1 Simplifying Human Resource Management The Drive For Less Complexity And More Cost Control Executive Summary Today, there are Oracle Human Capital Management (HCM) solutions available to optimize every process from recruit to retire. This paper discusses the challenges that may keep companies from realizing the full benefits of this world-class HCM solution: greater cost control, productivity, and visibility across the workforce.
2 Simplifying Human Resource Management 2 Introduction Oracle solutions for human capital management (HCM)* go beyond the basics of HR, payroll, and benefit administration. Now, companies can take advantage of Oracle HCM applications to manage and deploy people when and where it makes sense for the business, while attracting, training, and nurturing the best talent. Yet, with so much potential to optimize the recruit-to-retire process, companies are still struggling with applications that are out of date and out of synch with the needs of the business. Why? Limited staff and capital Application upkeep demands Aging infrastructures Fragmented multi-sourcing approaches Confusing deployment options Here, we discuss these roadblocks, their impacts, and recommendations for moving forward by outsourcing your applications and infrastructure to a certified Oracle partner. Why Oracle HCM? A world-class, award-winning HCM solution for organizations of every size, region, and industry. A global, Web-based, single-system HCM solution that covers every aspect of the HCM function from core human resources functionality to complete enterprise talent management. The solution of choice for more than 14,000 HCM customers, including 9 of the top 10 Fortune 500, and 89 of the top Fortune 100. With the right service provider, you can decrease cost and complexity, while increasing the value of Oracle HCM solutions and at a time when you need that value the most. Roadblocks to Realizing Oracle HCM Benefits Escalating Costs And Staff Demands Challenge: Ramping up internal staff to roll out new applications in house can be an expensive and time-intensive undertaking and given budget and personnel cuts an unrealistic one. Further, this upfront work is just the beginning of the software cycle. As with any enterprise application, Oracle HCM solutions require daily management tasks to keep application performance and availability high, along with critical software updates and fixes that must be applied. Further, most software will typically require major upgrades It s prudent to avoid perpetual investments in a poor economy. within two years of implementation and more regular patching for tax and regulatory updates. All these activities call for continual investments in capital and people at a time when both are scarce. On-Going Staff And Cost Concerns Risks of off-maintenance, out-of-date applications Performance and availability issues Staff retention, shortage, or burn out Perpetual maintenance, management and upgrade costs Solution: When you work with a certified Oracle service provider, there s no need to tie up internal staff or budgets on in-house implementations and ongoing maintenance. There are armies of people behind the scenes who can manage the entire software lifecycle for you from implementation and management to maintenance, upgrades and support. For further cost control, work with an Oracle provider offering a range of pricing options. For example, services can be provided for a fixed monthly fee, a subscription-based fee or a lower-cost, per-user fee. Overall, outsourcing your Oracle HCM applications can reduce perpetual costs, as well as the burden on internal IT staffs. Aging Infrastructures Increase Risks And Costs Challenge: To trim IT expenditures, many companies delay the replacement of out-of-date hardware. This decreases capital investments over the short term, but the added costs and staff time involved in maintaining and supporting aging systems can be more expensive in the long run. Feeling the economic crunch, many companies have also been forced let go of the support people who know how to maintain the systems best. Short-term capital savings lead to long-term increases in support costs. As hardware ages, it becomes more vulnerable and less reliable, increasing security, compliance, and availability risks across the infrastructure. Without the latest security technologies, companies are left vulnerable against new threats. Older systems also make it difficult to comply with regulatory requirements around data availability, storage, and protection. Further, the potential for system failure increases. Downtime follows, occurring during critical times like when payroll is being processed or when job candidates are uploading resumes. At that point, both employee and applicant confidence in your company can begin to wane. In the end, you can spend more time supporting and trouble-shooting aging technologies than supporting the businesses. Given that, you can attempt to build a case for investing in new hardware, but a typical in-house implementation of Oracle HCM applications can take a year or more.
