HfS Webinar Slides: Are we ready for Digital HCM?

Proprietary │Page 1© 2017 HfS Research
Navigating Digital HCM with
HfS Research’s HR Practice
A Webinar by HfS Research
April 25th, 2017

Web: www.hfsresearch.com
Blog: www.horsesforsources.com

…With a More Serious Side Too! www.hfsresearch.com

Overview:
• Industry analyst, author, speaker, strategist, entrepreneur and blogger
• 20 years’ in the global IT and business process outsourcing and shared services
industry spanning analyst and consulting roles
• Coined the As-a-Service Economy in 2014
• Coined The Digital OneOfficeTM in 2017
• Advised and on 100’s of global IT services, BPO and shared services engagements
• Overseas the largest global network of enterprise services and operations
professionals
Career Experience:
• Founded HfS Research in 2010, overseeing an unprecedented growth story
in the analyst industry
• Practice Lead, Global IT Services & BPO Research, Gartner, Inc
• Global BPO Marketplace Leader, Deloitte Consulting
• Consulting Practice Head, IDC Asia/Pacific
• European IT Markets Practice Lead, IDC Europe
Education:
• BSc. Honors in Business & Technology, Coventry University, UK
• Diplôme Universitaire de Technologie in Business & Technology, University of
Grenoble, France
phil.fersht@hfsresearch.com
@pfersht
Web: hfsresearch.com
Blog: horsesforsources.com
Phil Fersht, CEO and Chief Analyst, HfS Research

Steve Goldberg, Research Vice President, HR Technology
and Workforce Strategies
My Research Practice Areas for 2017:
§ Predictive Analytics in HCM Systems
§ Payroll-as-a-Service: 2017
§ HR Technology: Industry Vertical View
§ HR-as-a-Service: Industry Vertical View
§ New Sources of HR Technology Innovation
Key Themes Impacting My Research Practice in 2017
§ Digitally Empowered Employees and Line Managers
§ Industry-Specific Capabilities in HR Solutions and Services
§ Change Management in HR Technology Deployments
§ Global Capabilities in HCM Solutions
§ The Intelligent Office Model in HR
§ HR Technology in Mergers and Acquisitions
§ Subtle yet critical HR Tech Selection Considerations
§ Crafting a Winning People Analytics Roadmap
§ Combatting “HR Data Distrust”
§ New Data Privacy Considerations
Steve.Goldberg@HfSResearch.com
@empoweredHR
• 3 decades in HR / HR
Technology: Practitioner,
Product Strategy Exec,
Industry Advisor
• 30+ white papers and
articles published
• MBA in HR

Khalda De Souza, Research Director
My Research Practice Areas for 2017
§ Service Provider SaaS Services Strategies
§ Enterprise SaaS Services Demands and Requirements
§ Tracking the development of key SaaS Services markets
Blueprints for 2017
§ Salesforce Services
§ Microsoft Dynamics Services
§ SuccessFactors Services
§ Workday Services
Key Themes Impacting My Research Practice in 2017
§ The change management required to deliver and consume SaaS services: still a journey
§ Service Providers:
§ Moving from strict silos of delivering consulting, implementation and support services
to flexible and continuous advice and deployment based on agile methodologies
§ The ability to provide onsite services
§ The focus on hiring, training and acquiring talent with technical and business skills, and
with the right mind-set
§ Enterprise Clients:
§ Understanding the importance of organizational change management
§ Driving user adoption
§ Achieving real business process transformation
§ The need for ongoing, flexible support services
Khalda.de-souza@hfsresearch.com
@Khalda_De_Souza
• >20 years analyst experience
in IT Services
• SaaS Services expertise
• Leading analyst in the
market tracking Workday
and SuccessFactors Services

