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Changing the Game

A recap of the 2007 HR Technology Conference and Expo®, held this year at the Navy Pier in Chicago.

Thursday, November 1, 2007
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The opening and closing keynotes at this year's HR Technology ConferenceĀ® touched on metrics. At the opening keynote, professor and author Thomas H. Davenport urged the audience to use metrics to build competitive advantage, while at the closing keynote, Professor John Boudreau cautioned attendees that having the ability to measure something doesn't automatically mean it's worth measuring. 

One metric -- the number of conference-goers at this year's event -- broke previous records: More than 2,200 HR practitioners flooded Chicago's historic Navy Pier on Oct. 10 through 12 to listen to speakers, wander the exhibit hall and network.

The conference included breakout sessions that addressed everything from talent- management systems to workforce management, HR outsourcing and learning and performance management. Other conference mainstays included the Industry Analyst Panel, featuring insights and predictions from four of the HCM industry's most respected analysts, along with the first-ever integrated performance and recruiting shootout (with Authoria emerging as the winner).

Other events included the debut of this year's CedarCrestone's 10th anniversary report, a talent- management panel and an HCM "battle" in which Oracle, Workday and Lawson provided live demonstrations of their software.

Next year's event will take place at Chicago's McCormick Place on Oct. 15 through 17. Below are some of the highlights from this year's conference.

On The Spot

At this year's Industry Analyst Panel, moderator and conference co-chair Bill Kutik put the panelists on the spot with a series of "blunt statements" that he challenged them to agree or disagree with.

The first: "Upcoming major releases from vendors will completely change the game."

Jim Holincheck, vice president of research for HR applications at Stamford, Conn.-based Gartner, said he believed a number of upcoming releases from vendors built on service-oriented architecture will be game-changers because it will be easier for customers and vendors to change and update the software.

"Software-as-a-Service will also be part of these products, and that may be the most game-changing part," he said.

Jason Corsello, vice president of the center for excellence at Knowledge Infusion, a Minneapolis-based consulting firm, said he didn't see anything on the product horizon that he considered "game- changing," but said the impact of emerging interactive technologies such as Web 2.0 will be "huge."

Kutik asked the panelists to name the most innovative HR technology product they'd seen in the past year.

Holincheck said he was particularly impressed with the succession planning and performance management products from a small New Zealand-based vendor called Sonar 6 (among the winners of this year's Top HR Products competition). "They've radically re-thought these processes and have a very nice graphical user interface."

Corsello said he was most impressed with HR software products that include Microsoft Outlook plug-ins, which give users the ability to access the products from commonly used applications such as Outlook instead of logging into a new system.

"It amazes me that everyone's got a new user interface, but why not simply go to where users hang out -- places like Google and Outlook?" he asked. "Make the applications more innovative by using the users' application of choice."

The next blunt statement posed by Kutik: "Having an integrated talent-management suite is the only way for HR to be strategic, and such a suite is available today from a single vendor."

Naomi Bloom, managing partner of Fort Myers, Fla.-based consulting firm Bloom & Wallace, said "HR is not going to become strategic by using software. "If you don't know the key things your company has to do to get the people you need, software won't help you."

Added Corsello: "Lots of vendors claim they offer an integrated TM suite, but no one's really there yet."

Kutik asked the panelists whether the major enterprise-resource planning vendors' efforts to update their talent-management functions would enable them to catch up with -- and ultimately replace -- niche vendors.

Corsello said he believed they stood a chance, but doubted it would happen within three years.

Bloom said that regardless of what the ERP vendors did, the stability and staying power of many niche vendors should be of concern to HR executives. "There's so much churn in this industry -- there are too many vendors trying to do the same thing."

She urged attendees to "please take a hard look at the implications of choosing a vendor that [may not] be around to exhibit at this show next year."

Kutik asked Lisa Rowan, program manager for HR and talent management services at IDC in Framingham, Mass., to explain Software-as-a-Service -- its importance and advantages and disadvantages.

