Further info and resources from my website

Showing posts with label glocalization. Show all posts
Showing posts with label glocalization. Show all posts

Wednesday, October 18, 2017

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

SEOUL
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.)

Language
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 cafĂ© 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

BUENOS AIRES / Update from PARIS
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 22, 2016

Middle Kingdom: Musings on Chinese HR, technology and the country

SHANGHAI
The Oriental Pearl Tower  seen from the Bund.
As spectacular as un-Chinese since, unlike Muslim
minarets and Gothic cathedrals, Chinese palaces, pagodas
and pavilions have traditionally been low-rise affairs
Surprising as it may seem for the globe-trotter I am, until this week I had never set foot in China. Although I had worked on many global projects which involved rolling out an HR system for a Chinese workforce the opportunity never arose for me to visit the ancient land known to Marco Polo as Cathay* (the name is still used by one of the most successful airlines in the world, based out of Hong Kong.)

It was therefore with great trepidation that I boarded the world's largest aircraft, the Airbus A380, for the longest trip east that I had ever taken in order to spend most of the week in Shanghai with the local subsidiary of a multinational client. This was a unique opportunity to gather business requirements face to face with HR users in their local environment, something only imperfectly done in virtual meetings, on the phone or by email.

You soon realize that if in China rules and laws may not be voted on by a democratically elected parliament, but rather handed down by the omnipotent Communist Party, they are adhered to ferociously, as I was reminded when, during one of the workshops I led, I suggested we shorten the lunch break from one hour to 45 minutes. The reaction was a categorical NO. Labor laws are labor laws: one hour's break for lunch is one hour. Can't say I was shocked since that is exactly the same rule as in France (but outside the rest period, the Chinese workforce is a hard working one and I was impressed by the quality and dedication they bring to the task.) Actually, many other aspects of China's labor laws seem to be directly inspired from France's: such as the 1-2% of a company's payroll which must be set aside for the worker union to spend on employee benefits. But then French laws are at times very socialistic, if not outright Communist (ever wondered why the Labor Code in France is a little red book?)

Replica of Xi'an Terracotta Army
soldier, gifted to the blogger
by the Chinese delegation to the
UN World Tourism Organization where
he worked in the 1990s


A rapidly changing country
As everybody knows, China has managed to bring hundreds of millions of people into middle-class wealth faster than any other country on earth: in the past 25 years income per person has risen 13 times, whereas in the rest of the world the figure is barely 3 times. I see on Shanghai overcrowded roads more SUVs  than anywhere else but the US. Beijing has more billionaires than New York.  If there ever was a national success story it is China. And yet serious problems are looming: it is still an autocratic country, unemployment is rising, especially in the poorer rural areas in the country's western half, inflation is high (Shanghai home prices rose by 20% last year), the population is greying fast as a result of the one-child policy aiming at reining in demographic pressure, pollution shows its ugly face in many places with foul air a constant irritant. Some un-Chinese traits such as individualism and Western-style consumerism are on the rise in this increasingly unequal People's Republic. (I always marvel at Chinese tourists who buy designer bags at Paris upscale department stores for a price that is higher than many workers back home make in a year)

Now, to the topic at hand, requirements to manage a Chinese workforce as part of a global HRIS. In some aspects HR law and  practice in China may be complex, even cumbersome (but is there a place  where that is not the case?) However, in many other aspects it is quite simple and even free-market based, reminiscent of the practice in the (income-tax free) Persian Gulf states. For instance, in Europe and America, there is a quite clear-cut distinction between permanent employees and contractors, HR processes apply fully to the first, not to the second. In China, there are no contractors: everybody is a permanent employee. There are also no part-time workers. In other countries, some employees may work only 30% of the normal schedule, and in some cases be paid differently, all depending on labor agreements and regulations. In China, if you're going to work for a company, you work full time. Otherwise, go somewhere else. And no labor agreements either, which makes it much easier to set up compensation plans and eligibility rules
Art Deco glory.
East meets West at the spendid
waterfront neighborhood known
as the Bund

Over lunch, when the Head of HR asked me why there were so many strikes in France (yes, that national trait has made it to the other end of the world) I replied, "For the usual reason: to get more money." She looked very surprised: "Really? But if they want more money and they are not getting it from their current employer, why don't they just move to another better-paying company?" Admirable logic, which makes sense in a fast-growing, emerging market like China, but, alas, does not apply in sclerotic European countries like France.

