Of cars and HR software: Metaphor-based HRIS tips

PARIS

Remember that great song "Why Can't a Woman Be More Like a Man?" from that wittiest of musicals, My Fair Lady? Well, for the past couple of decades that I have been in the HR technology industry, I have been asking myself a similar question: Why can't my HR software be like a car? Throughout my career I have peppered my articles, presentations and meetings with car metaphors to drive the various points I was trying to make. (Here's the scene from the 1964 movie with Rex Harrison singing, well more like uttering, the song.)

You'll find hereafter some of the most frequent ones. Note that most would apply to enterprise software, not HR only; however, since I am an HR technology person through and through, you'll hardly be surprised that's my focus.

System Evaluation
This is the oldest car-metaphor case I can recall, having used it for at least 20 years. In the latest 1990s when I started out as an HR system analyst-cum-consultant spending most of my time advising French companies on which HR system to select, I would use this metaphor quite often. Actually so much that I put it early on in my book, High-Tech Planet. Here's the relevant excerpt of the metaphor which I still use to warn my clients off including ever single product specification whim that might cross their mind just because "it can be useful."

Having four wheels on a car rooftop is certainly useful in case the car were to turn over; but since no car maker offers that, it would be a waste of time to include that feature in a list of requirements, especially when every business process is now available in a computer system developed, sold and serviced by countless companies. Delphi Tech was one of such companies. Actually, it was more than just one of them. It was the biggest, the largest, the best-known one: indeed, as Dick claimed, Delphi had to a large extent created the business of corporate software, or at least contributed to its development. It was, as Dick would say, the Rolls-Royce of computer systems.  (High-Tech Planet: Secrets of  an IT Road Warrior, 2010 edition, p. 3.)

I also warn against using SIs (system implementers) as selection advisors for obvious reasons: SIs tend to focus on one or two systems; many, especially the boutique ones, are actually one-trick ponies. If you only have experience driving one or two cars, you will only recommend those ones. Or using research firms like Gartner who have limited, if any, HRIS implementation experience. This is like recommending a car based on several great features, but forgetting to ask the prospective buyer whether they can drive.

And beware overkill: When famed French soccer club Paris-Saint-Germain bought Workday, considering their small headcount and limited resources, it was clearly like buying a huge bus just for you, your wife and your two kids. Or like buying a Lamborghini to avoid walking on your driveway to your mailbox and back.

Finally, I strongly advise against falling for what I call the "critical capabilities" trap. If you only focus on these, you are likely to overlook other useful aspects and not be able to really pick the system that is best for you. Such an approach is as smart as when buying  a car to look only at the number of wheels and car paint. Three cars can all have the same features (tires, automatic transmission, air conditioning), but when you use them you will know which one is better. 

Product Design
As someone who spent a big chunk of his career in product strategy and management roles (at PeopleSoft and Fidelity Investments' HR Access) I am still amazed at how HR system  vendors make a point to diverge on fundamental design choices. If SAP decides that one process will require different screens, you can be sure that Oracle would prefer to have just one screen (albeit a long one obliging the user to scroll down endlessly) while Workday would probably prefer to have several tabs on the same screen. This can be very confusing for users who, as part of their daily HR tasks, have to toggle back and forth between several HR applications. Wouldn't it be nice if they were all designed along similar lines? 

Just imagine that if Ford puts the brake pedal to the left of the accelerator, so Renault puts it to the right. If BMW  uses a steering wheel to enable the driver to move the front wheels, so everyone else must use levers and sticks and chains. There would be almost no learning-curve effects either from a manufacturing or a usability perspective. And yet, HR software vendors do exactly that, which is quite insane, especially when you know that the musical-chairs game so prevalent among software executives means it's basically the same folks who oversee products across companies. 


Change Management
What many end-user companies are still grappling with as part of their new HR system implementations, especially in the cloud, is the right mix between configuration and training which now goes by the fancy name of change management. As I often tell my client, redoing you car's body and changing the engine would be of little use if the driver is incompetent. If you never learned to drive, buy a BMW and then crash it into a wall , how is that the car maker's fault? 

And when a client insists on implementing the same inadequate process again and again, I warn them against reinventing the flat tire.


HR System Implementation
There are many companies that in their move to cloud HR adopted the approach whereby they start with the low-hanging fruit of talent modules before, like an afterthought, implementing Core HR. More often than not, the added complexity doesn't make up for the lower risk. Core HR is your HRIS engine, without it your global HRIS simply won’t work. It is like trying to drive without a steering wheel: you’re not going to go far.

Discussing the Implementation phase one is often reminded that the Design phase seems never to have been closed since users will always try until the very last moment (and even after!) to change the design. This is very dangerous and akin to changing the tyre while driving the car: recipe for disaster.

Another maddening aspect of requirements is that companies often come up with contradictory requirements. Imagine that you're driving a car and when you arrive at a crossroads you ask for instructions, "left or right?" "Both," is the answer you get. 

Cloud/SaaS HR for the dummies
Surprising as it may seem, there are still many corporate executives involved in on-premise-to-cloud transition projects who are still struggling with the cloud concept. This is where I probably make the most of the car metaphor. Starting at the evaluation stage, I warn my clients about  dinosaur vendors like Oracle who try to make us believe that they can tweak on-premise PeopleSoft into a cloud offering. It's like saying that if you affix wings to a car and add  a pointed nose along with powerful reactors, and find a way to hide the wheels, you can turn a car into a plane. It just won't fly - in more sense than one.  

Or putting a new body on a  30-year car. Would you fall for that?

If you still decide to take the risk to adopt half-baked products, then be prepared to fork out the funds needed to have onboard several consultants for a long period of time and whose function will be to fix the inevitable bugs and issues that are bound to arise. Remember that when the first automobiles came, owners needed to hire a mechanic full-time because those first cars had a bad habit of always breaking down.

For those who can't wrap their head around capex and opex (that's capital and operation expenditure to you) I explain that Saas is like leasing a car versus buying it. When they compare that with the millions they used to pay upfront just for the honor of being an SAP or Oracle customer, these executives' eyes brighten up immediately.

One car metaphor I used a lot when the cloud model arrived, and less so now as the cloud has gone mainstream, aimed at helping users to understand the key difference between traditional ERP (on-premise) and the cloud (SaaS based.) In order to convince the pro-ERP camp I explained to them they can't stop progress.  When automobiles arrived, they coexisted for a while with horse-drawn carriages before these got ditched because everybody saw that cars were faster and more practical. As an early advocate of the cloud model, against Oracle's (in)famous scorning of the cloud, I am glad to see that I eventually was vindicated by the market. (See my Jan. 2011 article, "Can software dinosaurs reinvent themselves as cloud-based vendors?")

One concept that, surprise, surprise, dinosaur vendors  try to push is the hybrid system of on-premise + SaaS system supposed to work in perfect harmony like hybrid cars. I debunk it by pointing that it's like saying, "Oh you don’t like the engine in your car, no problem, we can remove it for you and attach the car to two horses instead." Really!

Another fallacy about hybrid HR systems is that customers are led to believe that it's the best of two worlds. Come on! Will you really buy half of a Porsche and couple it with half of a Ferrari? 

SaaS, a relatively new concept,  is often confused with BPO (outsourcing the full process, be it payroll or recruiting.) When a client tells me they are not sure whether they should move to a SaaS  vendor or a BPO one, I tell them they are mixing things: First of all, you have to analyze and make a decision whether you want to run your full process inhouse or out. And only then can you decide, if inhouse, whether Saas or on-premise; and, if outsourced, then what vendor. In car terms, it is like saying, " I’m tired, I can’t walk to work, so I’ll invest in either a bike or a car." Well, they are two different tings, you should be either comparing bike/motorbike or motor bike/car but a bike vs. a car doesn't make sense. Like the proverbial apples and oranges.

