HRO in the Cloud - Executive Interview: Titan Technology SVP

There are a number of software delivery models available to companies today. While I write a lot about SaaS/Cloud solutions, I also watch the changes in the on-premise, hosted/on-premise, BPO (business process outsourcing) and other spaces. There a couple of solution providers that offer Human Resource Outsourcing or HR BPO solutions that have significant parts of their solutions rooted in the cloud. In fact, these solutions are cloud, multi-tenant ERP products that may be deployed much more inexpensively than a traditional on-premise ERP product.

I’ve written several times about Northgate Arinso, a U.K. firm that offers a multi-tenant, on-demand version of SAP’s HCM R/3 solution. Titan Technology Partners is to the Oracle space what Northgate Arinso is to the SAP space. Titan helps Oracle ERP users (be they Oracle EBS, JD Edwards or PeopleSoft) upgrade to cloud-based, current versions of this software, including Fusion versions (as an Early Adopter Oracle partner) and add-ons of these products.

A couple of months ago, colleague and Vital Analysis partner Katherine Jones and I met with Titan executives at the latest HR Technology Conference show. Recently, Katherine recently spoke with Kephanie Landess, the SVP of Global People Solutions at Titan Technology Partners. Kephanie is a veteran of HRO (Human Resources Outsourcing) with 9 ½ years at Ceridian and then UK-based Patersons’ Global Payroll. Katherine and Kephanie discussed the role of the SaaS model and the delivery of the traditional ERP application, particularly within the HR environment.

I realize this interview is long, but, I think some of the points Kephanie makes (e.g., companies don't necessarily have more employees today but the ones they have are now in more countries) are quite interesting.

Katherine: Titan provides outsourcing and consulting around the world, areas you have a lot of experience in from Ceridian and Patersons. What changes have you seen recently in the adoption and acceptance of HRO and use of third-party maintenance and support?

Kephanie: Well, to start and this should not be a surprise, it’s all about SaaS. Organizations want robust, scalable and low maintenance solutions that still meet their unique and complex needs. SaaS in comparison to traditional ERP applications have gotten plenty of press lately and the best of breed SaaS players seemingly have their advantages.

Katherine: Then what is the role for traditional ERPs in the SaaS world?

Kephanie: Companies are beginning to better understand the alternative deployment options for ERP -- ERP in a SaaS model. With solutions such as ours, the playing field levels and overall ERP advantages are rising to the surface in many cases.

Katherine: How so?

Kephanie: Most notably, SaaS solutions are generally less integrated than Enterprise applications. What is also becoming apparent is that SaaS players are narrowly focused on their best of breed purpose, making it necessary for SaaS providers to partner with other providers in order to round out a comparable solution to ERP. Furthermore, SaaS players have found that by partnering, they can be more market competitive, but with that, there are many resulting challenges for the client. For example, if a SaaS player provides HCM as its core technology solution, but partners with another provider for such functions as Global Payroll, Time & Attendance and other closely related functional solutions, the end result for clients is not always where they expected. Resulting issues can include multiple systems and interfaces to manage, lack of accountability among the multiple providers, and multiple contracts to manage.

Katherine, over the last few years, we’ve all seen a shift from integrated solutions to best of breed, but now with the evolution of ERP deployment options (i.e., providers that will host and provide IT managed services for ERP applications), I believe companies are realizing that integrated ERP applications may be key to getting them to their long term strategic vision.

With TITAN, organizations can leverage the benefits of an ERP solution, such as Oracle, but do so with very little IT support required (note: TITAN hosts, manages all IT support functions, implements and provides HRO services globally). This model allows organizations to leverage a predictable subscription cost model, which greatly minimizes the up-front capital expense, eliminates the need for hardware or IT staff to support the application, and puts the responsibility of upgrades and application maintenance on the provider.

I believe SaaS and alternate deployment options for ERP have and will continue to evolve.. It’s safe to say that the use of HRO and third party services is far from settled. It’s an area that requires constant innovation, and a keen focus on global capabilities and service delivery.

Katherine: What has most affected HRO growth?

Kephanie: I think you would agree that the last 8-10 years in the HRO (Human Resource Outsourcing) industry have been an interesting evolution and full of ups and downs. In fact, many HRO providers that got into the business in the early to mid 2000’s have since discontinued providing HRO services. From my experience, HRO contracts were historically driven by a compelling event such as a spin-off, acquisition growth, or some trigger event that required the client to rapidly leverage a vendor to provide HR outsourcing services as a result of an expiring service agreement or similar event driving an aggressive timeline. The growth slowed in 2008-2009 as a result of the economic conditions, which minimized the compelling events that originally drove HRO growth.

