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Wednesday, May 25, 2011

PeopleSoft vs Workday - Old vs New

ROME (Updated March 5, 2012)
While in the Eternal City to evangelize European HR leaders on the joys of a modern HR system at a Talent and Mobility Conference, I was asked by the Head of HR of an Italian bank  running PeopleSoft and considering alternatives to present  to their board of directors the pros and cons of PeopleSoft versus Workday. Here is the takeaway I left the board members with at the end of my presentation:

  • PeopleSoft has over 3,000 customers, and the number is decreasing* − Workday  has less than a tenth of that but the number is increasing fast.

  • PeopleSoft runs the whole gamut of HCM − Workday has yet to plug some big holes in its product scope (global payroll, recruiting, learning, time.)
  • When PeopleSoft grew and went international, it took Europe by storm − Workday is taking much longer  to grow overseas.
  • To run PeopleSoft will cost you several hundred dollars per year per user − Workday will cost you a fraction of that.
  • PeopleSoft is based on a technology that is 30 years old - Workday has the most modern object-oriented technology found in enterprise software.

It looked great at the end of last millennium...

...but this is clearly what companies require in the 21st century

  • When you meet a fellow PeopleSoft user and discuss your respective projects, you are comparing apples and oranges as many are either on Releases 7.5, or 8.3 or 9.0 − Workday customers can have a more meaningful discussion as they all are on the same product release.
  • You buy PeopleSoft − you rent Workday.
  • You install PeopleSoft on your computers − you access Workday over the internet.**
  • To meet your requirements you can (and sometimes have to) customize PeopleSoft to your heart’s content - and your system integrator’s great financial satisfaction − Configuring Workday may be enough.***
  • PeopleSoft, which covers all industries, has a strong offering for, and a large customer base in, the public sector  −  Workday so far is targeting mainly private businesses****
  • You upgrade PeopleSoft every three and a half years *****  − you get a regular update from Workday several times a year.
  • PeopleSoft HCM is part of an ERP offering itself just another of several other business applications belonging to Oracle whose sprawling portfolio includes hardware and its flagship database system − Workday is first and foremost an HCM system branching out into the ERP world.
  • Both PeopleSoft and Workday are the brainchild of one of our industry’s legendary and visionary leaders, Dave Duffield − he built the former in his middle age and the latter as he nears his sunset years.

PeopleSoft is the past  Workday is the future.

*Companies that have recently discontinued PeopleSoft HR include: Johnson &Johnson, Hershey (both gone to SAP), Flextronics, T. Rowe Price, McKee Foods (all three switched to Workday). Many more have moved to local providers (LG Systems in Brazil, Meta4 or HR Access in Europe.) And an even greater number of customers are considering the move for 2012/2013, with Workday featuring in many shortlists. 

**There are many reasons why a SaaS system can cost less, but one of the most obvious ones is that you do not need to purchase any hardware NOR any database either when you start out or when you upgrade to a new release as is the case with on-premise systems such as PeopleSoft. 

***This is one of the most interesting aspects in a PeopleSoft vs Workday comparison. Many companies throughout the years have acquired the very bad habit of over-customizing their systems when configuring the system as the setup stage was in many cases enough to meet corporate requirements. It is therefore difficult for many to accept to "lose" that possibility. This being said, if  after careful analysis there are some mission-critical requirements which cannot be met neither through configuration nor with coming functionality, then I would agree that a SaaS system like Workday cannot be envisaged.

****Directly linked to the previous point. Government organizations whether in the US or in Europe were the last to move from home-made system to package software. The reason is the unique and complex requirements they have (try understanding how to move somebody from one step to another and onto a different grade while ensuring their payroll is on track.) Customization eased the pain to move to package software. Localization (especially of payroll) is also an issue: may of  SOP's (SAP, Oracle, PeopleSoft) localizations were achieved through customization, not as part of the standard offering. How will a SaaS system deal with a Saudi Arabia customer that wants to use a lunar-based calendar rather than the Western (Gregorian) one? I do not expect a Workday for the Federal Government soon to replace the PeopleSoft equivalent.
Companies in other industries are also sitting on the fence and not rushing to SaaS because of this issue. An HR executive from a major US-based computer-equipment company told me last week that although they want to move away from PeopleSoft, their experience with Taleo is not encouraging them to adopt Workday. Retail companies, because of their complex time management requirements, also fall within this category. SaaS vendors, of which Workday is the standard bearer, will have to make quick and serious progress in configurability to meet these challenges.

