Maximize Your Talent with Oracle HCM s Unified Solution: A Brief History, Analysis, and Overview of Your Options

Transcription

1 Maximize Your Talent with Oracle HCM s Unified Solution: A Brief History, Analysis, and Overview of Your Options By Alexia Martin Director, Research and Analytics Sponsored by Oracle

2 Table of Contents Part 1: A Look Back and Defining the Unified Talent Model...1 A Look Back at ERP-based Human Capital Management (HCM) as a Talent Management Solution Source...1 What Does a Unified and Integrated HCM Solution Look Like?...2 One Single Profile and Competency Management...4 Analytics...4 Social Media Provides Collaborative Work Solutions...5 Integration...5 Part 2: ERP-based HCM and Talent Evolution Innovation and New Strategies...6 Innovation Creates Value...7 Workforce Productivity...7 Employee Engagement...7 Leadership Development...8 New Strategies Create Value...9 Vendor Consolidation...9 IT Complexity Drives up Costs and Lowers Productivity...9 Risk Mitigation/Vendor Viability Part 3: Exploring Your Choices for Talent Management Continue Upgrade Path with Existing PeopleSoft and E-Business Suite Investments Evaluate Fusion Talent Management BPO and Hosting Evaluate SaaS Talent Management Niche Solutions Carefully The Choice is Yours...20 i

3 Part 1: A Look Back and Defining the Unified Talent Model A Look Back at ERP-based Human Capital Management (HCM) as a Talent Management Solution Source 1 The Human Resource Information System (HRIS), also known as a Human Resource Management System (HRMS), became prevalent in the 1980s with the popularity of Enterprise Resource Management (ERP) applications and the move from mainframe systems to client server technology. 2 The first truly innovative HR management system (HRMS) vendor, PeopleSoft introduced the first graphical user interface (versus the old green screens ) on client server in By the mid-nineties, PeopleSoft was the market leader in HRMS systems and introduced PeopleSoft HRMS 8.0 using Pure Internet Architecture in Oracle s E-Business Suite HRMS offering was starting to come into its own as a part of the overall Oracle E-Business Suite offering by 2000 as well. In terms of talent management, by the mid-nineties countless small vendors had Internet-based applications for single functionality such as recruiting or learning. Oracle with its E-Business Suite and PeopleSoft with its HCM and e-applications both began offering talent management functionality as part of their respective HRMS self service offerings starting in the early 2000s. For Oracle E-Business Suite, this ultimately included recruitment, performance management, compensation management, succession planning, and competency management. Oracle also had a learning management solution considered a challenger by Gartner, but not a leading product. 3 PeopleSoft offered erecruit, ecompensation, eperformance as part of the HCM system, and a learning management solution on a separate database. But few of these modules were top rated compared to what was available from smaller vendors. For example, in 2005 Gartner 4 gave the PeopleSoft eperformance a positive rating but not the strong positive given to niche vendor solutions at the time. The talent management applications from Oracle E-Business Suite and Oracle PeopleSoft Enterprise along with SAP HCM had 23% of the talent management market, at least in terms of respondents to the CedarCrestone annual HR survey in 2008, 5 behind a number of best of breed vendors which were still mostly single-function talent management application providers. These included SuccessFactors (strong initially in performance management), Taleo (strong initially in recruiting), Saba (strong initially in learning management), Workscape (strong with its compensation management functionality), and a host of others offered exciting functionality with enticing user experience, a hallmark of best-of-breed vendors. 1 With thanks for support in historical time-lining to Naomi Bloom, independent analyst, Managing Partner at Bloom & Wallace and Bill Kutik, independent industry analyst, columnist, co-chair HR Technology Conference, host of the The Bill Kutik Radio Show along with contacts at all vendors mentioned in this section. 2 Human Resources Software History and Evolution, 3 Gartner, Magic Quadrant for Learning Management Systems, 2005; 4 Gartner, Magic Quadrant for Employee Performance Management Software, 2005; magic+quadrant/ 5 CedarCrestone HR Systems Survey: HR Technologies, Deployment Approaches, Value and Metrics 11 th Annual Edition ( Note in the latest CedarCrestone HR Systems Survey report, the percentage with an ERP-based talent management solution has increased to 27%. 1

