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Wednesday, October 18, 2017

Land of the Morning Calm: Tips on implementing a global HRIS in Korea

Last year when I spent several days in Shanghai gathering the requirements for a client as part of an HRIS evaluation exercise, I realized this was the easternmost place on Earth I had ever reached. I am gratified to announce that I just beat my own record by spending a week in South Korea's sprawling megalopolis, finalizing an amazing global tour as part of the implementation of one of the largest HRIS projects in the world. This post aims at sharing some of my thoughts about one of the Asian dragons as well as provide tips on how to include a Korean subsidiary in a global HRIS project.

Hierarchical society
Korea's society will come across to first-time visitors as a very class-conscious one, not in the traditional British sense where one's place is determined by birth, but by the merit-based place one occupies in the corporate world. I was  struck by the constant bowing that takes place: whereas in the West people shake hands when they meet, in Korea, you take a bow, with the person occupying a lower rung in the social pecking order bowing lower - When you meet your company's CEO your body's basically at a 90° angle.

Small wonder then that your global HRIS will need to track the various statuses, grades and levels an employee enjoys throughout his employment life cycle (make sure you carefully identify which ones apply to the person and which to the position.) Just like Germans love to be addressed by their titles (Doktor and Professor have to be included in the name section of your HRIS) Koreans use their professional gradess as part of the name when addressing each other. "Good morning, Mr Lee M32"  - Bow. "Hello, Mr. Kim L11" - Deeper bow.

It was therefore quite revealing that in the workshop I ran, when we covered the list of dependents (to be used for benefits purposes), the value "Sibling" was found lacking. "We should have Elder or Younger Brother/Sister" I was told. And, of course, in this most deferential and hierarchical of societies expect your workflow to include several additional approvers as  it travels up and down the hierarchy.

Finally, make sure when you organize meetings, especially workshops where decisions need to be made, that you mix equals with equals. Should you have participants belonging to different rungs on the corporate ladder, you'll find out that subordinates will almost always defer to their superiors, never contradict them, thus preventing you from getting a full picture of the situation.

Gyeongbokgung Palace.
A haven of peace in the hustle and bustle of downtown Seoul

Strong culture of service and duty
Koreans will go to great lengths to do their duty and ensure the service they provide is first notch. Of all the countries I covered while I crisscrossed the globe none did their prerequisite homework so thoroughly and conscientiously as did the Korean team. I took the subway one afternoon and must have gotten my fares mixed up because, on the way out, I swiped my card but, after a shrill beep, the turnstile remained stubbornly stuck while a few Korean characters in scaring red danced on the small monitor. I must have looked confused or lost, or simply obviously foreign in this racially homogeneous society, because a rider stopped by, embarrassingly explained that I had insufficient credit  and then swiped his card to top me up. The turnstile opened as if by magic. I insisted  to pay him what I owed him, but he'd have none of it. "I just did my duty to a fellow human," he said. Try that in Paris or New York!

HR and Technology
South Korea (or, as it is known officially, the Republic of Korea) has gone through dizzying changes in the past few decades becoming an advanced economy, with efficient public transportation, technologically savvy (I'd even say obsessed) with a high mobile-device penetration rate (you know you're on a Seoul street when pedestrians walk with their eyes glued on their smartphones.) A global HRIS would have few issues rolling out its self service features to a nation whose mobile devices have become an extension of its citizens.

Although Korea has a vibrant democracy (they recently impeached their president on corruption grounds- a first for the country, while France is still considering whether to prosecute a former president on similar charges), there is one thing it shares with China: social media and other tools that we take for granted in most of the world are largely absent in Korea. Don't message anybody on WhatsApp -  you are unlikely to receive a reply. Facebook and Uber don't fare any better, either, as Koreans rely on homegrown tools. Global HRIS vendors face an uphill battle to penetrate this market with only a handful of mainly multinationals adopting Workday, SAP or Oracle, midmarket businesses remaining largely impervious to them, in the absence of good localization work. To take one example, none of the SOW vendors provide the controls needed for Korean address formats.

Going lunar - not lunatic
Taking a break from a punishing
schedule of global HRIS workshops
Reminiscent of a requirement I saw in Saudi Arabia, Koreans use a dual calendar: Western and lunar. By way of consequence, employees will display two ages: the one they have according to a Western calendar, and the one based on a lunar calendar. Make sure your global HRIS can handle this seemingly puzzling requirement. Some allowances are paid depending on the lunar date, and if you feel like wishing an employee Happy Birthday, make sure it's the lunar one, not the Western (or "Sun" one as I heard it referred to.)

