17 th Annual HR Systems Survey Findings Special LEHRN Presentation

17 th Annual HR Systems Survey Findings Special LEHRN Presentation Presenter: Stacey Harris, Vice President, Research and Analytics @StaceyHarrisHR

Sierra-Cedar Fast Facts 7 Service & Solution Areas Application Services Business Intelligence Host & Managed Services Infrastructure Services Integration & Cloud Solutions Research Strategy Training 17 Years of Leading HR Systems Survey & Research 2014 merger of 4 companies with decades of experience 2000 + Employees 5 Industry Focus Commercial Healthcare Higher Education Public Sector Justice & Public Safety Delivering industry-focused client success by providing consulting, technical, and managed services for the deployment, management and optimization of next-generation applications and technology. 2

Stacey Harris Vice President Research and Analytics Passions: Research Background: HR and OE Practitioner for over 10 years in finance, retail, and franchised businesses. Direct of Research Bersin & Associates, Launched the HR research practice VP of Research for Brandon Hall Group Major Research and Papers: The High Impact HR Organization, The HR Framework, Employee Engagement: A Changing Marketplace, and Relationship Centered Learning Feel free to connect at: www.linkedin.com/in/staceyharris/ 3

Sierra-Cedar Annual HR Systems Survey Over 17 years of continuous data gathering The most comprehensive survey in the industry: Strategy, Process, and Structure Administrative and Service Delivery Applications Workforce Management Applications Talent Management Applications Business Intelligence/Analytics/Workforce Planning Applications Integration and Implementation Emerging Technologies and Innovations Vendor Landscape Workforce and HR Expenditures Workforce Usage and Perception Please, Register to Participate! http://www.sierra-cedar.com/annual-survey/ Next Years Launch is May 12 th, 2015! 4

Sierra-Cedar 2014 2015 HR Systems Survey Demographics: All Respondents Total Workforce Represented 19 Million Organization Sizes Represented Large 10,000 + 28% Medium 2,500 10,000 Small 100 2,500 29% 43% 1,063 Organizations Other Services Avg. number of Employees = 16,053 Employees + Contingent (in millions) Agriculture/ Mining/ Construction 3% High-tech 6.8% Trans., Comm. Utilities Retail Wholesale 7.3% 7.9% Manufacturing 12.1% Higher Ed./ Public Admin. Financial Services 12.5% 14.9% Healthcare 14.9% 20.5% 5

Key Themes for 2014 2015 Survey Results Strategy and Culture HR Tech Strategy Foundation Cloud HRMS Innovation Social Enterprise Integration Strategy User Experience Mobile Culture of Change WFM + TM + BI Quantified Organization 6

Sierra-Cedar HCM Application Blueprint FIN General Ledger, Purchasing, Budgeting, T&E Enterprise Content Enterprise Social Vendor Management Enterprise Workflow VMS Administrative Excellence Service Delivery HR Help Desk, Portal, Workforce Lifecycle Management (Onboarding) Service Delivery Excellence Workforce Management Excellence Talent Management Excellence Workforce Optimization Excellence Self Service/Direct Access Employee Self Service Manager Self Service Administrative Apps Core HRMS, Roles/Competencies (Profile Mgt.), Payroll, Benefit Admin, Embedded HR Analytics, Embedded HR Social Workforce Management Time & Labor, Absence & Leave Management, Labor Scheduling, Labor Budgeting, WFM Analytics, Social Workforce Optimization Workforce Planning, Workforce Analytics, Predictive Analytics Talent Management Recruiting, Performance, Learning, Compensation, Succession, Career, Talent Profile, Talent Analytics, Social Business Intelligence Foundation Reporting/visualization and BI tools CRM Network Security Mobile Access SOA, API, ETL Integration Platform Projects Backlog, Pipeline, Customer Satisfaction Project Costing, Contracts, Grants 7

What are your 2015 Initiatives? Which areas of the HCM Application Blueprint will your organization spend at least 25% of your internal resources? Which areas of the HCM Application Blueprint require more industry data and education? 8