4 In order to capture more market share, many of these talent management vendors began to offer their solutions as a Software as a Service (SaaS), which tended to cost less than licensed, on-premise solutions, the dominant model prior to SaaS-based solutions came into the HRMS market in the mid-2000s, with Ultimate being the first publicly traded organization to come out on SaaS in 2002 with a HRMS solution. Meta4, with its sophisticated architecture that supports global workforces, garnered non-us-based market share. Workday, led by CEO Dave Duffield also a prior PeopleSoft CEO shipped its first HRMS product in Altogether, good talent functionality plus lower-cost deployment models contributed to a rise in market share for these niche-talent vendors. For the past five years, talent management vendors have continued to innovate on multiple fronts, from additional functionality, improved graphical user interfaces, integration of multiple talent management functions, and the addition of social networking functionality. But today, the ERP-based HCM vendors are catching up with and, in some cases, passing talent management functionality available from the niche or integrated talent management suite vendors. Further, the past two years of economic decline have forced organizations to review the costs of their HR application portfolio. Their tally of costs for the ERP core record keeping and talent management sides has been eye opening and, in 2009 specifically, many large organizations began to consolidate vendors as part of a move to best practice and to reduce costs. 6 Additionally, the market has begun to understand the need for integrated talent management integrated not just within the talent management applications, but more broadly. Specifically, the market is beginning to understand that talent management functionality must be unified and integrated to the HRMS, business intelligence (BI) infrastructure, other technologies such as security and social media/collaboration solutions, and to other ERP applications such as financials and supply chain. This then is the genesis of a unified and integrated HCM solution. CedarCrestone has done numerous ROI and business case projects over the past 10 years and consistently documents the lower total cost of ownership of these unified, integrated solutions. 7 A leading US insurer forecasting the cost to integrate from a niche compensation management solution at over $1 million plus development chose to upgrade to 9.1 and implement the People- Soft-based compensation solution. The projected costs of integration far outweighed the cost of an upgrade! The release of 9.1 and the available talent management enhancements allowed the organization to easily change its direction and return to an integrated HCM and talent management solution based on PeopleSoft. What Does a Unified and Integrated HCM Solution Look Like? CedarCrestone, in its annual HR Systems Survey white paper, has used an HCM Application Blueprint to explain the breadth of functionality within an HCM solution. In our latest report, 8 we introduce the Unified and Integrated HCM Application Blueprint which encapsulates HCM functionality, including core administrative, service delivery, workforce management, talent management, and business intelligence/workforce optimization applications within an ecosystem that provides further data sources and functionality. What is important about all these categories and applications is that in order to use technology to truly optimize the workforce contribution to the 6 The Hackett Group: Maximize the IT Organization s Effectiveness by Reducing Complexity in the Application Portfolio; 7 CedarCrestone ROI Studies ( ). Contact author. 8 CedarCrestone HR Systems Survey, (September, 2010) 2

5 organization, it is important that all functionality be unified end to end and integrated within an ecosystem that provides: 1. Access to and support of other services such as social and collaboration tools, service-oriented architecture (SOA) middleware, electronic content management, and others in the light orange ring. These should ideally be architected for seamless integration rather than available as add ons. 2. Access to other information sources, including financial and customer-facing information, at the lowest total cost of ownership. This often means that integration must be direct and ideally real time rather than through batch interfaces. You hear a lot about the importance of an integrated talent management solution that enables you to share and use data from one talent management process to another. An example is being able to integrate from a performance management process, perhaps to identify profiles of high performers to then use that information in recruiting or workforce planning. However, integrating the data directly with other information sources such as finance or customer-facing repositories is also important to do workforce analytics to show how the workforce impacts financials or customer results. Further integrating talent with project costing, time, scheduling, absence management, activity-based costing, pay, and more ultimately enables workforce optimization. CedarCrestone believes that talent management or in fact any aspect of human capital management must interplay as seamlessly as possible with all these other organizational resources to provide the strongest value and the lowest total cost of ownership. Oracle solutions offer this environment today. Figure 1: CedarCrestone Unified and Integrated HCM Application Blueprint FIN General Ledger, Purchasing, Budgeting, Travel & Expense Security Social and Collaboration Tools Vendor Management Workflow SCM Service Delivery/ Service Center HR Help Desk, Workforce Communications, Onboarding Portal Framework With Identity Management and single sign-on Self Service and Workflow Benefits, pay, personal data Promotions, transfers, salary actions Approvals and notifications Administrative Excellence Service Delivery Excellence Workforce Mgt. Excellence Talent Mgt. Excellence Performance/Workforce Optimization Excellence Core HRMS/ERP Foundation Data for Roles and Competencies (Profile Mgt.), Position Management, Payroll and Benefit Administration Workforce Management Time Record Management, Absence Management, Labor Budgeting, Scheduling and Forecasting, Task Management Workforce Optimization Workforce Planning, Workforce Analytics, Predictive Analytics Talent Management Competency Mgt., Recruiting, Learning Mgt., Performance Mgt., Compensation Mgt., Succession Mgt., Career Planning/Dev. Business Intelligence Tools HR warehouse Reporting/dashboards Middleware CRM SOA Electronic Content Management Backlog, Pipeline, Customer Satisfaction ETL Bus. Process Mgt. Projects Project Costing, Contracts, Grants Source: CedarCrestone HR Systems Survey 3