Compensation and Payroll Interface
Since it is most likely you'll be interfacing your Core HR tool with a Korean payroll (none of the three global HRIS vendors - for whom I coined the acronym SOW - has released a Korea cloud-based payroll), figuring out where to place the cursor between Core HR (Compensation) and Payroll will be quite a challenge. Just ask Samsung Electronics, embroiled in its attempts to interface local payroll PDSS with one of the SOW vendors.

Vibrant modern culture within a traditional society
Adhering to a deferential culture (where women tend to play a submissive role), proud of its history and traditions (I strongly recommend visiting the royal palaces in Seoul such as Gyeongbokgung Palace pictured here), Korea's modern culture punches above its weight. Korean filmmakers have made a name for themselves on the map of world cinema: A recent Korean movie I enjoyed is The King's Case Note, part-historical drama (set in the Joseon era), part-thriller (Sherlock and Watson -style), part-comedy. What has become known as K-pop is now all the rage: Is there anybody on planet Earth who is not familiar with the the catchy tune of Park Jae-san "Psy" 's Gangnam Style? The song takes its name from the trendy Gangnam neighborhood, south of the Han River where yours truly stayed at the Sheraton (loved the beautiful Joseon-era chests of drawers on display on every floor.)

Although Korean script is traditionally based on Chinese ("Hanja" script) , the most common script ("Hangul") is alphabet-based  with characters representing vowels and consonants, and written left to right. Many Koreans write in mixed script, meaning that your global HRIS will need to cater to both.  Note that "Korea" is the Western name: Koreans refer to their country by a different name, which itself differs whether you are in the North or the South. Land of the Morning Calm is an old nickname for the country.

Food and Coffee
Unlike the Japanese and Chinese, Koreans love their cuisine quite spicy with side dish kimchee having pride of place at any Korean meal. I was surprised when I visited a friend to see that most Korean apartments come with a kimchee fridge, specially designed to ensure the delicacy is kept in optimal temperature. The coffee addict that I am was more than exhilarated to discover the pervasive café culture. I am hardly exaggerating when I say that at every other street you cross in Seoul, you'll find a coffee place, most belonging to Korean franchises with names such as A Twosome Place, Angel in Us Coffee (sic), Tous les Jours, Paris Baguette, Hollys Coffee, Tom N Toms coffee (I cringe at the missing apostrophe for the latter two).

Overall, I enjoyed my Korean experience tremendously (pace the dreadful traffic jams.) I would gladly come back, hopefully flying airline other than Korea Air: Despite the constant bowing by the pretty all-female crew, I found the experience quite underwhelming. The business class on the Airbus A380 is inferior to the one on Air France and, of course, nothing to be compared with best-in-class Emirates.

NOTE: All pictures taken by the consultant/blogger and remain the property of Ahmed Limam who is hereby asserting his copyright.

(This is the latest in a series of wide-ranging articles focusing on a single country. Previous posts:

July 2017: Romania: Between HR technology and childhood memories
July 2016: Middle Kingdom: Musings on Chinese HR, technology and the country
Nov. 2014: Of Switzerland, the country, its HR practice and technology landscape
June 2013: Thoughts on India, its HR/technology space 
Dec. 2012: My 20-Year Affair with Spain  - with more than 10,000 views it is one of my most popular articles
Aug. 2011: Brazil Rising: Thoughts on HR, technology and an emerging giant )

Tuesday, September 5, 2017

Gartner's HR Magic Quadrant: A (Strong) Rebuttal - Updated Sep. 2018

The 2017 edition

For someone whose HR technology career includes a couple of years as an analyst with a Gartner-like outfit (Paris-based CXP), I keep an eye out for what Gartner, IDC, Forrester and a flurry of new analyst entrants produce. Apart from some comments in LinkedIn discussions, I hadn't dedicated a full post on these research firms. Gartner's latest Magic Quadrant dedicated to cloud HR gives me the opportunity to share some inconvenient truths (some of which I already aired in my book, High-Tech Planet : Secrets of an IT Road Warrior.)
There is a lot in the report that I agree with because it is simply common sense or knowledge, just like if Gartner were to state that water boils at 100° C I would agree with that. But that doesn't mean that I do not disagree with a lot, too. And there are quite a few findings that are misleading, inaccurate, odd if not altogether bizarre. And some astonishing omissions.

Methodology-wise, Gartner is guilty of equating mid-market size in the US with Europe. As anybody who has done any market research would know, SMBs tend to be larger in the US vs Europe. The cloud definition misses out completely the private-cloud variant (Oracle recently renamed theirs Cloud @ Customer - which I always found an oxymoron.)