2014 2015 Three-Year Look at HR Initiatives Energy on BPI, Service Delivery, Global; Declining Focus on Talent Mgt. Major Initiatives Three Year View 2012 2013 26% 2013 2014 64% 2014 2015 40% 37% 35% 35% 24% 44% 31% 25% 23% 20% n=823 9 * * Global Organizations Only

An Enterprise HR Systems Strategy Our Top Performers Do. Do You Have One? Percentage of Organizations With a Current Enterprise HR Systems Strategy Regularly updated strategy 21% 36% In development strategy Rarely updated strategy 8% No strategy/not aware 35% HR organizations with an Enterprise HR Systems Strategy are 38% more likely to be viewed by all levels of management as contributing strategic value to the organization. 10

HR System Integration Approaches Early Indication that Enterprise Integration Strategy (EIS) is Valuable Primary Approach for HR Application Integration 33% 17% Integrate into HRMS Integrate into ITM 15% 13% 22% Enterprise integration strategy/platform Case by case integration No approach/not aware Respondents with an Enterprise Integration Strategy Are Using 45%: on-premise solution (Oracle SOA, WebSphere) 23%: platform as a service solution (PasS Dell Boomi, MuleSoft, Informatica) 20%: hybrid solutions 12%: not aware n=494 11

2014 2015 HR Tech Spending Outlook Over 50% of Survey Respondents Will Increase Spending Next Year Spending Plans for Next Year by Employer Size* 58% Large 35% 8% Large Increase 51% Stay the same Medium 44% Decrease 4% Medium 51% Small 45% 5% Small *Large = 10,000+; Medium = 2,500 10,000; Small = <2,500 n=924 12

Change Management Practices 27% of Respondents Report a Culture of Change Management Level of Change Management for HR Technology Projects 17% 27% Consistent culture of change mangement Key projects that meet criteria Sporadically, with no criteria Never 22% Change Management Practices for HR Technology Projects 34% Basics* BPI Usability testing 59% 72% 100% Champions 43% Formal CM: Six Sigma etc. Readiness assessment Incentives 15% 27% 23% *Basics: Senior sponsorship, communications, documentation, training, and project management. 13

Benefits of Change Management Reduces Costs and Increases Perception of HR as Strategic Total HR Technology Costs/Employee Culture of CM $302 Key projects $344 Sporadic $461 57% Never $691 Change Management Increases Strategic Value of HR 2 X Organizations with a Culture of Change Management are twice as likely to be viewed by all levels of management as contributing strategic value, versus at organizations that never uses change management. 14

Contingent Workforces Contingent Workforce Management Tools Primarily HRMS 84% of organizations have a contingent workforce 32% 43% Combo HRMS/Other Tools Contingent workers are 20% of the average company s workforce 25% Non-HRMS Tools Types of contingent workforces: Independent contractors self employed, 1099 s, legal limitations Temporary workers employed by temporary service agencies On-call workers report to work when needed Contracted employment on location, but employed by a third party Short-term contractors agreed upon short term contracts n = 854 (excluding staffing agencies with 100% contingent workforces) 15 www.domain.com

Beyond the HRMS, Other Systems Managing Contingent Workforces Systems Currently Used to Manage Contingent Workforces Primarily HRMS 32% 25% 43% Combo HRMS/Other Tools Non-HRMS Tools Other than the HRMS, What Systems are Used to Manage Contingent Workforces Procurement/VMS System 53% *Chart does not equal100% as organizations have multiple solutions in use Outsourced Stand-Alone, C-WFM 33% 32% 16

Discuss Enterprise HR Systems Strategies What is included in your Enterprise HR Systems strategy? How do you define workforce? Do you have an HR application deployment Roadmap? 17

