HCDM vs. ERP: Human Capital Development

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HCDM vs. ERP: Human Capital Development

  1. 1. S A B A White Paper HCDM vs. ERP: Human Capital Development & Management and Enterprise Resource Planning Systems Complements for Supporting Organizational Performance
  2. 2. Executive Overview: The Evolution of Enterprise Applications in the Management of Human Capital During the 1990s, companies invested heavily in ERP (Enterprise Resource Planning) systems – enterprise-wide Financial, Order Processing, Manufacturing and HR applications. The goal was to aggregate and automate functional business information to increase efficiency and provide financial control. These systems drive cost savings by creating consistency across an enterprise, and give the organization visibility over transactions that affect their physical, financial and - to some extent - human capital. As companies have been automating their transactional and human capital information with ERP, they are faced with two new challenges. These challenges represent both significant change and significant opportunities for organizations. First, with the widespread adoption of the Internet, organizations must extend their human capital information and applications to employees, customers, partners and suppliers — the extended enterprise of the organization. Second, best performing organizations are beginning to strategically develop and manage their human capital skills, experience and knowledge as a source of competitive advantage. Organizations have started to evaluate their ERP systems as sources to address these challenges, but have discovered limitations in translating a human capital information system into a human capital process system. This challenge stimulated the creation of a more comprehensive and innovative system to complement ERP – Human Capital Development and Management (HCDM). HCDM is a management system for developing and managing people, rather than managing people’s information. It focuses on the integration and improvement of enterprise-wide cross-organizational processes, and emphasizes competency development, certifications, organizational alignment, knowledge management and talent tracking and development. Extended enterprises now span the globe, communities and alliances of people are working together in multiple time zones, speaking multiple languages, forming ecosystems of distributed relationships requiring visibility, process and alignment. HCDM systems are becoming both the glue and dynamic catalyst for making these extended enterprises operate as a seamless, high-performing whole. Though HCDM and ERP are both enterprise-wide management systems, their purpose, features and functions, and value propositions are very different; they are components of a complementary broad-based infrastructure, not substitutes for one another. ERP systems focus on information, financial and physical assets, in an automated, functional, internal- only back-office format; HCDM focuses on people-in an aligning, cross-enterprise, and end- user format. Whereas ERP collects and organizes data for cost-saving administrative efficiency, HCDM integrates the core processes of a human capital management system – learning, performance, content, collaboration and talent management – to achieve superior
  3. 3. performance. Good ERP deployment results in better budgets and cost accounting; good HCDM deployment results in improved productivity of people, speed-to-market, business alignment and reduced risk of non-compliance. Taken together the two kinds of systems represent an operational and strategic whole. This white paper explains the HCDM strategic imperative, the differences between ERP and HCDM and explains how they work together as an overall management system for the enterprise. 2 Saba Human Capital Strategy in the Networked Enterprise A New Application Imperative
  4. 4. The Challenge: Developing and Managing Human Capital in the Extended Enterprise Study after study demonstrates that a business’ value is directly linked to its collective knowledge and skills, and the ability to develop and manage its people to achieve superior performance. Organizations with the best people, most knowledge and most effectively deployed human capital increase their ability to increase revenue and market share while reducing costs and risk. Not surprisingly, an organization’s human capital assets are now the greatest factor in determining its market value. Figure 1a: Economic Value of Human Capital Assets As much as we now understand that human capital assets are keys to success, organizing well for such things is not easy. It is difficult to systematically develop and manage people, while efficiently and effectively keeping their knowledge, skills and capabilities up-to-date and constantly linked with performance objectives. This complexity is exacerbated by the expansion of organizations’ reach to become extended enterprises of employees, customers, partners and suppliers. Each of which has its own complement of human capital upon which strategy and execution depends. Human Capital Strategy in the Networked Enterprise A New Application Imperative Saba 3