In addition to the above, two other notable areas that have affected HRO growth are: One, we now have a more educated (2nd and 3rd generation) buyer in the market, and two, organizations are experiencing significant global growth which has become a big factor in planning for their long term strategic plans in HR. I believe growth in HRO will regain its momentum over the coming years but not necessarily in the same fashion in which we saw the growth originally. Organizations want flexibility and options to support their global growth, coupled with the strong technology and service delivery, so they can service regions and countries in a way that complements their existing people infrastructure.

Katherine: Given that, what models do you see today?

Kephanie: In terms of how companies handle the administration, the traditional options remain on the continuum from in-house to fully outsourced solutions. However, in terms of deployment of technology, the primary deployment model that is taking the lead is one that requires very little support from IT. Although the selection of technology is very important, it’s not just about the technology. What’s also a key decision criterion is what service and support is core to the provider’s offering. So, for example, does the provider support and service the application and users of the application on-going--does the same provider that implements the technology live with the delivery on-going)? As I’ve worked with many global organizations, I often hear a consistent set of challenges. Most of these challenges for organizations have been created over time as companies have grown and evolved from a US-centric organization to a a growing global organization. Some of the key challenges are multiple systems, multiple contracts, lack of standardized process, and lack of global reporting. Companies more than ever want to get to a single source of truth globally, but also need support beyond the technology. Companies need to know that they have a single partner to not only help them implement the solution but one that will own the management and administrative functions in support of the technology and administrative services.

Katherine: What are the advantages of this model for HR customers?

Kephanie: In our case, we are a single partner to support our clients end to end ERP requirements. Including Global HCM/Payroll requirements, and support of Oracle’s ERP application (PeopleSoft, Oracle EBS, or JD Edwards), plus Hyperion,. This gives organizations an option to either expand their existing ERP footprint to add modules such as HR, Talent Management, Payroll, and Time & Labor or leverage their existing investment and take advantage of an alternative deployment.

If a client has already deployed an Oracle ERP application, but no longer wants to support the ERP application within IT, TITAN can simply assume hosting/management of the application while also providing upgrade, optimization and additional services in support of the transition. If a client is implementing Oracle as a new application, TITAN will implement, host and manage the application while also providing other innovative solutions to support organizations in process standardization and organizational readiness for the new implementation. What generally resonates most with IT is that they have an alternative to the traditional on-premise ERP model where they can leverage an enterprise-wide solution but do so with less up front capital expense and no longer have to worry about the upgrade cycles and maintenance of the application.

Katherine: What HR challenges are you seeing that most impact your consulting team?

Kephanie: Well, first let me touch on how clients have evolved and what has created the opportunities for our consulting teams.

First, the evolution of the current HR & Payroll complexities are a result of many factors, such as Sarbanes-Oxley, economic factors, and rising legislative demands but one key driver of heightened complexity hinges on the growth that has occurred on a multinational level. This doesn’t necessarily mean the number of employees have grown within organizations; rather, the numbers of countries in which employees work or live, adding layers of complexities that didn’t exist in a U.S.only organization.

Whether organizational growth has occurred organically or by acquisition, the resulting challenges include a lack of global reporting, rising compliance requirements, vast cultural differences, and inconsistent processes across the HR organization. These ordeals are often exacerbated by some common themes: for example, multiple technology solutions with inconsistent business policies and rules, multiple vendor contracts with in-country solution providers and de-centralized and non-standard process locally and globally.

So, what this means for us is that we have to constantly innovate and evolve our practices to drive standardization for our clients across their global enterprise. We do this through innovating our intellectual property, and service delivery model. The good news is that clients want to standardize and automate to ultimately drive repeatability in their HR organization so it’s up to us to ensure we bring those capabilities to our clients.

Katherine: And what areas are you most interested in personally?

Kephanie: Probably the area that immediately comes to mind is around Global Analytics. This continues to be a key area of need for global organizations and one I don’t believe the market has mastered. Through TITAN’s partnership with Oracle coupled with TITAN’s innovative tools, we are well on our way to mastering this ever increasing market need, which will provide our clients analytics from the simplest of headcount reports to real-time access to trends and service levels provided as standard tools for our clients.