Language-wise (you may want to brush up on my 5 pillars of "glocalization") if you're going to roll out a global HRIS in China, make sure all self service features are available in Mandarin. Otherwise, the system won't be used. Many HR power users, even if working for a multinational company, will struggle with English, so having the whole system in Mandarin is a must.

Workflows with different levels of approvals is also a must-have in a country where deference to senior management is part and parcel of the culture. Electronic notifications have made great progress in the Middle Kingdom but some document still need to be printed out for signature and be handed out to the relevant recipient. If you ever wondered why China is referred to as the Middle Kingdom it's simply the name in Chinese: The first character for the name is a horizontal rectangle cut in half by a vertical stroke, meaning, you've guessed, Middle. Like all great societies, China sees itself as the center of the universe. Can't blame them; after all, they are the most populous nation on earth, soon to be the richest, and the one with the longest continuous civilization in the world.

It's all about Human Resources


HR rules and HR Departments are nothing new in this country. The US only got its Civil Service with its grades and steps and examinations at the end of the 19th century, but the Chinese Ming dynasty, which ruled the country until 1644, already had a Department of Personnel with a nine-grade bureaucracy and legendary examinations one had to sit for and pass before being entitled to a position. Modern China is simply the heir to a long, centuries-old  tradition.

Among the various HR domains and processes, time recording can be quite complex in many Chinese companies, especially manufacturing now that China has become the world's factory. However, soaring taxes, transportation and energy costs means that China's labor force is no longer as cheap as it was. China will increasingly have to move up the value chain, which explains the strong emphasis on training, competencies, learning and development, and executive assessment. Again, nothing surprising in this ancient Confucian culture where learning values  are rated very high.
The blogger ready to board the Shanghai
MagLev Train. At an average speed of 300 km/186 m
per hour, with a peak speed of 430 km/237 m per hour,
it is the world's fastest train.  It is also the only one that runs on
magnetic-levitation technology.  Whether it is profitable
remains to be seen as it is pricey and covers a short distance
(in a highly congested area, though)

Payroll, is of course, highly regulated like everywhere else, but China is far from being the worst offenders. And there are limits to nannying employees: for instance, salary advances, which in some countries are mandatory if requested by the employee, simply don't exist in China You are paid for the work done, not the promise of it. For any help, go to your family, is the message in a culture where family bonds are stronger than in the West, but weaker than in Mao's times (In China people don't resort to banks for their savings needs but rather to the family or peer-to-peer networks.)

Absence management is also complex, and China is rather unique in that it distinguishes between absence types mandated by law and  those awarded by a company as a benefit for a differentiated treatment. The former  have to be taken during the take period, and if the employee leaves before its end they are compensated; whereas the latter, if not taken, are lost and are not compensated. And just as part-time employees are unusual, taking an unpaid leave or a sabbatical is unheard of for most people. Note the existence of many recruiting and training agencies (such as Zhaopin or 51job.)

Benefits involve many players: government, worker union and employer. Noteworthy that if some benefits (such as birthday allowance) are not provided by the worker union then the employer will play the substitute role and provide them.

In a  country where education has long been seen as a passport  to success, small wonder that competency frameworks, training agencies and learning models are all the rage. Many companies would finance employee degrees in exchange for a guaranteed stay with the company (similar to tuition reimbursement by US companies.) For some useful training (such as languages), private enrollment would also be refunded by the employer if the employee brings evidence of the certification thus earned.