Of second-hand cars
Of  course, no car metaphor would be complete without the time-honored used-car example. When Oracle provides its prospects with heavy discounts to adopt Fusion, I remind them that you get what you pay for: If the price of a second-hand car ("used car" to most Americans) is too good to be true, it's probably because it is neither good nor true. Also, you buy a second-hand car if  you’re a good mechanic (in HR technology words, you have enough in-house skilled resources), because then you can fix it. Otherwise, you’re on your own: Compare this with the first-automobile and mechanic metaphor a couple of paragraphs before.

Sales 
I could spend gazillions of pixels and tire your eyes out of their sockets decrying software sales tactics (the object of my aforementioned book.) One particular tactic which I recently saw  on a global HRIS project with payroll outsourcer ADP was when the vendor stated they were willing to bid with SAP SuccessFactors Core HR (Employee Central) but on the condition that my client bought two payrolls from ADP. I shot back at them, "How would feel if your car dealer offered to sell you a car only if you accepted to also buy two bikes?"

Vendor Management
Despite the Buyer Beware motto, customers  are entitled to escalate issues, especially when a promised feature is not working as touted in sales demos - or, worse, is not available. However, I find it misguided from some customers to focus on minor issues while not seeing the bigger picture. It is akin to buying a car that is  bigger, nicer and faster and yet spend an inordinate amount of time on small imperfections. As in life in general, you should choose your battles wisely: know which ones are worth fighting, and which ones should not be launched.

HAPPY NEW YEAR TO ALL!

This is the latest in an HRIS Selection & Implementation Tips series. Previous posts included:
- April 2018: Cloud HR Implementation Tips: Focus on Migration
- Jan. 2016:  Pricing and Contracting with Your Cloud Vendor: Tips and Tricks
- Jan.2013:  An HR leader's Top 10 New Year's Resolutions


(The fact that the blogger-analyst-consultant has been spending the better part of the last year and a half on implementing a new global HRIS for one of the world's largest car makers is obviously a cute coincidence, since I have been using these metaphors for two decades now.)

SOW - A Comparison of 3 Global Cloud HR vendors: SAP, Oracle and Workday

GENEVA & NEW YORK

The leader, the follower and the laggard

I have been asked for a while to share my system-evaluation and -implementation experience with the community and my readership by comparing the three most frequently shortlisted cloud HR systems: SAP (SuccessFactors), Oracle (Fusion) and Workday. I will from now on refer to them as SOW, to be pronounced either to rhyme with "low" (as in "low adoption") or to sound like a female pig since some of these vendors' features are no better than lipstick on a pig. *

Of apples and oranges
Although there are more than three cloud-based HR vendors, the reason I am limiting myself to the SOW usual suspects is because they are the only ones with a global reach to meet the complex requirements of multinational companies. Despite attempts to the contrary, Ultimate is still a US vendor, Meta4 has all but disappeared, HR Access has been folded into Sopra and Cornerstone has yet to make up its mind whether to develop a full-fledged HR Admin module - and without an HR system of record you cannot have a global HRIS worth its salt. ADP is mainly a payroll outsourcer with multiple products (some in the cloud and covering various HR processes) but not a global HR system of record. Infor has yet to rationalize its product offering à la Fusion and its Lawson offering was never a truly global HRIS. And some of these vendors' "cloud" offerings are really nothing more than a quick repackaging of their old hosting business. So, here we are, stuck with SOW.

This being said, it is worth remembering that to a large extent  we are comparing apples and oranges since there are such key differences between these vendors that some evaluation exercises can turn to the surreal. Oracle, for instance, is mainly a database vendor with a strong anti-cloud history and a PeopleSoft legacy customer base which has yet to endorse Oracle Fusion. SAP, which comes from the application world, has therefore more serious credentials, reinforced by its continuing investment in the SuccessFactors platform. Its main issue is that, in addition to some questionable product decisions, it has yet to articulate a cogent cloud-based ERP strategy.  This is the main reason why I refer to Oracle and SAP (along with some others) as dinosaurs in a popular blog post. Workday, on the other hand, is of course a native cloud vendor which has quickly shot to the top of the league table with an offering, business culture and service quality that the other dinosaurs can only dream of emulating. Yet, Workday is far from perfect and also has some serious issues.

SaaS and cloud
Some companies may not care about the differences between SaaS and cloud, some may even be ignorant of them, but it is good to remind my readership of the meaning of these  two concepts which are often and wrongly used interchangeably. SaaS is the most advanced form of the cloud where all parts of an offering (hardware, database, software) come from a  single vendor. All you the customer need to provide is a browser-toting device (desktop/tablet/smartphone) and you're in business. Workday is thus a true SaaS vendor. SuccessFactors, whose offering relies on some on-premise legacy features which are hosted, is getting there but cannot be considered 100% SaaS. As for Oracle, who first developed its Fusion product as  an on-premise solution, and can deliver it as a hosted system, it is therefore in the cloud but of course not SaaS. So remember this key differentiator: All SaaS systems are by definition cloud-based, but the reverse is not true.


Stats wars
As the community knows, I have zero tolerance for fanciful figures, especially around customer numbers. Some of the fairy tales I hear are so absurd that I am unsure whether to laugh or sob when I hear them. The below scorecards provide a reasonable count of LIVE customers as per each cloud system. If the customer is still on PeopleSoft for HR Admin and has interfaced it to Taleo or some Fusion talent modules, Oracle will refer to this misleadingly as Cloud HCM. I don't. Same thing for SAP: If Employee Central is not implemented, then I do not count SuccessFactors as a reference - it is only a talent project, not a global HR one. Workday is easier since, by definition, their system cannot run without core HR as a foundation (although some customers use a light HR version to start with talent processes such as performance.)

Integrated/interfaced/unified/organic etc.
After phony customer count figures, the biggest source of BS that comes from vendors has to do with how well integrated the offering is. Here misinformation is rife, with Oracle the undisputed leader. Fusion, which can come in different flavors as mentioned earlier (public cloud, private cloud, on-premise - see below) does not necessarily cover all HR processes and most customers prefer to hang on to the legacy core HR. Talent features can come from either Fusion or Taleo. And within Taleo remember that the Learn.com product was built on .NET technology whereas Taleo was built on Java.

SAP SuccessFactors at least developed Employee Central on its own technology stack; however Plateau was not a 100% SaaS offering, and Concur and Fieldglass are based on other technologies. The other SF modules are also on different technologies which means a customer running the whole suite will have different code bases AND versions. (And as for Multiposting, well, nobody knows when/if it will be integrated in SF/EC.) Not pretty, and not full SaaS. And, of course, Employee Central Payroll is anything but an Employee Central payroll.

Workday, on the other hand, as befits a product developed from scratch and organically, has the cleanest data model with all HR processes now available, except Learning. Payroll is largely work in progress, with the last two countries released (UK, France) yet to go live with a customer. I still have my doubts as to the ability of a single global SaaS payroll vendor to deliver the goods in an efficient manner.
I can already hear some jump and say, "Hold on a second. Workday, too, has integrated third-party technologies after acquiring Cape Clear and Identified." Most true, but there is a fundamental difference when you integrate a third-party product as part of your underlying technology and when you do it to cover a specific HR domain. With the latter you find yourself with a different look and feel, different workflows, a different data model. Any HR user who had to struggle with different products would tell you what a nightmare it is.