6 Let s dig even deeper into some characteristics of a unified and integrated HCM solution. These include key parts ranging from profile management and competency management, analytics, social networking, as well as the seamless integration with the entire ERP ecosystem. One Single Profile and Competency Management Profile management is the foundation of talent management. The concept of profiles consists of not only a repository for competencies but encompasses much more, such as characteristics: certifications, experience, interests, travel preferences, personal goals, and more. These characteristics are useful for supporting work assignments, conducting performance management, identifying learning paths, career development, succession planning, workforce scheduling, and organization-wide workforce planning. In a truly unified system, profile information is used for assigning resources to projects, scheduling call centers, optimizing sales engineers, etc. Talent profiles are the foundation of not just HR and talent management but the operational effectiveness of the business. A key component of the profile is competencies as these are the connection between talent management applications and workforce management. From both competencies and other components in a profile, an organization can determine who has what skills, experience, availability, and desires, etc. Competency gap analysis is a way for organizations to programmatically review who has what skills and experience today, assign and schedule personnel with the right mix for the future, and thus recruit for needed competencies, develop curricula for employees to expand their competencies, and plan for the acquisition of competencies needed for the long term. A rich set of variables, available in the profile beyond just competencies when conducting this gap analysis, is very useful. Using analytics is also useful in terms of optimizing the workforce to find the competencies and attributes that really result in higher performance in a role. For this, integration with data sources containing performance information such as financial systems or customer-facing systems is also needed. When coupled with an analysis of pivotal roles, organizations can improve and fine-tune their performance. Analytics Analytics is another foundation of a unified and integrated HCM solution. The talent management environment needs integration with not only the core system of record, but with the BI infrastructure and even the larger ecosystem of data sources for analytics. With this integration, analysis of workforce performance is possible and issues identified can result in actions back into the system of record so that execution of strategic goals is possible. To do meaningful analytics to optimize the use of the workforce, organizations must integrate workforce data with performance information from other data sources: finance, customer relationship management, project management, and operational data on key processes such as supply chain management or supplier relationship management. Without a pervasive integration juxtaposing the financial and operational data with workforce data to enable workforce performance measurement and fine tuning, meaningful analytics are not possible. That is what delivers workforce performance and optimization excellence. In HR Analytics: Driving Return on Human Capital, 9 we cite two case stories, a major financial services organization and Pernod Ricard and its journey to provide workforce performance metrics and analytics that depend on this comprehensive integration. 9 HR Analytics: Driving Return on Human Capital; 4

7 With pervasive talent management analytics seamlessly integrated with the larger ERP ecosystem, organizations can link results of acquisition, development, performance, and compensation processes with the business results. They can help managers make better decisions. For example, managers, in partnership with HR, can better understand whether to invest more or less in recruiting efforts vs. development efforts. 10 They can understand whether salary increases or other rewards can maximize workforce performance. Working with HR, managers can best decide how fine-tuning talent processes should change in reaction to economic, regulatory, and competitive changes. Social Media Provides Collaborative Work Solutions The we-ness or the whole is greater than the sum of parts notion through social media is another part of the foundation of a unified and integrated talent and HCM solution. Providing a way for individuals to share information about themselves (skills, goals, hopes, values) so both the individual and the organization can make decisions about their mutual futures is key. This sharing must be a sticky, helpful process. Many organizations are currently utilizing commonly available social networking applications outside their firewall for recruiting and brand awareness, but early adopter organizations are starting to use these social media solutions internally (behind the firewall) for knowledge capture and sharing, informal learning, formal and informal collaboration, communication, and engagement. An Aberdeen Group study of more than 500 organizations released in June notes that more organizations have workforces not located under one roof, spread out project teams, and workgroups that often include vendors and customers. The study concludes: Business executives (HR and non-hr) are realizing that these new realities require a rethinking of the talent management lifecycle and of the new tools they can use to manage this diverse and dispersed workforce. 12 And, as we will discuss later in the value section, social media plays a valuable role in driving employee engagement and other benefits which in turn deliver shareholder value. Oracle has embraced a full set of social media from social networking to collaboration aids as evidenced by the recent release of PeopleSoft 9.1 and PeopleTools 8.51, which provide internal capabilities for blogs, instant messaging, discussion boards, and many other features, as well as the very recent introduction of Fusion HCM which includes brand new modules completely designed to make social networking an integral part of how organizations conduct HR business. Integration Delivered integration is another part of the foundation of a unified and integrated talent and HCM solution. Many organizations that choose a best-of-breed approach to talent management using solutions from multiple vendors, fully intending to create custom integrations back to their core HRMS, never do. Integrations are costly to develop, implement, and maintain as we indicated with the example of the insurance organization earlier. Without integration, organizations are faced with double data entry and decreased data integrity. 10 Ibid. 11 Aberdeen, HR Executive s Guide to Web 2.0: Cracking the Code for Talent Management, 12 SHRM India, Developing a Business Social Network, 5