  5. 5. Businesses are challenged, directly and indirectly, with considerable barriers to developing and managing people across the complex environments of these extended enterprises. Consider these very real quandaries, for example: • Product Introductions: “We roll out twenty new products every month. How can I get my global channel partners up to speed faster, so they can sell greater volumes before competition enters my market?” • Sales Force Effectiveness: “Our highest margins come from selling to enterprise accounts. How do I quickly develop and share the knowledge and skills across my sales organization to leverage our success in selling to Fortune 500 customers? How do I ensure collaboration from our partners in big deals?” • Regulatory Compliance: “We beat every other airline in on-time departures, yet new security regulations dramatically affect my flight schedules. How can I track and record that my people learn the new regulations and are certified as quickly as possible? And what about our contractors? “ • Customer Service: “I know that within my extended enterprise there are people with the skills to solve my customer’s problem. How do I locate them fast and get their expertise applied to a critical problem right now? How can I shorten the time to competence of my support people when new products roll out? Should I train my customers to make them smarter about the problems they send to us?” • Employee Development and Retention: “After a round of layoffs, we worry about retention and morale. Employees want to improve their knowledge and skills. How can we use our limited training budget to deliver new and exciting development opportunities to our critical people throughout the world?” • Performance Management During Restructuring: “We have improved productivity and reduced inventory. But we are dramatically restructuring — how do I make sure that my leadership knows how to manage and motivate their teams, establish clear performance plans and adapt to new ways of working? How do I bring that same thinking to our customers, partners and suppliers, both new and old?” Looking at these kinds of challenges, the complexity of achieving success becomes apparent. The people that business leaders depend upon for the execution typically sit in different functions; and, in many of the examples indicated, they are not in the core organization but rather in organizations of customers, partners and suppliers. Customers have a significant role to play, both in providing insights for new innovation, and in being an audience for some of the learning and knowledge associated with new products and services. In addition, the pace of activity within departments and initiatives such as customer service, 4 Saba Human Capital Strategy in the Networked Enterprise A New Application Imperative
  6. 6. merger and acquisition or compliance is frenetic: knowledge and skill development must be quick, flexible and driven by the individual. At the same time, for that knowledge and learning to impact organizational performance, it must be closely linked to performance goals and assessment and be continuously monitored for improvement and adaptation by managers. Ideally, it is not only tailored to specific people-their needs, styles, cultural settings and placement in an organization – but even to the different roles that they play in the many different processes to which they contribute. It must be flexible to both scale and mode, combining both formal and informal learning. The Performance Imperative The human capital challenges we have been discussing ultimately roll up to one overarching objective – organizations must be able to develop and manage people better than their competition to achieve superior performance. Today, disembodied strategy is not enough: value is created through superb execution, and execution critically depends on getting the best people and making them the most productive that you can. Doing that has never been easy, and no one system can solve the myriad interrelated problems implied, but a giant step forward has been taken with the development of the management systems of human capital. To better understand how these solutions have emerged, and indeed how Saba has led their evolution with its vision and experience, we should turn to some of the recent history of ERP and HCDM technologies: where they came from, and how they have evolved. Human Capital Strategy in the Networked Enterprise A New Application Imperative Saba 5
  7. 7. Traditional ERP Solutions: An Historical Perspective Understanding the origins and assumptions that helped develop ERP will illustrate the advances Evolution of ERP Applications represented by HCDM, as well as underscore the different value propositions of these solutions. 1980s – Automation of back office In the 1980s, computing became inexpensive enough functions such as payroll, human resources, financials to mainframe for a wide range of new applications to be developed. online systems (Dun & Bradstreet, Thanks to both the advent of client/server Cullinet, et al) architectures, as well as a more broad-based approach to extending technology to a wider range of business 1990s – Migration of back-office systems to client/server architectures (Oracle, processes, organizations were ready to embrace a new Peoplesoft, Baan, SAP) – emergence class of solutions that standardized and integrated of HR focused ERP systems. separate islands of information. Enterprise Resource Planning solutions (ERP) were first developed to Late 1990s – Emergence of sales and CRM front-office systems (CRM and automate financial and physical asset management call center automation) (Siebel, and better manage the back office functions that Vantive, Scopus). were the center of business operations. 