"Saas requires a one-to-many model, managed by the vendor but accessed by many clients," she said. A saas-delivered application can be upgraded to many clients at the same time, but is limited in how it can be customized to each client, she added.

Although many vendors equate SaaS with "on-demand," she said, on-demand is more a marketing term and does not necessarily mean a product is truly SaaS-enabled.

HR Visionary

A few little-known facts about HR technology veteran Naomi Lee Bloom: As a child growing up in Springfield, Mass., she spoke only Yiddish until she enrolled in kindergarten. She founded a group called the Brazen Hussies, a networking group for women working in technology. She started her consulting firm, Bloom & Wallace, 20 years ago after spending decades designing and developing HR software.

But the focus of the "Visionaries of HR Technology" session at this year's conference, which was moderated by Kutik, wasn't so much on Bloom's life as it was on what she sees as the ongoing challenges facing HR technology.

The biggest problem, she says, is that the systems and software simply don't work very well.

"I have enormous respect for the programmers who write the code that makes possible the software magic you see out on the exhibit floor," she said, in response to a question from Kutik on why so many HR professionals are unhappy with HR technology. "But we're not doing a very good job."

The issue isn't the software so much as the disconnect that still exists between HR and the actual mission of the companies it's supposed to serve, Bloom added. HR leaders continue to be too focused on processes that have yet to evolve with the times instead of tying their HR strategy to the organization's business drivers: time to market, speed in serving customers, etc.

Rather than designing processes that are tailored to their firm's business strategy, HR people continue to be too focused on transactions and processes that don't take into account today's workforce, with its mix of full-time, part-time, contingent and global employees, she said.

This is reflected in software that, though it may appear "shiny and new," continues to be based on outmoded data designs that date from the era when punch cards were used to program computers.

"Look under the covers of today's shiny new software and you'll find the same old crappy data designs," she said.

Newer innovations such as service-oriented architecture offer HR the promise to change over to something completely new and different, said Bloom.

But in order to take advantage of it, HR must be prepared for a whole new implementation process in which the previous tools will be discarded completely, and it must ensure that the new software really is new technology, rather than a dressed-up version of the same old data models, she said.

"Go with a vendor that's really making the leap, rather than one that's just toddling along," she said.

LMS Strategies

Josh Bersin stressed some key pointers with HR and IT professionals in the midst of an in-depth look at the talent-management evolution, "What You Still Need to Know about Learning and Performance Systems."

Top among them was the stern suggestion to HR leaders to decide what kind of company they work for, where it fits in the competitive chain and where they want to go with learning management before beginning the vendor-selection process.

Whether going with a centralized or distributed learning-management system, the system strategy must follow or create an organizational strategy, said Bersin, talent-management guru and president of Oakland, Calif.-based Bersin & Associates.

In addition to offering attendees a comparative shopping list of LMS vendors and a rundown of the kinds of problems and needs they're equipped to answer, Bersin urged listeners to develop a list of the services and features they need from these products.

Creating test cases for vendors to show how compliance training is tracked and managed, how career development and customer training are managed, even how users access the system, "can be time-consuming and can feel like it slows you down, but it actually speeds you up," he said.

Listeners were encouraged to fully assess how many customers a particular vendor serves "who are exactly like you, of the same size and space ... . Choosing a vendor with many customers much like you will greatly enhance your chances for success," he said.

Competing on Analytics

Collecting data is a good start, but it's more important to use that data to create a competitive advantage, said Thomas H. Davenport, a professor and author of Competing on Analytics: The Science of Winning, to a record-breaking crowd during the conference's opening keynote.

It's about "how do I get to the more sophisticated models and optimization [of the workforce] ... ," he said. "I think we will see [the use of analytics for a competitive advantage] in the future in HR to a very large degree. ... The path is pretty clear."

Davenport noted that it's common for pro-sports teams to leverage HR analytics, such as identifying performance metrics, determining undervalued attributes, assessing the ability to work as part of a team and discovering the players who inspire others to perform better.