3 -VENDOR ANALYSIS: COMPANY COMPARISON

Oracle Fusion has come a long way from an on-premise, complex-to-implement, functionally limited product with an ugly look and feel (those overloaded screens with horrid blue!), to one that can be deployed in the cloud. To get a sense of Fusion's background, refer to my post "Error 404: Oracle Fusion not found".) Since then, it has made progress (especially on the  UI front when it moved from FusionFX to Skyros), but its two other competitors, both cloud natives, have moved faster and often better. Oracle still misses many key HR domains (see the product scorecard below) and its vision and roadmap at best are fuzzy, at worse don't make any sense: Why waste its time developing unneeded products such as Employee Wellness, Reputation Management, My Volunteering or low-priority ones such as HR Help Desk, and still miss, Tier-1 country localizations or Recruitment on the Fusion platform? The co-existence or hybrid approach is not a meaningful differentiator, but actually a sign of weakness: Missing key bits, Oracle tends to lump everything together and it's up to the customer to make sense of what is what and how to integrate it, not an easy task when Oracle is still not very forthcoming when it comes to its offering, as explained below.

Public Cloud, Private Cloud, and Cloud ServicesThe Taleo product line is a case in point: Officially rebranded as Oracle Talent Cloud (but on their website still referred to as Oracle Taleo Cloud) it is supposed to be the Recruiting offering to be interfaced to Fusion Core HR. However, the overlap issues (Fusion Performance vs Taleo Performance, say, or Fusion Compensation vs Taleo Compensation) has yet to be resolved. Ask the question and  you'll get a mumble from poor sales executives who are none the wiser. Note that Taleo is a hodgepodge of various acquisitions itself: Learn.com (with its scaling issues), Jobpartners, Recruitforce and Vurv, and Wordwide Compensation. (Not to mention that there are two Taleo flavors that go by the Enterprise and Business monikers)Talking about Compensation I find it a pity that Fusion does not allow user-defined logic to go into compensation elements, for instance to add a regional rate to a pay rate and calculate an employee's compensation on that basis.
Fusion, born as an on-premise product, can be hosted in a private cloud (customer's own environment) or shared (public cloud) with different deployment implications.
As if  the (con)Fusion was not enough, you have PeopleSoft Cloud Service which is as far from a SaaS offering as St Petersburg, Florida is from St Petersburg, Russia.
Then there is a host of other products such as Right Now Policy Automation (benefit eligibility), another acquisition, which Oracle throws at befuddled customers.
Making sense of Oracle's offering is clearly not for the faint-hearted.

Great products are built by great people. The converse is also true: Mediocre people build mediocre products. Oracle, with its stifling bureaucracy and awful management, has problems attracting and retaining quality people, especially in the HCM ¨product line. Add to that the fact that in Oracle's highly political culture the technology side has always had the upper hand versus product, and that HCM has always been the Cinderella application, only getting attention when a top leader emerges (first PeopleSoft, and now Workday.) This explains why the company never features in Great Places To Work league tables and has suffered from a steady hemorrhage of its best and brightest from PeopleSoft who have been poached from Workday, leaving a lot of deadwood behind.

An even bigger biggest issue with Oracle is how it (mis)treats its long-suffering customers. Just this week, an old customer, the  French Civil Aviation Authority, who has had enough of Oracle's abusive licensing and audit practices, decided to discontinue the use of all Oracle products. Last year, two other French companies, Carrefour and AFPA, went to court over the same issues and won. In 2014, a survey by the Campaign for Clear Licensing of 100 global Oracle customers found that 92% of them were deeply unhappy with the vendor. In the US, none other than the federal government decided in 2012 to ban Oracle from bidding for its business due to the vendor's questionable sales practices. Well, you get the idea. Unless you evince a particularly strong masochistic streak, selecting Oracle often  means tough times ahead.

On the technology front, Fusion, contrary to the vendor's spin, is not a "fusion" of its portfolio applications, but neither is it exclusively based on its unpopular EBS product line even if it borrows many features from it such as FastFormulas and Flexfields - the latter permeates Fusion even more than with EBS thus allowing good customization possibilities. However, Forms have mercifully been retired in favor of more modern Java and SOA-based technology. Outbound integration is a big headache as is data migration, even from Oracle's legacy systems. It is noteworthy that if many Oracle customers prefer to implement Fusion in the cloud rather than on-premise it is (in addition to the natural preference for the cloud), because, first, the HR Admin part has yet to reach functional parity with PeopleSoft (or Workday) and, second, the technical complexity of doing so is not to be ignored (just the sizing requirements would discourage the best-intentioned customer.)

Although initial pricing can be quite seductive (Oracle heavily discounts Fusion in order to drive up customer adoption, or offers a credit to swap on-premise applications for cloud-based Fusion), the vendor's customer-relations record, as mentioned earlier, is far from reassuring. Also, if you are an-on premise customer and are renewing/extending your license, Oracle will throw a cloud subscription at you included in the package. You might as well take it, even if you are unsure whether you'll actually move to the cloud.

In summary, customers  who already run an Oracle HR application (PeopleSoft, EBS, JDE), have a good rapport with the vendor (admittedly a rare occurrence), negotiate a financially interesting migration, do not need cutting-edge technology or terrific look and feel, and don't mind not being pampered or the complex integration behind products that come from disparate technological stacks, can look at Fusion seriously, especially when taking into account a strong point: its reversibility. Surprising as it may sound, there are still companies out there that are wary of the cloud (after the NSA snooping scandal and the current legal tug-of-war between US authorities and Apple and Microsoft you can't really blame them): With Oracle you can bring your HR system within your corporate firewall without having to switch systems and go through another complex implementation. This advantage comes at a hefty price, though: no single code line for all customers since, depending on what flavor of Fusion customers have, they can stay on their version much longer than public cloud customers. There are therefore multiple versions of Fusion at any given time, which increases the cost of running the product. And, as we all know, the customer always ends up bearing the costs. And if you are a customer who is still on the old look and feel, moving to the new one is not a straightforward process.

The world's largest business-software vendor, and the one with the most localized payrolls, took a leaf from its nemesis Oracle when it went down the acquisition road by acquiring SuccessFactors (SF). However, as I explained in detail in my blog post on their strategy just after the transaction was announced, SAP differs markedly from Oracle: Rather than build from scratch a product for the cloud, in which neither had any experience, SAP decided to continue investing in the SF platform by beefing up its Core HR/HR Admin product a.k.a. Employee Central (EC). Although the latter has grown significantly since its earlier releases, it has yet to catch up to the group's leader, Workday.

One increasingly important strong point of SF is that it belongs to a European vendor. With all the data-privacy issues raised by NSA snooping, many companies (especially European ones) are loath to go with a US-based vendor with a loss-of-data Sword of Damocles hanging over them.

Three weaknesses from SAP SF have yet to be solved:

-SF is still missing a payroll module based on its own platform, and the misleading Employee Central Payroll (in reality a hosted SAP Payroll) is no substitute for a truly integrated offering. SAP brought us the largest number of localized payrolls on earth; Why can't it use that expertise to enhance SF and make it a truly global and comprehensive HR offering? No full-fledged global HR system has come to market without its own payroll, so the jury is still out on whether SAP can be the exception that proves the rule.

- The multiple code lines and releases that make up the SF platform need to converge on a single code line and release based on EC. It is bad product design and worse customer support not to inform a customer that they are not enjoying a critical feature because they are on a older release  as happens with many customers. (Workday would never allow that to happen if only because the window customers have to move from one release to another is expressed in weeks, not months or years as is the case with SAP or Oracle.)