2002 – Focus of ERP remains on automating internal processes. From the beginning, the main focus of ERP was to automate and integrate existing business processes for financial and manufacturing control and increased efficiency. Specifically, the goal of ERP was to tightly integrate certain internal administrative processes so the organization could manage financial and physical capital more consistently and more streamlined. By bringing together business processes such as accounting, order entry and fulfillment, purchasing and supply chain into a standard and linked set of applications, ERP systems now provide the ability to tightly manage the information a business carries on its balance sheet. ERP Supply Chain Automation Systems specifically manage processes such as ordering parts to meet manufacturing plans, sharing materials across plants and setting up supplier and vendor contracts to meet particular manufacturing needs and processing manufacturing costs. These ERP systems ensure, for example, that parts ordered in one factory are purchased in bulk and shared across multiple locations. ERP Financial Systems integrate processes related to financial flows and manage such things as purchasing equipment, paying invoices, processing payroll and depreciating equipment. They close the books on the business, ensuring that all business processes traverse the necessary financial transactions to calculate true costs, true revenue and manage expenses. ERP systems took a major step closer to managing people processes with the arrival of integrated human resource systems. The information work of such systems has historically been operational and administrative, not strategic: they tend to optimize people–information for standardization, rather than personalization and flexibility. These human resource systems manage processes such as the administration of hiring employees; changing pay scales; 6 Saba Human Capital Strategy in the Networked Enterprise A New Application Imperative
  8. 8. reductions in force; and tracking benefits, retirement programs and reporting structures in the organization. ERP HR solutions allow Human Resources departments to keep track of people-information and also log all relevant financial information about a company’s employees. ERP has little functionality or perspective related to managing people’s skills, supporting their development needs nor does it provide tools and analysis for flexible and dynamic planning of talent acquisition and deployment. In the end, ERP systems, even ERP HR systems, are tools for accounting and administrative managers whose primary function is people-information management. ERP systems are an important part of most large organizations’ architecture because they provide this useful and necessary functionality. Deployed correctly and appropriately, ERP systems improve efficiencies of people-information management in large complex organizations. HCDM, by contrast, is an integrated platform to both equip managers to develop and deploy people for business impact, and to empower people to manage their own careers, community-based learning and performance objectives. HCDM focuses on the development and management of people processes that ERP is not suited to manage. Human Capital Strategy in the Networked Enterprise A New Application Imperative Saba 7
  9. 9. HCDM Technology Evolution HCDM can be traced to many different applications over the last decade, each of which tried to solve some piece of the overall people-process puzzle. A major shift occurred when organizations recognized both the need to focus on the strategic, rather than administrative, side of people management, and the importance of developing and managing organizational capability at a time when business was accelerating and becoming more global. Some of the earliest efforts to bring technology to bear on the needs of the forward-looking organization were simple (and often awkward) collaboration and knowledge management tools. These early efforts were followed by first generation training systems-based upon the realization that the administration of training, once computerized, had the potential to create more strategic processes of learning. When the Internet began to boom, visionary companies saw the potential to combine not only these systems in an easier and more flexible format, but also to link other related people-process applications (such as performance management), and to bring them all together in a common platform to provide an integrated solution for the extended enterprise. From its origins in the mid-1990s, Saba has been pacing this broad-reaching and integrative vision: creating an overall, end-to-end management system for the entire extended enterprise of human capital. 8 Saba Human Capital Strategy in the Networked Enterprise A New Application Imperative
  10. 10. After years of experience, working collaboratively with innovative customers, Saba has taken the HCDM vision and translated it into a new class of enterprise application – one that ensures that the people in an extended enterprise are trained, aligned, performing and collaborating in a consistent and optimal manner. HCDM supports the sharing of information, best practices, knowledge, content and expertise on a global scale. The solution allows customers, partners, employees and suppliers to access formal and informal learning content, manage goals and performance plans, share position descriptions and utilize collaboration tools and certification programs to ensure execution of business goals. It is scalable, open, Internet-based and designed to accommodate flexible business processes. Human Capital Strategy in the Networked Enterprise A New Application Imperative Saba 9