3 Simplifying Human Resource Management 3 Reasons For Technology Refresh Cost and time spent on support Loss of collective support knowledge with staff cuts Hardware is less reliable, secure, and compliant Downtime delays processes and erodes employee confidence Solution: When you work with the right service provider, you don t have to worry about refreshing your technology assets. Service providers are able to spread hardware costs across many customers taking advantage of economies of scale, so it s much easier and cost-effective for them to deploy the latest hardware. With a large support staff, they can also keep the infrastructure up to date, which greatly simplifies security and compliance and increases uptime. Managing Multiple Vendors Challenge: In an effort to free internal staff for more strategic activities, some companies make the right decision to outsource HCM hosting and application management, but take the wrong approach to doing so. They employ a multi-sourcing strategy, using a mix of vendors to provide specialized services in specific areas. One may host the Oracle HCM solutions, another may support them, while another processes payroll, or performs development. Focus on human resource management, not vendor management. Managing a mix of outsourcers can be time-consuming, complex, and expensive, as internal staff must oversee each vendor relationship and track their performance to verify the investment in services pays off. Expanding applications and business processes globally is also an issue, as some vendors may not have an established presence in other geographies. Even if they do, they may not be familiar with localized employment laws and compliance requirements. Some may even lack critical international security certifications. With multiple vendors, data integrity, accuracy, and security can be at risk, too. Complicating the matter further, some service providers outsource key functions to their own sub-contracted partners (and you may not even know it). As data travels from network to network, system to system, database to database, files can become corrupted or lost and exposed to security threats anywhere along the service delivery chain. This patchwork sourcing approach makes data consolidation difficult and time-consuming, as well as expensive when custom interfaces have to be built. In the end, internal staff must struggle to bring disparate data streams together for accurate cross-process reports and timely paychecks. Multi-Sourcing Mayhem Too much time managing relationships Lack of global capabilities Lack of international security certifications Data integrity at risk Consolidation is difficult and expensive Lack of accurate, cross-process reporting Solution: Look for a single service provider who can combine a complete solution for hosting, application management, support, and business process outsourcing. Choose a world-class provider with proven experience in Oracle applications, as well as managing critical business processes, such as payroll. A single supplier can also provide one, consolidated statement of record to draw from, whether you re updating benefits or cutting paychecks. But be sure to check under the hood: Your data isn t protected unless your service provider has robust security solutions at the network and database layers. To prepare for future growth, select a provider with a choice of service delivery models from dedicated or shared infrastructure, multi-tenant hosting options to managed hosting, colocation and utility computing. That way, you can shift to different services as needs change, while maintaining single sourcing benefits. Further, if you plan on expanding globally, make sure your provider can maintain enterprise-class security and availability in other geographies. You should also ask for verification that they have been certified in international standards for computer security. Choosing The Right Deployment Model Challenge: Once companies make the decision to outsource, the next step is choosing the right deployment model that aligns with the needs of business. First, determine how much responsibility you want to take on to manage the applications infrastructure. The options and cost structures offered by service providers can vary widely, which can complicate the selection. But it all really comes down to one question: How much responsibility do you want to maintain internally for the applications and infrastructure? Solution: In addition to traditional in-house hosting for your Oracle HCM applications, there are four basic deployment models to choose from. (See comparison chart, on t page 5 of this report.) Each varies not only in the degree of responsibility the provider takes on, but in their potential to help you reduce the total cost of running your applications. Here s how they re different.
4 Simplifying Human Resource Management 4 Traditional dedicated solutions. In this model, you own the Oracle HCM software license for applications implemented on your own in-house hardware. The Deployment Decision Do you want to own the software or lease it? Do you need dedicated or shared servers? Do you need custom configurations, or will standard configurations suffice? Do you want to pay a fixed monthly fee or a subscription-based fee? A single software instance supports only one tenant or company (yours) and you can build unique features and functions into the software. You take full responsibility for the technology lifecycle and pay annual software maintenance and support fees. The downsides to this model are upfront capital expenses, along with the perpetual cost structure involved in monitoring, maintaining, managing, supporting, updating, and upgrading the software and infrastructure. There aren t many options for reducing costs, which is why some companies put critical updates and fixes on hold, falling into a vulnerable off-maintenance state. Hosted dedicated solutions. When you outsource your applications under this model, you own the Oracle HCM software but not the hardware. Instead, the applications are hosted on dedicated servers within the provider s data center. This type of deployment still supports a single software instance and unique configurations, but the provider takes full responsibility for hosting and managing the applications and infrastructure. There are also more opportunities to reduce total cost of ownership. Although you re still responsible for annual software maintenance fees, capital investments in hardware can be amortized into an operating expense, payable as a fixed monthly fee. Instead of perpetual staff and budget investments in monitoring, maintaining, managing, updating, and supporting the environment, you re covered by the monthly fee. To keep up with new features and technologies, the right provider can also handle the software and hardware upgrades in an easier and more timely manner, since they do it for so many customers already. Hosted multi-tenancy solutions. This deployment model is designed to replace software ownership and reduce related infrastructure costs by allowing you to lease the Oracle applications, as well as space on shared servers in the provider s data center. It can be ideal for software not requiring dedicated servers or custom hardware configurations, yet it still allows for flexible software configurations. By allowing multiple companies (or tenants) to share computing resources, the fee structure for this deployment model breaks cost barriers for companies who were once unable to take advantage of Oracle HCM applications. SaaS multi-tenancy solutions. Software-as-a-Service can be a great option for companies wanting access to a world-class HCM solution at a very affordable price. It delivers the same service benefits and monthly subscription pricing as a hosted multi-tenancy solution (see above), with three points of differentiation: First, monthly SaaS subscriptions are billed on a per-user basis. Second, both hardware and software configurations are standardized across tenants. Third, software upgrades are automatically applied on a frequent basis (rather than the typical annual upgrade cycle) and also include new versions of third-party products to fill in product gaps such as database, middleware, integration, software development, and reporting tools. Results Missed Opportunities To Optimize, Innovate, And Lead Over the last few years, talent management solutions have burst on the scene. With new ways to attract, train, reward, and develop the best talent, these Oracle HCM solutions surpass the power of traditional HR and payroll solutions. Innovations in workforce management have made it easier than ever for you to forecast needs, optimize talent pools, and even schedule people according to unique attributes. There are solutions for long-term compensation and succession planning to help you retain superior employees by furthering their skills and knowledge and preparing them for advancement. Additionally, automated processes and self-service functionality have changed HR service delivery models decreasing red tape, administrative costs, and employee frustration. However, the roadblocks discussed in this paper from escalating costs and staff demands, outdated applications, and aging infrastructures to managing multiple vendors and choosing the right deployment model can keep you from realizing these strategic advantages. Stuck In The Status Quo Inability to recruit and retain the right people Need to train and develop the best talent Workforce out of alignment with business needs Lack of long-term compensation and succession planning Rising administrative costs The provider takes responsibility for monitoring, maintaining, managing, updating, and supporting the software and the hardware lifecycle for a monthly, with annual software maintenance costs included. For new features and technologies, hardware upgrades are included and software upgrades can be streamlined by the provider.
