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Forward Focus

Attendees at the 11th Annual HR Technology Conference® were urged to put aside short-term economic worries and concentrate on building tomorrow's talent.

Saturday, November 1, 2008
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Leading off the 11th Annual HR Technology Conference and Exposition® at Chicago's McCormick Center, opening keynote speaker Michael Beschloss guided most of this year's some 2,000 conference-goers through historical vignettes aimed at bettering their understanding of presidential leadership, and leadership in general.

Author of six best-selling books, including Presidential Courage: Brave Leaders and How They Changed America, 1789-1989, Beschloss is also the presidential historian for NBC News and a frequent guest speaker on PBS. He humored the crowd on Tuesday with some little-known stories from the presidencies of Lyndon Johnson, Harry Truman and even George Washington to underscore his point that "leaders are best depicted in those times when they are forced to be spontaneous and off-guard."

When Johnson built his presidential museum in Austin, Texas, across from the University of Texas football stadium after his final term, for instance, the country was facing social and economic hard times. No one was coming to his new Presidential Library. In a streak of quick thinking, Johnson worked with stadium officials so announcements were made at every game that "anyone who needs water or restroom facilities can go across the street to the library," Beschloss told the crowd. "The ploy worked and the library went on to become one of the best-attended of the country."

When George Washington was about to leave his presidency, said Beschloss, "he had a hunch the British would invade and the country would cease to be the country we know it as today." "So he did something unpopular. He agreed to a treaty with the British in order to ensure the longevity of the United States."

Whether heading HR or IT -- or nations -- leaders sometimes have to make decisions at the risk of popularity for the greater good.

"But make sure you can explain yourself, convince your people why such a move is necessary," said Beschloss. When Abraham Lincoln risked his popularity by trying to convince the American people that freeing the slaves should be the true cause of the Civil War, he said, "He paid the ultimate sacrifice with his own life."

Beschloss, who said he is an independent, went on to offer a few predictions for the 2008 presidential election, namely that Sen. Barack Obama might have fewer obstacles getting to the White House than Sen. John McCain.

Rarely has history "ever given the White House to the same party three terms in a row," he said. However, Obama's "progressive ideology, his admitted lack of experience" and the "disturbing possibility that some voters may be influenced by race" also come into consideration, he said.

"Whoever wins," he said, "will have to lead a struggling nation and do a lot to heal the toxic climate in Washington."

Workforce Planning

During a session entitled "The What, Why and How of Workforce Planning at Aetna," Melissa Cummings, Aetna's vice president of workforce planning, detailed the Hartford, Conn., insurance company's strategy.

In pursuing a workforce planning initiative, Aetna targeted five critical job groups that were selected based on their importance to the company's overall business strategy.

"These were jobs central to where we were going in our three-year strategic plan," Cummings said.

At the heart of the initiative were one-day workshops that included a combination of qualitative and quantitative dialogue about possible scenarios, she said. Participants in the sessions were carefully selected. "They needed to be high-level enough to make a decision, but also people involved in the day-to-day business," she said, adding that they were provided with key data in advance of the meetings.

"We needed to get business leaders to think about the different scenarios -- the 'what ifs' -- and then put together an action plan for the future," she said. "We needed to identify what were the gaps ... and how do we fill them in a sequential way?"

Typically, Cummings said, "organizations are good at thinking about themselves, but not always in the context of what's happening around them."

Aetna used a software tool developed by Aruspex to capture the data used for the workshop discussions. Part of the product's appeal was its ability to automate and standardize the process, she said, adding that the software was customized with the look and feel of an Aetna tool.

Panelists' Prescriptions

The second day of the conference began with the annual Industry Analysts Panel, where what conference co-chair and HRE columnist Bill Kutik described as four of "arguably the smartest [people] in the world about HR technology" offered their opinions on a range of subjects -- from the future of Software-as-a-Service and the uses of Web 2.0 technologies to coping with economic turmoil and naming some of the vendors they like most.

The analysts on the panel included Jim Holincheck, managing vice president at Gartner; Lisa Rowan, program director at IDC; Zach Thomas, senior analyst at Forrester Research; and Naomi Lee Bloom, managing partner at business and technology consultancy Bloom & Wallace.

