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HR 2.0

Some HR technology vendors are taking bold new steps to reach out to end-users in an effort to build products that are more appealing to them.

Tuesday, October 2, 2007
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Rob Bernshteyn thinks the human resource function can be a center of innovation. Specifically, he thinks HR can help pioneer the use of business software tools that are just as easy and fun to use as the consumer software offered by the likes of Google, Facebook and Apple Computer, yet robust enough to deliver bottom-line results for the organizations that buy them.

Bernshteyn and the organization he works for, San Mateo, Calif.-based talent-management vendor SuccessFactors, are devoting quite a bit of time and money to try and make this proposal a reality. They've started a new project at the company called NEXT Labs, which takes instantaneous user feedback via the Web and incorporates it into new software applications that are fired off to users (SuccessFactors is a Software-as-a-Service vendor) for them to evaluate.

The users then tinker with the new apps and offer more feedback to the engineers at NEXT Labs. The initiative has already cranked out at least five new software prototypes since it began early this year.

The idea, says Bernshteyn, is to create software that will appeal to everyone in a company, not just the so-called "super users" in the HR department.

"There is so much emphasis placed [by vendors] on meeting the functional requirements of buyers, and yet there's so little time spent on meeting the requirements of the end-user," he says.

Bernshteyn is hardly alone. Analysts who follow the HR technology industry argue that HR technology vendors should be doing much more to make their products enticing to line managers and employees. After all, they reason, if a new tool is difficult to use and needlessly complex, end-users won't adopt it, regardless of the pedigree of its designers or how much the HR department pours into its change-management efforts.

"Employees have come to expect software that's as intuitive and easy to use as the stuff on Amazon and Google," Naomi Lee Bloom, managing partner of Fort Myers, Fla.-based Bloom & Wallace, said during the analyst panel at last year's HR Technology Conference® in Chicago. "So they're frustrated when they encounter tools that are anything but user-friendly."

By incorporating rapid user-feedback into new product designs, NEXT Labs is attempting to take advantage of Web 2.0 -- the so-called "second generation" of the Web that refers, in part, to relatively new inventions such as social-networking software, Wikis and "mashups" (software that lets users combine two separate applications to create their own hybrid application) that let ordinary users quickly create and display their own content and tweak existing applications as they see fit. 

These developments have resulted in a more "democratic" Web, where almost anyone (theoretically, at least) can be a programmer and share feedback instantaneously with others. 

NEXT Labs -- and SuccessFactors, for that matter -- have their detractors. The company itself attracted lots of negative attention recently with an Initial Public Offering statement that not only revealed its annual revenues to be far less than what many analysts had been led to believe, but spending on marketing and publicity that, alone, was equal to all of its revenue last year.

Meanwhile, critics question the wisdom and necessity of churning out such a high volume of prototypes in such a short amount of time.

However, SuccessFactors is not the only HCM vendor that's begun to take advantage of Web 2.0 to build quick rapport with end-users. And proponents argue that this approach will change the face of HR technology -- for the better.

"Fun to Use"

The users conference for SuccessFactors, held last June in New York, featured an unusual sight: Several programmers seated in front of computers, furiously tapping and clicking away as they built a new application from scratch that had to be finished before the conference concluded within the next two days.

The prototype they built was a tool called "Career Exploration," which is designed to let employees map out career paths within their company. The idea for Career Exploration was one of three presented at the beginning of the conference to attendees, who were asked to vote for the idea they liked best.

The concept on display at the user conference represented in a nutshell what NEXT Labs is all about, says Bernshteyn: A group of programmers who incorporate rapid feedback from customers into new products that are delivered in a record amount of time.

Within SuccessFactors, the NEXT Labs initiative has three full-time programmers assigned to it, along with three other employees who divide their time between it and other projects. The initiative is overseen by Bernshteyn, who arrived at the seven-year-old company after stints as a consultant at McKinsey and at Siebel Systems, where he helped work on that company's performance-management applications prior to its acquisition by Oracle Corp.

"My time at Siebel helped me understand the HCM landscape," says Bernshteyn. "It gave me a sense of what works, how the buyer views things and where the opportunities are."

Those opportunities include the chance to make HCM software that's actually fun to use, he says, which is where NEXT Labs and one of the creations it's spawned, IdeaFactory, are intended to come in. With IdeaFactory, SuccessFactors customers are invited to submit their ideas for HCM products they'd like to see hit the market.

After the ideas are submitted via a portal, other customers vote on their favorites, which are then reviewed by the company's programmers to see which ones merit development.

"We take the most popular ideas, combine them with analyst input and our own innovation options, and all of this goes into our overall product road map," says Bernshteyn. "With NEXT, we're releasing a new product every month, and we're committed to keeping to that schedule."

The company's approach represents a significant break from the traditional way of doing things in the HR technology industry. But Bernshteyn and his boss, SuccessFactors CEO Lars Dalgaard, believe it's an approach that's overdue.

"HCM products are typically the applications that are used by the biggest number of people in an organization," he says. "So shouldn't the HCM community be pushing the envelope in finding ways to make these applications more user-centric?"

Irrational Demand?

Other HR technology vendors regard SuccessFactors with a mix of admiration and contempt.

"Our existing model [for product development] is working fine," says Paul Sparta, CEO of Arlington, Va.-based Plateau Systems, which made its mark with learning-management systems and has since entered the market for performance-management systems as well.