C-Suite Directives: Hi-tech firms are harnessing digital talent
How critical are the following C-Suite directives to your operations strategy? (“Mission Critical”
responses – all buyers)
0%
20%
40%
60%
80%
Drive down
operating costs
Accelerate speed
to market with
new products
Create real-time
data that supports
predictive, not
reactive decisions
Align middle/back
office operations
to improve
customer
experiences
Improve the
quality of
operations talent
Policies that
restrict the hiring
of people
Invest in process
automation and
robotics to reduce
reliance on low-
skilled labor
Invest in cognitive
technologies and
machine learning
to reduce reliance
on mid/high
skilled labor
BFSI Manufacturing Healthcare & Life Sciences Retail Software & Hi Tech Energy & Utilities
Source: HfS Research in Conjunction with KPMG, “State of Operations and Outsourcing 2017”
Sample: n=454 Enterprise Buyers

What customers
have I delighted
recently?
What new
relationships have
I made that add
value to our
business?
What work have I
done that excites
people?
How can I help
energize my
colleagues?
How have I helped
add value to new
business wins?
How have I
contributed to new
initiatives that
improve productivity
and effectiveness?
The Outcome
Worker Survival
Guide…

The Future of Operations: The Digital OneOfficeTM Organization

Refocus our skills! Top skills in 2020 shift to critical thinking,
creativity and Emotional Intelligence…
Source: Future of Jobs Report, World Economic Forum, 2017

Five simple steps for HR execs to break the legacy mold
① Be smart about your career
② Begin with quick wins
③ Focus on integrating data with real urgency
④ Focus on speed and urgency with short-terms plans
to realize your long-term vision
⑤ Be brave!

- Delighted customers
- Profitability and growth
- Great brand (incl as employer)
- Organizational agility
- Pre-empted execution risks
- Differentiated products/svcs
- Optimized svce delivery model
- Best fit, highest caliber talent
- Dynamic talent deployment
- High engagement/productivity
- High ROI from HR/HCM spend
- Culture of innovation
HR / HCM Outcomes Business Outcomes
Intelligent OneOffice
Conduit
- Design Thinking - Plug & Play Solutions & Services - On-Demand Analytics
- Cognitive / AI / NLP - Standardization / Personalization - Interaction Channels
- Engaging Software - Functional Integration - IoT
HR Technology Themes
1. Productivity not just coolness
2. End-to-end personalization
3. Cognitive and conversational
4. Way past process automation
5. Line manager enablement
6. Focus on “abilities” (I-C-U-S)
7. Predictive HCM capabilities
HR SaaS Services Themes
1. Business strategy
2. Design Thinking
3. Change Management
4. Integration services
5. Analytics for real insights
6. Flexible management services
7. Visionary service provider
For Context

What has the biggest financial impact?
a) 40% cost savings in HR Service Delivery
• HR staff, HR outsourcing, HR-IT
b) 20% reduction in (undesirable) employee turnover
c) 4% improvement in employee productivity
It’s All About Productivity – Pop Quiz

What has the biggest financial impact?
a) 40% cost savings in HR Service Delivery
• HR staff, HR outsourcing, HR-IT
b) 20% reduction in (undesirable) employee turnover
c) 4% improvement in employee productivity
$4M
$9M
$30M
Not even close!This example: 5,000 employee organization
- HR service delivery costs = $2k per employee
- Fully loaded turnover cost per empl = 1 x empl cost
- Turnover went from 10% to 8%, or 20% reduction
- Avg revenue per empl = $150k
- Avg empl cost = $90k
It’s All About Productivity – Pop Quiz

Personalization Drives Adoption, ROI

Other cognitive computing examples:
§ System suggests a well-matched mentor
§ System leads a personalized on-boarding experience
§ System helps employee optimize Benefit plan selection
§ System pre-fills timesheets/expense reports using past patterns
PTO requested
Hi Bob, what dates
are involved?
Next week on Wed and Thurs,
the 10th and 11th Ok Bob, you have more than
enough accrued PTO, I will
forward for approvals
Fantastic – thanks
You’re welcome, and btw, pls say
“yes” if you want me to cancel
your meetings on those days
Chatbots all the Rage

Chatbots all the Rage (Example from Engazify – Ranked 2017 Startup of the Year)

Aligning Innovation and Adoption Cycles
SOLUTION / SERVICES PROVIDER IMPERATIVES
• Design thinking
• Customer success model
• Innovations must pass the “value test”
• Innovations should not add complexity
CUSTOMER IMPERATIVES
• Organizational readiness
• Best-fit change management overall
• Leverage customer community learnings
• Find ways to ensure alignment of priorities with vendor