5 Simplifying Human Resource Management 5 Comparison of Deployment Models for Oracle HCM Applications Business Model Traditional Hosted Hosted SaaS Single-Tenancy Single-Tenancy Multi-Tenancy Multi-tenancy Software Ownership Yes Yes No No Hardware Ownership Yes No No No Dedicated Servers Yes Yes No No Upfront Costs Software license, install, Software license, install, Data conversion Data conversion customization customization Hardware purchase, Hardware purchase, Implementation Included in cost implementation implementation Investment Type Capital/software Capital/software, then a Monthly operating expense Monthly operating expense monthly operating expense Capital/Hardware Capital/Amortized into Monthly operating expense Monthly operating expense fixed monthly fee On-going Costs Annual software Annual software Covered by agreement and Covered by agreement and Responsibilities maintenance and fees maintenance and fees monthly and monthly per-user Software patches and fixes Covered by agreement Covered by agreement and Covered by agreement and fixed monthly fee monthly and monthly per-user Hardware maintenance Covered by agreement Covered by agreement and Covered by agreement and fixed monthly fee monthly and monthly per-user Hardware and software Covered by agreement Covered by agreement and Covered by agreement management, monitoring, and fixed monthly fee monthly and monthly per-user and support Software upgrades Fee-based service Fee-based service Frequent, automatic upgrades included Hardware upgrades Amortized into monthly fee Included Included Configuration Options Software/flexible Software/flexible Software/flexible Software/standard Hardware/flexible Hardware/flexible Hardware/standard Hardware/standard Total Cost of Ownership High Reduced Reduced Low (Fees increase as user population grows.) Recommendations When you offload hosting, application management, and business processes to a service provider, you can be free to go beyond the basics of human resource management. A certified Oracle partner can help you gain the most from the world-class features and functionality of Oracle HCM applications, while helping you adopt the best business processes and practices for the best results. Together, AT&T and Oracle provide an industry-leading solution for human resource outsourcing from recruit to retire, as well as complete payroll processing services. Available as a single-source solution from AT&T, companies can finally free internal staffs from on-going application upkeep, complex multi-sourcing strategies, aging infrastructures, and payroll pressures. With a single, consolidated system of record for global HR processes, companies can increase the accuracy and timeliness of reporting and paychecks, while they move beyond HR basics to prevailing industry practice talent management and workforce optimization. With 10+ years of experience in Oracle applications, AT&T applies the latest technologies and skills of the AT&T Internet Data Center staff to quickly implement and continuously manage Oracle HCM applications.
6 Simplifying Human Resource Management 6 A decade s worth of payroll processing services are backed by certified payroll professionals and payroll tax specialists with expertise across all states and jurisdictions. Flexible services, pricing plans, and deployment models simplify the outsourcing decision and reduce total cost of ownership. For your company, all this means less time and less worry about technology, so you can finally begin realizing the benefits of a worldclass Oracle HCM solution. As a result, you can have the quality information you need to put the right people in the right jobs, attract and retain the best talent, and develop and reward the top performers who will lead your business in the years ahead. Notes * All references to Oracle HCM applications or solutions include both the Oracle E-Business Suite and Oracle s PeopleSoft Enterprise. Why AT&T? An Oracle Platinum Partner 10+ years of hosting and application management experience for mission-critical solutions. 10+ years experience in payroll processing services with certified payroll professionals on staff. Combined power and reliability of the AT&T global network and enterprise-class Internet Data Centers worldwide. International security certifications for global protection, SAS 70 Type II examinations, and SysTrust audits. High availability SLA of 99.9 percent and industry-leading service level agreements. A range of solutions, from managed hosting, colocation and remote hosting services to utility-based and on-demand Software-as-a-Service (SaaS). Positioned in 2009 Gartner Magic Quadrant for web hosting and hosted infrastructure cloud services. For more information contact an AT&T Representative or visit 12/08/10 AB AT&T Intellectual Property. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Intellectual Property. The information in this document is provided by AT&T for informational purposes only. AT&T does not warrant the accuracy or completeness of the information or commit to issue updates or corrections to the information. AT&T is not responsible for any damages resulting from use of or reliance on the information.
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