Workforce Management in the Cloud. White Paper. Case Studies Reveal Benefits of Cloud Deployment. Sponsored by

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1 Workforce Management in the Cloud Case Studies Reveal Benefits of Cloud Deployment White Paper Sponsored by

2 Table of Contents The Rationale for Cloud Computing 3 Adoption in the Enterprise 4 Human Capital Management in the Cloud 5 Cloud Deployments of Workforce Management 6 Reduced Cost 7 Increased Efficiency 7 Sharing Information Better 8 Enhanced Productivity 9 Reliability and Consistency 10 Improvement in the Cloud 11 About Ventana Research 13 2 Ventana Research 2013

3 The Rationale for Cloud Computing Cloud computing is now well established as a viable platform for businesses to use in deploying and accessing applications; it has proven to be an appealing alternative to installing and managing them in-house. Cloud computing frees organizations from many of the limitations and burdens of deploying systems locally. It can speed deployment and reduce the costs of software licenses for databases and operating systems, hardware purchases and IT time and resources while enabling more rapid response to changes and keeping information fresh for employees and customers alike. Thus, it can simplify and speed access to information, improve application performance, and free up the time of on-staff technical specialists to enable them to focus on activities of greater value to the business. Not surprisingly, in pursuit of these benefits many organizations are exploring moving various applications to the cloud while others already have done so in recent years. Our benchmark research on business technology innovation shows that half of organizations already use cloud computing to improve their value or performance. More than one-third (35%) of organizations have used it for access to applications and information for more than a year, and another one-fifth began using it in the last year. Among those considering one or more cloud deployments, 15 percent will start to use it within 12 months and 19 percent more said they will do so at some point in the future. Cloud computing is thus an alternative that is growing in popularity as organizations embrace it to increase agility and the effectiveness of their use of business and IT resources. To supplement our research into the use and benefits of business applications and gain greater insight into details of cloud deployment and use, we conducted in-depth interviews with representatives of 3 Ventana Research 2013

4 three organizations in different industries that have taken this step to learn about their experiences with workforce management applications in the cloud. Adoption in the Enterprise Our research shows that use of cloud computing is increasing. Cloud computing is being adopted in virtually every industry. According to our business technology innovation research, two specific categories that use cloud-based applications more than the average (44%), are large organizations (63%), which we define as having 1,000 to 10,000 employees, and the Government, Education and Nonprofit industry sector (71%). Both of these segments are represented in our interviews with users of workforce management in the cloud. Similarly, we found cloud computing to be in use in every line of business. As many organizations have scaled back their in-house IT staffs, the need for business software that is easy to deploy, access and use has increased, and cloud computing is a readily available option. Our research confirms that organizations consider cloud computing to be important. Nearly three-fifths (57%) of organizations participating in the business technology innovation research said the use of cloud computing to access applications and information is important or very important to them. Among those that use cloud computing, 88 percent said it improved the availability of applications and information to the business. Organizations also expressed confidence in their ability to effectively use cloud-based applications within their business. About half (49%) said they are confident in that regard. In addition, more than three- 4 Ventana Research 2013

5 fourths (78%) are satisfied with their organization s cloud computing efforts. Even more executives (84%) are satisfied with those efforts. Human Capital Management in the Cloud Like other departments, those involved in managing employee-related functions have adopted cloud computing. Encompassed by the human capital management category, these functions include core human resources activities such as headcount, payroll and benefits administration, talent management for salaried workers and workforce management for hourly workers; management of contractors and contingent workers also figures in the mix. Employees today are more dispersed than ever, yet obtaining and providing access to information about them is more important than ever. Thus it is no surprise that cloud computing, which typically makes systems and information as accessible as the nearest Web browser, should be attractive to organizations. Human capital management in the cloud is a growing segment, as is evidenced by many of the financial statements and press releases of the largest vendors in this space. Our own research on business data in the cloud confirms this, showing that workforce-related applications rank fourth among eight categories of applications that currently are cloud-based, with three in 10 organizations using them. It also reveals that an additional 35 percent will support cloud applications within a year, which would bring the total to nearly two-thirds of all organizations. Deeper analysis shows that different subcategories of human capital management are moving to the cloud at different rates. In our research on the next generation of workforce management, 19 percent of participants said that they prefer a cloud deployment for their workforce management system. An additional 27 percent expressed no 5 Ventana Research 2013

