Perfect Storm: HR in the Cloud


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  • Client base has grown from 105 clients at the end of 2010 to 300 clients now; projecting 600 by the end of 201260 clients with 7,500+ employees; 22 clients with 25,000+Recent wins include Motorola (both Solutions and Mobility), AIG, Tyco, Thomson Reuters US payroll platform is “live”; Canada payroll platform being rolled out in 2012; no further geographic expansion plannedBuilding relationships with NgA, Safeguard World and Patersons for global payrollGlobal time management module available later this yearAccenture, IBM and the Big 4 firms all have growing implementation groups focused on WorkdayDeloitte just announced acquisition of Aggressor, a 100-employee firm focused exclusively on Workday consulting and implementation servicesWorkday only does about 30% of their implementations, relying on various partners to handle most of this workMost buyers interested in a fully outsourced solution based on Workday platform have contracted directly with Workday and then separately contracted with a services providerContrary to popular belief, Workday is not the only SaaS HRIS provider, but they have developed a commanding lead in this emerging market. Other alternatives include:NgA is the only provider capable of delivering a self-contained fully outsourced delivery model around their SaaS platform supported with their own contact center and back office processing capabilities NgA has the most mature model (euHReka) which has been used for yearsUltimate Software – North America focused SaaS competitor to Workday
  • Internal 9/7 = 1.25 = round down to 1 = Inadequate Outsourced 18/7 = 2.57 = round up to 3 = Good
  • Perfect Storm: HR in the Cloud

    1. 1. Perfect Storm: HR in the CloudMarket Trends and Key Considerations October 30, 2012 Sponsored by: Wall Street Tech Conference & Expo Produced and Presented by: The Outsourcing Institute
    2. 2. Today’s Speakers Moderator Dan Goodstein Vice President The Outsourcing Institute Maribeth Sivak Stanton Jones Principal Consultant Analyst, Emerging Technology Business Advisory Services ISG ISG
    3. 3. • Located at – Largest Professional Association of Outsourcers with 70,000 Members Globally• Gateway to Resources, Trends, Best Practices, Case Studies• Recently launched OTV, including new RPO Video Channel• Outsourcing Jobs Opportunities and Recruiting Services Through CMS Inc.• For Buyers: – Training Through OI University – Outsourcing RFP Builder Software and Related Tools – Vendor Matchmaker Service• For Providers: – Sponsorship and promotions – Marketing Campaigns for brand acceleration and exposure – Performance-based Integrated Sales and Marketing Programs for lead generation & business developmentFor more information contact us or 516-279-6850 ext. 712 3
    4. 4. Outsourcing Institute Fall Road Show: Outsourcing Governance andRelationship ManagementDecember 5, 2012 in NYCJoin over 80 senior outsourcing executives within both the ITO and BPO space to generate leads, relationships andexposure for your brand and message.Our Fall show will include panels and discussion on the following topics:ITO Trends & Best Practices;Onshoring and Rural Sourcing;The True Power of BPO and How it Can Work for You;Alternatives to India - All Key Alternative Destinations;T5 Panel (Tech Related Trends All Executives Must be on Top of);Opportunities in Latin America;Innovation-Cost Save is Table Stakes -Why Settle- Innovation can be Game Changer you are SeekingThe Keys to Winning Relationships Cross Fire panel.Wall Street Tech Conference & ExhibitionMarch 13, 1013 in NYCCIOs, CTOs and Tech Sourcing Execs in Banking, Financial Services & Insurance to Explore "T-5": Sourcing, Cloud Computing, BigData, Mobility, Security & Compliance - also known as "T-5", or the five critical technology-related trends creating bothopportunities and risk for banking, financial services and insurance organizations - will be explored at theWall Street Tech Conference & Exhibition.To learn more and register for events visit
    5. 5. Agenda1. Cloud Level Set2. HR SaaS: Market Trends3. HR SaaS vs. HR BPO4. Considerations for Prospective Buyers 5
    6. 6. Cloud Level Set: NISTThe National Institute of Standards and Technology (NIST) defines Cloud Computing as follows:• A model for enabling convenient, on-demand network access to a shared pool of configurable computing resources that can be rapidly provisioned and released with minimal management effort or service provider interaction.• While this definition is hotly debated within the Cloud community, ISG views it as a broadly accepted industry standard. Characteristics Service Delivery Models Deployment Models • On-demand self-service • Business Process as a • Public Cloud • Broad network access Service • Private Cloud • Resource pooling • Software as a Service • Hybrid Cloud • Rapid elasticity • Platform as a Service • Community Cloud • Measured service • Infrastructure as a Service 6