- SAP is also the vendor that brought us the integrated ERP. But it seems that all the strongly vaunted advantages of a single-platform ERP got lost in the move from on-premise to the cloud. All the HANA'ing in the world cannot hide the fact that the company that gave us the on-premise integrated business software is incapable of pulling the same trick in the brave new world of the cloud.

In a recent blog I compared SF's and Workday's pricing so no need for me to repeat myself since that analysis is recent and  therefore up to date. Oracle's talent-retaining issues are not unknown to SAP (I covered it in my recently updated blog post "Could the last executive leaving SAP turn the lights off, please?")

Another issue SAP needs to fix is the implementation methodology. SF came with its own methodology, SAP had another one, and integration partners are at times unaware of which is which. This will hardly help in building confidence in the offering. And the implementation template that SF provides does not list implementation activities in detail so you are often on your own. (Compare that with the fastidiously detailed documents you get from Workday)

Noteworthy is SAP's equivalent to Oracle's co-existence deployment model called here the Talent Hybrid model. The two approaches are not much to write home about since customers have been doing it for a while: Integrating their on-premise HR system of record with cloud-based talent features. Actually, customers started doing it even before SAP and SF found themselves under the same roof.

Who is the most likely customer for SF as a global HRIS? Experience shows that it is mainly SAP's on-premise customers who move to the cloud with it, especially if they are already using SF for their talent needs (in particular Performance or Learning.) However, an increasing number of SAP's on-premise customers include Workday in their cloud evaluation, and a worryingly lengthening list have decided to go with it. SAP, as a vendor, and SF, as a product, need to make themselves more attractive to retain these fickle customers.

3 -VENDOR ANALYSIS: PRODUCT COMPARISON

The HR thought leader and Wall Street darling has revolutionized the HR technology world (that search-based navigation was truly something out of this world when it first came out) and has just passed $1 billion in revenue (in comparison, Oracle's cloud HR business makes up less than 1% of its total revenue.) Workday also has more customers using it as a cloud-based HR system of record than Oracle and SAP  put together. They say that plagiarism is the best form of flattery; considering how many features of Fusion and SuccessFactors were obviously copied from Workday who premiered them, the newest kid on the block still retains its thought leader's crown.

What is attracting the crowds is a native-cloud product, built with consumer-grade usability, a depth of functionality that only those who built PeopleSoft could engineer, a customer focus and engagement that is still unique in the industry. The latter has made the vendor evolve its approach significantly: For instance, from the four releases a year at the beginning to a more manageable two now. Workday has also listened to customers and forsaken its rigidly neutral system-integrator (SI) approach: it will now recommend a specific SI for a specific project, something that was anathema for so long.

All the oohing and aahing about Workday, most of it well deserved, cannot hide that not everything is hunky-dory in the Pleasanton, CA-based HRIS heaven. You can read my Open Letter to Workday's founders for a discussion of these issues. There are still some surprising holes to plug in the offering such as the production of contracts and offer letters or some workflow limitations (despite the fact that their workflow framework is the best of the three.) So far, Payroll has been limited to North America and no date has been set for the release of the Learning piece. The talent features have been improved significantly, in no small measure through the addition  of a Recruitment module (some integration issues with their Core HR need  to be fixed), but Workday has yet to reach functional parity with SuccessFactors in the talent space.

Reporting is undoubtedly one of Workday's strongest suits. For those who use PeopleSoft, it is such a relief not to need to be a PeopleTools expert to write Workday reports. To a large extent you can even say that Workday is a collection of reports since wherever you are in the system you can pull up the relevant reports many of which are "actionable" to use the hackneyed word. But, careful, user-friendliness here is more for the HR team, not occasional users, and it may be better to restrict the creation of reports to a core reporting team rather than jeopardize consistency by having any/everybody duplicating existing reports.

Customization, or lack thereof, is the hallmark of SaaS systems. Unfortunately, in the  real world companies need a certain amount of customization which will not be lost when upgrading. Squaring the circle, you may think.  Workday's custom objects is a move in the right direction, but it has its limitations: There are only so many custom objects you can have, you cannot use them where you see fit and cannot pull them up necessarily where needed. SuccessFactors, with its Metadata Framework-based extensibility approach (especially in Employee Central), does a better job in that respect and so does Oracle (with Flexfields, as mentioned earlier), as befits a product that is available both on-premise and in the cloud.

Workday's greatest success has probably been that a significant segment of their customers comes from companies that either had a Tier-2 vendor or did not have a single, global HR system of record (they used various payrolls and different talent tools.) When these customers finally get their act together, they tend to look at Workday first, rarely at SAP or Oracle. However, cloud-seeking SAP and Oracle customers will almost always evaluate Workday, even if they don’t systematically select it: that does not bode well for the dinosaurs’ cloud future.

3 -VENDOR ANALYSIS: TECHNOLOGY COMPARISON

NOTE ON SCORECARD METHODOLOGY
The grading is based on the many RFPs I have worked on and demos I have attended, along with my own knowledge of these products (derived in no small part from my own use of the systems) and feedback from customers other than the ones I have worked for.
The analysis has been done based on three sets of criteria: Vendor, Product and underlying Technology. Where awarding a grade does not make sense (such as pricing: expensive does not in and of itself mean bad, since often quality comes at a premium) I have left the relevant cells colorless. An explanation of most of the grades can be found throughout this blog post, but I have also mentioned them in the scorecards so that the reader can understand why a vendor is getting a YELLOW rather than an AMBER, for instance.

NOTE ON SOURCES AND COPYRIGHT
All data and graphs are by Ahmed Limam who is hereby asserting his copyright. They can be referred to with proper copyright and authorship acknowledgement.

*Some of the ideas in this post were first presented in an article I wrote for TechTarget in January 2015.

(In addition to the vendor-specific posts I mention throughout this piece, there are many more I wrote in the past few years focusing on a vendor or a particular issue. The most popular ones can be found in the list provided in the top-right corner and automatically updated based on viewer number. For other posts, you'll have to scroll down and search for them one by one). 

An open letter to Workday's Bhusri and Duffield: Time to fix Europe

RIO DE JANEIRO

Dear Dave and Aneel,

Drip-feeding country extensions
is NOT the right strategy

A great admirer of Workday's since its beginnings, for various reasons you will find summarized in several of my blog posts, the global and European person I am was more than gratified to see that you have decided to open an office in Germany. However, this cannot hide the fact that  before you open a new market, you should make sure the previous ones are up and running.

The Frenchman in me cannot therefore understand why you are expanding in Germany when you have yet to make France work. It was exactly three years ago  that you opened the French office and in that period of time you have only signed up two French customers: Lafarge and Sanofi. Even Oracle has managed to sign up more Fusion customers in France, which is the ultimate insult. With France being PeopleSoft's most successful market outside the United States, it should have been a piece of cake to convert many of these customers to Workday. Adding insult to injury, Danone, of all customers switched from PeopleSoft to... SuccessFactors when it should have been yours. A crime!

What has gone wrong?

The most serious mistake you have made is one typical of American multinaltionals: starting a presence in the UK and thinking that with that "Europe is solved." The UK, as many British people may have told you, is not in Europe, but off Europe. In a couple of years, they may no longer even be in the European Union. Opening an office in London is no more meaningful than opening one in Chicago. With most EMEA executives being UK-based (and British) you have made your EMEA organization EMEA in name only. As is natural they would focus on what they know best: the UK market, which explains your success in the UK, and then the "low-hanging fruit" of the Netherlands and Scandinavia. But the rest is as far away from them as planet Mars. The appointment of Chano Fernandez, a Spanish national, was a step in the right direction, but I have a feeling you didn't hire him because he hails from Spain, a country close to my heart (read my blog post "My 20-Year Affair with Spain") but because he was at SAP. And, anyway, since he was appointed, a year ago, I have yet to see a single Spanish company select Workday. Or an Italian company. Or a German one.

