Cloud Watch on HCM applications

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1 Cloud Watch on HCM applications Summary version November 2012 Transform to the power of digital

2 A sneak peek at SaaS industry (1/2) November, Q3, 2012 Vendor corner Workday rolled out the latest version of its human resources and finance cloud service Cornerstone announced significant enhancements to its talent acquisition solution Lumesse launches comprehensive on-demand learning content service ADP unveiled its next-generation ADP Now cloud-based platform for midsize organizations Partnerships, alliances and M&As Korn/Ferry and SuccessFactors establish strategic partnership to develop solutions Peoplefluent expands integration with LinkedIn Recruiter IBM to acquire Kenexa to Bolster Social Business Initiatives Halogen Software and SHL partnered to provide and Assessment 2

3 A sneak peek at SaaS industry (2/2) November, Q3, 2012 Analysts speak Kronos received the NorthFace ScoreBoard Award from the Omega Management Group for excellence in customer satisfaction for 2011 ADP ranked 68, up 19 spots from last year on Forbes List of World s Most Innovative Companies Silkroad named as a finalist in the 4th Annual 2012 Golden Bridge awards for SaaS/Cloud computing Ceridian has been named to leading strategy and consulting firm LAROCQUE's #HRWins 2012 HR Companies to Watch program Events and awards Kenexa to unveil its fall 2012 lineup of new HR technology products during the 15th annual HR Technology Conference & Exposition in Chicago Meta4 to showcase their Global SaaS HR solution at the international HR Tech Europe 2012 conference SumTotal announced the opening of new EMEA headquarters in Reading, U.K 3

4 SaaS can be categorized into core, compensation, talent, learning, recruitment and workforce SaaS Solution blueprint Course content Performance Goals Mentoring Virtual classroom Applicant tracking Sourcing Succession planning Organisation charting On-boarding Social recruiting/ networking Career planning Payroll Competency Employee records Strategic planning Pay-forperformance Stock based & deferred compensation Salary administration Compliance Incentive compensation Market comparisons Jobs & Positions Shared & self service Time & Attendance Benefits administration Enrollment & communication HR Analytics Absence scheduling Source HRM : Traditional models clash with next generation processes and technology, Forrester Research, 2010; CC India Analysis; 4

5 has made the transition from on-premise solutions to SaaS and leading vendors indicate new deals coming in are heavily weighted towards SaaS Course New Players in point solution vendors have built or acquired performance capabilities solution vendors are looking to enter learning market The SaaS model currently accounts for 45% of product revenues in Management Virtual classroom As learning has become more central to employee development, vendors have responded by expanding their solutions' existing functionality and adding performance to it Mentoring content SuccessFactors is moving toward an informal learning offering through its recent acquisition of Jambok Lumesse developed a learning platform via its acquisition of ExecuTRACK Cornerstone OnDemand, Plateau, and Saba had built performance solutions and now have robust integrated offerings SumTotal added performance solutions through acquisition of Softscape Source: HRM : Traditional models clash with next generation processes and technology, Forrester Research, 2010; The Forrester Wave: Management:, 2011; 5

6 solutions have a fair bit of SaaS based solution providers prevalent in the market Applicant tracking Market consolidation Management Forrester estimates that 83% of the recruitment solutions market is deployed via SaaS Sourcing On-boarding Acquisitions in the applicant tracking system (ATS) area mean fewer vendors and cater to the needs of both enterprise and SMB customers Social recruiting/ networking Strategic planning Kenexa acquired BrassRing, Cerdian acquired RSI, Sumtotal acquired Softscape and Cybershift Growth of installed bases of the existing players Many vendors have made acquisitions for intellectual property, advanced technology, and increase of customer base Oracle acquired Taleo to provide a richer recruiting application Source: HRM : Traditional models clash with next generation processes and technology, Forrester Research, 2010; Recruitment Aligns with Management, Forrester Research, 2011; 6