2014 2015 Three-year Adoption Outlook Looking Forward, Workforce Optimization Will Be Hot! Three-year Application Outlook 92% Administrative 96% Service delivery 49% 76% 55% Workforce management Talent management 46% 65% 55% 80% In Use Today In Use within 3 Years Social media tools BI (reporting and tools) 41% 41% 68% 65% Workforce optimization 12% 44% 268% n=648 18

Embedded Analytics Solutions 2 to 3x Growth Anticipated Embedded Analytics Three-year Application Outlook Administrative embedded analytics 28% 70% Workforce management embedded analytics 15% 52% In Use Today Talent management embedded analytics 13% 58% In Use within 3 Years n=733 19

Simple Management and Operational Reporting Insight-Drill Down and Ad Hoc Tools Statistical Analysis Tools Dashboards Other Visualizations BI/Analytics Overview Workforce Optimization Applications Workforce Analytics, Workforce Planning and Predictive Analytics Reporting, Visualization, and Statistical Tools BI Foundation Automatic Report Distribution Middleware (ETL) HR Warehouse 20

BI/Analytics Deployment Approaches Adoption is Less Important than Deployment. We Must Learn from the Past! Business Intelligence/HR Analytics Approach Predominantly Standalone Apps 2007 Enterprise BI Embedded HR Combination Solutions 9% 13% 53% 47% 30% 33% With experience, organizations moved to adopt Enterprise Solutions Currently, an emerging trend of Embedded HR Analytics 2012 2014 Standalone HR Analytics Tool Today 7% 8% 12 Months Going forward, we will see 44% growth in adoption of Combinations 12 Mo n=488 21 Caution: consider past learning as you develop your BI/analytics strategy. While embedded analytics solutions that provide transactional and operational analytics will not go away, they are not the end solution. Enterprise solutions will be needed.

2014 2015 HRMS Deployment Models SaaS HRMS Deployments Will Overtake Licensed Next Year HRMS Application Deployment Only Licensed software on premise 31% 46% Licensed software hosted 13% 9% Today 12 Months SaaS subscription-based 28% 47% Combinations In-house developed/bespoke Outsourced (process and software) 10% 11% 3% 1% 2% 1% n=602 22

2014 2015 HRMS Deployment Models Large Organizations* Will Double Their SaaS HRMS Adoption Next Year HRMS SaaS Application Deployment Only by Employer Size* 15% 31% 106% Large 25% Medium 40% 46% Today 12 Months Small 59% *Large = 10,000+; Medium = 2,500 10,000; Small = <2,500 n=602 23

More HRMS Replacement Initiatives With Variations by Industry Upgrade vs. Replacements by Industry All Respondents Replace HRMS 18% Upgrade HRMS 15% 29% 8% 26% 16% 20% 16% 14% 15% 14% 9% 20% 21% 19% 18% 16% 9% 12% 13% 23% 13% n=823 24

HRMS Replacement Initiatives With Variations by Region Europe Respondents APAC Respondents Canada Respondents All Respondents Upgrade HRMS Upgrade HRMS Upgrade HRMS Replace HRMS 14% 21% 31% 18% Replace HRMS Replace HRMS Replace HRMS Upgrade HRMS 10% 17% 26% 15% 25

Legacy HRMS Respondents Change Plans Today s HRMS Environment 59% are legacy solutions (licensed on premise and hosted) 66% of legacy HRMS s are NOT on the current version The average time since upgrade for legacy HRMS s is 4 years 22% of all HRMS Respondents are Changing their HRMS 35% Single Legacy HRMS environment 32% Multi-vendor HRMS environment 33% Cloud to Cloud, Homegrown to Vendor, etc. Single Legacy HRMS Changes (avg. employee size 7,592) 1/3 Moving to Workday 1/3 Moving to other single cloud solution 1/3 Evaluating cloud slate Multi-vendor HRMS Changes (avg. employee size 22,043) 1/3 Moving to all major single cloud solutions 1/3 Evaluating cloud slate 1/3 Consolidating (most often keeping an existing on premise solution) 26

