It was bound to happen. Put two highly opinionated and data-driven people working closely with each other for a few weeks, and eventually we will find something that we disagree on. We thought the conversation was interesting enough to share and request feedback.
I think we all agree that the more connected and seamless the technology ecosystem is, the better the end-user experience—and CedarCrestone HR Systems Survey data show this. It is also common knowledge that most of the solution providers and many of the buyers are focusing their attention on “Cloud” as their go-forward strategy, and again our data show that the cloud is the preferred deployment model for talent management and that the HRMS is trending towards the cloud as a preferred model. The big decision for many HR leaders today revolves around when and how to consolidate and integrate their enterprise HR technology ecosystem. Their ecosystem is often comprised of multiple HR, Talent Management, and even Business Intelligence technologies, along with social tools and operation tools. Our area of disagreement is over two choices: should organizations dive head first into adopting an integrated HRMS and TM solution (as our data show they are) or should they adopt an integrated talent management suite?
Stacey’s Point of View
I’ve always been a big proponent of simplicity—especially when it comes to technology. Too many options, too many competing applications, too much technology can simply make our work environments more difficult to manage. I’m also very pragmatic and, having been on the front lines as a practitioner for many years myself, I’m very aware of how elusive simplicity can be when it comes to technology. I believe that organizations still need to put critical thought into their strategy for selecting HR Technologies.
As Alexia shares in her point of view below, data from the CedarCrestone HR Systems Survey clearly shows that the aggregate group of organizations and specifically top-performing organizations more frequently leverage a combined HRMS/TM solution. We also see that organizations that have a combined HRMS/TM solution are twice as likely to have “real time solution integration.” My challenge is that we need to look deeper at individual talent management applications to understand which functionality and processes are actually being combined in the data. What we find is that critical talent applications such as Learning, Succession Planning, and Career Management are not as often part of the unified or integrated HRMS/TM solutions our Survey respondents are describing.
Looking at the Survey data a little deeper, we see the following:
- When we asked organizations which components were included in their Integrated Talent Management (ITM) solutions, over 81% said Performance Management, and over 50% said Recruiting, Compensation, Profile Management, and Competency Management. In contrast, less than 50% stated that Career Development, Succession Planning, and Learning Management were included. In fact, Learning Management came in ahead of only one other area: Workforce Analytics and Planning.
- Of the 255 organizations that leverage their HRMS for their Talent Management solutions, only 11% include Learning or Succession Planning, and only 14% include Career Planning. This is in comparison to over 20% of those who include Recruiting and Compensation, and over 27% who include Performance Management. But when we look at overall application adoption, we see that 67% of organizations are using a Learning Management Solution (LMS).
- If we look even deeper at those organizations that have real-time or two-way integration and also use an HRMS/TM, we see less frequent integration across Learning, Career Development, and Succession planning.
- Finally, for those organizations that use anything else besides a single HRMS/TM for their talent solutions, including point solutions or hybrid options, we see that almost 30% of these organizations include Learning, Career Planning, and Recruiting—a much higher percentage than those with HRMS/TM alone.
Many of today’s HRMS/TM solution providers are in the process of integrating or rebuilding LMSs that were acquired through acquisitions such as Oracle HCM and Learn.com or Successfactors/SAP and Plateau into their cloud products. Complete process level integration between Oracle HCM Cloud and Learn are scheduled to be completed by the end of 2014. Some existing HRMS/TM solutions have less complex LMS functionality, while others such as Workday have created deep partnerships with Learning Management Solutions. Workday has prepackaged integration with Cornerstone OnDemand, syncing learning experiences with core worker history and talent profile data. Few HRMS/TM solution providers have been able to completely integrate all the nuances of a complex learning and development environment, including internal and external training needs, into their HRMS/TM solutions. Those that are working on this level of integration or organic development are still at least a year or two away from a fully integrated solution that allows an organization to create, manage, extend, and connect learning and development throughout the talent processes. To a lesser degree, we see this same issue with career planning and succession planning functionality.