Speaking of Oracle, one can only wonder that it is put so close behind SAP SuccessFactors (SF) when all empirical research shows it should be closer to Ultimate which, in many respects, should rate higher than Oracle, anyway. Gartner then commits the unforgivable crime of belting out features like a good parrot without discussing their value. Why? Oracle Work-Like Solutions is a good example of vaporware, nobody’s interested in it but because Oracle stresses it in its Analyst Day presentations Gartner dutifully presents it too. Why can't Gartner be honest and tell us that customers licensing it (never mind actually using it) are few and far between?  Because  Gartner takes money from vendors, so it is not free to write what it wants.

The 2018 edition

Sep. 2018: 
Oracle’s vision better than Workday? (Last year it was SAP which was ahead of Workday - see below) The company that (in)famously pooh-phoned the cloud before scrambling to tweak  Fusion to have it hosted? (Remember that I coined faux-Saas in Oracle’s “honor”) So, Oracle displays better vision than Workday, the vendor that in less than a decade has managed to win the hearts and minds of HR? Laughable. How can the new Fusion Recruiting module gets such accolades when NOBODY is live on it? I have been involved in more HRIS evaluation exercizes than most of you have had hot dinners, and no HR user has ever expressed any admiration at Oracle’s HR vision, especially not in the cloud. Gartner just buys all the marketing crap that Oracle sends its way, lock, stock and barrel and delivers it to us with no critique whatsoever, just like the customer numbers that Gartner hasn’t audited: but if a vendor claims they have 2,000 customers, then it must be as true as Holy Writ. Preposterous.

Why doesn’t Gartner tell you that more Oracle PeopleSoft customers move to the cloud with Workday than with Oracle Fusion (which Oracle wants you to believe is true cloud by slapping the moniker cloud on it – which Gartner dutifully obliges.)

Putting SAP ahead of Workday on …Vision? Is Gartner deranged? Who in their right mind can countenance such an absurd claim: Workday with its single line of code, true SaaS offering, revolutionary UI, workflow, reporting, same-platform payroll, pionnering Community. And SAP is ahead? With SF? Completely silly.

SF Employee Central (EC)  figures are not accurate: As usual with these mainstream analysts, such figures are accepted from the vendor's mouth, lock, stock and barrel - not verified. I am on record for being very critical with vendor-provided figures, but Gartner considers them like Holy Writ. Also, to mention "EC payroll" is, again, just parroting the vendor with no critical thinking: There is no such think as EC Payroll but good old SAP Payroll, just like there is no such thing as Oracle HCM Cloud but just  a rebranding of  Fusion, which is available on-premise as well. I can understand the vendor trying to mislead the customer, but the analyst doing it, too? How shameful! Gartner clearly makes a lot of money from SAP and Oracle, and being in their pay it has to put lipstick on their pigs.

Sep. 2018: As for SAP, Gartner aids and abets vendors in their well-trodden path of misleading customers, when it parrots the false claim of SuccessFactors’ “supported payrolls for 42 countries”. As I have denounced SAP for so long, that is BS, pure and simple (can BS be pure?) We the cognoscenti know it is just good ole SAP Payroll hosted and interfaced to SF. GARTNER: stop lying to customers by feeding them false information. You have just become an extension of vendors’ marketing organizations.

Very odd to see Talentia and Ramco which I NEVER ran into in any bid having pride of place (well, sort of) in this report. Just because you need to put a logo on your fancy diagram, doesn't mean that you should make up analysis. Ramco has no meaningful presence in either the US or Europe, which represent the lion's share of the global HRIS market. Shouldn't be there...yet!
Sep. 2018: Other examples of absurd findings: Ramco having 40 payrolls! Really? Only SAP (on-premise), after several decades, was able to provide that many localized payrolls. Not even PeopleSoft, for so long the best HR system around, was able to get close. Workday, PeopleSoft’s successor, has barely managed a couple of payrolls, and Gartner wants us to believe that Ramco, with limited financial and human resources vs Workday (or Oracle,) has been able  to produce so many payrolls. Puh-lease!

Same thing with Kronos whose only claim to HRIS fame is that it is the Time Management leader (I positively hate the term “WFM”), but it doesn’t have the footprint to be considered  a suite. Where is its global HR Admin (or Core HR)? And yet Gartner says it is one of its criteria, as it should be. Cornerstone has much stronger credentials to feature in the report than Kronos since it has a (light) Core HR offering. And yet the Santa Monica-based vendor is nowhere to be seen. As glaring omissions go, this one is simply bizarre.