While the panelists offered some advice to the audience on ways to cope with the economy, some audience polling at the start of the session indicated there has only been moderate impact thus far.

Using instant-polling devices, two-thirds (66 percent) of the end-user audience indicated there had been "no effect" on the purchase of technology by their companies due to the economic situation, while nearly one-quarter (23 percent) said purchases or subscriptions to new software and services had been postponed and 11 percent said "some" purchases had been eliminated.

(See chart here on the top purchasing priorities of conference attendees.)

On the vendor side, 44 percent said their companies had seen or projected no decline in revenue because of the economic turmoil. Nearly two in 10 (19 percent) said their companies had seen or projected a 20-percent decline in revenue, 14 percent said a 15-percent decline, 9 percent said more than 20 percent, 8 percent said a 10 percent-decline and 6 percent said 5 percent.

But all companies need to be prepared, said Bloom, who urged the audience to come up with some strategies to guide their organizations through the turmoil.

"You need an intelligent plan to make sure you hold on to the key players in your organization," she said.

The war for talent is shifting from recruiting to retention, said Thomas, so it's important for HR to concentrate on developing its key talent -- as well as determining how to identify just which employees are key for the organization.

When Kutik brought the questions around to discussing specific vendors in the HR technology field, beginning with Oracle's long-awaited Fusion application, Holincheck told the audience that "I don't think you can have Fusion be part of your [upgrade] plan" at this point, as there is no definite date when it will be delivered, although some "edge-area" applications will be available this year.

As for talent-management suites, Rowan said Lawson's ERP system does a good job at offering the "breadth and depth of capabilities," while some of the best-of-breed vendors include Softscape, Authoria, SuccessFactors and Taleo.

Thomas "largely agreed" with her assessment, adding Plateau to the mix. He cautioned the audience, however, to look at the history of the vendors to determine their capabilities "because they are all a little bit different -- not better or worse, just different."

Holincheck's selections of modules included Plateau, Saba, SumTotal and Cornerstone OnDemand for companies interested in learning, performance management and succession planning.

For performance management and compensation, he said SuccessFactors, Softscape and Authoria were best-of-breed, and mentioned Halogen as a good choice in a "limited market."

For performance, comp and succession, it would be "another eight vendors," he said.

"I don't see any one set of vendors dominating. It's really the set of modules [each vendor offers]," Holincheck said.

He also said that the trend toward SaaS would continue to be adopted by vendors, but that on-premise installations would remain a vital part of HR technology solutions.

"Most customers don't care," he said. "They want to pick the best product to meet their business needs."

He suggested HR leaders focus on the product first and on the delivery model second.

"Start Small, Think Big"

Jason Averbook, president of Knowledge Infusion in Minneapolis, had a simple message for those attending the "Updated Great New Technologies Just for You" session: If you're not using Web 2.0 technologies today, you probably will be some time soon.

For the first time, conference attendees were able to bring their own laptops and follow a session along in real-time as Averbook toured a variety of Web 2.0 offerings, including social-networking sites, blogs, wikis and RSS feeds.

Along the way, he detailed some of the ways these tools could be leveraged by HR to engage employees and facilitate information and knowledge sharing.

In particular, social-networking software provides HR with a powerful tool, he said, noting that hiring, onboarding, employee engagement and training represent a few of the areas that could benefit from it.

"Facebook and LinkedIn know more about your employees than you do," said Averbook, who walked attendees through the process of setting up a Facebook account -- and outlined some of the site's capabilities.

Averbook recalled how one HR executive he spoke to believed none of his employees were registered on Facebook. But when he demonstrated that more than 2,000 of them were actually on the site, the executive's immediate response was to ask what could be done to stop it, Averbook said. Instead, he said, the executive should have asked how he could replicate it.

About halfway through his presentation, Averbook asked how many attendees were using Facebook to recruit potential candidates. Only a handful of the roughly 250 people in the room raised their hands. "Employers need to go to where the people are -- and that's [sites such as] Facebook," he said.