On the other hand, we see many Talent Management Suites building out from strong learning heritages such as Cornerstone OnDemand, SumTotal, or Saba, and selling clients on additional Talent Management functionality they have developed or acquired over time. Advanced integration tools, data layers, and portal technology have allowed many of these solution providers to create some level of continuity, providing a relatively seamless user experience for end–users. Buyers still need to pair these options with HRMS and Payroll capabilities. At the end of the day, even if the solutions are owned by a single provider, much of the data in these ecosystems are not contained in a single environment, and much of the technology is still loosely connected.
If organizations have limited budget—or critical business needs for complex learning and career development today—the answer might still be point solutions or talent management suites that have the necessary depth. Other organizations may find that light learning and career development features meet their needs and the improved user experience from a single platform is a more important issue. Others may find that they can afford to wait for a fully unified solution and would rather work closely with a single vendor on that journey. The cloud marketplace is reducing barriers and giving organizations more options if they choose to switch providers over time as technology continues to mature. No answer is perfect, and I also concede that Alexia’s perspective is backed up with very compelling data—and if the market continues to progress along its current path, we’ll see more and more complex functionality added to HRMS/TM solutions. Organizations have to carefully weigh short- and long-term HR technology goals, as well as today’s critical business needs before they make final technology decisions.
Alexia’s Point of View:
My point of view is based on our data. For the past few years, we have seen an increase in respondent organizations with Integrated Talent Management. Our definition of Integrated Talent Management may bother people—we require that two or more talent management solutions reside on the same vendor’s solution. For example, recruiting and performance management functionality may reside on a PeopleSoft HRMS or on a Cornerstone OnDemand Integrated Talent Management suite. Thus we say the respondent has an ITM. But we don’t stop there. We also ask respondents if they have an ITM and validate this is so by checking that they have two or more talent management solutions and that they have specified the same vendor for these solutions. So first of all, according to our data, organizations increasingly have an Integrated Talent Management solution (52% in 2012, 58% in 2013). Next we see an increase in organizations having that Integrated Talent Management solution on their HRMS (51% in 2012, 62% in 2013)—and more importantly, we see that the “Top Performers” (those publicly traded organizations in the top 20% in terms of financial performance) even more frequently have this integrated HRMS/ITM solution (70% in 2012, 77% in 2013). So, this is the basis of my assertion for several years in the Annual Survey that the direction is towards a unified HRMS/TM solution and that it is a leading practice.
But let me temper this statement in two ways and suggest that while I am technically correct on the trend towards HRMS/TM on the same platform, that Stacey, too, is correct. What I have seen in the past years from our data is a trend away from point solutions towards putting talent management on the HRMS. It’s because the HRMS solutions are getting better. PeopleSoft 9.2 is better than PeopleSoft 8.9. Workday or Ultimate, both with great HRMSs, now have great talent management and organizations are getting around to adding the talent management functionality onto their new Workday or Ultimate deployments. Organizations want simplicity of system management and they want integration of processes—thus, they’ve been turning to their HRMS for talent management functionality as they acquire updated and best practice HRMS functionality. They may also be doing some math and finding that getting all the functionality from the same vendor is less expensive than having two solutions.
Nevertheless, the ITMs are also getting better, and so we see organizations with an SAP HCM not going with SAP for their Integrated Talent Management solutions, but instead going to a Cornerstone OnDemand or organizations with PeopleSoft going to a Lumesse solution for their ITM. In either case, the organizations with SAP HCM might update to EmployeeCentral and then add talent management functionality from out of the SuccessFactors arsenal that are increasingly being integrated with the EmployeeCentral solution, and the organizations with PeopleSoft might update to Oracle’s HCM Cloud and then integrate in the solutions from the Taleo acquisition, again increasingly being integrated into the Cloud solution. But, quite honestly, we may not see the trend I’ve reported continue because the ITM vendor solutions are getting better, too, and not just the two I mentioned. There’s been a maturation of products across the board with newer solutions getting better and better.
There’s just a lot going on in our HR technology marketplace and the bottom line is that each organization needs to evaluate its own requirements. When we do a benchmark project, we suggest solutions based not only on our data, but also based on where the organization is in its own maturation. Each organization must also do its own total cost of ownership calculations, factoring in integration requirements based on their use cases. It’s complex!