You have clearly made some casting mistakes, hiring the wrong people for the wrong roles in the wrong geography. Worse, many of the people you have hired in key positions have no prior experience in HR systems, your flagship product. Don't get me wrong: it may make sense sometimes to hire people from a  wider field, but when your product is first and foremost about HR, it boggles the mind to see so many people in key Workday EMEA roles who have no experience of talking to HR leaders, have no sense of the local HR ecosystem or a deep understanding of the competition.

As you know, every HR market is quite parochial. Sending to France a high-flying VP from HQ who speaks no French, cannot spell the name of some of the competitors, is not on a first-name basis with many opinion leaders and system integrators is a waste of your resources. And are you surprised at the results? Are you surprised that some of your better people,especially from sales, have left and are joining your competition?

Another key dimension of the local nature of HR is localization or what I  call "glocalization". I am

Marketing 101 mistake: English-language product screens
on  Workday's French website (As of  09-02-15 )

flabbergasted that it is taking you so long to develop the various country payroll localizations needed to be successful in the European market. You have waited for your 11th year in business to finally come up with your first European localization: the UK (well, not yet available, just announced for this year.) And France won't be available before next year. Wouldn't it make sense, from a product strategy perspective, to have swapped the countries and delivered France first?  That UK-centricity I mentioned earlier is again at work. Do you remember the number of European localizations (including Payroll) we released in PeopleSoft 8 between 2000 and 2001? EIGHT! Why this suspenseful drip-feeding of localizations at Workday? (And don't get me started on other regions of the world such as Asia or Brazil where I spend part of the year, and which are unlikely to get anything from you before eons - unless there is a clear change in product direction.)

Used to be one of the blogger's favorite 
Workday features. 
Now gone

You got so many things right from the beginning, and are still performing so brilliantly in many areas, that it pains me to see how you lost sight of the ball in Europe, and are making mistakes which, based on your previous PeopleSoft experience, you shouldn't have made. I guess you wouldn't be human if you didn't repeat some of your past mistakes.

Another thing. Please tone down the paranoid streak in your Partner and Alliance organization. So many positive things are already being written/said about you, you don't need to overdo it by becoming a marketing control freak who tries to prevent any constructive criticism to be published. All of your admirers, whose numbers include me, do not want you to turn into another evil company of which there are far too many in our industry.

I hope that my advice will help Workday grow into a better, more focused and successful SaaS company.

Oh, one last thing: Please bring back the Wheel. I miss it a lot.

Sincerely,
Ahmed Limam

No SaaS please, we're bankers!

PARIS

As traditional, on-premise corporate computing moves relentlessly to the cloud, especially its more sophisticated version, SaaS (software as a service)*, one business sector seems impervious to the march of History: the banking industry. Since banks spend more on IT than any other business, it is worth discussing what is holding up bankers (no pun intended) and wondering whether it is a question of time before the industry moves with the times, or will it remain as a quaint on-premise island in a sea of SaaS-based systems. In this post I'll focus on HR systems, since that is the corporate IT sector I have more experience in.

The changing landscape of international banking and how it will affect HR
Following the financial meltdown that started in 2007, banks are facing some unique challenges:

- More stringent regulations in all developed countries, though so far the bark has been worse than the bite. European banks have been faster at adopting so-called Basel 3 rules, thus giving them, counter-intuitively, an edge on US banks because, once the latter are hit, they will find their European counterparts better prepared. 

- Some of the new rules, especially in Europe,  have to do with bankers' compensation. Senior managers will have to learn to focus on profits (see below comment). One of the challenges of HR leaders will be how to enforce a new culture where greed is no longer good, and where other aspects of performance are taken into account, rather than the obsessive focus on revenue.

- One such regulation has to do with block leave (or garden leave) which mandates that during a certain period of time employees have no access to email/systems/phone in order to restraint heir ability to engage in fraudulent activities. (Of course, I still receive email messages from some senior executives who are on such block leave - and I'm talking here about their their bank email!)

-  Increased use of technology, such as complex trading algorithms, which means that many jobs formerly done by humans  are now done by machines which do not threaten to leave you for the competition nor demand exorbitant compensation.

- The days of unlimited profits are gone, and that will have an impact on IT budgets. This would be a driver to move to the cloud since costs can be reduced substantially when your HR system of record is migrated from on-premise to SaaS.

- Most of the global investment banks are retreating from their global operations and closing businesses. This deglobalization will affect all players, with global powerhouses shrinking their global operations, and the size of their workforce, and a larger number of regional/domestic banks will become even more local in nature. The challenge for all banks will be to trim fat without cutting muscle.

- In emerging markets, such as Brazil, Turkey, China and South Africa, local banks will matter even more than the global one, a trend not really new as I witnessed myself when I started spending part of the year in Brazil and was shocked to see that  the local HSBC subsidiary had little in common with the European parent company. It was quite surprising, and humbling, to see that Premier status, despite HSBC's marketing slogans, meant nothing there. In that market, as in India (think ICICI) local talent prevails and is giving the global banks a run for their money, if that is the phrase. If global banks want to survive, they will have to learn to fly the right talent on the right opportunity, say from London or New York, to São Paulo or Singapore, close the deal and then back home. The type of skills necessary will be markedly different from what we currently see.

Better be safe than sorry
There are various reasons why bankers are reluctant to move to a SaaS HR system of record (note that for other HR functions, such as recruiting or learning, the move to SaaS started a while ago.)

First, HR systems of record, along with  core banking tools, tend to be particularly sticky here. This most conservative of industries tends to favor status quo systems, stressing their advantages ("We've been using them for so long") while drawing attention to some problems associated with  the cloud. The financial crisis, which revealed banks' boldness, has put the brakes on many innovative ideas. The cloud suddenly became particularly risky, and it is a brave HRIS leader that will push for it. Rarely does a banking head of HR even bother about it, feeling s/he has more urgent battles to fight.

The banking industry also has a long history of home-made systems, in use next to packaged software, the latter often customized beyond recognition, thus adding another strong incentive to stick to legacy systems longer than other industries. And yet the complexity of their  legacy systems will eventually force the banks to move forward and start considering SaaS more seriously.

Security, for obvious reasons a predominant concern with banks, has them look at SaaS with particularly watchful eyes. And NSA snooping has not helped the SaaS movement, especially in Europe, where banks are not particularly keen on having the integrity of their core HR data  compromised along with privacy concerns. It is safe to say that SaaS vendors are losing 10% of their potential revenue in Europe because of this issue.

As everywhere else, moving to SaaS entails cultural change that banks are not finding easy to make. A bank 's IT department with an army of PeopleTools or ABAP consultants will be reluctant to consider that it has a problem, and that it may not need these skills anymore. Often, HR does not have enough clout to stand its ground and insist on having its own technology.

Leading by example...where there is no clear example
HR departments in the banking industry tend to display pack mentality. There is a lot of hand-wringing, indecision and wait-and-see among HR/IT leaders, with everybody watching their counterparts in other banks to see who will take the plunge first. (Interestingly, their brethren in the insurance industry didn't have such qualms and have moved to the cloud much faster.) As the following graph shows, there have already been a couple of banks that have made the move to SaaS HR (adopting mainly Workday) but they tend to be tier-2 banks. None of the global behemoths have pulled the plug on their legacy HR (usually PeopleSoft), although several are looking at the SaaS model seriously.