6 preference among deployment models, but we expect that many of them will actively consider the cloud alternative. We found the strongest preferences for cloud computing in this market in the area of social collaboration and human capital management, an inherently Web-based topic. Our research in this area finds that more than one in five (23%) participants prefer a cloud deployment, with an additional 38 percent undecided. Cloud Deployments of Workforce Management To gain a more intimate perspective on the use of workforce management applications in the cloud, we interviewed business professionals with responsibility for them in three rather different organizations. One is a services company that has more than 10,000 employees, which by our definition makes it very large. The other two, in healthcare and state government, we categorize as large companies, having more than 1,000 employees each. All the people we interviewed are based in the United States, but two of the three organizations are global, with workforces in multiple countries. All of the three use workforce management for timekeeping of hourly employees, and one also uses it for leave management. The top benefits of moving to cloud computing as uncovered in our research match those expressed in the interviews we conducted. The number-one benefit of cloud computing, selected by 40 percent of the participants in our business technology innovation research, is reduced cost. Very large companies identified lower costs as a benefit even more often (53%). The benefit named secondmost often is improved efficiency of business processes (39%). In fact, all of the six top benefits (listed in 6 Ventana Research 2013

7 the chart at left) were mentioned in our interviews as achieved in one or more of the organizations. Reduced Cost As noted earlier, cloud computing can lower costs in several ways. One is that because the cloud business model includes upgrades as part of the license to use the software, licensing charges for version changes don t impact the customer s budget. The services company found this to be true. When we upgrade in the cloud, our typical upgrades are free, said the company s workforce management administrator. That s in addition to the savings that can be realized from eliminating the cost of resources to install and maintain the upgrades in an onpremises deployment. In the cloud, the software provider takes responsibility for managing the software and upgrades, relieving inhouse professionals of that burden. We learned in our interview that when the deployment of the workforce Now we don t need a DBA on call to troubleshoot issues or look at error logs. He is working on other applications. management software was in-house, the services company had a database administrator (DBA) dedicated to helping to manage this application, upgrade it as needed and do general troubleshooting. Basing the application in the cloud means none of that person s salary is spent for this purpose any more. Moving to the cloud resolved some tasks that IT had to do in dealing with third-party vendors, the administrator said. Now they don t have to help manage the application, and we don t need a DBA on call to troubleshoot issues or look at error logs. He is now working on other applications. Reducing cost is a common goal of technology change, and cloud computing provides ways to address this mandate. Increased Efficiency The government agency reports that being in the cloud has saved it money on upgrades and made it more productive. Faced with a complex and lengthy approvals process required by the state to execute any kind of upgrades to the software, the agency simply chose not to upgrade its time management software. We had to pay the provider for everything we had done, the administrator recalled, and 7 Ventana Research 2013

8 each of those charges had to be approved. Now the installation of service packs is included in our plan at no additional cost, she said. As a result the agency is able to receive new versions with improved capabilities without delay or new expense. What s more, the cloud services team proactively contacts the customer. They say, We ve got new service packs ready to install for you, the administrator said. They give us plenty of notice so we can let everybody know when the application is going to be offline. Even more than the convenience, the agency appreciates the new functionality. Upgrading has helped a lot because the latest version is much easier to use and gives us more flexibility, she said. I look forward to upgrading again and getting even more value from the application. The cloud model increases the efficiency of upgrading functionality when an organization is ready to use it in business and eliminates delays waiting for IT to find time to deploy the new version. Managers did not have visibility into who was going on vacation. [The cloud] gave them one centralized place to view information. Sharing Information Better Better communication and knowledge sharing is the benefit of cloud deployment cited third-most often. For the services company, moving to the cloud enabled greater visibility of time-worked and time-off data for all managers globally. Some of our locations outside the U.S. still maintained a paper trail for time-off management, and managers did not have visibility to see who was going on vacation and who was going to be in the office, the administrator explained. In the new environment those managers can see all time-off requests. It gave them one centralized place to view information, she added. Internet Web browser-based access makes it easy for HR departments within the various countries to log on when convenient and make sure their local practices conform to enterprise policies. And global visibility made it simpler for corporate management to access the information it needs to understand the state of operations and to track adherence to polices. 8 Ventana Research 2013

9 Cloud deployment also helps the company manage governance and compliance. Some countries outside the U.S. mandate that employees be compensated for time off. Now they log that information into a database through the application that other people can view, the administrator explained. This provides confirmation that employees have taken time off appropriately. Management has the ability to look at regulatory issues, whether it s for overtime or shift pay, and to report accurately on all those, she said. Being in compliance can be easier to manage in a cloud deployment that centralizes and controls information. The government agency realized a similar benefit regarding payroll information across the state. We have much better control now over the timecards, and we ve put in place ways to be sure no overpayments are made, said the administrator. Sharing information doesn t have to be difficult when everyone has visibility into a single centralized information source. Enhanced Productivity Having all relevant information accessible in a single location can help workforce managers do their jobs more quickly and confidently. For example, in two locations on separate continents managers had trouble preparing their timekeeping data for transfer to the payroll system run by a third party. It would take approximately a week and a half for them to pull their data together for their thirdparty payroll vendor, the administrator recalled. Today, the managers use the cloud-based application to approve their employees timecards much more quickly. According to the administrator, To do that and process the interfaces that pull data out of the application takes about a day. Thus each location saves a week or more in handling this routine but critical task each time. We have much better control now over the timecards, and we ve put in place ways to be sure no overpayments are made. Employees can t be productive when they don t have timely information, and cloud deployment helps ensure that they have it. In the past, said the services company administrator, it took about two 9 Ventana Research 2013