Meta4? The zombie vendor? If you consider Meta4 as a cloud vendor just because its offering can be hosted, then why not have PeopleSoft? It can also be hosted, and is as much on life support as Meta4 is. But Gartner takes money from vendors, so it is not free to write what it wants. The shared vs public cloud is not as meaningful as the private cloud (Cloud  @ Customer as Oracle calls it) which doesn’t even get a mention. I wonder why. And of course, as is usual with those pseudo-independent analysts, many figures are given, not verified. Very sad when analysts become an extension of vendors’ marketing departments.

Echo-chamber mentality
Mind you, there are times when a vendor dares produce a truly independent analysis. A couple of years ago Forrester wrote about the low customer uptake of Oracle Fusion. The vendor immediately retaliated by cutting all funding. Since then Forrester has been toing the line. As with Gartner, you can't bite the hand that feeds you. Forrester's latest report is a case in point where it becomes almost indistinguishable from Gartner's. Lesson learned, you might (and can) say.

Along with many others, I have been demanding of Gartner & Co to commit not to take any paid assignment from vendors and avoid making money from them. But they refuse to put an end to this inherent conflict of interest and therefore lose in credibility and ability to produce unbiased analysis. It is a disservice to user organizations to make them believe otherwise.

Sep. 2018: Great minds think alike. Independent analyst Shaun Snapp from Brightwork Research just published a cogent analysis documenting Gartner's inherent conflict of interests.

Another weakness of this type of analyst reports, is that since most of these analysts have NEVER implemented an HRIS, they completely ignore the issues related with implementation. What’s the point of selecting the best HRIS in the world if you can’t find resources to implement it? Or they are too expensive? Or the methodology is fuzzy? Or the SI ecosystem is half-baked? Or building reports or maintaining workflows is too  cumbersome? Or if change management leads to customer rejection? Nothing whatsoever in the Gartner report. This is like recommending a car based on several great features, but forgetting to ask the prospective buyer whether they can drive. Largely pointless.  I checked the LinkedIn profiles of the analysts involved in the report: the "stars" (Hanscombe, Lougee, Poitevin) and most of the others have ZERO to little cloud implementation experience. And yet here they are pontificating about something they have limited knowledge of. How reassuring.

Check out my analysis done with my own two ten fingers, with no paid assignment accepted from any vendor and you'll see the difference: SOW -  A Comparison of 3 Cloud HR Vendors: SAP, Oracle and Workday.  I firmly believe that there is a lot to be said for critical thinking, lack of bias and independence. 

The blogger/analyst/consultant is continuing his World Localization Tour as part of one of the largest global HRIS projects in the world. After Brazil last week, he is now in Argentina presenting the prototype to HR representatives from several Spanish-speaking countries. NEXT STOPS: France, Spain and Turkey.

NOTE ON BUENOS AIRES: For anybody currently in the Americas' most beautiful capital city, I strongly recommend Fuerza Bruta, a terrific Cirque du Soleil-like  show at the Centro Cultural de Recoleta. And, of course, enjoy the amazing architecture, large avenues (9 de Julio is the world's largest avenue with 18 lanes), numerous parks and the world's best meat. If you are staying near Avenida Corrientes (Buenos Aires' answer to the Big Apple's Time Square) as I am, Chiquilin is a great option. I will later dedicate a full-length post to HR technology in Spanish-speaking Latin America (already done it for Brazil.)

Friday, July 14, 2017

Romania: Between HR technology and childhood memories

The blogger at age 8
wearing a traditional
Romanian costume
Two historic events are taking place in Romania this month. First, King Michael will celebrate the 90th anniversary of his accession to the throne, a record for any monarch in history*. Sure, he lost it 70 years ago, but post-Communist Romania returned, if not his crown, at least his palaces (I am staying just a few blocks from his Bucharest home, Elisabeta Palace), castles (you should visit lovely Peleș Castle) along with full honors and titles (move over, Elizabeth II, your 60 years on the throne are kid's stuff.) The second memorable event is that yours truly is launching from here the first of a worldwide series of HR localization workshops for one of the largest cloud HRIS projects in the world.

Romania has always been close to my heart. That's where my mother's family hails from, and where my Paris-born mother grew up, separated by the Iron Curtain from her Paris-residing mother for 20 years. Amazing at it may sound, between the ages of 2 and 21, my mother never saw her own mother, growing up in the most beautiful region of Romania: Transylvania (known as Ardeal in Romanian.) Dracula's region is indeed not only the most beautiful from a landscape perspective, it is also among the most ethnically diverse areas in Europe: Romanians (the majority) live next to Hungarians and Germans, and almost every town in Transylvania has a Romanian, Hungaria and German name (In another record, Romania recently elected as president a member of the German minority, thus becoming the only country in Europe whose leader comes from a minority group!) Many cities are medieval jewels, in particular what is known as the "Saxon towns."

