowed to build applications on the platform, a situation that contrasts with many other ERP providers that make theirs available to third-party software developers and consultants.

At the summit Workday demonstrated the cloud-based spreadsheet technology that it acquired in 2015. Referred to as worksheets, it is embedded in its platform. Workday insists on the value of having a spreadsheet on its platform to provide flexibility for workers in the lines of business. We think it is a smart approach to bind spreadsheets into the platform as our benchmark research frequently finds that using them independently can be unproductive and even problematic in an enterprise setting. I did not agree with Workday’s presentation on the history of analytics and spreadsheets in computing; analytics and decision support systems were in business use well before spreadsheets were invented and date back to the 1970s and have been maturing for some time. But worksheets adds flexibility for the analytic in Workday Planning. With this addition, this application now competes with products of Workday’s partners, even ones in which it has invested such as Anaplan and Tidemark.

Planning is an essential business function that most organizations do not manage effectively in finance, HR and operations, and Workday’s efforts to unify planning like that needed to administrate the workforce can help organizations to optimally manage their business processes. Our research on next-generation business planning finds that two-thirds of organizations in which planning is integrated and its elements are linked said their planning processes work well or very well.

I am impressed by what Workday has introduced in its collaboration capabilities, which are blended with Worksheets, unlike in the majority of analytics and planning products in the market today in which have no collaboration or not easily accessed from within planning. Some of its technologists have significant experience in developing collaborative capabilities, and I expect that the company will be able to exploit embedded collaboration across its platform for social collaboration, which works much better than email or external tools that don’t maintain the contexts of discussions. Workday enables Worksheets and collaboration to operate across mobile platforms but also secures the data they use. As part of its platform, the application can access data in real time to provide up-to-date information and enable fast actions. These advances will not be available until the next upgrade, Workday 26, and more fully available in Workday 27, both of which the company says it plans to release in 2016.

Workday also demonstrated to analysts its Workday Insight Applications architecture, which provides analytics and metrics that are shaped into applications and used by its tools. It has continued to embed advanced technology including Apache Spark, machine learning and elastic search as part of its approach to big data and analytics. Probably most valuable are the simpler user experience and the ability to seamlessly present third-party information from across the Internet and within the enterprise. Workday has some work to do on data preparation and integration of other applications and systems, but I don’t doubt it’s assertions that it will deliver a simpler approach to the presentation of metrics and context for individual roles. Using its advances in collaboration and planning Workday will be able to set goals and track key performance indicators, which can fulfill the promise of scorecards and performance management for business. My colleague Robert Kugel outlined the finance overlap of ERP and performance management recently that outlines this shift This would help businesses focus on achieving their full potential.

The latest release of the platform, Workday 25, was the highlight of the annual Workday Rising conference last fall of 2015, also has advanced its suite of applications. Its human capital management (HCM) applications provide not only the core HR functions through self-service methods but also management of recruiting, learning, benefits, performance, time tracking and payroll – subtle but significant improvements since our last analysis in 2014. It also includes packaged application-specific dashboards. A new application called Workday Learning can help workers improve their job performance to realize their potential in the organization. Our research into next-generation learning management finds that nearly half of companies have increased their investments in learning. Workday now provides more flexibility to connect to third party payroll through its payroll interface and with what it calls Payroll Effective Change Interface (PECI). Workday has advanced its partnership with ADP to streamline access and processing of payroll. Our research into payroll management finds that payroll management integrated with talent management helps organizations establish more effective processes. Workday did not mention compensation management, during the analyst summit . The company sees this application as a capability of HCM, and could use the worksheets technology for modeling and analytics and adding workflow that operates across management, managers and workers.

I really like what Workday is doing in the area of employee engagement, which I see as essential to ensuring worker satisfaction and retention. Workday has built a framework to run campaigns and surveys to measure feedback and provide recommendations for how workers can improve their performance. This framework streamlines the process for job offers and acceptances, which most organizations now do manually. Workday is also advancing its efforts in workforce management to integrate with time clocks, support checking in and out, and manage absences and time off; it also has added abilities to track time worked by job type and to process large volumes of time entries.

Workday has set the bar high for business applications in the cloud with its progressive approach to its applications and platform and by embracing the new generation of innovative technologies in analytics, collaboration and mobility. Its platform is well prepared to advance nearly all aspects of human capital management for organizations and help HR increase its value to the business. Workday is on a mission to provide applications for HR, payroll, benefits, talent management and workforce management to ensure it can meet the merits of what is called human capital management. If you have not examined Workday’s products to see what is available today and what is coming in 2016, I recommend doing so.

Regards,

Mark Smith

CEO & Chief Research Officer

Research Agenda: What Matters for Human Capital Management in 2015

Managing investments in people and their performance is critical to every organization. It also is complicated. To support the various aspects of human capital management (HCM), organizations often use a variety of technology including systems for human resource management, talent management, workforce management and payroll management. Often these separate systems use their own information and are not well connected to each other. Today they are deployed both on-premises and in cloud computing environments, which further complicates integration. This situation disrupts processes and challenges HR departments and leaders to invest time and resources to correct it.