Whatever the geography, on-premise HR rules the roost

Action items for a successful transition
Any successful move from legacy HR to cloud HR in the banking industry will need the following:

• Display bold HR vision from determined HR leaders. When considering the challenges facing the banking industry, this is a golden opportunity for HR leaders to lead change and transformation and try to show their value. The move to SaaS is a once-in-a-decade opportunity to do so.
  
• Ensure that new rules are adhered to. The example I gave above of block leave is a good one. So far none of the heavyweight software vendors can cover that functionality satisfactorily which explains why many banks are not in compliance.  (Even Workday covers this requirement only partially)
  
• Identify what needs to be available for a successful cloud implementation: Is the SaaS model good for us? Can the vendors' service level agreements meet our needs? Will they understand our way of doing business? If we, a European bank, select Workday, how confident are we that they will protect our data? I heard Workday's Aneel Bhusri the other day reiterate that HR data is safe because the customer can decide to have it stored in any of the regional data centers outside the US. That is simply not true. Even outside the US,Workday is still an American company, subject to US law and jurisdiction. If a US court orders it to provide the data stored in its data center in Ireland, will Workday refuse to comply? And if it complies,  what guarantees will a European bank (or any customer, for that matter) have that the data will not be subject to NSA abuse? No American vendor can provide any such guarantee.
  
• Find the budget for the new investment. Considering the vast amounts banks have traditionally spent on IT, you might think that that should not be a problem. But with profit growth going south HR leaders need to beef up their ROI and make a more compelling case than in the past, something which, as mentioned earlier, they should be able to articulate cogently...if they know how to do it!
  
• Realize that the move to a SaaS model requires a mental recalibration of people and organizations, along with revisited processes. That spaghetti environment that HR systems in banks have become over the decades should be disentangled and streamlined. What better opportunity than a move to a new next-generation system?

Banks should remember the unique characteristic of an HR system: it is the only IT system in a company where every employee is a user. Provide them with a rich interface and a modern user experience, and you are suddenly increasing your current and future employee engagement. Just as an earlier generation moved en masse from mainframe computing to a cloud-server environment, what are you waiting for, bankers, to move to SaaS?

No SaaS? You must be bonkers!


*For those who are confused about the terms "SaaS" and  "cloud", mainly because some  less-than-wholesome vendors use the two interchangeably, let me clarify some key differences. When a company's IT system no longer runs on its own data centers but is hosted by a third-party vendor, it is said to be "in the cloud" whether that IT system refers only to the hardware (network, for instance), the technology (database, OS) or the application (say, HR system.) When your application runs in the cloud, and the hardware and infrastructure are also managed by the same vendor, then we are talking about SaaS, the most advanced cloud offering. For software purists, as your humble servant is, you then have true SaaS (such as Salesforce, Workday, SAP's SuccessFactors) or faux-SaaS, a term I coined to refer to those products (such as Oracle's Fusion and the numerous legacy systems masquerading as SaaS) that were developed as an on-premise offering and then ported to the cloud, often in a single-tenant environment. True SaaS, on the other hand, is always multi-tenant, with a single line of code, is not available in an on-premise deployment, and only requires a browser to access the application.  In other words, a true SaaS product is always in the cloud; the reverse, however, is not true.

(Although the blogger, in his capacity as advisor-cum-consultant, has been involved with two banks on their legacy-HR-to-SaaS projects, the ideas defended in this post are his only, and do not reflect neither the banks' opinions nor their particular situation)

Thoughts on India, its HR/technology space and the latest on Oracle

BANGALORE

Wipro's HQ in the Electronic City district of Bangalore

The last few few weeks have been hectic as I crossed half the globe to visit the center of the universe, a.k.a. Bangalore, heart of the Indian IT industry before heading back to Europe for a 10-day training on Workday in London. (Interesting how one's center of universe tends to change over time: for a decade when I worked for US software powerhouses PeopleSoft and Oracle it used to be San Francisco, now that I work for an Indian company it 's as far east as I have ever been.)

Working for a systems integrator makes me realize how imbalanced is the perception of users and other observers: an IT project is almost always called an SAP project or an Oracle project when sometimes the SI's involvement is such that it would warrant to have its name tagged to it. After all, user organizations use the same standard software, the difference and consequently success (or lack thereof) hinges on how well (or badly) it has been customized/configured, which falls within the remit of the SI.

Bangalore is a good epitome of India, encapsulating all the chaos, historical layers, mix of first and third worlds in a single place (albeit of subcontinental proportions, since the city is home to 10 million people.) Whereas other Indian cities have adopted their local names  (Madras/Chennai, Calcutta/Kolkata, Bombay/Mumbai)  Bangalore, which is locally known as Bengaluru, still retains the British-era name of Bangalore even officially. Actually, I was surprised at how much of the old Raj is still present in downtown Bangalore, with its British-style clubs, parks and inevitable statue of Queen Victoria.

The blogger doing some sightseeing at a Hindu
temple in Bangalore

One thing that India has in common with another emerging country, Brazil, (more below) is creaking infrastructure and the challenges to bring it up to global standards. And yet an impressive surprise awaited when I landed at Bangalore airport. In the five years that have elapsed since my last (and first) visit to the place, a brand-new airport has sprung up. (Let's see whether the Brazilians manage to upgrade their poor airports,especially in Rio and São Paulo on time for the World Cup and the Olympics.)  On the way to your destination a fascinating mix of thousands of years of history meets you (Hindu temples, British-era army barracks, Muslim mosques, Christian churches, sacred cows strolling about, gleaming IT campuses, maddening traffic, glitzy bars where expatriates and the local elite meet.) During my stay the monsoon started and I was caught unawares on MG Road, one of Bangalore's thoroughfares. The street soon turned into a flood and I was lucky there was a railing I could grab otherwise I would have been swept away (I still had to waddle knee deep in the water and was copiously splashed by passing cars.)

Queen Victoria, the first and last Empress of India, still stands guard in
 Cubbon Park, an oasis of peace in the hustle and bustle of Bangalore 

Some characteristics of India's HR and technology landscape:

• First you have to realize that India's 10-million-strong civil service may not be overall the most efficient in the world (there are some pockets of excellence, though) but it is one of the oldest, even predating the US Civil Service by several decades.
• Just as in Brazil, a country I know well having spent there part of the last couple of years, India's labor laws are quite complex. The federal government imposes no less than 55 labor laws and the states another 150... at least! Dismissing an employee, as in the South American giant and co-BRIC fellow, is quasi-impossible if your company is of a certain size.
• Although the buyer of any HR system remains the head of HR, s/he is often unable to justify the investment which gives some power to the CTO/CFO/CEO in the decision-making process.
• The numbers of HR players is quite astounding, with few national ones and many local ones, in addition to the global ones ("SOP") catering to multinationals' local subsidiaries. Ramco is India's best-know HR and payroll vendor with a presence in the whole Asia-Pacific region.
• HR is still not considered strategic by most Indian companies, payroll automation being the key driver for many.
• The wide availability of IT capabilities in India means that companies tend to over-customize some HR processes rather than rely on standard software.
• One trend that will affect the global IT workforce: according to ILO, a UN agency, soon three out of 10 of the world's new workers will be Indian.With labour cheap in India the impact in developed countries will be felt, especially as India's software companies move up the value chain from lowly technical work such as integration and data conversion to higher value tasks such as configuration and business process analysis.    
• Most unexpected is that India, despite its red tape, is, according to Forbes, the most tax friendly country in the world. Considering that France is at #14, maybe I should talk to my employer about relocating to Chennai, Pune, Gurgaon or the very Bangalore. 

