HR Technology Column

Made in Japan: Enterprise HCM

After recovering from World War II, Japan had a breathtaking time of technical innovation that many thought ended with its economic troubles. Now its long-time leading HCM vendor, Works Applications, has opened an office south of Los Angeles and is hunting for U.S. early adopters.

Monday, March 28, 2016
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Only baby boomers and their elders have lived through the full cycle of the quickly changing subtext of "Made in Japan" since World War II.

In the early 1950s, it seemed to be a code phrase for shoddy, cheap merchandise, often stamped on the bottom of toys won in a penny arcade (worth less than the cost of the games played to get them) or stacked in open bins at Woolworth's.

But by the middle of that decade, it was pinned to the first portable transistor radios that Sony sold to millions of American teenagers. If you don't know what they were, imagine truly ubiquitous WiFi and a connected portable music device where you can't control the playlist or eliminate the ads.

In fact, it was Sony, perhaps more than any other company, that was responsible for turning the phrase "Made in Japan" into the seal of distinction by the 1980s.

Forty years ago, it became a symbol -- particularly to Americans -- of the strengths of Japanese industry: its ability to make high-quality, ingenious and affordable products, which back then U.S. companies seemed unable to match.

In chronological order, the Sony Trinitron color television came to market in 1968 and soon became the gold standard. Eventually, U.S. companies stopped making televisions.

In 1975, Sony introduced the first video-cassette recorder, the Betamax, though that was later eclipsed by another standard, VHS.

In 1979, the actual Walkman portable music player came out, first using cassette tapes, then CDs. How quaint that it used a headset rather than ear buds. (But this was how many years before the iPod's arrival?)

In the 1980s, Japanese companies successfully flooded the market with "clones" of DOS PCs and soon also became the world's quality leader for affordable cars made by Honda and Toyota.

(BTW, should you think Sony has disappeared entirely from the world of consumer electronics; it has sold the phenomenally successful PlayStation video game-playing console since 1994.)

There was a moment when American business feared Japan was better at designing, producing and selling just about everything -- except aircraft and software. Then Japan's economic troubles hit and our heads turned toward China, while Japan did not really lose its leadership position.

How appropriate then to find that innovation is alive and well in Japan -- by looking at the leading HRMS from Japan: Works Applications, coming soon perhaps to a company near you.

WAP is an ERP vendor that actually started with HR software in 1996 when lifetime employment was still the expectation in Japan, making HR very important. In 2004, it added financial management, supply chain management and, later, an e-commerce suite.

It now reports more than 4,000 employees, 7,000 clients (including subsidiaries) and a majority HCM market share, beating SAP, Oracle and others -- combined.

As with many Asian companies, its customers are still 90 percent on-premise and only 10 percent in the cloud. Its old product, called "Company," was single-tenant-hosted software.

All of these numbers come from Vikram Kashyap, the American general manager, software entrepreneur and former venture capitalist at Battery Ventures.

WAP has a new office in Torrance, Calif., with more than 10 employees, where it will target its first customers: the U.S. subsidiaries of Japanese companies. WAP debuted at the HR Tech Conference last year and got a brief flurry of business coverage.

Similar to CivilSoft in Dubai, WAP is very aware of the cultural hurdles it will face with U.S. corporations. For WAP, the first is its operating model of having no partners (except for Amazon Cloud Services) and doing everything itself: sales, consulting, project management, implementation and configuration. Kashyap says it is looking at systems-integrator partners.

Second, and more fundamentally, WAP delivers its software (as some European enterprise-software vendors used to) still requiring a lot more user customization than U.S. software and is definitely not usable "out of the box." Probably as much as 50 percent more customization is necessary.

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Now this can be seen as an advantage in the age of SaaS configurations, but it means a lot more work on implementation than U.S. companies are used to doing.

For this reason, WAP likes to demo its new artificial-intelligence product, AI Works, which it dubs the "perfect personal assistant" and wraps around its HCM functionality. It will be generally available this year.

AI Works integrates spreadsheets, e-mail, online discussions, analytics and other tools with cloud storage so users can collaborate on documents and cut the amount of time anyone spends on data entry. Since it includes e-mail, customers will have to pass up Microsoft Office in addition to passing up SAP, Oracle and Workday.

Some of what you can do with AI Works was unique to me:

Search for an employee or group using faceted-search as well as keywords. Click on one to see the profile page, and it includes the first "history slider" I've seen with a graphical timeline of the person's promotions and positions. Move the slider to a new day, and the spider diagram on the page changes to show performance ratings at that moment, giving HR easy access to longitudinal data.

Enterprise spreadsheets can be created from a profile or any data source, where each cell can become a search box. Workday is working on something similar. Other managers can be invited to edit at the same time and collaborate on the document.

Many people don't want to hear about analytics unless they are "prescriptive," meaning they suggest what you should do with the information or the insights served up. In a simple example, an attendance dashboard for retail, the tardy employees are not only flagged, but the software recommends actions to be taken.

WAP, it seems, is once again making "Made in Japan" stand for ingenuity and innovation.

HR Technology Columnist Bill Kutik is co-chair emeritus of the 19th Annual HR Technology® Conference & Expo, back at Chicago's McCormick Place, Oct. 4-7, 2016. Watch the 14th episode of his broadcast-quality video series, Firing Line with Bill Kutik® to learn how to get the best out of your potential vendors during selection.


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