China's HRIS vendors hold their own
To meet the HRIS needs of Chinese companies, whether domestic or subsidiaries of multinationals, the array of providers is quite large. SAP's market share is largely around its on-premise offering, and Oracle's is based on PeopleSoft. Cloud vendors are represented by Workday, a distant third but growing fastest. Kronos is well-entrenched when it comes to time management. Unsurprisingly for such a highly patriotic, even nationalistic, country, Chinese vendors have, together, a majority market share. They include household names in China such as Beisen, the undisputed talent company, and other vendors such as Neusoft (or even micro-blogging firm Weibo) covering various HR processes, when not the whole gamut of functions.



The biggest challenge facing homegrown vendors is how to go global, not an easy task when some tools which we take for granted are not available in China. First-come visitors to China may be surprised, even shocked, to find that social media and internet tools like Facebook and Google are banned (unless you, or your company, are lucky to have your own VPN.) In the West, and even the rest of the world, so much HR work, actually so much business work, involves using these platforms that you may be thrown offbalance when you realize you cannot keep up with your friends (on Facebook), get your email (on Gmail), check a video on YouTube, or plan an itinerary on Google Maps. Surprisingly and erratically WhatsApp, despite being a Facebook product, is allowed to operate in China. The Chinese make do with local variants such as Baidu, Weibo or WeChat (which is integrated with LinkedIn.).

The Chinese are a justifiably proud nation, but also a pragmatic one. They will find ways to live up to their full potential and be a full member of the global business community, something they've longed for and craved for a long time.Needless to say that this post only covers the People's Republic of China (PRC) aka Mainland China. Taiwan, Hong Kong and Macao are completely different in terms of context, HR maturity and vendor landscape. In due course they will warrant their own blog post.

(The blogger is currently crisscrossing the globe gathering requirements for a multinational company. Next stop: Detroit, USA.)

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

August 2011: Brazil Rising: Thoughts on HR, technology and an emerging giant 
December 2012: My 20-Year Affair with Spain  - with more than 9,000 views it is one of my most popular blog posts
June 2013: Thoughts on India, its HR/technology space
Nov. 2014: Of Switzerland, the country, its HR practice and technology landscape)

NOTE: All photos are the work of the blogger and copyright applies
From the blogger's library

*I strongly recommend Gary Jennings' superb novel, The Journeyer, about the great man's 13th- century travels throughout a China few  people had ever seen then. 1,000 pages which you can't put down until you reach the end. For anybody wanting to understand China's wrenching changes in a historical perspective, Jonathan Spence's In Search of Modern China is a must-read. Nobel-Prize winner Pearl Buck's novels, set in pre-Communist post-Imperial China,  have a lot to say about the Chinese soul and experience. The movie buff I am relishes Zhang Yimou's movies (especially when the incomparable Gong Li is in them): Raise the Red Lantern, Ju Dou, Red Sorghum and Flying Daggers are favorites. He is also the man behind the highly acclaimed opening and closing ceremonies at Beijing's 2008 Olympics. 

Saturday, August 29, 2015

Cor(e)nerstone HR right around the corner (UPDATED)

PARIS
About to join the full HCM club?
One of the advantages of being an independent consultant is the great diversity of clients, industries, projects I get involved with. One of the drawbacks, especially in the HR technology space, is that when it comes to moving antiquated HR systems (on-premise SAP, Oracle, Meta4, HR Access et al.) to the cloud, supply is pretty much on the thin side. If I am asked  one more time to work on an RFP where the vendors under evaluation are SAP (SuccessFactors), Oracle (Fusion) and Workday, I'll slit my throat (I can almost hear the sound of glee coming from some vendor quarters at such a prospect).

It is therefore with increasing trepidation that I am keeping my ears pricked for the news from Santa Monica, CA. Why Santa Monica? Well, let me take a step back.

Although the cloud has been around for a a few years now, the investment needed to build a core HR module to support a full-fledged global HR system (or HCM) is such that, since Workday created the first cloud system, only two other vendors have entered the fray: Oracle built theirs from scratch, (well kinda, the first Fusion draft was an on-premise system that was tweaked to be able to be hosted); SAP bought one of the talent software leaders, SuccessFactors, which had already started building a core HR module (Employee Central) and  kept on pumping in funds to see it come to fruition.