I spent many a lovely summer in Transylvania in my teen years, enjoying the food (see below), fishing in the Mureș river, trekking through the Carpathian mountains, bonding with the extended Romanian family: cousins galore from Geoagiu de Sus to Teiuș and Alba Iulia, the old capital where 99 years ago the country was reunited, as well as Cluj-Napoca where my mother started university and Bucharest where cousin Felicia lived and where my mother and I  had to hide from the building's Securitate man since we were "foreigners."

Sun of IT rises in the East...and women too!
It is therefore with great pleasure that I always come back to Romania, although now it is more likely to be to Bucharest on business than Transylvania, although the latter's capital, Cluj-Napoca has become a major IT hub, rivaling Bucharest. Many large multinationals are taking advantage of the good infrastructure and education, competitive salaries and tax structure and Romanians' linguistic abilities, to set up engineering and shared service centers. Many of my international clients have consolidated shared HR operations from either Cluj or Bucharest. As an employee, if you have a question about your vacation balance, send an email or pick up the phone and your request is likely to be handled by a Romanian.

An even more remarkable development is that an increasing number of women developers are to be found in Romanian-based IT centers: latest figures show that almost 30% of the tech force in Romania is female. Much higher than in Western Europe or the United States. Communism doesn't have much to recommend it for (my family lost land acquired through hard work when the monarchy was overthrown) but at least it pushed women into science and engineering jobs, resulting  in the amazing stats I just mentioned.

HR in Romania
Although Romanian companies can elicit their share of complex rules (especially when allowances are dependent on absence/time data or extraneous factors such as outside temperature several days in a  row), in comparison with other countries I know well such as France, Italy or Brazil, Romania is a model of simplicity.  For instance, whereas France has a good 20 different types of labor contracts, Romania has, for all intents and purposes, only two: fixed term or unlimited term (permanent.) Temporary employees are not common either, reminiscent of Italy who banned it for so long. But post-Communist Romanian governments have clearly embraced pro-business labor laws, simplifying the tax code (both individual and corporate income tax is a flat 16% rate), getting rid of the quaint labor booklet or cărtea de muncă (similar to Brazil's carteira de trabalho) and overall making life much easier for employers and (some) employees. Although the dreadful and dreaded bureaucracy of old hasn't entirely disappeared, the current situation clearly has nothing to do with the olden days of the command economy.

HRIS vendor market
The Romanian HRIS market can be divided into two groups. Tier-1 vendors cater to the local subsidiaries of multinational groups and large Romanian companies (including utilities such as Romgaz and state agencies such as the Romanian Central Bank). Amazing how history tends to repeat itself, although with a twist: A decade ago I worked on the Oracle localization effort for Romania, leading a workshop in Bucharest; and now here I am running another localization workshop in Bucharest, but this time on the customer side. Tier-1 vendors include the usual suspects we know, with SAP on top (the only one with full localization including payroll) and Workday the #1 cloud HR vendor with limited localization (and the need to improve its Romanian translation).

...and their lei

Tier-2 vendors cater to the other Romanian companies: smaller in size but more numerous. Charisma and Wizrom are top of the pack, with Charisma the payroll vendor used by many multinational subsidiaries.

Culture and the rest
View of Bucharest's Royal Palace from the blogger's
room in the landmark Plaza Athénée hotel
My favorite hotel in Bucharest is the Plaza Athénée (now part of the Hilton hotel chain): in Communist times my mother would book a room there when we visited Bucharest since as a "foreigner" she was not allowed to stay with her cousin (the local authorities in her hometown, though, turned a blind eye - after all, they all went to school with her!) I continue the family tradition in this grand hotel, whose heyday was in the 1930s where glitterati, royalty, diplomats, and spies made of the Paris of the Balkans (as Bucharest was known) their HQ. It faces both Revolution Square (where hated dictator Ceaușescu's fall started) and the Royal Palace. The Old Town and most sights are within walking distance.

Romanian cinema has rapidly become one of the most dynamic in the world winning prizes in major festivals. I strongly recommend   Cristi Puiu's The Death of Mr. Lăzărescu, Cristian Mungiu's at times disturbing Behind the Hills and 4 Months, 3 Weeks and 2 Days. Many of Communist-era movies are forgettable, but I would single out the exceptional World War I drama Forest of the Hanged.