HRMS Vendor Landscape 12 Months Plans Indicate Increased SaaS Adoption HRMS Vendor Outlook Overall and by Size Overall In 12 Today Months Large 10,00+ Employees In 12 Today Months Medium 2,500 10,000 Employees In 12 Today Months Small 200 2,500 Employees In 12 Today Months Oracle PeopleSoft 27% 24% 47% 41% 28% 23% 9% 8% ADP 20% 16% 15% 11% 15% 10% 28% 25% Ultimate Software (UltiPro) 11% 11% 1% 2% 16% 16% 15% 14% Kronos 11% 9% 15% 13% 12% 8% 7% 5% SAP* 9% 8% 15% 12% 9% 8% 4% 5% Infor/Lawson 9% 8% 13% 11% 13% 9% 4% 4% Workday 6% 15% 9% 21% 6% 18% 3% 6% Oracle (EBS)/JD Ewards 7% 7% 11% 11% 6% 5% 6% 6% Ceridian HR 5% 3% 2% 2% 5% 1% 7% 4% SumTotal/Softscape/Accero 4% 4% 3% 3% 5% 5% 4% 1% SuccessFactors Employee Central 3% 6% 3% 7% 4% 6% 2% 4% Oracle Fusion (HCM Cloud) 2% 4% 3% 5% 1% 3% 2% 4% Ceridian Dayforce HCM 2% 3% 1% 1% 2% 3% 3% 5% Other 13% 13% 9% 7% 9% 8% 21% 22% * SAP adoption underrepresented Columns do not add to 100% as organizations have multiple solutions in use Colored cells indicate greater than 5% gain or loss projected in 12 months. +5% loss +5% gain n=497 27

#1 Reason For Moving is User Experience! How Are Vendors Doing? 1 = Poor: not user friendly, excessive steps, limits use 2 = Acceptable: workable but requires training to use 3 = Excellent: intuitive, user centered design, effectively promotes use And, why is it is such a big deal? It s about driving user adoption, so both employees and the organization get the most value from the solution! 28

User Adoption Percentage User Adoption Level by User Experience Scores Higher User Experience Scores with Newer Cloud Solutions 75 HR Management System Manager User Adoption and User Experience n=389 29 70 65 60 55 50 45 40 35 Oracle, EBS Infor/Law SAP (HCM) Ceridian HR PSFT Multiple Vendors Kronos ADP UltiPro 30 1.60 1.85 2.10 2.35 2.60 User Experience Scores Workday * Ceridian DF UltiPro (2013) * Oracle HCM Cloud (Fusion) * SF/Employee Central UltiPro: Manager adoption, increased by 47% from last year. Organizations with new cloud solutions will see increased adoption levels quickly. * Sample Size Small, Indicative Data Only

HRMS Customers Continue to be Dissatisfied DETRACTORS PASSIVES PROMOTERS (0 through 6) 0 1 2 3 4 5 6 7 8 9 10 Not at all likely Neutral Net Promoter Score % Promoters = (9s & 10s) Extremely likely % Detractors (0 through 6) Net Promoter Score by HRMS Deployment Approach Net Promoter Score Promoters Detractors Overall -35 18% 53% Licensed on Premise -47 11% 58% Licensed Hosted -39 21% 60% Software as a Service -9 31% 40% n=418 30

Vendors Pay Attention! Implementation Time Matters and Yields Highest NP Score Avg. NP Scores Average Net Promoter Score by Vendor Benefit 27 4 8 8 11-30 -23-23 -10-4 n=558 Question: Which vendor benefits have the greatest positive impact for your organization today with your current core HR Management system? 31

Low Industry Net Promoter Scores Actions to Take from HRMS Scores Plan for faster implementations, upgrades, or release deployments Don t try and boil the ocean. Piloting and phased rollouts can help reduce project time. Complete process re-engineering before technology work, not during. If your organization is on an older release, consider changing! Those on older releases are the most unsatisfied by 40 points lower than the average. Those on newest releases are 8 20 points higher than the average. Customize as a last resort! Those with high levels of customization (over 25%) are 20 points lower than those with moderate and low customization, and 50% lower than those with no customization. Those with no or low customization give the highest scores, 62 points higher than those with high levels of customization. Develop an enterprise integration strategy Those with an Enterprise Integration Strategy and Platform have scores 10 points higher than the average, and 14 points higher than those that integrate on a case by case basis. 32