Just when I was about to start adopting an Indian accent, local quirks of speech ("Kindly revert to me after the needful has been done"") and nodding my head quickly from left to right, it was time to cross several time zones and a half (another Indian oddity) it was time to fly to London for an 8-day product training session.

Back to the world of software, Oracle announced this week that it has missed its quarterly targets for the second time in a row which sent its shares to plummet by almost 10%. and Reuters published an article about it yesterday, largely in line with I have previously wrote in my blogs.

Some great excerpts that hit the nail on the head:

• [Oracle's CEO]  "is struggling to fit his ageing IT giant into a newly cloud-centric world - a hard scramble."
• [Oracle's] rivals have grown, winning business from corporate and government customers seeking cloud-based software that is cheaper and faster-to-deploy than traditional offerings housed in massive inhouse datacenters.
• "They [Oracle] spent the last four years focusing on engineered systems when the bigger industry trend was the cloud," JMP Securities analyst Pat Walravens said. "They now have a structural problem."
• "Emergent (sic) business software providers such as Workday started from scratch by focusing on ease of use and simpler interfaces, while old-school IT giants like Oracle have been hampered by legacy systems and software products that they were slow to re-tool." "This is causing a real disruption in Oracle's business," said Tim Ghriskey, chief investment officer with Solaris Group."
• A great one on the futility of Oracle's cloud strategy based on faux SaaS: "The inevitable is the inevitable," Goldmacher said. "You can get as many tummy tucks and face lifts as you as want, but it doesn't make your heart and liver and kidneys any younger."
• And my favorite, a reminder of how Larry Ellison is trying to rewrite history: "What the hell is cloud computing?" Oracle Corp Chief Executive Larry Ellison said during a diatribe against the whole concept at an investor Q&A in 2008... the software giant's head said he had no idea what people were talking about when they referred to cloud computing, describing it as "nonsensical" and those writing about it as "insane".  (Here is the full article.) 

Exciting times when we are witnessing the passing away of the old guard (or dinosaurs as I call them) and the emergence of a new model of corporate computing. There are few things as satisfying as seeing history unfold before your own eyes. And being part of it.


(For those interested in India and partial to great prose, some of the world's best contemporary literature has come from Indians, residing in the sub-continent or belonging to the diaspora. I would strongly recommend the following:

• Arundhati Roy's The God of Small Things: this first novel, which deservedly won the Booker Prize, tells the complex story of a family by shedding layer after layer of secrets until the shocking truth is revealed.
•  Two other terrific books also tell the story of modern India but with slightly different messages: Vikas Swarup's Q&A (made into a film as Slumdog Millionnaire) seems to imply that to make it in India today you need luck while Aravind Adiga's brilliant The White Tiger (another Booker Prize winner) suggests crime will do the trick.
• Rohinton Mistry's A Fine Balance and Vikram Seth's A Suitable Boy are two other great
  
  reads.
• If you don't have the patience to go through a book but can spare a couple of hours watching a movie, my favorite Indian films  include  Salaam Bombay (the most powerful and authentic of the lot), Lagaan and Devdas (the latter a Bollywood movie with Aishwarya Rai, India's answer to Angelina Jolie.) 

The 10 Commandments for selecting a new software: Best practice guidelines

If Moses were  a software consultant,
he would probably have the
following tips on his tablets

RIO DE JANEIRO
From the moment corporate IT decided to eschew home-made systems for package software  two decades ago (in the most advanced economies, that is), user organizations have been using different methods to select the best software that matches their needs. My methodology was honed by a 15-year experience which started with Paris-based CXP (briefly part of Giga analyst group), an analyst-cum-consulting firm which was born out of the desire of large French companies to have a vendor-neutral outfit that could provide them with unbiased advice on the booming corporate software industry.

Since then I have been able to see what works, what does not, what tasks in the selection process can be improved. Surprisingly enough, most companies tend to make similar mistakes regardless of size, industry or geography. I am currently helping a client in Brazil navigate the shoals of finding a talent management tool and I am confronting issues similar to ones seen in Europe and the United States.

This post is a description of  what best practice I have witnessed and currently use as part of my software-selection methodology. I have summarized my findings in what I call, a tad pretentiously,  my Ten Commandments of  a software-selection system.

1. Thou shalt link your project to your company's business objectives

The first thing I ask a client when they tell me they are looking for a new HR system is, "What are your company's business objectives?" And I am still amazed to hear the answer, even from an HR leader, to the effect that they have no clue. My first piece of advice is that if you don't know what your company's business objectives are (increase market share? be recognized as the best in your industry? reduce costs? etc.) you better get acquainted with them ASAP. Sometimes I have to brace myself for the realization that the situation is even worse than I thought: the company has yet to determine what its objectives are. I have become known for harassing my clients until they manage to get from senior management clarity on this aspect, otherwise there is little point in the whole exercize. Only then can we move on and start linking the automation of a performance appraisal system or a new payroll to those overall goals. Yes, even payroll. I know that few companies, if any, have ever gained market share or attracted new customers with a brandnew payroll product, but assuming that your previous system managed to pay your employees accurately and in a timely fashion, if you have decided to replace it there should be more drivers than just, "Our vendor has gone under."  In one short sentence, show how this new HR project (regardless of scope) can contribute to the bottom line.


2. Thou shalt shirk away from a lengthy RFP

I am not a lazy person and do not charge my clients by the number of pages an RFP contains. So if I strongly advise against spending time to produce an RFP the size of a door-stopper it is for a good reason. In the goold old days when companies moved from home-made systems to standard software, it made sense to list every single feature needed, to compare which vendor would require the least amount of (expensive) customization. But now that the package-software market has reached functional maturity and that a new breed of vendors, web-based and with no possibility to customize, has emerged, spending an inordinate amount of time on listing every single requirement one can think of does not make sense any more. It is far more efficient to have fewer requirements, but well-chosen ones, which would allow you to differentiate between vendors since, at the end of the day, that is the point of the whole exercize: to select one vendor over others.

It is worth remembering that just because a requirement is crucial it does not mean it has to feature in your RFP. If you are looking at replacing your HR system of record,  there is little doubt that the ability to track employees is key, and yet you don't need to mention that in your RFP since by definition all HR systems worth their salt would have that feature which is now largely commoditized. So, since it will not help you differentiate between various offerings, don't waste your time on it. Similarly, some nice-to-have features which no vendor offers (say, expatriate management in a global HCM system) are not going to help you: since no vendor is likely to offer the feature, it will not help you differntiate between the vendors.

3. Thou shalt pay particular attention to integration points

A summary of my previous point (or commandment) is to focus on what really matters, such as a data model/architecture to reflect the 21st century and not the previous one, or integration points. We are in an industry that moves very fast, and we can be certain of few things about it except that one of the major issues I have been confronted with since I started out two decades ago will probably be around when I retire: integrating the different pieces of your HR system to make it deliver the value you expect. It is therefore key that you identify the different integration point between Payroll<->HR Admin <-> Time Management and of course between your overall HR system and other corporate applications.

Be aware that integration issues can arise not only when duct-taping systems from different vendors but even with products from a single vendor: either because it was the result of various acquisitions or because of lousy design.


4. Thou shalt consult ALL stakeholders

Long gone are the days when the IT department would buy, install, run an application and spring it on HR users unawares. Nowadays, it is more likely that HR will be the in the driver's seat of selecting an HR system, although in less advanced parts of the world it still is not the case. IT still has to be consulted if only to make sure that the system used does fit within the company's overall technology structure. If your company is an SAP shop, you will have to make the case very strongly that your HR-specific requirements need a PeopleSoft or Workday. But there are two types of stakeholders that need to be taken care of.