    7. 7. Cloud Level Set: Service Delivery ModelsA useful way to evaluate Service Models is to define management responsibility. Infrastructure Platform Software as a Service (IaaS) as a Service (PaaS) as a Service (SaaS) Customer Managed Customer Managed Configuration Configuration ConfigurationCustomerManaged Application Application Application Middleware Middleware Middleware Database Database Database Managed Provider Operating System Operating System Operating System Managed Provider Virtualization Virtualization VirtualizationManagedProvider Servers Servers Servers Storage Storage Storage Network Network Network 7
    8. 8. Cloud Level Set: Deployment ModelsThe deployment model, either shared or dedicated, has a significant impact on the maturity offeatures, standardization of commercial terms and pricing, and data privacy/security. Shared Dedicated “Public Cloud” “Private Cloud” • Nearly always shared (multi-tenant), with • Typically dedicated to smaller number of frequent feature updates. customers, or single customer. • Highly standardized in features, pricing • More easily customized for specific and commercial terms. customers or requirements. • Oftentimes fail to meet enterprise IT • Typically more robust, negotiable SLAs security & service level expectations. that meet enterprise IT expectations. • Most closely meets NIST definition. • Portions of NIST definitions likely do not apply. Provider logos a small sample of available market options; many suppliers have both shared and dedicated offerings. 8
    9. 9. Market Trends: HR ERPGiven the emergence of ERP offerings in the cloud, clients’ buying decisions over the next few yearswill become more complex.• ERP software vendors are leveraging cloud offerings for both survival and predatory purposes. Oracle and SAP are expanding cloud offerings via both organic and acquisition-related growth.• Offshore service delivery and the tools/methods used by Systems Integrators (SI) have become commoditized as a cost of entry.• SIs are competing on their experience with new ERP SaaS offerings and their library of proprietary best practices/accelerators to add-onto the core ERP products.• SI players and ERP vendors are pitching SaaS offerings with promises of speed and increased time to value.• SI partner selection criteria increasingly focused on program leadership teams, vertical knowledge and business processes savvy. 9
    10. 10. Market Trends: HR SaaSWe expect HR’s movement to Software-as-a-Service to continue.• SaaS solutions continue to gain traction: – Workday’s native SaaS platform is rapidly evolving from a US-centric mid-market core HR technology player into a strong competitor to Oracle and SAP for large, complex global companies – SaaS solutions delivered by Ultimate Ultipro, ADP Vantage , Ceridian Latitude and Sapien address the needs of mid-market U.S. firms• Acquisition activity: – December 2011, SAP announces their intent to acquire SuccessFactors [March 2012 close]. Speculation is that SAP went down this path because of a serious lag in their internal product development of Cloud and SaaS products – February 2012, Oracle announces their intent to acquire Taleo [mid 2012 close]. Speculation is that this acquisition was driven by the goal to provide a complete cloud offering via the integration of Oracle Fusion and Taleo – August 2012, IBM announces their intent to acquire Kenexa 10
    11. 11. Market Trends: Workday• Workday is providing a formidable challenge with a number of significant, recent wins with large multi-national companies: – Client base has grown from 105 clients at the end of 2010 to 300 clients now; projecting 600 by the end of 2012 – US and Canadian payroll platforms are “live”; no further geographic expansion planned – Modules for Organization Management, Compensation, Absence, and Talent each with robust business analytics• HR SaaS technology does not address buyer’s desire to outsource routine HR, Payroll, and Benefits administration – Building “services” relationships with Aon Hewitt, Accenture and IBM. These HRO Providers are furthest along in wrapping their portal, CRM, and services solutions around Workday to deliver a fully outsourced solution – Accenture, IBM and the Big 4 firms all have growing implementation groups focused on Workday 11
    12. 12. HR SaaS vs HR BPO: What is the Difference?The HR SaaS delivery model does not address buyer’s desire to outsource routine transactionprocessing and call center support. Software as a Service (SaaS) Business Process Outsourcing (BPO) Employee Portal Employee Portal Customer Managed Employee Contact Employee Contact Transactions Transactions Configuration Configuration Application Application Managed Provider Middleware Middleware Managed Provider Database Database Operating System Operating System Infrastructure Infrastructure 12