And ...that's it! Shocking as it may appear, no other vendor has come up with a solid, global cloud or SaaS-based HR system. Some talent vendors have tried to follow in SuccessFactors' steps: Canadian-based Technomedia is promising "something" and French-based Talentsoft  has developed a light HR admin offering for a couple of its customers.

What about Santa Monica-based Cornerstone? After  all, they are the largest independent, organically built talent software vendor. If smaller vendors can start down the core HR road why can't Cornerstone?  Workday is treading on Cornerstone's toes by beefing up its talent footprint and planning on building its own learning system. Once that is done, the partnership with Cornerstone will have come to its logical conclusion (Workday is also using Cornerstone as a customer, by the way.) So, why wait any longer? Getting cold feet, Adam?

Or still testing the waters?

Actually, although there is no official communication from the vendor, Cornerstone is working on a core HR offering. It would be insane not to. I have been prodding them for a couple of years now to do exactly that. Sure, it's a lot of hard work, look at SuccessFactors whose Employee Central is far from being as robust as one might wish. Building HR admin functionality that can be used in Argentina, Austria, Algeria and Australia requires good understanding of local requirements (read here my "Five pillars of HR localization" - or glocalization as I prefer to call it). That means getting the right product management team in place (no more junior managers, Adam, you need people with experience) who can make some hard choices regarding the best data model to accommodate multinational companies. Strong thought leadership is required to avoid pitfalls that even the leader, Workday, has encountered. Think about payroll. Once you go down the HR path payroll is right around the corner, so to speak. Think about how your technology can adapt to and build a global payroll engine. And absence management. Both are complex, both are linked. The more you think ahead, the higher the rewards.

Can't wait for my next HRIS RFP where I can advise my client to include in the vendor shortlist  the name of Cornerstone (another advice, Adam, drop that OnDemand from the name, just too unwieldy and redundant  -  all cloud systems are now on demand, anyway). The question is, shall I take a vacation through the end of the year and come back in 2016 to a brand-new HR system debuting on the market? Or will that happen sooner? No longer a question of if, but when.

Exciting times ahead!

UPDATE OCT. 12, 2015: At last week’s Convergence event in London, Cornerstone took the wraps off their new core HR offering with an interesting positioning: called Link, this new product is not supposed to be a traditional Core HR (or HR Admin) product. According to the company’s CEO, Adam Miller, Core HR as we’ve known it, courtesy of SAP/Oracle/Peoplesoft/Workday et al., is simply outdated. 2/3 of  companies don’t need a global HRIS or Core HR  anymore, he claims, since the value of any HR system is in talent, so the user profile (which is being beefed up in Link to interface to/from third party systems) is way sufficient. Interestingly, one of their customers I chatted with (French banking giant BNP Paribas -who once upon a time ran PeopleSoft) agrees and have interfaced their various payroll systems and CSOD modules to a Link-like home-grown light core HR.

BNP Paribas seems to agree with Cornerstone's vision -
but without its product


This strategy is clearly targeting Workday (not to mention legacy vendors). Will it work? Will a significant market segment buy into it? I find the idea seductive, even conceptually alluring as I told Adam Miller and the other analysts/influencers at our get-together, but the market has been formatted for so long  into thinking a global HRIS is a key requirement that unless CSOD shows  compelling vision and strong thought leadership I don’t see this really taking off. And somewhere in the back of my mind there is this nagging doubt that this vision is self-serving and born more out of necessity than design. Could this strategy be the result of CSOD’s inability to build the deep/robust functionality that are part of Core HR, as well as  Payroll, Benefits, Time, all requiring strong process expertise which CSOD currentlly does not possess? (Check the Link datasheet - although there is no pricing yet.) 

On a side note, I was gratified to see that in his keynote address Adam Miller followed my advice and announced they were now dropping On Demand from the company name.   