"Obviously, there's a couple of trends in Web 2.0, but there's also a lot of hype within the HCM community that's being driven by SuccessFactors more than anyone else. Their goal seems to be 'Let's see how quickly we can develop and deploy stuff.'

"While I think it's great if you can do that, you also have to realize that showing how quickly you can prototype a product, versus providing one to customers in a stable form they can actually use, are two separate things.

"Prototypes are good for showing ideas to customers and getting feedback," he says. "But you don't want to create irrational demand for something that's not ready for prime time. You need to demonstrate that you can deliver real enhancements that are going to work right away."

Bill Bergen, senior vice president and chief information officer at Mass.-based Workscape, says of SuccessFactors' 24-hour product creation: "There's something to be said for their speed and innovation -- on the other hand, as you're looking at pieces of functionality that are enterprise-class in nature, it's a hard sell, for me anyway, to see how something that comes out in 24 hours is really going to get to the core of business processes and have an impact, enterprise-wide."

Becky Sterling, global practice leader for the talent-management practice at Wayne, Pa.-based Kenexa, credits SuccessFactors with using its initiatives to attract publicity.

"It's funny they're calling their initiative 'NEXT Labs' -- lots of companies in the marketplace have similar initiatives," says Sterling. "We have our own division called Kenexa Labs. I don't think we've highlighted it to the degree that [SuccessFactors] has, but if you have that in our marketplace, it means you have key job families for thinking about -- and facilitating -- the next wave of change."

Michael George, the "product evangelist" at Vurv in Jacksonville, Fla., says he admires SuccessFactors' approach, although he has a few reservations.

"I thought what they did at their users conference was a brilliant idea," he says. "You can make all kinds of comments -- like, how much quality assurance do they actually do on these applications? But I don't know why our industry gets so 'snipey' when it comes to the competition."

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Necessary Collaboration

Regardless of how they feel about SuccessFactors, other HR technology firms are also turning to the Web to increase end-user engagement. But some are skeptical as to whether a Web 2.0 approach would be any better than their existing processes.

At Plateau Systems, the firm has an "industry vertical" approach in which customers join industry-specific user groups that collaborate together (online and off-line) in suggesting ways to improve Plateau products, says Sparta. The groups, which are self-governing, meet with Plateau representatives on a regular basis to provide feedback.

That's not to say Plateau is neglecting the Web, however. "Although our existing model is working fine, we're looking into whether you can enhance a community discussion with Web 2.0," he says. Customers can already offer feedback via a special portal built just for that purpose, adds Sparta.

Workscape is in the process of building a new application designed to facilitate an online "community" of Workscape end-users that will include "Wiki-type functionality," says Bergen.

"Clients will be able to share feedback not only with us but with other clients," says David Turetsky, Workscape's director of product management. The new site will be available to customers near the end of this year, he adds, although not all customers will be able to join immediately. "This will be a case of learning as we go, so we're not going to let everyone on at once."

"The final step of this introduction is essentially accomplishing what our client advisory board does, but on an ongoing and real-time basis, using technology instead of traveling," says Bergen.

The idea is to combine real-time electronic feedback from customers with SaaS delivery, he adds. "You can be very quick in terms of collecting feedback and modifying the product and then rolling it out to clients who are interested in taking advantage of doing this -- it kind of works together."

At Kenexa, the company began taking advantage of Web 2.0 late last year with the release of Kenexa Recruiter BrassRing (Kenexa acquired recruiting vendor BrassRing earlier in 2007), which includes a feature that lets end-users give the firm direct feedback on upgrades and improvements they think should be made to the software.

"It links to where the client is in the platform and lets them comment on usability, lets them highlight and make circles and diagrams on 'We think this feature or button should be located here instead of there' -- it's pretty sophisticated, and we've gotten a lot of feedback," says Sterling. 

She says Kenexa's super users -- HR staff and other employees who use the product on a regular basis -- tend to use the feedback tool the most. Data from the feedback is combined and put into a queue, which is then forwarded to Kenexa's product managers. A "priority list" is created from the feedback, and is then turned into a client survey in which customers vote on the enhancements they'd most like to see, says Sterling.

"Our focus is beyond having stuff that's 'cool' or 'innovative,' but on making sure it's useful for clients, not just adding another feature," she says.

Changes and additions made to the product as a result of this real-time feedback include "Agency Manager," which is designed to make it easier for clients to monitor the performance of outside staffing agencies that supply them with temporary and contingent workers, says Sterling. "Agency Manager is a key feature for clients that have agency contracts. It's an example of clients helping us build something," she says.

Sterling says the enhanced feedback and collaboration from end-users via Web 2.0 will ultimately return technology to what it was originally supposed to do: "It's going to go back to people expecting technology to simplify their lives," she says.

At Vurv, the company recently created online discussion panels of users who offer feedback on improvements they'd like to see. It's also created a "Vurv Suggest" button on its applications that end-users can click to send feedback directly to the company. One result of this feedback is a new feature called "SuperDay Scheduler" that's designed to let job candidates coordinate their interview schedules with hiring managers, says George. 

The company now considers this online collaboration a necessity for designing products that meet customers' specific needs, he says.

"Software programmers come up with good solutions, but they often miss the little nuances that are so important," says George. "To think you're going to wrestle someone into your software, make them change their processes to fit your product -- it's not going to happen."

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