Romanians have produced great writers: Eugen Ionescu wrote Englezește fără profesor ("English Without a Teacher") in Romanian before he moved to Paris, Frenchified his name and wrote a French-language version which became La cantatrice chauve, a masterpiece of absurdist theater and the longest running play in French history (it just celebrated its 60th anniversary, playing every single day in the same tiny theater in the Latin Quarter in Paris). During the 30s, like all Romanian aristocrats, Princess Bibesco had a preference for the French language and wrote what is still amazing prose. Although many other good Romanian writers are only available in Romanian, Mihai Cărtărescu's amazing Nostalgia is available in English and I strongly recommend it. Transylvania-born Herta Müller writes in her native German (although she is fully bilingual), mainly about life in Communist-era Romania: for her efforts, she won the Nobel Prize for Literature.
The blogger, at age 10, with his mother in a
photographer's studio in Aiud, Transylvania

Speaking of languages, Romanian is a linguistic oddity: the only Latin-based language that maintains noun cases lost since Roman times, and with a strong Slavic influence. In other words, if you speak Russian and Italian, Romanian will be easy to learn. My favorite Romanian word? The joyful "lalelele" which means "the tulips."

Last but not least, Romanian food has to be sampled: often hearty, it relies on local produce, has some similarities to dishes found elsewhere in the Balkans. Many meats are served with mămăligă, similar to the Italian polenta, a type of mashed corn. I cannot eat eggplant purée, sarmale (meat in vine leaves)  and ardei copți (roast red peppers) without thinking fondly of my childhood summers where we grew those vegetables in the garden (water came from...a well! it was cold, clean  and delicious). Sweet cozonac and ișler (the latter, a Transylvanian specialty that reminds me of the Latin American alfajor)),especially when served with a shot of vişinată should round off your evening brilliantly. 

*King Michael holds another record: He is one of the  few monarchs in history to have both preceded and succeeded his father on the throne.

Next destination after Bucharest: Casablanca, Morocco. 

(This is the latest in a series of wide-ranging articles focusing on a single country. Previous posts:

July 2016: Middle Kingdom: Musings on Chinese HR, technology and the country
Nov. 2014: Of Switzerland, the country, its HR practice and technology landscape
June 2013: Thoughts on India, its HR/technology space 
Dec. 2012: My 20-Year Affair with Spain  - with more than 10,000 views it is one of my most popular articles
Aug. 2011: Brazil Rising: Thoughts on HR, technology and an emerging giant )

NOTE: All pictures are by/from the blogger and therefore copyrighted.

Thursday, May 4, 2017

The French presidential election: Going blank

Facing off for the top prize
So, here we are, just a few days' away from the runoff election that will decide who will be the most powerful man in the Western world. Yes, I mean it: the French president has more powers than his American counterpart who has to deal with Congress, a more often-than-not independent judiciary and a highly decentralized country where most decisions affecting people's lives are made by mayors or governors rather than by the Federal government. And other European leaders tend to be heads of government, sharing power with a head of state (elected or hereditary, depending on the case). As one of the major candidates reminded the nation in his campaign (see below), we live under a presidential monarchic who, apart from being elected, maintains most of the power and trappings of the "kings who built France," as the phrase goes (Les rois qui ont fait la France).

And, for once, the finalists are as different as can be, with two radically different views of what ails France and how the country should be run. After many decades of pretending otherwise, voters have finally realized that there is no difference between the mainstream parties and gave the Socialists and their partner-in-crime the Gaullists what Churchill called "the order of the boot". Something I have been calling for in as far back as 2011, when I wrote in a post subtitled "Democracy 2.0" that throughout the Western world whether you pick Party A or Party B makes no difference. They are just the two faces of the same coin, the establishment party. Or, to quote my beloved Gore Vidal, they are just the two wings of the single party.

Let me give you my two cents on the four candidates who made this campaign by being within a whisker of each other in both polls and actual election results, before I share with you my vote - and why.

François Fillon, a.k.a The Crook, had what was  undoubtedly the best program, and it certainly wasn't the most popular one as it offered the French some belt-tightening ahead. The only issue with it, were actually two, both related to how credible its plan is: First, when Fillon was in charge for five years, why didn't he implement  it? What guarantees do we have that once in charge he will deliver on his promises? Remember that when a private business makes false claims on its products, it can be penalized and fined; not so with politicians, who can promise you the moon and the stars and, once elected, do the opposite and still keep their seat. Second, the little credibility Fillon had disappeared with the financial scandal he got engulfed in. French voters can tell a liar and crook when they see one, and rewarded his campaign with the dubious distinction of  being the one which, in a 60-year period of time, managed to get a Conservative candidate disqualified for the runoff. If there is a dustbin of history for politicians, Fillon is heading straight for it.