SaaS Takes Less Time to Deploy Length of Time for New HRMS Deployments JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Licensed On Premise = 15.3 months Licensed Hosted = 11 SaaS = 9.0 months Large Time for New Deployment for an HRMS by Size of Organization* in months 14.2 14.3 18.7 n=536 Medium Small 14.4 13.6 10.0 11.0 8.3 7.1 *Large = 10,000+; Medium = 2,500 10,000; Small = <2,500 Licensed On Premise Licensed Hosted SaaS 33

Average Time for Upgrades and Releases SaaS Continues to Provide Faster Speed to Benefit Length of Time for HRMS Upgrades/Releases JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Licensed On Premise Upgrades = 7.3 months Lic. Hosted Upgrades = 5.17 months SaaS Release = 4.2 months Large Time for HRMS Upgrades/Releases by Size of Organization* in months *- Not sufficient data 5.8 8.7 Medium 3.9 4.9 6.3 Licensed On Premise Upgrade n=536 Small 5.0 4.6 3.8 *Large = 10,000+; Medium = 2,500 10,000; Small = <2,500 Licensed Hosted Upgrade SaaS Release 34

Headcount SaaS Takes Less Resources Requires Fewer Total HR Technology Headcount than Licensed Solutions HRIT/IT Headcount by Deployment Type* Functional HRMS Application Support HRMS Infrastructure 5.0 4.9 4.3 4.0 3.0 2.8 Licensed on premise SaaS *All Licensed on premise and SaaS respondents from organizations with average of ~11,000 employees plus contingents served by the HRMS n=85 SaaS advantage holds true across small, medium, and large organizations. It is best to benchmark for your size and industry. 35

Expenditures are Complicated Benchmarking is Necessary! HRMS Technology Costs * (per employee)** Licensed On Premise Current Year Licensed On Premise Next Year SaaS Current Year SaaS Next Year $134 $148 $132 $132 External Costs Paid to Consultants/or Vendor (per Employee)** for Implementation Costs Licensed On Premise Current Year Implementation *** Licensed On Premise Next Year Implementation *** SaaS Current Year Implementation *** SaaS Next Year Implementation *** $41 $39 $47 $67 External Costs Paid to Consultants/or Vendor (per Employee)** for Ongoing Support n=85 Licensed On Premise Current Year Ongoing Support**** Licensed On Premise Next Year Ongoing Support**** SaaS Current Year Ongoing Support**** SaaS Next Year Ongoing Support**** $34 $14 $22 $24 *License plus maintenance for licensed on premise; annual amount paid to vendor for SaaS **From licensed on premise and SaaS respondents with an average of ~11,000 employees plus contingents served by the HRMS *** Implementation, upgrade, and/or change management **** Ongoing support for HRMS 36

Value of Service Delivery Technologies Enable Serving More Workforce per HR Administrative Staff Employees Served by HR Administrative Headcount*** 10% No or Low Tech 31% With Self Service* With Self Service*, and Help Desk 204 224 268 n=160 *With Self Service: Employee and manager self service applications serve 60% or more of employees and 50% or more of manager populations ***HR Administration is calculated with headcount 37

Why Add Mobile to Service Delivery Tech? Higher HRMS User Experience Scores HRMS User Experience Scores** by Service Delivery Model No or Low Tech With Self Service* With Self Service* and Help Desk With Self Service*, Help Desk, and Mobile 1.75 2.1 2.2 2.6 n=158 38 49% increase in user experience scores with combined self service, help desk, and mobile technologies. *With Self Service: Employee and manager self service applications serve 60% or more of employees and 50% or more of manager populations **User experience scores based on a three point scale: 1 = Poor, 2 = Acceptable, 3 = Excellent