If those teams can compete on analytics, companies can too, he said, noting that it "won't be long" until companies adopt such an approach. That is the future, he said.

In fact, he added, a survey of chief information officers by Gartner analysts found that "business intelligence" has been the No. 1 spending priority for the past two years. That indicates the return of "thinking about positive possibilities for using information and technology in the business," he said.

Davenport told the HR leaders they need to hire employees who can take the data and see "the human side. The passion for this particular way to compete. Creativity. Intuition. Insight."

Selling Talent Management

Vendors shouldn't bother selling an integrated talent-management strategy to the senior-most HR leader of an organization, said Valerie Norvell, vice president of training and development for Mason, Ohio-based Luxottica/Sunglass Hut, one of five panelists on "The Talent Management Panel," moderated by Jason Averbook, CEO of Minneapolis-based Knowledge Infusion.

It's more than likely, she said, that the HR executive already understands the need for such a strategy. That's why such time is better spent speaking one-on-one with other C-level executives to "prime the pump."

"Know their objections, what drives them," she said. It's also important that the business leaders own the talent management strategy, she said. "HR shouldn't own it."

Bryan Abramowitz, vice president of enterprise services for Chicago-based advertising agency Leo Burnett, agreed. "This isn't about HR. This is about the organization." It's not about making HR more effective, he said. It's about building organizational efficiency and business results.

Executive sponsorship of the process is key to success, said Liviu Dedes, vice president of organizational and leadership development for Philadelphia-based Aramark, but gaining the necessary consensus can be challenging.

"It's an evolutionary process," he said, but noted that at Aramark, it was important to focus on the commonalities among the various business lines instead of its differences, "and one of [those commonalities was] how we manage talent."

It's also important, Averbook said, to follow the proper sequence of events. Focus on the process first, he said, then gain consensus for the process. Finally, he added, look for the technology to implement the process.

Too many people buy the technology first and retrofit their processes, he said.

And all too often, said Nickolas Nyhus, vice president of workforce planning and HR compliance at Minneapolis-based Ameriprise Financial Inc., HR is "not clear on what we want." They buy a system and end up not using "even half of it," he said.

HR should also remember that most users of talent-management systems do not use those applications daily. Thus, it is important that the application is intuitive.

ROI on HRIT

When it comes to the return on investment companies are getting from their HR-system implementations, companies appear to be less focused on headcount reduction in the HR staff and more focused on the business value the systems are delivering to the organization.

That was just one of many observations from Lexy Martin, director of research and analytics at CedarCrestone, an Alpharetta, Ga.-based research firm that's released a report in each of the last 10 years analyzing trends within HR technology. She spoke at a session devoted to analyzing the results of this year's report.

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That report was based on a survey of 466 companies in a variety of industries, with about half of them global, representing a total of more than 9 million employees.

Martin noted that the last few years have seen a trend of more companies moving toward strategic HR applications, such as talent management. The biggest area in terms of 2006-2007 spending growth was for business intelligence applications, at 26 percent.

In terms of what HR applications respondents were devoting the most time and money to, business-process improvements ranked No. 1, with 52 percent of companies devoting time to it and 36 percent spending money, followed by HR systems strategy at 48 percent and 35 percent. Forty-four percent were spending time and 34 percent were spending money on metrics and analytics this year.

However, respondents were devoting very little time and money to service-oriented architecture, mobile or wireless applications and "Web 2.0" initiatives.

Mobile and wireless applications were consuming 2 percent of respondents' time and 5 percent of their budgets, while Web 2.0 garnered only 1 percent of their time and 4 percent of their budgets.

Martin said these areas represent an area of opportunity for vendors.

"Vendors need to educate HR on what SOA, wireless technologies and Web 2.0 can do for them," she said.

Outsourcing HR

Don't be put off HR business-process outsourcing by bad press, said Mark Hodges, chairman of outsourcing advisory firm EquaTerra, in a presentation entitled "What's Really Happening Now in HR Outsourcing?"