8 Integration comes explicitly with a single Oracle environment or at least with minimal setup. One of the most valuable aspects of E-Business and PeopleSoft HCM and their talent solutions is that they integrate with other Oracle products at the lowest possible costs compared to any integration from non-oracle products to Oracle solutions. Data models are similar, if not identical for some areas, making it very easy to move data from one application area to another. The underlying integration technologies available as part of the Oracle standard toolset/ middleware compared to the typical batch approach necessary to interface non-oracle products to Oracle solutions is like day and night. Within its Application Integration Architecture, Oracle offers data replication if needed, native interfaces, transaction interfaces through web services, composite business flow process-centric integration across multiple applications, and user interface layer integration. Forrester reports that 73% of organizations have lower maintenance and operating costs by having a comprehensive integration solution to handle needs. 13 Further, there are a variety of valuable technology solutions in the Oracle sphere for enterprise use such as portal, security, electronic content management, risk management, and SOA that provide useful and needed functionality which are seamlessly integrated (see Figure 1). Native integration of all these components results in lower total cost of ownership. Integration is exceedingly important, especially as organizations look to engage in metrics-based management where they can enable managers to correlate workforce information with financial and customer-facing data to get the truest possible picture of workforce performance to optimize even further. With Oracle E-Business Suite applications and our shared service centers, we have standardized processes across the system, reduced IT resource redundancies, extended visibility into our operations, and fine-tuned our supply chain, human capital management, and financial processes to yield new levels of operational efficiency. Integration of our talent and HR processes with deep insight through business intelligence allows us to better optimize the workforce and deliver higher quality of care. Jason DeSantis, Division Chief Information Officer, Information Technology & Solutions Part 2: ERP-based HCM and Talent Evolution Innovation and New Strategies Oracle has innovated not only with its talent applications but also with its workforce management and overall Web 2.0 collaborative technologies. With its E-Business Suite 12.1 and PeopleSoft 9.1 applications, Oracle has increased the focus on user-centric processes. Simple enhancements such as a task-oriented user interface within the Compensation Workbench of E-Business Suite, or providing step-by-step metrics within ecompensation in PeopleSoft 9.1, assist the manager through the process of allocating compensation. 14 These Oracle HCM and talent processes contribute to both improved workforce productivity and increased employee engagement Update: Evaluating Integration Alternatives, Forrester Research, Inc., January 2010; 14 Delivering Value with EBS 12.1 HCM Whitepaper, and Delivering Value with PS 9.1 HCM Whitepaper, 6

9 Between benefits from these innovative contributions and a strategy of application vendor consolidation and reducing IT complexity, the value of a unified and integrated talent and HCM solution is clear. Innovation Creates Value Workforce Productivity An easy-to-use technology solution ensures use and productivity benefits. Nowhere is that more true than with employee and manager direct access to transactional services and talent management processes. Research conducted by CedarCrestone over the past ten years indicates that most all transactional services benefit from automated direct access. For example, a manager conducting a performance review online will take less time than the related manual activity. 15 Worker productivity extends well beyond automating manual tasks. Recognizing that informal activities are a growing part of business, technology solutions are evolving to consider users and the information they need to do their job rather than just transactions. Oracle s introduction of the most innovative versions of Oracle Applications Technology and PeopleTools (8.50) has facilitated product-wide improvements in usability, user experience, and productivity. Oracle E-Business Suite and PeopleSoft HCM products now include a wide array of enhancements directed at increasing productivity. These include in-context pop-up windows, look ahead capability in lists of values, pull down navigator menus to reduce clicks and load times, and faster navigation through redesigned menus. Within the HCM product lines, Oracle has continued to improve the efficiency of employee and manager self service functions for automated transactional services and talent management processes. PeopleSoft 9.1 delivers new self service functions in ecompensation, Career Planning, Succession Planning, and Profile Management, along with redesigned pages throughout the system to help improve access and productivity. E-Business Suite HCM 12.1 introduced new features throughout the product suite to improve workforce productivity such as offline appraisals and line of sight objectives in performance management, major enhancements in compensation workbench, and recruitment communications and employee referrals in irecruitment. Employee Engagement Organizations with effective service delivery and talent management processes contribute to employee engagement and the ultimate value of employee engagement is improved shareholder value. Cox measures employee engagement and has seen that rise 5% as its comprehensive HR systems transformation project continues to provide employees with benefits such as self service, better insight into career paths and goals, and visibility to corporate strategy that affects everyone. 16 Cox has all HR information in one place enabling it to analyze the workforce, adjust processes, and plan for the future. All business processes are connected, not siloed, which enables visibility into how workforce processes flow and impact each other. By standardizing on Oracle s PeopleSoft HCM applications, Cox has significantly reduced its total cost of ownership while proactively managing every aspect of the employee lifecycle. 15 CedarCrestone ROI Studies ( ). Contact author. 16 Cox Communications Transforms Human Resources Processes to Boost Efficiency and Engagement, Oracle Case Study; 7

