HR and talent directors give SaaS a positive appraisal

The emergence of software as a service has driven use of human capital management systems in Australasian organisations like never before. Rob O'Neill reports on the experiences of four such organisations, each using different SaaS applications.
Written by Rob O'Neill, Contributor

For HR departments, human capital management (HCM) systems deliver a host of benefits, and have become much more accessible through the software-as-a-service (SaaS) cloud delivery model.

And, users report, despite often being public cloud applications, most of the systems on offer are configurable to suit existing processes and structures.

Let's backtrack for a moment and define what we mean by SaaS-based human capital management. It's a software solution for HR and talent processes, delivered by cloud computing suppliers. One of the big selling points for HR/talent directors is that they buy the services directly from SaaS suppliers, meaning the HR team doesn't have to go through a potentially lengthy process of liaising with the IT team to agree on what to buy, then implement (on in-house servers) and configure their preferred software solution.

The HR teams are turned on by the prospect of fast tracking the acquisition, and by gaining independence from IT in the process. Not only that, but the payment is also usually out of operational expenditure, rather than the hitherto prevalent method of capital expenditure on hardware and software.

But it's not all upside. With more control comes more responsibility. HR business owners must take responsibility to manage the transition, need people that can manage a project, and commit to working with the SaaS supplier to understand and configure the software to best suit their business. That's where the traditional IT process skills can be co-opted, and HR teams can benefit from working with and learning from professional project managers and change managers.

For a large user, such as the 10,000-strong Auckland District Health Board, the shift to Oracle's Taleo was driven by the need for centralisation and control. Indeed, HR and recruitment manager Don Fulford said it was as much about getting internal processes and systems in line as it was about enhanced candidate management.

And with that came cost effectiveness.

Australasian building products and services giant Fletcher Building is implementing SaaS-based HCM from US provider Workday as part of its effort to unite and transform a "fragmented" conglomerate. The rollout is part of a broader transformation program called FBUnite, aiming to reap NZ$100 million in savings.

FBUnite aims to deliver four pillars, the company's general manager of human resources systems and procurement, Sharon Spence, said in a video inadvertently posted online last year: A winning culture; responsiveness to the market; optimised operational performance; and the lowest possible cost structures. The new HCM system is a foundation of that.

Fletcher was not prepared to comment on the project until its rollout is complete, but in the video, Spence said it would deliver cash to the business and benefit to shareholders.

"We will be held to account to deliver the value we say we are going to deliver," she said.

She described Workday as "state of the art", adding that it would be available on mobiles and tablets as well as desktops.

Spence described the current state of Fletcher Building's HR environment as "fragmented". The company knows little about the people who work in the business, she said.

The aim of the Workday project is to unite and simplify that complexity, track and develop talent, and make the company more productive.

Save the Children saves money, too

For Tracey McMillan, human resources manager of charity Save the Children Australia, selecting HCM modules from SilkRoad was a no-brainer. Save the Children HR was working entirely manually on paper to service 540 staff members.

McMillan had used SilkRoad at a previous employer, and found it to be cost effective and flexible. Indeed, Save the Children estimates efficiency savings from the SaaS rollout at AU$46,000 per year through streamlined processes and the reduction of manual, paper-based work.

Melbourne-based Corporate Travel Management (CTM) has been using SuccessFactors' SaaS system for nearly a year, implementing multiple modules from the SAP-owned company.

CTM started out with the performance and goals, employee profile, and employee central modules, and has since implemented succession, career development plan, and 360 for performance reviews. Position management is built in underneath that.

Save the Children Australia  540  SilkRoad
Auckland District Health Board  10,000  Taleo (Oracle)
Corporate Travel Management  470  SuccessFactors (SAP)
Fletcher Building  15,000  Workday

Because of rapid growth, CTM decided early on that succession is an important module for identifying the right talent and key roles within the organisation.

"As we were growing, we needed to get a handle on what those roles were," Marika Barber, CTM's organisational development manager, said.

Whatever system was chosen had to be scalable to manage both organic and geographic growth.