Strategy for WFM Solution Adoption PLEASE CHARACTERIZE THE PRIMARY APPROACH TO SELECTING WORKFORCE MANAGEMENT APPLICATIONS? No Strategy 19% WFM Suite 15% Point Solutions 13% ITM Suite 13% HRMS Suite 40% n=580 * WFM Suite Not part of the HRMS or ITM Suite 39

2014 2015 WFM Deployment Models WFM Deployment is Quickly Moving to the Cloud WFM Application Deployment Only Licensed software on premise 26% 40% Licensed software hosted 18% 16% SaaS subscription-based 21% 38% Combinations In-house developed/bespoke 13% 16% 4% 1% Today 12 Months Outsourced (process and software) 2% 1% n=580 40

Time and Attendance Tracking Solutions Percent of Organizations Using these Time Tracking Tools Currently Manual - paper based 13% Individual PC 54% Company device (biometric, card-swipe, code) 52% Mobile device 8% n=580 * WFM Suite Not part of the HRMS or ITM Suite 41

Top Adopters of WFM, TM, and BI Achieve Higher Outcome Scores and Higher ROE Workforce Management Talent Management Business Intelligence Top Workforce Management, Talent Management, and Business Intelligence Adopters: Have across the board higher HR, talent and business outcome scores Achieve higher Return on Equity (31% higher than lower adopters) They integrate WFM, TM, and HRMS data three times as often as lower adopters. 42

Integrated Talent Management All ITM Components Will Grow in Adoption in Next 12 Months Integrated Talent Management Approach Integrated Talent Management Components Point Solutions 15% None/Not Aware 14% ITM Suite 29% Performance Talent Profile Acquisition 84% 86% 63% 78% 60% 69% HRMS- ITM suite 42% Compensation Learning 59% 64% 50% 62% Career 45% 63% Organizations with higher than average TM components (4) have 6% higher ROE. Succession Today 44% 12 Months 67% 43

Integrated Talent Management Vendors 31% of Respondents Report They Will Change Solutions! Integrated Talent Management Vendor Outlook Overall and by Size Today Overall In 12 Months Large 10,000+ Employees Today In 12 Months Medium 2,500 10,000 Employees Today In 12 Months Small 200 2,500 Employees Today In 12 Months Oracle (PeopleSoft, EBS) 25% 18% 41% 30% 23% 17% 11% 10% SuccessFactors/Plateau 20% 19% 21% 23% 27% 23% 12% 12% Oracle (HCM Cloud, Taleo) 14% 18% 26% 30% 9% 13% 7% 11% Cornerstone OnDemand 11% 15% 10% 14% 9% 10% 15% 19% Ultimate (UltiPro) 9% 10% 0% 1% 13% 14% 14% 14% ADP 9% 7% 5% 4% 3% 2% 20% 13% Workday 6% 13% 7% 15% 8% 17% 3% 8% SumTotal/Softscape 5% 4% 6% 3% 8% 8% 2% 1% SAP* 4% 3% 6% 6% 3% 3% 2% 2% Halogen 3% 4% 0% 1% 5% 3% 6% 6% Other 28% 29% 34% 39% 25% 27% 25% 30% * SAP adoption underrepresented Columns do not add to 100% as organizations have multiple solutions in use Colored cells indicate greater than 3% gain or loss in 12 months. +3% loss +3% gain n=363 44

Social Continues to Grow Social Tools Use and Plan Collaboration tools/repository 62% 10% 6% 3% 19% LinkedIn 52% 9% 17% 9% 4% 9% Facebook 36% 5% 15% 8% 18% 17% Twitter 30% 4% 13% 10% 16% 28% Enterprise social netowrk (behind firewall) 27% 7% 6% 13% 10% 38% Used strategically today Will be used strategically in next 12 months Allowed for individual use only Evaluating use Not allowed 45