Tuesday, February 10, 2015

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

Friday, November 28, 2014

Of Switzerland, the country, its HR practices and technology landscape

ZURICH
Lake Zurich became the blogger's temporary home last August,
and many a weekend were spent crisscrossing
this eminently bikable town
(Picture by the blogger)
I have been visiting the Alpine country for a good decade and a half now, with a strong focus on the French-speaking area around Geneva and Lausanne. In the late 1990s I was a frequent rider on the Paris-Lausanne train visiting a client, La Suisse Assurances, to help them move to a package HR system (that ancient insurance company is no longer, its parent company, Swiss Life, having decided to fold it several years ago.) I still remember vividly my favorite restaurant, le Vieux-Lausanne, at the foot of the cathedral, for its delicious food. Then, in the early 2000s, I would become a frequent traveler to Geneva, where Oracle's European headquarters is located, for internal meetings and customer presentations, especially at UN agencies; I dedicated a full chapter to Geneva in my book, High-Tech Planet.

The German-speaking part, though,was largely unknown territory to me until last August when I set up camp in Zurich to help Credit Suisse, the country's second largest bank,  on their new HR system. This more intense exposure to the country has given me further insight on what is one of the most original countries on earth.


Politics: Swiss exceptionalism
For someone used to the continental size of the US or Brazil where, despite the huge landmass and population, a single language prevails, diminutive Switzerland with its three main languages (German, French and, in one state, Italian)* can be puzzling. And yet, despite ethnic, religious and linguistic differences, Switzerland is a haven of peace, prosperity and serenity (and also, let's face it, at times stultifying dullness) unequaled anywhere else on earth. A lot of it has to do with its unique system of (semi-)direct democracy, which those of us who suffer from renewed gridlock in the US or stagnation in France under the most incompetent and despised president in history can only envy. In Switzerland, no topic is too important not to ask citizens to vote on it. This month, the question is whether the country's central bank should increase its share of assets held in gold from 8% to 20%. In any of the mock-democracies of Europe and North America, the decision would have been taken by a politician or an obscure committee behind closed doors. Not in the Helvetian Confederation where the people are asked to vote on what may sound as too an arcane topic to most. I always wondered why I never see political protests and demonstrations in Switzerland. Now I know why. Who are you going to protest against? Yourself? Your neighbors? Most decisions are made by citizens directly, you can't blame anybody but yourself if you aren't happy with the results. (I have always been a keen advocate of direct democracy, those interested can read my post,"Technology-enabled Democracy 2.0.")

Global business: punching above its weight
Except for the Netherlands, which has twice its population, no other small country in the world boats such a roster of successful global companies: Roche and Novartis (pharmaceutical), Nestlé (food), UBS and Credit Suisse (banking), Adecco (staffing), Swiss (airlines) are world class champions. This success lays to rest the cliché about the Swiss excelling only at clocks and chocolate, although some of the challenges facing the banking industry with the looming end of banking secrecy will have a not insignificant impact on the overall economy.

Rules-based engine
Another key feature of the Swiss national psyche is the strong, almost obsessive, adherence to rules. Peter Ustinov, the great actor/director/writer, who lived many years in Switzerland, once said, and quite accurately so, "In Switzerland, everything is either mandatory or forbidden; nothing is optional."  Woe betide you if you dare cross the street with the red light still on, even if there is no incoming traffic for as far as you can see. I mischievously jaywalk from time to time just to see how many Swiss will get a stroke at the heinous crime I am committing. And don't you even consider being late at a meeting; I know of an employee who was fired for his tardiness. For the Swiss punctuality is up there with cleanliness, motherhood and apple pie. It also helps that their public transportation system is amazingly efficient and in this town trams, buses and trains run on time. I have yet to witness a tram that didn't pull into its stop at the exact time advertised on the monitor. In comparison with another country I know well, Brazil, Switzerland is the anti-Brazil in every respect. Whereas a Swiss takes their job very seriously (the worst insult you can throw at a  Swiss is, "You are not professional!"), telling the same thing to the average Brazilian will elicit nothing more than a hearty laugh and a shrug.

Small wonder then that managing Swiss companies requires quite complex HR rules made even more so by the decentralized nature of the country where every state (or canton as they are known here) is quasi-independent and sets its own rules.