One are line managers and by extension other casual users. At the turn of the millennium it was enough to make sure that the system provided manager (or employee) self-service transactions and everybody was happy. Now, there is an increasing realization that HR tools are no longer the province of HR but of the whole organization. A successful recruiting drive brings on board not only HR specialists and recruiters but the recruiting (line) manager, other  colleagues-to-be, the applicants, maybe a manager + 1. In other words, HR has become too important to be left to HR only, and by way of consequence so have HR tools become: tools for everybody in the company.

Second, and even more important for global companies, is the need to also take into account the requirements of all types of users in different countries where you have subsidiaries. I still see many global projects where only a token interest is taken in the non-HQ workforce. Many global US-based companies suffer from this attitude, still believing that "If it's good for US it must be good for them." Thankfully, the belief that to be global means to be American everywhere is on the wane and when I take an international assignment I always make a point to visit the most important foreign operations  and meet face-to-face with a variety of users there. Where it is not practical because of time or budget reasons, I set up conference calls. The fact that I speak fluently five global languages is a tremendous help since HR is largely a "glocal" business and many HR users are monolingual: speaking, literally and metaphorically, their language can make or break the deal, so to speak. But regardless of your linguistic abilities, the point is that if you do not take into account all your constituents' needs, the system ends up being used only by a few and rejected by a majority. And for me that is the definition of failure. Not going over budget and beyond schedule. If anything, I'd rather have a system that costs more and took longer than initially planned but which most users like and enjoy using rather than one delivered on time, within budget and which everybody hates. I still see too much of that.


5. Thou shalt work with a vendor shortlist -not longlist

15 years ago when I started advising companies on what was the best HR system for them I would send out that lengthy RFP (decried in §2) to a good half a dozen vendors, often even up to eight, and spend quite some time analyzing the responses before selecting a short list of three. I still see too many companies doing that. And yet it is now a waste of time. If you have devised your RFP smartly, rather than comprehensively, a knowledgeable observer would easily know which top vendors are more likely to meet your needs. If your underlying technology is IBM (DB2) then Oracle EBS does not make sense. If you have unique customization needs and are paranoid about security and data confidentiality, then going true SaaS (such as with Workday) may be a non-starter.

One of the points of a compact, concise and precise RFP (as defined earlier) is that by allowing you to focus on differentiators you can go straight to the production of the shortlist of vendors who will receive your RFI/RFP. The time, resources and energy thus saved can be better employed doing your homework or due diligence.

6. Thou shalt do thy due diligence thoroughly

By due diligence I mean several activities that will allow you to get under the hood of the product and understand the culture of the vendor. Since you are likely to be doing business together for at least half a decade (the life expectancy of an HR system has come down from 7 years to less than 5 now) you better make sure you understand one another. Selecting a vendor is to a large extent akin to entering into a marriage with all its attendant ups and downs.

- Have meaningful, representative use cases to be used in scripted demos. Be particularly careful with on-premise systems which can doctored (customized). I know many companies that are still licking their wounds, the result of too credulous a belief that everything they saw during a demo was standard (or vanilla as we call it in our jargon) functionality when it actually involved hundreds of man-days of consulting work.

- I find it very useful to keep some "trump cards": a use case or a question that are sprung on the vendor during the demo to get an idea on how unexpected requirements (which always happen) can be taken care of, especially if you are planning to go with a web-based SaaS vendor where you don't have the liberty to customize your way out of a particularly complex but crucial need.

- "It's the references, stupid!": a relevant customer using the same system you are considering can provide you with more insight than pages of responses to an RFP and days of demoing. Again, you will place the cursor differently whether you are looking at SaaS or on-premise vendors, since with SaaS customers, everybody will be describing the same beast, whereas an on-premise customer may well be on a different release from the one you are considering and some of the points they are making will therefore not be relevant to you. Also, don't focus exclusively on product aspects but also on service quality, customer-centricity, how good the vendor is (or is not) at including your enhancement requests in future releases. Here again, older, on-premise systems will have to be gauged differently from newer, web-based SaaS products.


7. Thou shalt avoid falling prey to fads

Although the corporate software market, and its HR segment, is made up of literally hundreds of vendors, we are still quite a gregarious bunch, often adopting tools because others have. In the late '90s when I was still with CXP, a client of mine was the French savings bank network Caisses d'épargne (actually one member of the grouping.) I helped them select an HR system and they wanted PeopleSoft even though they didn't have the budget for it. And when I pointed out that another product would do the job just as well, I remember the whine: "But every HR director has PeopleSoft!" Sounded like a kid wanting the same toy as his buddy next door.

Things have not changed that much. Last week, an HR leader told me they were about to select Workday but he couldn't give me an objective reason for that. Actually, remembering point #1, he couldn't even link that decision to a business reason, or even what HR features he wanted, apart from some high-level HR functions. But he wanted Workday because he had heard it was a good system.

Grievous error. As I always tell my client, "there is NOT such a thing as a good product or a bad product." All products and vendors have their pros and cons, you have to match them to your technical, functional, corporate and strategic circumstances and decide which one will be the lowest risk. Workday is undoubtedly the most remarkable corporate and HR tool to have emerged in a long time. And yet it is not the cure-all. In many cases it is not the best tool, it could even be counter-productive to use it. So, Mr./Madam User, please do yourself a favor and refrain from being a software fashionista.


8. Thou shalt have a sponsor

Whenever I get involved in an HR project,  especially at the initial system-selection stage, I always insist on having a "sponsor" or "champion." This is not the key contact that is a liaison between the company and the outside world, but a senior manager (either the Head of HR or the CEO, but preferably a C-level executive) who, when the time comes, will bang heads together to make things happen. Barring such a role, the chances of such a project succeeding will be limited.

The sad state of things is that often such  a person is either not identified or if they are they keep a low-profile apart from attending a launch party or steering-committee meetings. They are often afraid of becoming the fall guy, taking the brunt of criticism should the project not deliver the goods, not realizing that by such an attitude they turn that possibility into a self-fulfilling prophecy.


9. Thou shalt negotiate carefully

"If we only knew" is the perennial cry of the client when things go wrong and they realize that thy have limited recourse options. If you are adopting an on-premise system, where you are basically in charge of everything, make sure that any roadmap promises are not something you overheard at a user conference but a contractual commitment that is part and parcel of the contract. Otherwise, apart from withholding  maintenance fees, you do not have much leverage with your vendor. If you are a SaaS customer, you are in a different situation: at least you didn't pay a hefty license fee upfront to get started, so the revenue your vendor gets from you is the monthly susbcription fee which you can withhold. Because in this model the vendor owns both the software and your data be even more careful before signing the SLA contract, especially if the vendor insists that their template is the only one available and are reluctant to modify it to accommodate your needs.

I am not saying you should base your relationship entirely on legal terms, but make sure that should litigation be unavoidable, you have some good cards to play.

10. Thou shalt hope for the best and plan for the worst

Having a Plan B is always a good idea, whatever endeavor you are in. If you have decided to use a SaaS-based system, make sure that you are covered in terms of disruption to the service, that you have in place a disaster-recovery strategy (in conjunction/addition to what the vendor already offers.) If you are planning on changing your payroll system, don't discontinue the previous one until the new one is up and running to your entire satisfaction, not merely selected. This means way beyond the few months' parallel payroll exercize.


Of course, success cannot be guaranteed until the system has been implemented (and a future blog will address what I am likely to call my 10 Commandments for a successful implementation.) But many seeds for a successful implementation are planted at the earlier, system-selection stage, and as such this stage is crucial. Skip it or skimp on it at your own peril!