  11. 11. Understanding the Differences Between HCDM and ERP Five Key Differentiating Features of HCDM: 1. HCDM provides an overall management system for human capital. The combination of functionality and processes managed by HCDM comprises an overall integrated approach to developing people, which represents a system for leaders to manage human capital. By both the breadth and interconnectedness of the processes included, HCDM enables a more comprehensive and interwoven approach to tracking and empowering people. Most of the processes in HCDM are not addressed by ERP systems. 2. HCDM automates and integrates development and management of information and processes about and for people, whereas ERP manages transactional information, mostly about tangible assets. HCDM focuses on the development and management of people. The core of its information is about people and their capabilities and potential: their competencies, learning history, assessments and development plans. It aligns goals, sets performance plans, delivers training and facilitates collaboration; it integrates opportunities for staffing, recruiting and succession. When a new product is launched, for example, the HCDM system assures that all members of the direct and indirect channels have training and certification programs available immediately – and tracks and measures their progress. When new government regulations are released, the HCDM system certifies that employees, customers, partners and suppliers meet compliance requirements. As a tool for recruitment, development and retention, HCDM provides performance planning, training and collaboration to help people improve their skills and performance. ERP solutions, by contrast, even those in the HR arena, focus primarily on transactions related to financial administration: employee names, ID numbers, demographics, payroll records, hiring/firing records, benefits and simple employee history. They have no understanding of, data regarding, or focus on the learning, development and people management processes. 3. HCDM is designed for the extended enterprise: employees, customers, partners and suppliers. HCDM is designed to share information and processes across the extended enterprise. ERP software solutions, in contrast, focus on organizing and structuring a company’s internal information, typically in a rather uniform way. ERP systems lack the necessary flexibility and dynamism to support learning across boundaries and among different constituencies. 10 Saba Human Capital Strategy in the Networked Enterprise A New Application Imperative
  12. 12. For example, training and learning programs about new products are often shared across employees, customers, partners and suppliers – but learning requirements and recommendations are based on job roles, and training requirements may be very different for employees than for partners and again different for different classifications of partner. Higher-level partners may require stricter certification rules than others, yet will share some of the same baseline certification programs and assessments. These differing requirements must be managed flexibly and quickly, as well as fluidly across different organizational boundaries. Talent Management must now also span organizational boundaries and accommodate the fast-changing world of soft assets. For example, a Talent Management system must allow people to locate talent – from anywhere, both internal and external – to participate on a project team. With talent management, an employee is now able to locate specialized skills not only within his own function or broader organization, even within partner organizations, or from interconnected pools of contractors and other talent providers. Similarly, managers can flexibly staff projects and new initiatives. To accommodate different groups of users in its multiple complex people processes, the HCDM solution supports different interfaces and access privileges, depending on the user. Each individual has a personalized view of information that is relevant and appropriate to him/her – while still respecting (and efficiently reusing) data and processes that are shared. ERP systems provide industrial-strength databases of information, but lack the flexibility and reach to differentiate among pools of users within and across enterprises. 4. HCDM supports highly flexible, configurable business rules. Because of the complexity of people and people processes, the HCDM solution solves many different business processes for many different constituencies across the extended enterprise. HCDM brings together best of class business processes in a scalable environment. For example, the demands of accommodating multiple kinds of learning, certifications and talent management must now extend across organizational boundaries. But even within an organization, HCDM supports several diverse populations of people, each with varying demands – based not only on different job types, but even on roles within those job types. It also supports the changing demands of projects, and new initiatives that characterize any best-performing organization. Training for a single product rollout, for example, may require five languages, several different certifications, different assessments and pricing in multiple currencies. Some business units may require management approval to attend courses – others may not. Partners may need to pay a fee to take courses. Certain managers must have access privileges in assessing pools of talent, and others may not. Some information must be kept confidential for security purposes, and other learning programs must be available to all, anywhere, any time. The HCDM system has flexible business rules to enable learning, both formal and informal across the extended enterprise; similarly HCDM enables flexible setting and monitoring of goals in its performance management processes. ERP systems, by contrast, tend to enforce consistent and uniform business processes across an entire enterprise. Consistency of information and process – for Human Capital Strategy in the Networked Enterprise A New Application Imperative Saba 11