Small country but specific requirements
Of all Swiss statistics, one figure stands out: the traditionally low unemployment rate which, in 2014,  is around 3%.  Labor-market tensions are not going to improve with the greying workforce since more workers are retiring than are being replaced by young arrivals. This explains the high proportion of foreign workers in Swiss companies, and not only in border areas, but all over the country. Another reason for the strong reliance on foreign workers is the presence of many multinational companies (along with international governmental organizations such as the UN in the Geneva area) and the fact that Swiss mid-sized companies tend to be  strong exporters.

  • As part of an HR system multi-assignment/contract is a key requirement: somebody can be working in a canton hospital, teach at university and  oversee a small business. All these jobs will have to be tracked and, when fed into a payroll system, the latter will have to split the relevant taxes.
  • The French-speaking area tends to have more of a focus on competency management than the German area where companies tend to spent HR and HRIT investments on regulatory aspects of HR.
  • Make sure that your HR system covers work permit extensions by date along with alerts and reminders. Local state offices are as efficient in granting work permits as they are stern when it comes to non-compliance with reporting requirements.
  • The Swiss take their data privacy very seriously, even more so than other Europeans, and certainly more than the US.  Any foreign company doing business in Switzerland will need to take into account this Swiss variant on work-life balance.
  • If you are expanding to Switzerland and need to manage your Swiss workforce as part of your global HR system, check that your vendor is Swissdec certified. It'll ensure that HR and payroll data are stored and sent to government agencies in the required format and scope.
  • Several reports are key such as the Beschäftigungsstatistik.
  • Support for SEPA bank format has become a recent requirement as well, although Switzerland is not part of the euro area.You may be puzzled by the fact that you can easily wire funds into a euro-denominated account abroad but not not the other way round. 

It is worth specifying that although Switzerland is not part of the EU, most of its trade is with the EU, many of its workforce comes from EU countries, as mentioned earlier, especially neighboring Germany, Austria and France.  As part of an agreement with the EU, there is a free movement of labor between Switzerland and the EU (it remains to be seen how a recently held referendum will jeopardize this arrangement).


HR vendor landscape
Although Zurich hosts a prestigious technology university (ETH) and  is a research hub for several technology firms such as Google, Switzerland has not sprouted strong local software firms. Actually ĂĽber-technology firm Amazon is not even present in Switzerland since its small size, difficult terrain (all those mountains are a transportation nightmare) and prosperous citizens do not justify the investment. As can be expected, neighboring Germany's SAP,  reigns supreme, especially in the German-speaking majority area. The only Swiss software firm of note is talent-management vendor Haufe (based in St-Gallen, home of another prestigious university) whose Umantis offering is one of the few, if not the only one, in Europe to have been developed organically.

The Google campus in Zurich, on my way
to/from the Credit Suisse office
(Picture by the blogger)

This most conservative of countries is moving its HR systems to the cloud at a glacial pace as legacy vendors are finding out. Oracle's Fusion implementation at banking giant UBS has been beset with product-quality issues that have delayed the go-live date several times. Workday, on the other hand, a virtual unknown this side of the Alps, without even a local presence, has managed to  sign up a couple of local companies including well-known travel firm Kuoni.

As we move into the second half of the decade it will be interesting to see how Swiss on-premise customers migrate to the cloud and, in doing so, which system they select. So far, no single unchallenged winner has emerged, so the market is still up for grabs.


*Actually, there is even a fourth national language, Romansh, spoken by a small minority. Speaking of languages, it is interesting to note that whereas Swiss French is quasi-identical to the one spoken in France, Swiss German is a dialect that differs markedly from standard German (Hochdeutsch). Adding to the complexity, Swiss German (Switzerdeutsch) is only spoken whereas standard German is the one used in writing giving a sense of Swiss schizophrenia

NOTE: It goes without saying that the opinions expressed in this post are the blogger's only, and do not reflect the position or  policies of Credit Suisse or any other Swiss company I have been/am associated with.

Monday, July 21, 2014

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 SĂŁo 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)