According to surveys, almost all (96 percent) of buyers are moderately or highly satisfied -- an average of 3.2 on a scale of 1 to 5 -- with their HR BPO arrangement, defined as outsourcing five or more HR services to a single provider. And, he said, very few HRO contracts have been terminated and brought back in house.

In fact, higher satisfaction levels are generally registered by those in their second or subsequent years of their outsourcing arrangements, which indicates that process-performance improvements had occurred, he said.

For HR professionals seeking significant cost improvements, however, he said to think again.

The cost per year, per employee for HR outsourcing was lowest in 2004, he said, and it has been "creeping up every year since."

In addition, while HR BPO is experiencing a 16 percent growth rate -- with HR BPO being the fastest-growing segment of the HR services market -- there is a supply constraint.

The resources of many providers on the selling and transition teams are at capacity -- although the service centers still have capacity -- so some HRO organizations are very selective about which projects to pursue, he said.

New Technology Tools

The value of wikis, blogs, RSS and social networking were the foundation of a session entitled "Great New Technology Just for You!," presented by Jason Averbook and Jason Corsello, CEO and vice president, respectively, of Knowledge Infusion.

HR leaders need to know about such emerging tools -- part of what is often called Web 2.0 -- and think about how they can be used to advance an organization's business strategy so they "won't get sacked from behind by not being aware of this technology," said Averbook, using a football analogy.

All of those concepts "mean big, big change for HR," but he noted, "it's not the technology. The technology is the means. The end is we are going to be much better companies."

The key concepts of Web 2.0, said Corsello, are individual participation in the processes, creating or maintaining relationships, harnessing collective intelligence and immediate action or information.

It's especially important when recruiting and retaining the millennial generation, Averbook said, because they are "digital natives." There was never a time when that generation didn't know about Google or what dot-com meant, he said. "They were born into a world where everything was already digital."

For others in the workforce, termed "digital immigrants" by Averbook, HR needs to prepare them for the digital transformation -- some generations needing more help than others.

"The workforce today isn't on one page," he said. "They are on a whole lot of pages."

"Elegance vs. Relevance"

John Boudreau, a professor at the University of Southern California's Marshall School of Business and co-leader of its Center for Effective Organizations, kicked off the conference's closing keynote with a quote from Albert Einstein: "Not everything that counts can be counted, and not everything that can be counted counts."

The HR profession has evolved considerably during the last 25 years, thanks in part to measurements developed by pioneers like Jac Fitz-Enz, and is considerably more respected by business leaders than it used to be, Boudreau said.

Nevertheless, HR will not achieve its full potential until it can measure its performance in ways that are much more meaningful to its clients -- its organization's business leaders.

"Just because we can measure it doesn't mean we should," said Boudreau, the co-author of a new book entitled Beyond HR: The New Science of Human Capital.

Boudreau compared HR to two functions that are considered much more strategic: finance and accounting. He noted that those professions are respected because they use measurements that are credible, rigorous and widely accepted.

As it stands now, he said, a wall exists between what HR currently measures and what the leading indicators are that really have an impact on the organization.

"It's a matter of elegance vs. relevance -- we have all these elegant new tools to measure things, but are they relevant to what our business leaders are wrestling with?" asked Boudreau.

"HR metrics should be a force for change to make the organization effective," he said.

But in order to have that power, those metrics must be based on logic that's accepted and understood by the business leaders who must use them, he added. Boudreau concluded by urging the attendees to diagnose their own HR measures to see whether they:

* Connect to ultimate organization success;

* Identify needed human capital strategy changes in an agile market;

* Reflect your unique competitive situation;

* Identify talent with the greatest potential for strategic impact;

* Support decisions about HR programs before they are implemented, not just after they are operational;

* Pinpoint HR programs that should be discontinued; and

* Identify how talent creates value within the organization in a way that is understandable and motivating to all employees.

Anne Freedman, Kristen Frasch and David Shadovitz contributed to this report.

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