The Gang of Four that made history

Marine Le Pen, a.k.a. The Loony or The Fruitcake (have your pick), has the silliest of all manifestos, basically based on hatred: of Arabs, Muslims, immigrants, Europe, the euro. Anything that can be offered to the people's anger as the source of their miseries, you'll find it in Ms Le Pen's bag. French politicians have been doing this for centuries: It used to be the Jews (in the Middle Ages) and Huguenots (in the 16th and 17th centuries). Nihil novi sub sole, as ancient Romans used to say (in their times, Christians were the scapegoats - food for thought.) Her success resides only on two facts: Her denunciation of the elite's abject failure in running the country (which hardly anybody can dispute) and that, having never been elected to office, she can claim the benefit of the doubt. Apart from that, her program of Fortress France does not make any sense at all.

Jean-Luc Mélenchon, a.k.a. The Commie (or Bolshie.) His sharp tongue, quick wit, consistent philosophy, grasp of details, brilliant, inventive campaign (those videos, holograms and the cruise on the Ile-de-France canals!) made him my favorite. He is the only one of all candidates, who realized that the corrupt leaders we got and their ineffective policies couldn't be separated from the sick political system we have. I fully agree with his calls for revamped political institutions, which he calls the 6th Republic, and many of its tenets such as the ability to recall all politicians. Is it normal that we  have to put up with a deeply unpopular and incompetent president as Hollande for so long? Is it normal that neither you and  I can decide on our compensation or rules governing most of our career, but politicians can? Is it normal that when we commit a felony or crime we go to court (and jail if found guilty) like everybody else, but not politicians who have their own court (Cour de justice de la  République) who rarely finds politicians guilty: and small wonder - its membership is largely made up of...fellow politicians! And even when they do find them guilty, they make the bizarre ruling that no punishment should be meted as we saw with the recent Christine Lagarde trial. Mélenchon is right to say that the system is rotten at the core and propose to do something about it, beyond the mere superficial slaps on the wrist for wayward politicians. I also fully support his call to move to real environmentally friendly policies, not the vague lip service most other politicians adopt.

However, on the economic front, I deeply disagree with Mélenchon. We already have the highest tax burden of the developed group of nations. If that could have translated in higher growth and more employment, we would have seen it. And I feel very uncomfortable with his anti-"rich" rhetoric. What is wrong with being rich, if you've earned it through your hard work - or inherited it? Unless the rich have gotten there through fraud and murder, confiscating their wealth strikes me as deeply unfair and demotivating for society at large.

Emmanuel Macron, a.k.a The Dapper (or the Charmer). Let's give credit where credit is due: His is the most amazing political career France has ever seen, and few countries can boast a novice with no experience of running a campaign, no party, no funds, coming from nowhere and about to win the ultimate prize. For sheer audacity, vision, and management skill, one has to acknowledge his amazing talents and wonder what he could do for the country if he continued to evince the same skills once in office. For a while, he was my favorite. Even when I couldn't completely shake off a feeling that he may just be a manipulator, who saw an opportunity and seized it. (Even then, still a brilliant one.) However, as  I shared several times with my old friend, C.T.H., a member of his campaign team, as soon as Macron put meat on the bone of his program, that's when he lost me. Freeing 80% of French households of the Taxe d'habitation (a kind of property tax) is typical of the worst of the French political-administrative establishment. First of all, that's a local tax, so what is he doing, apart from being generous with other people's money? And then, the lucky ones aren't exactly exempt from this tax, it's the central government that pays it to cities and towns on  their behalf, but should the rate go up, then you will still be liable for it. Again, what's the point  of putting in place such a complicated scheme when the objective, increasing people's purchasing power, could be done via levers the central government controls such as VAT, income rebates or credits. A bad idea, to be jettisoned immediately, as the idea to increase the CSG-based social security taxes, another tax created in the 1990s: then with a 1.1% rate, it currently stands at 15;5% and he wants to increase it? Wasn't he supposed to be a liberal (in the European sense?) As for his non-reform of the net-worth tax (ISF), it is absurd to remove most assets from it, except the one that affects most people who don't make money out of it: homeowners.

Worse, unlike Mélenchon, he seems to be very happy to keep the political system as it  is. Maybe just tinker a little bit here and there ("moralisation de la vie publique"), but over all, let's not rock the boat. Which rekindles my suspicion that Macron may just be all PR and marketing, all fluff, with some Conservative economic policies, some left-wing social policies,  all repackaged by a nice smile and endearing family life. But still a politician bent on grabbing power. And his will to rule by decree is alarming - this is the "presidential monarch" Mélenchon is right to denounce.