10 weeks to obtain the required approvals to have a backup copy of the workforce management environment used for testing purposes refreshed with all the required user data. There, too, the company has slashed substantial time from a sluggish process. Today, she said, I call cloud services, open up a ticket and within 30 minutes our test environment is refreshed with current production data. Reducing the time it takes to conduct tasks can free up that time for other, more important work. Reliability and Consistency As shown by the example above, cloud computing, which is not tied to a user company s infrastructure or dependent on a perhaps overburdened IT department, can cost-effectively provide services and the latest advances in technology to managers and users in a workforce. From hosting and support professionals dedicated to maintaining the applications, users often experience more reliable performance and faster response when support issues occur. The healthcare provider we interviewed realized such benefits. Before the move to the cloud, requests for support typically were delayed by circuitous routing as the first recipient of that request tried to find the right technicians. This was exacerbated by frequent system outages, sometimes occurring at critical moments in the execution of processes such as payroll. Now, said the company s The system is more reliable. We ve had very few problems in the year since we moved to the cloud. director of HR information systems, When there is an issue, I get an answer much quicker than I would before. Her call is routed to cloud services personnel who start work on resolving the issue right away. At the same time, the company s workforce management system has fewer outages. The system is more reliable. We ve had very few problems in the year since we moved to the cloud, she reported. One reason for this, she said, is that somebody is always monitoring the cloud. At times the technicians are already aware of the problem and working on it when she calls. In a managed cloud environment, the software provider can get immediate feedback and work to be as responsive as possible. 10 Ventana Research 2013

11 She added that performance has not gone down at all even though the company has doubled in size through a merger since moving to the cloud. Specifically she noted that the sign-on procedure and initial access are much faster. I used to hate that I could sign on with the old URL, walk away, and maybe it would be up and running when I got back 10 minutes later. Clearly this helps the 30 people who regularly log on to the application begin work faster without aggravation from a tool that is intended to enhance productivity. The government agency likewise has a sense of increased reliability. Our uptime has increased dramatically now that we have cloud services, the software administrator said. Before, users experienced system outages two or three times a month. She, too, added that things don t become a problem as often. We wanted to migrate the application to our other countries and felt it would be simpler if we went to the cloud. We ve been getting better service on the cloud. Performance has improved as well. The application used to run slowly, and it got hung up, she said. You d have to log off and log back on. In the cloud, users no longer encounter such impediments to their efficiency. Cloud-based access also can make it easier to bring new users on board in a globally dispersed operation. We wanted to migrate the application to our other countries and felt it would be simpler if we went to the cloud, said the services company administrator. That made it easy. The enterprise now has more than 10,000 employees using the timekeeping system in the same way. Cloud-based software can help organizations achieve economies of scale in their workforce processes that help boost productivity and overall performance. Improvement in the Cloud Our benchmark research and these interviews are consistent in indicating the benefits of moving workforce management to the cloud. 11 Ventana Research 2013

12 Advances in the functionality of workforce management applications are promptly and directly available to users while the expense and effort associated with them decline. Especially for large organizations dispersed around a state, the U.S. or the world, Web browser access makes the applications more readily available for employees and managers. As noted, two in five organizations participating in our business technology innovation research said they have lowered costs by using cloud computing. We also asked organizations planning to use cloud computing what benefits they hoped to achieve from doing. Again, most often cited lower costs (39%), while better communications and knowledge sharing (39%) moved up from third to second place. Based on both our benchmark research and these interviews, we recommend that organizations consider how they can improve the performance and costeffectiveness of their workforce management applications and processes by deploying them in a cloud computing environment. The benefits discussed here can provide compelling evidence of value in establishing a business case for situating key applications such as workforce or human capital management in the cloud. 12 Ventana Research 2013

13 About Ventana Research Ventana Research is the most authoritative and respected benchmark business technology research and advisory services firm. We provide insight and expert guidance on mainstream and disruptive technologies through a unique set of research-based offerings including benchmark research and technology evaluation assessments, education workshops and our research and advisory services, Ventana On-Demand. Our unparalleled understanding of the role of technology in optimizing business processes and performance and our best practices guidance are rooted in our rigorous research-based benchmarking of people, processes, information and technology across business and IT functions in every industry. This benchmark research plus our market coverage and in-depth knowledge of hundreds of technology providers means we can deliver education and expertise to our clients to increase the value they derive from technology investments while reducing time, cost and risk. Ventana Research provides the most comprehensive analyst and research coverage in the industry; business and IT professionals worldwide are members of our community and benefit from Ventana Research s insights, as do highly regarded media and association partners around the globe. Our views and analyses are distributed daily through blogs and social media channels including Twitter, Facebook, LinkedIn and Google+. To learn how Ventana Research advances the maturity of organizations use of information and technology through benchmark research, education and advisory services, visit 13 Ventana Research 2013

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