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As companies begin to pursue a digital HR -- or Web 2.0 -- strategy, Averbook said, they might want to start off with an incubator or pilot project. "Start small, but think big," he advised, noting that it's not only "the future of technology, but it's also the future of HR technology."

Higher Performance

Key to achieving an integrated talent-management strategy is the implementation of enterprise-wide performance management, said Chris Howard, vice president of research at Bersin & Associates, at a session entitled "What You Still Need to Learn About Performance Management."

As he reviewed the company's study of 700 HR professionals, he noted that performance management "is a very immature area of enterprise technology, which means there are not a lot of companies doing it."

And a growing number of organizations are looking for help from those vendor companies, he said. The research showed that the number of respondents who had a vendor solution for performance management jumped from 11 percent in 2005 to 27 percent today. More than one-third (36 percent) of the respondents still had paper-driven systems -- although 80 percent of them were looking at vendor solutions, Howard said. Three in 10 (31 percent) had an in-house solution and 6 percent had no solution.

He noted that 34 percent of the survey respondents said performance management was the HR strategy that had the highest impact on the business, followed by competency management at 31 percent, sourcing and recruiting at 27 percent, leadership development at 17 percent, learning and development at 15 percent, and both succession planning and workforce planning at 11 percent.

"We believe it's much more than simply a one-time annual review process of your employees," he said. "From a strategic perspective, it's all about management practices."

Enterprisewide performance management, Howard said, goes well beyond the compliance, paper-driven performance reviews that are common in most companies, and even beyond some of the competency assessments and succession planning initiatives that have been adopted by more advanced organizations.

An enterprisewide system, he said, involves performance management strategies that are tailored to the employee, employee groups and job roles. It moves beyond directing or motivating the employee and goes into engaging the employee. It will involve strategic talent planning, including having comprehensive profiles of employees and using that information to make staffing decisions for today and the future, Howard said.

Each organization, he said, will need to determine its own priorities, however, in creating its processes -- depending upon its culture, size, industry, type of workers and maturity of the processes and the business itself.

But the biggest barrier to implementation, he cautioned, will be "rolling it out and getting people trained."

When looking at software solutions, he said, make sure the process fits with the company's procedures and make sure it's easy to use for the end-user.

Changes in HR Outsourcing

Based on the attendance and attentiveness of those who came to hear Lowell Williams, executive director of global HR services at Houston-based EquaTerra, talk about "What's Really Happening Now in HR Outsourcing?" interest in and concerns about the HR outsourcing arena are high.

Driving the concerns are the massive changes in the global HRO market, the decisions now facing global and domestic HR leaders as they consider outsourcing solutions, and perhaps the overriding fear among many that HRO is a vanishing option.

On the contrary, said Williams, "rumors of the death of HRO have been greatly exaggerated." What providers and clients face now is a sea change.

New, powerful providers have entered the marketplace, he said. Indian providers that have long supported HR and HRIT functions are now open for business on their own.

Hexaware, through its Caliber Point brand, he said, is providing services directly in Europe and will soon in the United States. Tata Consulting is set to announce a new global HRO client and Infosys, WNS and Wipro should not be far behind.

Traditional providers have consolidated or retreated, he told the crowd, and there have been both victories and failed promises of early adopters. The key to making the right outsourcing decision for your organization, said Williams, is to keep up on the changing landscape and be realistic and accurate in spending decisions.

Using one rather telling chart showing EquaTerra's business data from the first quarter of this year, he illustrated the huge differences among HR processes -- in primarily large companies engaged in major outsourcing ventures -- between what is retained by the company and what outsourcers can really do.

HR strategy, organizational development, employee development and succession planning, for instance, showed far less outsourcing ownership -- from 10 percent to 32 percent -- and far greater company retention.

Recruiting, HRIT, benefits and payroll showed minimal company retention, from 30 percent to less than 25 percent, with outsourcers handling between about 70 percent and 75 percent of all functions.

At the bottom of the chart, employee service centers showed 95 percent in-scope outsourcing activity and absolutely no activity retained by companies.

"We're talking about the transactional activity measured by the bodies, ladies and gentlemen," said Williams. "That, right there, is the real world of outsourcing." Before outsourcing decisions are made and money is spent, "these are just some of the things that should be considered," he said.

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