10 Organizations with an effective talent management process also contribute to improved employee engagement with the same link to improved organizational revenue. In a recently published research bulletin from Bersin & Associates, this link is clearly seen with a large global financial organization that was able to correlate critical goal attainment in both its corporate and financial business units to employee engagement and ultimately tied improved engagement scores to organizational revenue. 17 Organizations are also increasingly using social media to engage their diverse and dispersed workforce and the promise of organizational value is strong. In a recent article in the IHRIM Workforce Solutions Review, Towers Watson reports: 18 Self service technologies were designed to reduce HR administrative work to allow HR to have a more strategic focus and become a true business partner. Now, HR needs to develop creative ways to align with key business drivers to further solidify the seat at the executive table. Improving employee engagement and productivity could be the ticket and social media technology will play a significant role. Social media, especially when used at an organizational level, is correlated to higher financial performance according to the latest CedarCrestone HR Systems Survey. 19 And other research organizations corroborate this finding: Aberdeen Group has published research briefs focusing on employee engagement where they found that building engagement was the top strategy for best-in-class organizations. They found that organizations utilizing blogs, wikis, and internal social networks saw a 26% year-over-year improvement in employee engagement. 20 Towers Watson also says that companies with highly engaged employees generate more marketplace power than their competitors. 21 Leadership Development Career and succession planning, natively integrated with compensation and performance, allow organizations greater visibility into leadership and development gaps. But they cannot be truly successful if they are not connected to the core HRMS in order to track basic employee information along with career and development plans. Both E-Business Suite and PeopleSoft HCM use the Person Profile to allow organizations to connect core HR data to talent management and provide this necessary and important view for each employee. For example, the career planning process provides the structure for development activities focused on advancement as well as a feeder into succession planning with PeopleSoft. 17 Measuring the Business Impact of Talent Strategies, Bersin; 18 Transforming HR Service Delivery with Collaboration and Social Media, Towers Watson; IHRIM Workforce Solutions Review, 19 CedarCrestone HR Systems Survey, (September, 2010) 20 Aberdeen Group, HR Executive s Guide to Web 2.0: Cracking the Code for Talent Management, 2009; Aberdeen-Library/6070/RA-web-social-media-talent.aspx 21 Towers, Watson, Turbocharging Employee Engagement; Part1_WP_ pdf 8

11 Organizations in the IT industry are notorious for having high staff attrition rates. PeopleSoft s human resources solutions help us nurture our staff by recognizing their key competencies, providing the right training and identifying new opportunities to advance their careers at this company. Guruprasad Murty, Vice President, IT & S, Microland Limited 22 New Strategies Create Value Vendor Consolidation Vendor consolidation brings about tangible monetary savings 23 through reduced vendor fees associated with maintenance; fewer specialized IT resources needed to maintain multiple packages or at least their interfaces; reduced training costs for IT, HR professionals, and managers/users; and reduced staff time spent on vendor relationship management required to maintain contracts with varying renewal dates. Perhaps more importantly, however, is that with a unified data model encompassing the core system of record, talent management and business intelligence data complexity is removed. There is no need to maintain multiple employee databases in both a core system of record and any niche talent management applications. All reporting, whether through standard operational reports or higher levels of business intelligence reporting and analytics, are available with little or no added integration required also a significant cost savings in comparison to what is required with integration from and to a niche solution. A single unified and integrated system, with fewer vendors providing talent management functionality, results in improved data accuracy and security and data privacy is improved and simplified as well. IT Complexity Drives up Costs and Lowers Productivity There is one key metric for CIOs to watch, according to The Hackett Group: the number of enterprise software applications per 1,000 end users. Best-performing organizations have an average of 20 applications, whereas all others have an average of 39. This metric is important as a high number signifies a complex technology environment such that IT cannot quickly respond to changing business needs as its time is spent supporting so many applications. By contrast, a low number implies an efficient environment and strong alignment between IT and overall business objectives, reports The Hackett Group. 24 Organizations with lots of applications suffer from complexity in their technology infrastructure, data models, and software maintenance, and presumably suffer from the costs of integration if done at all. As a result, it is difficult for the organization to scale up or down quickly with business climate changes. Many organizations failed to be able to react agilely during the recent economic crisis, and keeping a slimmer application portfolio with fewer unintegrated solutions makes the best business case. The CedarCrestone HR Systems Survey noted that during the economic downturn of , organizations that used to have a variety of best-of-breed talent management solutions are now getting that functionality from 22 Oracle Customer Snapshot 23 Forrester, Consolidating Vendors Brings Operational Benefits As Well As Dollar Savings; consolidating_vendors_brings_operational_benefits_as_well/q/id/46127/t/2 24 The Hackett Group: Maximize the IT Organization s Effectiveness by Reducing Complexity in the Application Portfolio; 9