Le protest vote
Based on this, I just can't bring myself to vote for Macron. And I won't cast a negative vote: voting for him, to block the Loony. Since neither of the two has managed to convince me, then I'm voting blank. I do hope that Macron will prove my concerns wrong, and manage to fix some of the country's most serious issues. If  he does, then in five years' time, I will be more than glad to vote for him. As for Blondie, I do hope that they commit her either to an institution or behind bars: either way we'll be free of that nightmare. Until 2022 when, should Macron fail, then the National Front could finally grab the elusive prize it has been after for several decades. After all, that's a French political tradition: Fight long enough, and you end up in the Elysée Palace.

Tuesday, February 21, 2017

Cooking the books: How Oracle inflates cloud revenue figures and what it means for you

The truth will always out
Technology firms have never been stranger to hyperbole, whether discussing the alleged value their products bring, customer numbers or the size of their business. As I described in my book, High-Tech Planet: Secrets of an IT Road Warrior, being creative with facts is par for the course for most of them. However,  those vendors scrambling frantically to move from a legacy on-premise business to the brave new world of cloud-based systems, find themselves so desperate that creativity with reality takes on new forms.

Oracle, though by no stretch of the imagination the only offender, is doubtlessly the worst one. This is compounded by the fact that it came late and reluctantly to the cloud (watch this video of Oracle's boss Larry Ellison pooh-poohing the cloud). After its on-premise succession product Fusion failed to gain much traction and its Sun hardware acquisition turned out to be in the words of former Oracle Über -VP of Sales, Keith Block, " a dud", Oracle and Larry Ellison (the two are interchangeable) had no other choice but to go down the cloud route.

Unfortunately the software industry, among others, is known for its first-mover advantage meaning that by the time Oracle decided to do something about (in) the cloud, many of its customers had already defected to Salesforce (for CRM) and Workday (for HR.) Resorting to its good old ways, Ellison didn't hesitate to predict quite outlandishly that his company would bury Workday. Post-truth statements and alternative facts didn't premiere with the Trump administration; Oracle had started the ball rolling earlier. However, since "facts are stubborn" as Lenin said, Oracle felt it had to go one step further: falsify its cloud revenue figures.

Last June, a courageous Oracle employee, Svetlana Blackburn, a finance manager, came forward denouncing Oracle for pressuring her to inflate cloud sales figures (here's another report by Reuters). The various tricks used by a vendor trying to inflate its cloud figures include, but are not limited to, the following :

  • Lump on-premise and cloud figures together and then pretend it's all cloud
  • Give huge credit to customers moving their on-premise license value to the cloud and consider it as booked cloud sales
  • Give a cloud product for free and then extrapolate its sales value to other modules
  • Sell a cloud subscription for a pilot population but book it as if it were for the whole company headcount.
Of course, Oracle immediately fired the whistleblower claiming she was being terminated for low performance. Yeah, right! Ms. Blackburn went to court, Oracle stood its ground saying it had done nothing wrong until last week it capitulated by offering an out-of court settlement. As we all know, nobody offers a settlement unless they have done something wrong. Oracle hoped to put behind it the embarrassing scandal and avoid more damaging revelations to come forward.

What does this mean for you?

As a customer, you need to get a sense of how serious an offering is, what its long-term prospects are and how likely that a sizable customer base will ensure that continuing investment in the platform is assured. Most of the clients I work with and who include Oracle Fusion in the evaluation, end up not shortlisting it for various reasons including fuzzy economics and product strategy. 

As an employee/candidate, especially from the sales function, you need guarantees that your employer will not fiddle sales figures with the aim to shortchange you. Interestingly, the same week that it was confirmed that Oracle indeed forges its cloud sales figures (last week), the company was on the receiving end of a $150 million class-action lawsuit by sales employees complaining about the company's efforts to avoid paying them their commissions.

Finally, as an investor you want to ensure that your investment dollars are well used and that you are not throwing good money after bad*.  Interestingly, too, when the whistleblower revealed Oracle's accounting shenanigans last June, a group of investors launched another lawsuit against Oracle. And for the past (rolling) year, as the below graph shows, Oracle's stock has been languishing whereas its pure, native cloud competitors' has shot up by 40 to 50%. 

A tale of two vendor types: native and adopted cloud

In summary, we  can see that Oracle's desperate behavior, far from helping it, is making matters worse: customers are not joining in droves, cloud sales remain stubbornly a tiny fraction of its overall revenue, in spite of all the figure massaging, and the stock price evolution reflects that situation. Until and  unless Oracle makes some serious changes to its product strategy/sales approach, and culture, it is no rocket science to see what the end game is likely to be: increasing irrelevance. 

Losing steam

*The blogger's clients include not only end-user organizations evaluating/selecting/ implementing/expanding new HRIS systems, but also investors requesting analysis as to HR system vendors' market potential.