Unifying applications across HCM is a critical concern that organizations are addressing. One intersection point is between core HR systems and payroll management; as well, payroll management must connect to talent management for salaried employees and workforce management for hourly earners. Our benchmark research finds that time and attendance (51%) and compensation (45%) as the two areas that most organizations need to integrate with payroll management. Application and data integration can support a range of key activities such as recruiting, onboarding, performance management, learning management and compensation management, all of which are crucial to motivate, develop and engage employees. It is essential to integration to have a single, consistent source of employee data that all these systems can draw upon; an employee master can provide a reliable source of information and simplify interactions of managers and employees and facilitate collaboration among workers. Many organizations are examining ways to create a consistent platform on which human capital management applications can interoperate.

Integration of systems will be a major focus of our research agenda for human capital management in 2015. We will closely examine the current state of core HR management, talent management and workforce management systems with an eye on possibilities for them to work together smoothly. Managers in HR departments and the lines of business realize the importance of providing the best possible employee experience in attracting and retaining all types of talent; to achieve this they must effectively use technology for all the people aspects of their organization. Developing a strategy and a plan to unify HCM systems should be the first step. To succeed this will require buy-in from executives and management across finance and operations. Our research this year will strive to identify best practices in making technology a more valuable asset for managing the most important component of any business – its people.

Our 2015 agenda will leverage two recent benchmark research projects, payroll management and next-generation learning management. In addition, soon we will have new insights from benchmark research on next-generation human resources management systems, and we will explore the expansion of talent management platforms and applications. As usual we will continue the in-depth product and vendor evaluations of our Value Index; in 2014 we released Value Indexes on compensation management and payroll management systems, and this year we will expand to assess learning management and HR management systems.

Examining new methods to recruit and retain employees will become critical as competing for available talent becomes more difficult, and our research in 2015 will explore this area. Being efficient at recruiting has become a top priority for organizations. To achieve that goal will require a more comprehensive approach than most take. It starts with marketing positions and moves on to how candidates are assessed and interviewed; both increasingly rely on technologies, now including video. Later on organizations seeking to enhance their employees’ skills and potential should consider using learning management as a platform not just for training but also to improve their onboarding, performance and employee development processes, and we will continue to focus on this area. In addition we’ll examine new ways to address the work/life balance, a major concern for today’s workers, including using wearable computing devices for wellness and fitness tracking as part of creating a more flexible work environment. As I have pointed out wearable computing has a larger potential for organizations. This innovation along with mobile technology could help transform management of hourly and salary workers over the next couple of years.

Technologies like these are part of the new landscape in human capital management as businesses work to support the needs of all employees, from management to front-line workers. As well as mobile and wearable technologies these include analytics, big data, collaboration, cloud computing, and social media. Combined they have opportunity to simplify workforce processes and increase understanding of performance and engagement. As many organizations have both cloud-based and on-premises environments it is more challenging to get timely data that can be used for a range of analytics and reports. And they more data than ever before, which big data tools can help them manage and which analytics can enable them to gain insights from. In this data-driven world HR can’t continue using spreadsheets and reports and should transition to dedicated analytics tools, including predictive analytics to determine future hires or risks involving current employees. Analytics also is essential for helping maintain regulatory compliance, particularly the new Affordable Care Act (ACA). Our research confirms that the foremost issue driving investment into human capital analytics (in almost two-thirds of organizations) is improving efficiency and productivity. Analytics will remain a major focus of our HCM research.

The rapidly expanding use of mobile technology won’t slow down, we predict, especially as smartphones grow into mini-tablets, and tablets become like ultra-lightweight notebook computers. This pace of innovation is challenging for HR, many of whose applications do not run well on them. Apple is the preferred platform for business mobility, followed by Android and a small but growing presence from Microsoft, and organizations must figure out to accommodate the workforce in using the variety of mobile technology. HR should take a leading role to determine the best strategy for the workforce and mobile use of human capital management applications. For example, our recent research on learning management systems finds mobile devices being used in more than one-third (35%) of organizations and almost half (43%) planning to use them.

The final item on our 2015 research agenda is the advancing use of systems that help individuals and teams collaborate. We observed embedded collaboration capabilities becoming a common component of talent management applications in 2014 and expect the trend to spread to workforce management in 2015. Organizations are rapidly turning to social collaboration methods, and while conventional discussion forums are most often used (by 39%), social recognition, wall posting or activity streams and earning badges and awards are being planned or evaluated for use in more than 40 percent of organizations, according to our next-generation learning management benchmark research. Organizations should be looking more closely at how to use collaboration to improve employee engagement, and we will provide recommendations on doing that.

Our HCM research agenda for 2015 continues to focus on the major issues in which technology plays a key role in addressing business issues. Please follow my analyst perspectives and our research and education in our community this year as we continue to evaluate the use of information technology to improve the effectiveness of HR professionals and lines-of-business managers.

Regards,

Mark Smith

CEO and Chief Research Officer