Looking back: HR technology in 2005 (Guest Commentary)

Corporate manoevres overshadow new products
By Ian Turnbull
|Canadian HR Reporter|Last Updated: 01/17/2006

In 2005 the industry known as human resource management systems (HRMS) was defined as much by corporate mergers and manoeuvres as it was by any new or exciting technology. Most of what we saw was consolidation of earlier trends with very little new technology or functionality in products.

PeopleSoft, the acknowledged market leader in HRMS for many years, spent 2004 working hard to merge its operations with those of its new acquisition, JD Edwards. The plans had barely been announced when PeopleSoft itself was under attack by Oracle, which won control in a heated battle. Oracle has tried to ease the concerns of PeopleSoft owners by announcing PeopleSoft maintenance to 2011, followed by a new integrated product, but projecting a desired six-year-plus life cycle from 2005 is making users nervous.

Meanwhile PeopleSoft founder Dave Duffield launched “Workday” in yet another effort to provide a leapfrog solution. The best way to outline his vision is to quote him: “Technology has dramatically changed since the introduction of current ERP systems and business models have changed. But today’s enterprise applications are constraining business and are no longer meeting the needs of their customers. They are too expensive to deploy and maintain, complicated and difficult to use, and were built for the back office, largely ignoring the informational needs of the line manager.”

The market has learned not to sell Duffield short and so is eagerly waiting for the Q1 release to see if he can deliver once again.

Outsourcing

The trend to outsourcing via alternate service providers (ASP) continued with varying degrees of success in 2005. Conceptually popular, the ASP movement hit the big time a few years ago when the CIBC outsourced to EDS. The trend has continued among bigger firms, Bank of Montreal and IBM to name two.

Vendors working hard to provide ASP services include Cyborg/Hewitt, Pivotal Integrated HR Solutions and the old-timers of the group, ADP and Ceridian. Coming soon, an American success story — Ultimate Software — is making plans to enter the Canadian market.

The two most important lessons learned about outsourcing? It usually doesn’t save any money, and no matter how hard you try, outsourcing the tasks doesn’t get rid of the responsibility.

Technology

There have been many technical advances in recent years: web services, wireless, service oriented architecture (SOA), object models, XML, JIT, DDSN, globalization and e-business. The impact of these is largely hidden to the average user but the overall impact is that software applications are more available and easier to use.

Perhaps the best model of web-based applications today is not a HR application at all, but “Sales Force.” Sales Force is a customer relationship management system (CRM) that reflects a new level of accessibility, user friendliness and overall effectiveness. Take a look at www.salesforce.com and you may get a sense of what Duffield and Workday are hoping for.

Two recent parallel developments, the widespread deployment of wireless networks and increased use of handheld devices have contributed to the development of mobile access to the Internet. Although Spectrum offered HRMS on personal digital assistant (PDA) devices over a year ago, wireless access hasn’t really taken off for this application — yet.

Problems include:

•The wireless RF signal is the most basic component of a WLAN. Unlike conventional wired infrastructures where transmission takes place over a guarded and closed medium, wireless networks are an unpredictable no man’s land with no guarantee of successful communication. Wireless networks operate in an unlicensed spectrum alongside Bluetooth devices (offering games entertainment and more), microwave ovens and cordless phones, opening the door to potential interference that ranges from annoying to a terminal illness.

•The small screen size of PDAs and cellphones limits some functions, especially those that require some size to display properly, such as spreadsheets, an HR staple. But it has been two years since engineers at the University of Toronto announced that they had constructed flexible organic light emitting devices (FOLEDs), technology that could lay the groundwork for future generations of bendable television, computer and cellphone screens. Unlike today’s flat panel displays made on heavy, inflexible glass that can break during transportation and installation, FOLEDs are with a variety of lightweight, flexible materials ranging from transparent plastic films to reflective metal foils that can bend or roll into any shape. A marketable device could be available soon.

Compliance

NOW Solutions and HRWare led the industry making significant strides towards leading-edge legislative compliance with applications that manage the privacy and security of personal information.

Self-Service

Competing with outsourcing as the year’s hot topic is self-service. Definitely not new, but whether managerial (MSS) or employee (ESS), the idea is simple; cut out HR (and payroll) as the middle-person and allow managers and staff to input directly and to get informative output.

The technology mentioned above makes it a lot easier for the vendors to offer self-service solutions. But being full of potential and being easier to use don’t automatically mean success. A brief survey of organizations that have implemented self-service yields one great truth — if you build it they will not come; that is, you have to sell the benefits of MSS or ESS before they will be used.

It would be hard for the HRMS industry to have better results than those of the late 1990s when everyone was spending to avoid the spectre called “Y2K.” Contributing to a softer market since then is the fact that the Oracle/PeopleSoft/JD Edwards trio has greatly unsettled the market, with many organizations going into a waiting mode until it stabilizes.

There are still many organizations that have no HRMS, or one or more systems that collectively don’t make the grade. But in an uncertain business climate, the future of the HRMS industry over the next year is likely as unsettled as it has been during the last 12 months.

Ian Turnbull is managing partner of Laird & Greer Management Consultants, specializing in HR, payroll and time system selection and management. He is co-author of two books on HRMS, including: HRMS: A Practical Approach (Carswell, 1999). He may be contacted at iturnbull@lairdandgreer.com or (416) 618-0052.

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