12 their ERP solution. 25 Hackett, too, notes this trend. According to Hackett, the trend reversal in IT spending is a reflection of historical investments made by world-class organizations, which began consolidating their application portfolio, rolling out a common ERP platform, and rationalizing their IT service delivery model and IT infrastructure earlier than the peer group. They are now harvesting the benefits of this investment, allowing them to deliver more business value at lower cost per end-user. 26 Figure 2: Historic and projected IT cost per end-user trend, 2009 A few recent cases highlight this move to ERP-based solutions: Talent Management. A major analyst firm replaced both SuccessFactors and Taleo with an integrated Oracle E-Business Suite HCM talent solution. Performance Management. A leading global provider of integrated logistics abandoned its prior performance management solution and moved to Oracle E-Business Suite Performance Management 12.1 for a fully integrated HR and Performance Management System. Learning Management. A leading medical supplier replaced Saba Learning with PeopleSoft Enterprise Learning Management. Recruiting Management. A global freight and logistics management company, a major international church, one of the largest heavy-duty truck manufacturers, a major European bank, the largest manufacturer of thin film solar modules, and one of America s leading retailers all replaced Taleo or Vurv recruiting solutions and moved to PeopleSoft Recruiting Solutions. 25 CedarCrestone HR Systems Survey: HR Technologies, Deployment Approaches, Value and Metrics, 12 th Annual Edition; 26 The Hackett Group: Information Technology Metric of the Month, IT Cost per End User Trend, May ocom/groups/public/@ocom/documents/webcontent/ pdf 10

13 Risk Mitigation/Vendor Viability While not the most critical selection criteria for Human Resources, over 60% of the 1,289 respondents to the CedarCrestone HR Systems Survey (released September 2010) indicate that vendor stability is important in their vendor evaluations. 27 Organizations need not fear for the viability of Oracle as they may with alternative solution providers. Oracle has proven HCM solutions with 14,000+ customers in 140 countries, serving over 40 million workers with close to 500,000 HR professionals. Additionally, unifying on a common system of record reduces data complexity and data entry errors, thus lowering risk. Part 3: Exploring Your Choices for Talent Management Oracle Talent Management solutions are offered via multiple delivery models to best fit customer functionality requirements and cost constraints: on-premise, hosted (OnDemand/BPO), and now SaaS with the Fusion applications, either directly from Oracle or through partners. Depending on your current situation and your strategic requirements, we offer the following review of options. The options all enable organizations to meet functionality and ease of integration requirements and pay attention to cost cutting. Your Current State PeopleSoft 9.1 E-Business Suite 12.1 PeopleSoft 8.9, 9.0 E-Business Suite 12.0 PeopleSoft 8.8 or earlier E-Business Suite or earlier Figure 3: Talent Management Options by Current State Your Options Continue upgrade path with your existing HCM applications investment; apply Family Packs to add additional functionality as they become available Evaluate Fusion Talent Management for additional talent functionality Continue upgrade path with your existing HCM applications investment; apply Family Packs to add additional functionality as they become available If on PeopleSoft, consider Talent Management Integrations for immediate talent needs If on E-Business Suite, evaluate the Family Pack or point releases and apply as warranted, or upgrade to the latest release Evaluate Fusion Talent Management for additional talent functionality Upgrade to the latest release to avoid losing support or paying for extended support Evaluate Fusion Talent Management after upgrading to the latest release Prospective buyer Evaluate both PeopleSoft 9.1, E-Business Suite 12.1 and Fusion HCM, and implement required talent management functionality In the following sections, we cover the key points from the table above. Continue Upgrade Path with Existing PeopleSoft and E-Business Suite Investments For customers on the latest releases of E-Business Suite and PeopleSoft, there is comfort with the known vendor stability of Oracle and the regular and consistent release cycle and Feature Pack/Family Pack updates that include enhancements/new functionality, legislative and regulatory changes as required, and usability improve- 27 CedarCrestone HR Systems Survey; 11