Social-enabled Process Adoption Recruiting Staff and Hiring Managers Have the Highest Levels of Use Major Social-enabled HR Processes Workforce Using Today In 12 Months Administrative HR management/record keeping 14% 21% Workforce Management Time and labor/time and attendance 8% 14% Talent Management Recruiting 23% 29% Performance management/goal management 10% 16% Learning and development 14% 22% Compensation 5% 11% Recruiting (recruiting/talent acquisition staff) 67% 74% Recruiting (hiring managers) 26% 36% Business Intelligence/Workforce Analytics 8% 13% Average workforce adoption across all mobile-enabled processes 12% 18% n=186 46

Mobile-enabled Process Adoption Mobile Adoption Will Grow by Over 100% Major Mobile-enabled HR Processes Workforce Using In 12 Today Months Administrative 15% 33% HR management/record keeping 11% 31% Payroll 19% 35% Workforce Management 8% 25% Time and labor/time and attendance 7% 24% Leave management 8% 27% Absence management 8% 26% Workforce scheduling/labor scheduling 7% 23% Talent Management 20% 37% Recruiting 17% 31% Performance management/goal management 25% 40% Learning and development 24% 37% Compensation 20% 39% Succession planning/management 13% 32% Business Intelligence/Workforce Analytics 4% 13% Average workforce adoption across all mobile-enabled processes 13% 27% n=568 47

Mobile & Social enabled Processes Higher Levels of Adoption Lead to Higher Levels of Use Employee Direct Access Manager Direct Access Employee Direct Access Manager Direct Access 26% 34% 60% 46% 58% 73% 46% 67% 53% 71% 41% 66% < 20% Social Process Enablement > 20% Social Process Enablement < 20% Mobile Process Enablement > 20% Mobile Process Enablement n=188 48

What is the Value of HR Systems? Does your organization require a business case for HR Technology adoption? What type of data does your organization require for a business case: ROI Savings Engagement Business Goals Etc. 49

Value Chain Factors and Outcomes HR Outcomes HR alignment with business strategy HR cost efficiency Employee engagement Talent Outcomes Ability to develop a highly qualified workforce Availability of workforce data for decision making Talent mobility Ability to attract top talent Retention of top talent Business Outcomes Market share Organizational profitability/cost efficiency Customer (constituent) satisfaction Competitive advantage Innovation Employee and manager productivity Strongly Declined Declined Neutral Improved Strongly Improved Scale of 1 5 50

Top Adoption of WFM, TM, and BI Across the Board, Higher Adoption Yields Higher Outcome Scores HR Outcomes Outcomes By Top WFM, TM, and BI Application Adopters Compared To Low Adopters Talent Outcomes Business Outcomes 4.1 4.0 4.1 3.9 3.9 3.8 3.8 3.9 3.8 4.0 4.1 4.0 3.8 3.6 3.6 3.6 3.5 3.5 3.3 3.5 3.6 3.7 3.8 3.7 n=526 Top Adoption WFM/TM/BI Lower WFM/ITM/BI Over the past year, how have the following changed across the organization? 1 = Strongly Declined and 5 = Strongly Improved 51

HR Technology Adoption Value Chain Model Linking HR Tech to HR/Talent and Business Outcomes to Financial Value TA Higher Total Apps Adoption Predicts HR Improved HR & Talent Outcomes Predicts BR Improved Business Results Predicts ROE Higher Return on Equity HR Technology application adoption is indirectly related to improved organizational results (Competitive Advantage and Market Share) through improved HR and talent outcomes (improved Cost Efficiency, Decision Making, Employee Engagement, Developed Workforce, Talent Retention) and linked to improved financial performance (ROE). 52

Introducing the Quantified Organization An Environment of Data-driven Decision Making Quantified Organization Not Quantified Better BI Process Maturity BI Process Maturity 3.2 Effective BI Process Maturity 1.8 Efficient More Manager Access to Analytics Managers with BI access 74% Managers with BI access 20% More Data Sources BI Sources 4.8 BI Sources 2.4 More Categories of Metrics Metrics Categories Tracked 4.2 Metrics Categories Tracked 2.8 53