7 tools become a component of broader talent suites and there have been significant mergers & acquisitions targets in the market vendors leverage payfor-performance pay-forperformance Mergers & Acquisitions specialists leverage the link between rewards and performance The link between performance and compensation is at least as strong as the link between performance and learning There have been significant mergers and acquisitions in the compensation market during the past few years SaaS Penetration in the compensation and benefits function has gained momentum and is currently 52% of the market Market comparisons Stock based & deferred compensation Benefits administration Incentive compensation Enrollment & communication Workscape added performance to its compensation capabilities & positioned as an integrated player Salary.com added performance-based talent solutions via internal development Examples include Kenexa acquiring Salary.com and ADP's acquisition of Workscape Source: HRM : Traditional models clash with next generation processes and technology, Forrester Research, 2010; Hype Cycle for Human Capital Management Software, Gartner-2011; The Four Pillars Of Management, Forrester Research, 2010; 7

8 Mobile based workforce (WFM), retailers & public sector industries relying on WFM solutions to improve productivity are some of the trends in the space Time & Attendance Strong demand for Mobile WFM Demand for WFM solutions in retail Increasing instances of public sector usage WFM SaaS adoption has slowly started to evolve, as the leading vendors offer both on-premise and on-demand Absence There is an upsurge in adoption of mobile based workforce solution Growing demand for WFM in retail industry, it is estimated to have a CAGR of 3% till 2015 Counties and other departments are extensively relying on WFM solution to streamline utilisation scheduling Kronos - Licensed to more than 250,000 employees across a wide variety of industries Reflexis claims that it has signed 30 new clients in retail over past 1 year Boulder county implements Kronos WFM to control labor costs, minimize compliance risk, and improve productivity Source: HRM : Traditional models clash with next generation processes and technology, Forrester Research, 2010; software, SearchCRM.com product directory, 2009; Factiva; 8

9 Only new generation software vendors throng the SaaS based core market and are slowly seeing acceptance in the market Payroll Mainstream adoption of SaaS based core has a long way to go with about 18% revenue contribution Jobs & Positions Footprints Gain In-Depth, Analytics, And Global Capabilities Employee records Shared & self service Salary administration Although the overall breadth of application suites has not evolved significantly over the past several years, their depth of functionality has improved in several areas HR Analytics Compliance Vendors are improving their depth through acquisitions - Oracle acquired Taleo - SAP acquired Successfactors Outsourcing vendors and ERP vendors are introducing mobile HR apps Outsourcing and ERP vendors are introducing mobile HR capabilities to their clients Introduces new benefits and flexible spending account functionality to its ADP mobile solutions application Source: HRM : Traditional models clash with next generation processes and technology, Forrester Research, 2010; Recruitment Aligns with Management, Forrester Research, 2011; 9

10 Integration challenges with, growing importance of social talent are the key trends in Performance Growing importance of social talent Integrating challenges with 58% of total revenue from talent is through SaaS solutions Goals Career planning Succession planning Competency Organisations that want to be at the forefront must move their HR practices into social media age now An organisation's social HR strategy reflects its culture, it can enhance productivity within an organisation and also collaboration and connectivity More than 35% of organizations are not integrating their talent applications with their core applications, according to customer reference survey Lack of usage of an integrated talent suite is the main reason for integration challenges Organisation charting Provides a new breed of HRIS software which is social open and measurable NA Source: HRM : Traditional models clash with next generation processes and technology, Forrester Research, 2010; Recruitment Aligns With Management, Forrester Research, 2011 ; The Management Suite Market Emerges, Gartner Research, 2011; 10

11 11 Ronald van den Berg Competence Cluster Leader Digital HR Principal Consultant People & Perfomance Mob : +31 (0) Secretary : +31 (0) Mail to : Tim van der Wal Business Development and Sales Managing Consultant People & Performance Mob: Secretary : +31 (0) Mail to :

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