14 ments these are planned for annual release. But there is much more. Continuing to move to E-Business Suite 12.1 and PeopleSoft 9.1 is the best option for immediate talent management needs. And many customers are already doing so. Gartner reports approximately 5% of E-Business Suite 12.0 or E-Business Suite 12.1 customers have completed their upgrades and experience with 12.1 is positive. 28 In the year since PeopleSoft HCM 9.1 was made generally available, Oracle has seen adoption by hundreds of customers, with hundreds more evaluating an upgrade. According to the latest CedarCrestone HR Systems Survey, there are numerous E-Business Suite and PeopleSoft customers that remain with and plan to remain with Oracle. Together, these customers dominate the worldwide HCM market with just a few moving to alternative solutions at the same time that both product lines gain customers. 29 The underpinning of what works includes the core HRMS record keeping system and smooth, fast, large-scale implementations. Despite accusations that once Oracle acquired PeopleSoft that it would be discontinued, the truth is that since then new versions of applications on both PeopleSoft and Oracle product lines have been released; new versions are on the horizon; and all are backed by Oracle Lifetime Support. PeopleSoft 9.1 is the third release since acquisition with current indications of a 9.2 upgrade. E-Business Suite has released three point releases since 12.1 was introduced in 2009, also with every indication a 12.2 release is soon to come. Underlying HRMS Functionality The underlying HRMS functionality from both E-Business Suite and PeopleSoft HCM provide core HR record keeping, payroll, and benefits administration along with service delivery components that can support global or considerably smaller organizations. The October 2008 Forrester Wave puts E-Business Suite HRMS 12 in the top position for large multinational HRMS installations. 30 Catholic Healthcare Partners (CHP) ensures best practices and reduces Human Resources Management costs with a centralized IT platform. CHP is the largest health system in Ohio and one of the largest nonprofit health systems in the United States. It operates 34 hospitals in nine geographic regions to meet the healthcare needs of people in Ohio, Tennessee, Kentucky, Pennsylvania, and Indiana. Each of CHP s hospitals joined the group with its own human resources information system platform, making it difficult to assess staffing needs across the organization and hindering the implementation of a shared services model. CHP standardized on Oracle s PeopleSoft Enterprise Release 9.1 Human Capital Management applications. It is creating a centralized HRIS infrastructure that is saving US $200,000 annually in payroll labor and transactional costs. The organization is also reducing benefits administration support staff and improving regional collaboration around best practices. Agility (formerly PWC Logistics) is a leading global provider of integrated logistics. The company consists of three key business groups: Global Integrated Logistics, Defense and Government Services, and Infrastructure. Agility operates more than 550 offices in 120 countries. E-Business Suite HCM 12.1 human resources, self service, and performance management, along with HR analytics, has allowed Agility to 28 Gartner, Oracle EBS Release 12 Upgrades: 12.1 is Ready for Wider Adoption, but is Still a Major Upgrade, July, 2010; 29 CedarCrestone HR Systems Survey, 30 The Forrester Wave : Human Resource Management Systems, Q4 2008, wave&trade%3b_human_resource_management_systems,_q4_2008/q/id/45873/t/2 12

15 implement a global enterprise-wide human resource management system within one 24x7 available database. This transformation has reduced the time required to collect summary data from six weeks to a few seconds, with access to consolidated data. Agility expects to save US $5.3 million over the next five years due to improved data accuracy and increased employee efficiency. Talent Management Talent management offerings of both product lines have rich functionality and recent user experience enhancements: According to Forrester in its June 2010 report, 31 the four pillars of talent management are recruiting, compensation, learning management, and performance management. While many vendors offer full functionality in all of these, only two vendors Oracle being one of them offer not only these but have product offerings in all aspects of talent management (recruiting, onboarding, workforce planning, learning management system, skills/competencies, performance management, succession planning and compensation). Both E-Business Suite and PeopleSoft HCM have improved their talent offerings over the last few years, with the most recent releases being the most robust when it comes to talent management. Particular areas of focus in the latest releases include an improved user experience, compensation, performance management, and career and succession planning enhancements. 32 Oracle E-Business Suite HRMS 12.1 delivered a new Talent Profile feature with dashboards for HR staff and department managers to give a comprehensive view of each employee, useful for all talent management processes such as providing the ability to compare employees during compensation review. irecruitment was expanded to include a portal for HR recruiters, hiring managers, and applicants. Portal dashboards now provide daily summaries of action items so stakeholders can view the entire recruitment progress. Another enhancement was the support of line-of-sight performance management that merges personnel information with corporate goals to show individuals and managers how the employee s objectives mesh with organizational objectives. 33 Release 9.1 of PeopleSoft Enterprise was the largest one ever with over 9,000 enhanced pages, 270 new features, 83 new web services, and 8 new solutions. Specific talent management enhancements added succession planning, career planning, business objectives management within eperformance, and talent management dashboards. Further, the talent management functionality of 9.1 can be integrated to prior versions without having to upgrade. 34 In a recent integrated talent management vendor analysis by IDC, both PeopleSoft HCM and E-Business Suite HCM are positioned in the Major Players category and have shown positive progression over a prior 2008 report Forrester, The Four Pillars Of Talent Management, forrester-talent-mgmt pdf 32 Delivering Value with EBS 12.1 HCM Whitepaper, and Delivering Value with PS 9.1 HCM Whitepaper, 33 Ibid. 34 Ibid. 35 IDC Marketscape: Worldwide Integrated Talent Management 2010 Vendor Analysis jsp?containerid=