  13. 13. example in the handling of receivables or currency valuations-are their strength. But that strength also highlights the inflexibility of the system when it comes to their people-who demand personalization and highly flexible development and management of knowledge and skills. 5. HCDM is an end-user focused application. HCDM is designed for anytime, anywhere access by end-user individuals – employees, managers and executives-through a browser. It is easily integrated into enterprise-wide employee and partner portals, and seamlessly becomes part of e-mail environments and normal communication processes. Its information and notifications are personalized to an individual’s job, role or project needs. It allows people to find and engage in formal and informal learning opportunities, collaborate with peers and experts online, contribute learning content and job aids, see and report progress against goals and development plans and chart their desired career and skill development paths. ERP systems, by contrast, are designed for use by back-office workers – typically HR, payroll, purchasing, order-entry and finance personnel. They do not have the interfaces, business logic or customization needed for broad end-user access; they are powerful but hierarchical systems, oriented for expert administrators — not people who must integrate learning into their daily and urgent tasks. Once again the strength of ERP systems also becomes their weakness: they discourage freedom of information even as they structure it well for the expert users who depend on it. 12 Saba Human Capital Strategy in the Networked Enterprise A New Application Imperative
  14. 14. Summary of differences between ERP & HCDM Systems ERP HCDM 1. Which ERP automates HR, financial HCDM manages the skills, capabilities, Processes are and manufacturing functions deployment and development of people. Managed? to improve financial control. Learning, Certification, Classroom Hiring, Firing, Change of Training, E-Learning, Live E-learning, Benefits, Department collaboration, Skills Management, Number and Change of Job. Certification and Performance Planning and Customer Education. 2. What People are ERP HR systems manage HCDM supports the extended enterprise, managed? internal personnel and in a single integrated system. resources only. 3. Who uses the ERP systems are designed for HCDM is designed for use by everyone in system? back office users. the extended enterprise. Typical users are internal HR Employees, customers, partners and employees, back office suppliers can directly access the system. workers and financial Interfaces and privileges vary depending managers. on the user. Administrators and managers have special privileges. End users may have access to basic information via portals. Portals provide access with both high information and functionality. 4. What data and ERP manages data and HCDM manages data and processes information is processes around financial and around people, organizational profiles, stored in the system physical assets. learning and related processes. Focuses on the master Employee, customer, partner, and supplier employee record, salary, training history, competencies, benefits, promotions, and performance plans, certifications, financial financial budgets for the transactions for training, as well as history enterprise – but from an of informal learning activities and administrative perspective. knowledge management resources. 5. How flexible is ERP solutions enforce HCDM supports global processes with the system in consistent and uniform flexible, configurable business rules. enabling global enterprise-wide business information. Flexible system with configurable business business rules? rules to enable different rules and alerts Designed to implement global for different sets of users within and processes in a uniform way beyond the enterprise. Enables many across the organization. Not portals depending on user needs and designed to support different audiences to be served. Integrated business rules for different financial management of the training parts of the organization. function is included System is transaction – oriented to create integrated financial reporting. Human Capital Strategy in the Networked Enterprise A New Application Imperative Saba 13
  15. 15. ERP HCDM 6. How does it None. Not designed for this Allows users to share information, access support informal application. experts and historically codified learning; learning and also obtain prescriptive recommendations collaboration? for informal learning as part of their performance plan. 7. Content None. Manages learning content, collaboration, management live learning and is built on AICC and Features? SCORM content standards. Content builder function to assemble content from learning objects. 8. Enables what Integrated and consistent Helps achieve superior performance by business benefits? business practices for integrating learning, performance, content financial functions – provides and talent development and management standardized budgeting and for the extended enterprise (customers, financial reporting across the employees, partners and suppliers). enterprise. Faster time-to-competency; shorter time- to-market; reduced cost of regulatory compliance; optimized channel alignment and increased sales and channel productivity. 14 Saba Human Capital Strategy in the Networked Enterprise A New Application Imperative