Where Digital HR is Taking Us
$20B HR Tech Market by 2020
• Conversational HR / Payroll / Benefits
• Employee performance expectations
redefined for digital era
• Collaboration and productivity tools
for the extended workforce
• Continuous coaching, learning, re-tooling
• Prescriptive analytics and supporting data
science infrastructure
• Changing role of HR Department

SaaS HR Services: A Growing and Changing Market
WHY?
• Standardized HR
processes
• Easy, Fast to Deploy
• User Interface
• Cost-Effective
• Corporate Cloud
Strategy
• Got it in a bundle!
PAST FOCUS
• Automation of processes
• Software Selection:
Ø Workday
Ø SuccessFactors
• Add-Ons/ Specialist
• One-off Fast Deployment
• Technical Transformation
• All Cloud or Hybrid
EMERGING FOCUS
• Analytics and Data Science
• Employee Engagement
• Productivity vs Cost Take-Out
• Platform Selection
• Flexible Support Services Demand
• Industry Sector Alignment

Start with YOUR business context
Business
Strategy
Micro Industry
Specifics
Culture
Employees
Vision
Country
Specifics
Enterprise Goals
and Mission
Technical
Experience

Operationalize your Context
Technology and
Business
Strategy
Change
Management
Design Thinking
Analytics
Automation
Integration
Services
Service Provider
Partnership
Support Services

HR SaaS Services Provider -- Selection and Engagement
• Existing relationship is good – but don’t discount alternatives, including new
names
• Talk to the software provider for recommendations
• Interview the team – and the back-up team. Have they worked together
before?
• How committed is the service provider?
• Check references, emphasizing those of similar profile
• Attend conferences for peer connections and technology innovation
learnings
• Consider the cost:value ratio of resource pricing
• There is a talent shortage! Be demanding but realistic
• Plug and play relates to technology and people/competencies
• What’s the service provider’s vision? Can it provide proactive advice and
recommendations?

Recapping the Take-Aways
• Productivity trumps cost savings and efficiency gains
• HR/HCM outcomes >>> business outcomes
• Embracing digital HR: Understand how far / how fast
• Stick to innovations that drive value, others just distracting
• Do not shortchange organizational change management, including
Organizational Readiness
• Strategic partnerships vs. vendor / customer relationships
• HR Departments adapt or disappear

About HfS Research
HfS Research is The Services Research Company™—the leading analyst authority and global community for business operations
and IT services. The firm helps enterprises validate and improve their global operations with world-class
research, benchmarking and peer networking. HfS Research was named "Independent Analyst Firm of the Year for 2017" by the
Institute of Industry Analyst Relations which voted on 170 other leading analysts. HfS Chief Analyst, Phil Fersht, was named
Analyst of the Year in 2017 for the third time.
HfS coined the terms "The As-a-Service Economy" and "OneOffice™", which describe HfS Research's vision for the future of global
operations and the impact of cognitive automation and digital technologies. HfS' vision is centered on creating the digital
customer experience and an intelligent, single office to enable and support it. HfS’ core mission is about helping clients achieve
an integrated support operation that has the digital prowess to enable its enterprise to meet customer demand - as and when
that demand happens. With specific practice areas focused on the Digitization of business processes and Design Thinking,
Intelligent Automation and Outsourcing, HfS analysts apply industry knowledge in healthcare, life sciences, retail, manufacturing,
energy, utilities, telecommunications and financial services to form a real viewpoint of the future of business operations.
HfS facilitates a thriving and dynamic global community which contributes to its research and stages several OneOffice™
Summits each year, bringing together senior service buyers, advisors, providers and technology suppliers in an intimate forum to
develop collective recommendations for the industry and add depth to the firm’s research publications and analyst offerings.
Now in its tenth year of publication, HfS Research’s acclaimed blog Horses for Sources is the most widely read and trusted
destination for unfettered collective insight, research and open debate about sourcing industry issues and developments.
HfS was named Analyst Firm of the Year for 2017, alongside Gartner and Forrester, by leading analyst observer
InfluencerRelations.

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