    13. 13. HR SaaS vs. HR BPO: Qualitative Analysis of Alternative ModelsIf a client has no existing call center technology and portal, an HR BPO SaaS delivery model can get theclient to their desired future state faster, at a lower cost and lower risk than the SaaS only alternative. Attributes of HR SaaS HR BPO Comments Alternative • HR BPO is designed to scale to business needs by leveraging Scalability infrastructure and resources across the provider’s client base • Both delivery models offer flexibility with HR BPO providing more Flexibility rigor in balancing process variations with quality • HR BPO brings commercial grade call center technology, best practice Customer Focus employee portal, knowledgebase and workflow Complexity to • HR BPO provides time tested implementation methodology, and Implement established service center delivery environment Speed to Future • HR BPO implementation experience and contractually committed State implementation fixed fees drive meeting timelines Demand on • HR BPO provides PMO and systems integrator resources as well as on Resources going service center and technology FTEs Cultural • Both models have risk associated with cultural acceptance. For some, Acceptance outsourcing may be more controversial • HR BPO provides HR process expertise and talent. Company may need Skills & Talent to build internal talent to support SaaS model Legend =High Risk =Medium Risk = Low Risk
    14. 14. Sample Considerations for Prospective BuyersMajority of time spent on SaaS evaluations: feature comparisons, evaluating standardcommercial & security terms, creating business case. HR SaaS Vision Customers Should VerifyGlobal payroll capability How many clients are live; is there a global roadmap?Point solution integration Any pre-built integrations with existing point solutions?Rapid access to new features Do capabilities exist internally to configure and test?Mobile support Includes iOS, Android, Blackberry & Windows apps?Eliminate customizations Can internal organization configure?Eliminate upgrades Are quarterly/seasonal released turned “off”?Decrease reliance on internal IT Who will design, build and support interfaces?Faster to implement Can legacy ERP be decommissioned?Reduce TCO Is the business case long enough to avoid upgrade?Pay per user How much of the TCV is required up front?More secure than current Will IT accept reports over 1st person audits?Employee data is safe Has Article 29 Working Party been considered? 14
    15. 15. Questions Stanton Jones Maribeth Sivak Analyst, Emerging Technology Principal Consultant, Business Advisory Services ISG ISG Tel: 281-795-2636 Tel: 630-659-5017 E-mail: E-mail: Url: Url: LinkedIn: LinkedIn: Twitter: sivak/14/368/418 Dan Goodstein Vice President The Outsourcing Institute Tel: 516-279-6850 x717 E-mail: Url: LinkedIn: 15
    16. 16. ISG Services ToolsThe Power of One: ISG-OneISG is a leading technology insights, market intelligence and advisory services company, offeringclients one source for support in driving operational effectiveness. The world’s leading sourcing data and advisory firm. the power A premier independent technology advisory of One serving the The premier independent U.S. public sector provider of business and IT benchmarking, performance improvement, data and analytics services. 16
    17. 17. ISG Services ToolsISG Solutions Provided World-wideWith consultants across the globe we are in the locations that matter to you. Local marketknowledge and language support can be critical to success in major change programs. Operating from 700 Professionals 1,000+ Clients 21 Countries Worldwide 10,000+ Engagements 17
    18. 18. ISG Services ToolsUnrivaled Depth of ExperienceISG focuses exclusively on helping clients achieve operational excellence. Our depth of experienceis unrivalled. scale We advise on over 25% of the Sourcing Markets Annual TCV Awarded. Having advised on over $330 billion in contract value, no other advisory firm comes close to our level of market engagement and experience. value 75% of our clients are either repeat or direct referrals. Our clients come back to us time and time again for critical market insight and advice around their strategic operational imperatives. clients 75% of the Forbes Global 100 are ISG clients. We advise the world’s largest blue chip firms through some of their most critical business operations transformation projects. market voice The TPI Index® is the premier source of quarterly insight and is considered the authority on trends and developments in the global sourcing industry. 18
    19. 19. Thank you for joining Perfect Storm: HR in the Cloud Market Trends and Clarifying SaaS Myths Dan Goodstein Maribeth Sivak Stanton Jones Vice President Principal Consultant Analyst, Emerging TechnologyThe Outsourcing Institute Business Advisory Services ISG ISG This webinar was sponsored by the Wall Street Tech Conference & Exhibition in conjunction with The Outsourcing Institute.