  16. 16. ERP and HCDM as Complementary Solutions Though we have stressed the differences between HCDM and ERP “Proctor and Gamble Global systems, in the appropriate role and deployment both are valuable for Training Initiative Integrates the large enterprise. Indeed, together they represent complementary with SAP HR” pieces of an operational and strategic whole. ERP systems and HCDM focus on solving different problems – and both serve important and Proctor and Gamble manages the 90,000 useful functions. Taken together they represent a strategic management P&G University globally with Saba. system for improved productivity. Proctor and Gamble University offers more than 150 learning programs, Every organization will-and indeed should — have its own technical including clases, e-learning programs and architectural plan for connecting ERP and HCDM; Saba makes that live collaboration. easy with our wide range of ERP connector applications, and well- documented system integration and migration specifications. Saba has The P&G Human Capital Development integrated with all major ERP systems, in scores of large complex and Management system supports 140 organizations; for PeopleSoft alone, robust and transparent interfaces are countries and is linked directly to SAP in place at such companies as Agilent, Amazon, EMC, Ford, which houses the company’s master Hillenbrand Industries, Network Appliances and others. human resource database. All training, certification, and skills data is stored in At a conceptual level the working relationship between ERP and the Saba server. HCDM is relatively simple to describe: ERP data becomes source information that adds to the pool of data for the HCDM management system. The data is processed and handled by the HCDM applications along with end-user information, profiles, preferences, and all human capital processes. Human Capital Strategy in the Networked Enterprise A New Application Imperative Saba 15
  17. 17. Figure 3: Different Data between ERP and HCDM In working with ERP HR systems, HCDM draws from the ERP databases the “primary employee record” for internal employees -employee ID, name, address, salary, organization and the master employee identifier. HCDM then Medtronic Integrates takes the basic employee or individual name and identification PeopleSoft with HCDM information and adds to it information on skills, competencies, the student transcript of all learning events and certifications, performance Medtronic, world leaders in plans, objectives, language and organizational location of the individual. manufacturing embedded medical life- The information in the HCDM system is additive to that in ERP; it extending devices, uses HCDM to puts the information in a human capital development context and manage its global process for training, provides functionality to make it end-user oriented and part of the certification and compliance with FDA productivity processes of the extended enterprise. regulations. PeopleSoft is the Medtronic ERP Human Resources system, forming the basis for the Medtronic global employee database and employee identifier. Regular batch programs update the HCDM system from PeopleSoft to make sure that all employees have a single identifier to provide certification and training records, allowing auditing by the FDA. 16 Saba Human Capital Strategy in the Networked Enterprise A New Application Imperative
  18. 18. Cisco Integrates PeopleSoft In each case, to integrate these two systems, a periodic batch program or XML-based file transfer program is typically used to replicate additions, with HCDM. updates and deletions as new employees are added or personnel records Cisco, the worldwide leader of change. Multiple ERP systems can in fact (and often do) feed into networking for the Internet, uses Saba HCDM. HCDM to manage training for 40,000 employees in 225 offices around the Since HCDM is less transactionally-focused than ERP, it is rarely world, a cost-saving and strategic necessary to send information back the other way, i.e. from HCDM to foundation for Cisco’s extensive e- ERP. HDCM becomes the global system of record for skills, training learning strategy. The Saba system takes history, certifications and performance plans, as well as handling all of nightly batch updates from PeopleSoft the human capital processes beyond the scope of ERP functionality. with data such as employee information, When organizations need integrated reporting on employees and their roles, locations and joins it to learner skills, performance plans and certifications, this information is all stored profile records for all Cisco people, in the HCDM system for easy reporting and analysis. ensuring continually updated information for human capital management. Figure 4: How HCDM Solutions complement ERP Solutions Human Capital Strategy in the Networked Enterprise A New Application Imperative Saba 17
  19. 19. FREQUENTLY ASKED QUESTIONS 1. What is Human Capital Development and Management (HCDM) and how do I explain it to my organization? How does it complement ERP? Just as traditional ERP solutions integrate financial management across the supply chain, Saba integrates information and learning across the extended enterprise. With HCDM you can consolidate learning, performance, content, collaboration and talent management in a single system – and this system complements your ERP solutions to provide an overall management system for the human capital in your extended enterprise. 2. I just finished implementing ERP for my HR and supply chain management. Why would I purchase Saba? An HCDM solution is unique and different from an ERP solution - it provides the learning, performance, content and talent management to support your human capital development and management, across employees, customers, partners and suppliers. HCDM also enables the management of the global formal and informal learning needs and allows you to deploy certification programs (OSHA, FDA, EEOC) across your extended enterprise, complementing your ERP solutions. ERP training management modules were not designed to accommodate this extended enterprise, nor do they have the features to manage all forms of learning in an enterprise. 