Quantified Organizations Outperform! They Have 79% Higher ROE than Non-QOs Quantified Organization Not Quantified Quantified Organization Return on equity measures an organization s success at generating profits from every unit of shareholders equity, such as that allocated for HR technologies. A company that earns an ROE in excess of its cost of equity capital adds value. ROE 18% ROE 10.1% 79% Higher ROE 54

Lessons from Quantified Organizations They Get the Basics Right Process Standardization Process Maturity ITM on HRMS ITM HRMS QO 57% Non-QO 42% QO 3.0 Effective Non-QO 2.0 Efficient QO 62% Non-QO 52% 55

Lessons from Quantified Organizations They Have Strategies and Culture that Support Performance Updated HR Systems Strategy Enterprise Integration Strategy Migrate to Enterprise BI Change Management Culture QO QO 75% Non-QO 64% 61% Non-QO QO QO 37% 35% 37% Non-QO 11% Non-QO 26% 56

Lessons From Quantified Organizations They Innovate with HR Technologies Adoption of WFM, TM, and BI Higher level of Social adoption Higher level of Mobile adoption QO 41% QO QO 32% 24% Non-QO Non-QO Non-QO 14% 5% 6% 57

HR Technology Seer

Emerging Technologies Gamification the Only One with Sizable Usage Workforce Using Today Evaluating No/NA Gamification of applications 34% 66% Wearable technology 7% 4% 89% Social aggregation applications 4% 6% 91% Fatigue management applications 2% 1% 97% Robotics/artificial intelligence 1% 3% 96% Wearables 60% of organizations using wearables believe the benefit will be increased workforce productivity. 59

Systems of Tomorrow Systems of Engagement a step beyond Talent and Administration Workforce Optimization Systems where data, answers, and actions come together Activity and task management goes beyond operations Open input and work design platforms 60

Employee Feedback Survey 92% of employees actually completed an employee self-service task online. Employees are most likely to contact their manager to request vacation and sick leave time versus HR. 32% of Asia Employees and 35% of Europe employees did not know that they had the ability to swap shifts or change withholdings on-line, compared to 18% of the U.S. employees. The most frequently done task by employees on a mobile device was to manage work related connections. Submitting job posting had the lowest users experience from managers. Asia-Pacific Millenials supervisors were the most likely to call HR versus using manager self-service HR tools. 61

Action Planning Exercise What were your big takeaways today? What two action items will you take from todays session? 62

I Need You! How can we improve the survey? Can we get at least 35 participants? 63

Visit Sierra-Cedar Website Get Full Survey Details and Sign Up To Participate Next Year! www.sierra-cedar.com/annual-survey 64

Reasons for Moving to SaaS Improving the User Experience Continues as #1 Reason to Move Reasons for Moving to a New SaaS Core HRMS Stakeholder Rankings HR IT Exec. 1 Improved user experience for employees, managers, as well as HR 76% 1 1 1 2 Easier upgrades 61% 2 2 3 3 Best practice functionality 58% 3 3 5 4 Faster time to implement and achieve value 50% 5 4 4 5 Eliminates dependence on IT 50% 4 6 6 6 Reduces need for internal infrastructure 48% 6 5 2 n=1,022 Executives Also Focus on Infrastructure and Upgrades 65

Concerns With Moving to SaaS HRMS With High Profile Data Leaks in Press, Security & Control Concerns are Growing Concerns About Moving to a New SaaS Core HRMS Stakeholder Rankings HR IT Exec. 1 Concerns about service and support 61% 1 3 1 2 Inability to customize 56% 2 4 2 3 Integration complexities 55% 3 1 3 4 Security/data privacy 50% +25% 4 5 5 5 Loss of control over systems/data 46% +40% 5 1 6 6 Concern about vendor lock-in 32% 6 6 3 n=1,022 66