16 Smooth and Fast Implementation In terms of smooth and fast large-scale implementations, within three to six months of announcing E-Business Suite 12.1 and PeopleSoft 9.1, Oracle tracked hundreds of customers that were live or in process of upgrading. Ricoh Electronics, Inc., a leading supplier of advanced office automation equipment, went live on the first deployment of PeopleSoft Enterprise HCM 9.1 in just six months, implemented by Optimum Solutions, an Oracle Platinum Partner. A company on the cutting edge of technology, Ricoh Electronics faced an upgrade path spanning multiple intermediary steps to move from version 8.3 to 9.1. Ricoh Electronics also sought to align its PeopleSoft Enterprise HCM 9.1 upgrade project with the strategic goal of expanding its PeopleSoft Enterprise HCM footprint by deploying additional modules to its entire user population. By taking advantage of the expanded functionality in the latest PeopleSoft Enterprise HCM 9.1 release, eliminating customizations, and further automating manual processes, Ricoh Electronics is gaining efficiencies from a fully integrated solution that will increase user productivity and reduce costs. Genworth Financial, Inc. (formally GE Financial Assurance), a leading financial security company, completed the functional portion of their upgrade from E-Business Suite to in three months. Genworth s upgrade included core HR functionality, self service, and time and labor along with talent management modules for learning, compensation, and performance management. Genworth s main business drivers to upgrade were two-fold: first, they wanted to stay up to date with software and avoid paying any extra costs for support; and secondly, they wanted to take advantage of new functionality mainly enhancements in self service, learning management, time and labor, and performance management. Performance management was very key for them and, coupled with some customized development, enabled Genworth to meet some critical business requirements in talent management. They have been able to totally revamp their appraisal process and next year they will update their objective setting processes. CedarCrestone, another Oracle Platinum Partner, has brought customers rapidly up on the latest releases through its Upgrade Lab solution. The CedarCrestone Managed Services (CMS) Upgrade Lab 36 solution accelerates client upgrade processes while reducing total client resource commitments and costs. CedarCrestone focuses not just on bringing a customer live on the technology, but through the related change management to ensure the solution is optimally used. Plexus, the Product Realization Company, has more than 25 years of experience turning clients concepts into world-class products. Dedicated to staying on the leading edge of technology, including taking advantage of best-in-class functionality and embedded business processes of PeopleSoft as its system of record, it has successfully upgraded to the latest release of Oracle PeopleSoft Enterprise HCM 9.1 through CedarCrestone s Upgrade Lab solution. This latest upgrade enables Plexus to expand use of Profile Manager for key job accountability and enhance the performance review process for international sites. CMS Upgrade Lab provides an off-site, lab-based upgrade option for completing PeopleSoft applications upgrades. Amy Merfeld, HRMS

17 Manager at Plexus, states, Truly, this is an amazing accomplishment. Plexus will be the envy of every other company that wants to be on 9.1 but just can t seem to figure out how to get there without breaking the bank or setting aside all of their other work for a year or more. CedarCrestone got us there in seven months, to a brand new release, with not a single issue along the way AMAZING. For Oracle E-Business Suite HCM, CedarCrestone conducted an upgrade in 13 weeks that included not only HR, but substantial functionality such as Time and Labor and Cash Management. The City of Arvada has successfully completed an upgrade from Oracle E-Business Suite 10g to Oracle E-Business Suite 11g The project was completed within the scheduled time of 13 weeks and completed under budget. The applications included the following: HR, Performance Appraisals, Payroll, Projects, Purchasing, Payables, Assets, Receivables, General Ledger, Public Sector Budgeting, along with the increased footprint of Oracle Time and Labor and Cash Management. Lower Total Cost of Ownership And then we come to the lower total cost of ownership of these solutions within the entire Oracle technology ecosystem. In the CedarCrestone HCM Blueprint (Figure 1 displayed earlier in the white paper), we convey the richness of functionality and the scope of integration inherently available in all these solutions. For greatest value, any talent management solution needs to be integrated to a multitude of data sources, from all the talent management processes, to the HRMS for workforce data, and to financial and customer-facing data in order to enable any kind of meaningful workforce optimization. In addition, customers benefit from the use of various technology solutions also available in the Oracle ecosystem ranging from Web 2.0 (for social media and collaboration support), workflow (for routing and approvals), security (for secure roles-based access), BPM (for continuous process improvements), governance, risk management, compliance, and even SOA services (for insertion of new process automation) many embedded in the latest PeopleSoft and Oracle HCM products. The cost of integration is less than that of integration to alternative best-of-breed talent management solutions or niche technologies. As mentioned earlier, CedarCrestone has done numerous ROI and business case projects over the past ten years and consistently sees the lower total cost of ownership of these unified, integrated solutions. For example: With a major worldwide pharmaceutical firm, CedarCrestone found that the estimated cost of moving from several best-of-breed talent management solutions to an upgraded PeopleSoft HCM system, plus adding Oracle pre-built business intelligence solutions vs. a build your own BI solution, would save over half a million dollars and be completed in six months less time. 37 Organizations such as Texas Children s Hospital find continuous savings from an integrated and unified solution as well. Texas Children s Hospital saved $400,000 annually through increased operational efficiency and visibility by integrating and consolidating disparate systems A Strategic Approach to Justification: Based on a Total Cost of Ownership Portfolio Assessment, IHRIM Link, 38 Oracle Customer Snapshot, 15