This being said, before jumping to the conclusion that customization is key, careful analysis and questioning of one's business processes are in order. In my (increasingly and frighteningly long) experience, it feels like many heads of HR use vanilla software the way few Californians (especially of the Angeleno variety) order their food without dismembering the menu as it is printed out ("Instead of the coleslaw, could I have a serving of mashed potatoes?") more out of habit and because it is possible rather than based on a true need.

*****The average time for a new release when PeopleSoft was an independent company was less than two years (PeopleSoft came out with 4 releases between early 2000 and end 2004). Since Oracle took it over in January 2005, that is for the past SEVEN years, there have been only 2 releases. 

Tuesday, May 3, 2011

Can Infor's acquisition of Lawson deliver on great HR technology?


The compulsive blogger that I am is going to be quite busy with the dizzying speed of M&A activity in the HR technology space.  In a lively LinkedIn discussion (registration is required) it was reported that serial acquirer Infor, which last week bought Lawson, had great plans to consolidate its multiple offerings, maybe  à la Oracle Fusion. My first reaction was, “Yeah, right!” since Infor’s business model has never been premised on innovation or consolidation. Just consider the history of its multiple acquisitions:

1.     Anael HR: this one is my favorite as it exemplifies the amazing M&A movement in our industry. It was developed (along with a payroll product called Sysper) in the 1980’s by a French company called Presys (itself the resulting merger of two small IT companies) which in turn was bought by UK-based ERP company JBA in the late 1990’s (which also bought a small French HR-cum-payroll vendor called Logi-Soft).  Anybody remembers JBA? They were quite big in the 1990’s (I attended their users' conference at their Birmingham, UK, HQ and it was quite impressive) but then they just vanished into thin software air. Then, when the 2000 dotcom bubble burst, JBA was sold to Canadian company GEAC.  Anael was an AS/400 offering that targeted construction and staffing companies, although I recall they also had a Windows version that came from the Logi-Soft product. The functional scope was basic HR and payroll, no workflow (at least when I saw it a decade ago), English was limited to payroll and there was no multi-currency (even though it was already part of a global offering!)

2.      In 2005, private equity firm Golden Gate Capital bought GEAC and breaking it up moved its ERP products to Infor (one of its companies) which thus found itself with two HR systems : French Anael and Canadian SmartStream. SmartStream had tried to expand in Europe – I remember meeting several of GEAC executives in the late 1990’s/ early 2000’s and they swore to me they were going to take Europe by storm. Well, I guess they found a way around perjury since SmartStream never went “continental.”

3.      Infor also has Infinium, a run-of-the-mill self-service offering they sell in the US though I’m not sure what payroll/HR system it runs off of. Maybe the previous, though for the life of me I can’t see US companies running Anael HR which is still part of Infor’s active portfolio.

4.      Now, with last week’s acquisition of Lawson, Infor finds itself with three "new" HCM products: Lawson HCM, recently acquired Enwisen  and whatever is left of Movex, the Swedish AS/400-based product Lawson had bought several years ago and which was a limited payroll and HR system targeting the retail and manufacturing industries. When I was an analyst/consultant with CXP in the second half of the 1990's both Movex and Anael were demoed to me and, truth be told, I was underwhemed. It does not seem that things have improved markedly since then.

5.      In addition to these seven HR products, there may well be other HR products tucked away in the sprawling Infor offering (I think they have a time-tracking system as part of their ERP or manufacturing software.)

It is therefore quite uplifting to hear that, like St. Paul on the road to Damascus, Infor has suddenly seen the light and is planning on bringing about big changes in their offering. This is all the more surprising since, as I described it above, nothing in Infor's record suggests it has ever been interested in innovation or consolidation. Infor, in its  business model, is similar to Sage which, in some geographies, has more revenue than giants Oracle and SAP, because it has a multitude of products it sells, often through resellers, to different segments of the mid-market with little product innovation. Investing little in R&D and selling to many makes you profitable. Why would Infor want to change this model and go down an unknown road? Have they stumbled upon a unique vision? I have yet to hear it articulated. Do tigers shed their stripes and sprout feathers? With all the innovation coming only from SaaS and talent management vendors, our industry is in sore need of a next-generation HCM system. Could Infor deliver that? To quote another saint, Thomas this time, “I’ll believe it when I see it.”