3. Will ERP vendors build their own HCDM solutions? Although this is theoretically possible (and indeed many ERP providers already claim to have an HCDM solution), one should not underestimate the effort to build what has taken Saba over 1500 man-years, working with world-class customers, to create. Nor should one underestimate the effort required to transform one kind of application into something with very different features and functionality, or to bolt on a basic LMS to try to achieve HCDM functionality. ERP and HCDM are management systems with highly dissimilar processes, data and users. ERP companies have already invested hundreds of millions of dollars into data models, application logic and engineering teams dedicated to solving the problem of automating HR business processes and integrating financial systems; their success in these realms make it all the more difficult for them to transition in a different direction. HCDM is a new class of management system designed to help an enterprise manage its human capital through integrated business processes and information flows for learning, performance, content and talent management. Businesses are increasingly recognizing the power of best-of-breed, complementary solutions. 18 Saba Human Capital Strategy in the Networked Enterprise A New Application Imperative
  20. 20. 4. Does an organization incur additional costs by adding an HCDM solution? In most corporations, training takes place in a relatively fragmented and often disorganized manner – each division, department or geography does their own training. This fragmentation and redundancy is reflected in multiple, costly separate content libraries, separate management systems and duplicate staff functions. An HCDM solution will integrate all these functions in one application - and why it therefore typically saves considerable costs by allowing a company to share content, reduce headcount and manage training consistently. Further, HCDM, with its business benefits of increasing revenue and market share while reducing costs and risks can also help drive top line growth and save other, more indirect costs, all of which adds to the ROI of the software. 5. How does Saba compare to other HCDM solutions? Both Gartner Group and Brandon Hall (a leading analyst in the United States) have rated Saba as the most mature, functionally rich and scalable solution for end-to-end learning management on the market. Saba is listed as a leader in the Gartner 2002 Learning Management System (LMS) “Magic Quadrant” report. * Published February 8, 2002, the report evaluates the performance of more than seventeen LMS vendors based on ability to execute and completeness of vision. Saba has an ecosystem of more than 100 content and application suppliers that add value to the Saba solution. *The Magic Quadrant is copyrighted February 2002 by Gartner, Inc. and is reused with permission. Gartner’s permission to print or reference its Magic Quadrant should not be deemed to be an endorsement of any company or product depicted in the quadrant. The Magic Quadrant is Gartner’s opinion and is an analytical representation of a marketplace at and for a specific time period. It measures vendors against Gartner-defined criteria for a marketplace. The positioning of vendors within a Magic Quadrant is based on the complex interplay of many factors. Gartner does not advise enterprises to select only those firms in the Leaders segment. In some situations, firms in the Visionary, Challenger, or Niche Player segments may be the right match for an enterprise’s requirements. Well-informed vendor selection decisions should rely on more than a Magic Quadrant. Gartner research is intended to be one of many information sources and the reader should not rely solely on the Magic Quadrant for decision-making. Gartner expressly disclaims all warranties, express or implied of fitness of this research for a particular purpose. Human Capital Strategy in the Networked Enterprise A New Application Imperative Saba 19
  21. 21. A Partial List of Saba Customers Organizations around the world and representing every industry type rely on Saba learning, performance, resource, and content management systems to enhance their competitive edge. C OMMUNICATIONS F INANCIAL AND P ROFESSIONAL S ERVICES Alcatel I NSURANCE S ERVICES Automatic Data Processing, Inc. CENTEC ABN AMRO (ADP) Lucent Technologies Banca Popolare di Milano Deloitte and Touche Nortel Networks Fifth Third Bank EDS Sprint Principal Financial Group KPMG Consulting Telecom Italia Royal & SunAlliance Kendle International, Inc. Standard Chartered Bank PricewaterhouseCoopers C OMPUTERS AND Wells Fargo & Company E LECTRONICS S OFTWARE Cisco Systems, Inc. G OVERNMENT BMC Software, Inc. Cypress Semiconductor Dutch Ministry of Economic Affairs Bowstreet Dell Scottish University for Industry E.piphany, Inc. EMC U.S. Army PTC Network Appliance, Inc. Veritas Software Corporation Xilinx M ANUFACTURING Caterpillar, Inc. O THER T OP C ONSUMER G OODS Daimler-Chrysler, AG O RGANIZATIONS Amazon.com Ford Motor Company Cemex Anheuser-Busch, Inc. General Motors Corporation Continental Airlines, Inc. Best Buy Hillenbrand Industries InformationWeek The Procter & Gamble Company Hyundai Kinko’s Minneapolis School District Schlumberger P HARMACEUTICAL AND W.W. Grainger M EDICAL E QUIPMENT Aventis Medtronic, Inc. The Procter & Gamble Company Siemens Medical Solutions 20 Saba Human Capital Strategy in the Networked Enterprise A New Application Imperative
  22. 22. SABA 2400 BRIDGE PARKWAY REDWOOD SHORES, CALIFORNIA 94065 USA 650-696-1758, 1-877-SABA-101 ©2002 Saba Software, Inc. All rights reserved. Saba, Saba Software, the Saba logo, Moving the info@saba.com saba.com Enterprise. Moving Minds and the names of Saba products and services referenced herein are either trademarks or registered trademarks of Saba Software, Inc. All other trademarks are the August 2002 WP-ERP001 property of their respective owners.

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