Save the Children uses three modules, and planning is underway to implement more, McMillan said. And that is mainly an HR decision, rather than an IT one.

McMillan said the IT department at the 540-employee organisation had been involved to ensure that SilkRoad was compatible and usable with the underlying infrastructure.

IT did not need to be involved in integration, because the SilkRoad modules are largely stand-alone. There is, for instance, no single sign-on, and little IT support is required. Because of its geographically dispersed workforce, employees have to be able to access the system without going through Save the Children's core portal.

The system is very configurable, she said, but again, HR can do most of that without IT's help.

Save the Children uses SilkRoad's RedCarpet for on-boarding new employees, OpenHire for recruitment and applicant tracking, and WingSpan performance management modules. However, these are currently somewhat isolated from each other.

While there is some built-in interaction between OpenHire and RedCarpet, Wingspan is more isolated. A module called Connect, which McMillan will roll out later in the year, allows them to talk to each other. GreenLight, for learning management, is also on the shopping list.

McMillan advises anyone thinking of implementing HCM that they need someone dedicated to managing the project, as it is quite time consuming.

Little user training is required, as the system is quite intuitive, she added. The Wingspan module does require training, but not so much in regards to the system as on how to have a quality conversation with employees when using it.

"For what we need, it is absolutely ideal," she said.

At CTM, SuccessFactors is now rolled out in Australia and New Zealand to nearly 470 staff members. It has not been extended to the US office as yet, or to the 700 Asian staff members who recently joined the group after CTM acquired Westminster Travel at the end of January.

Carol Jones, HR project manager, said SuccessFactors is configurable so it can embrace existing processes, but CTM also felt that many of its legacy processes were cumbersome.

"We were happy to be reviewing them at the same time as we were looking at a human resource information system," she said.

The major driver of the project was to cut manual handling of information and create efficiencies.

"The old system was a bit 'tail wagging the dog'," Barber said. "It wasn't flexible."

As with Save the Children, the system is largely isolated from other corporate platforms. A report can be generated by SuccessFactors to use in the corporate business intelligence system and for payroll.

Users get to it through either a favourite in their browser or a link on the corporate intranet.

Again, there is no single sign-on, and this facilitates remote access.

"We have a lot of people working from home, and they could not work with single sign-on," Jones said.

However, SuccessFactors has recently made changes to its single sign-on capability, and this may be reviewed.

HR determines functional fit, IT consulted on infrastructure fit

CTM's IT department was included in the selection process where appropriate, Barber said, but it was mainly an HR choice. As at Save the Children, IT had to ensure that shortlisted systems were a good fit with existing infrastructure. IT also had a view on costs.

No SuccessFactors data is stored on CTM's corporate servers, so there has been no impact on IT's workloads.

Barber said SuccessFactors' high level of configurability was a definite positive in the selection, but she warned that it is a double-edged sword.

"It's wonderful. It can adapt, but you need the support of SuccessFactors to give you a vision of what it could look like," she said.

Some configuration decisions did not work out for the best, she said, because the modules are closely linked and a decision made in one can have, in the end, an undesirable effect in the others.

"It's a massive learning curve, and time consuming and resource hungry," she said.

Anyone heading down the same road is advised that they need to be fully committed, and be right behind the project to drive it to a successful conclusion.

But with implementation over, CTM is reaping the rewards.

Barber and Jones said that overall, they are really pleased with their "fabulous" system, which has served to reduce workloads considerably by allowing processes to be pushed out to the managers directly in charge of staff.

Barber said that after a recent round of performance reviews, feedback from managers was remarkably positive, with several saying they enjoy using the system.

"We've never really had that before," she said.

CTM used SuccessFactors' Jam social collaboration tool to help train and coach users. Videos are available through it for users to watch in real time when trying to use the system.

Jones said that because users are not constantly using the platform to get used to it, this allows them to access coaching on demand.

Early bird Auckland District Health Board derives reporting benefits

With 10,000 staff members, the Auckland District Health Board (DHB) is truly an enterprise-level user of SaaS HCM, in this case, Oracle's Taleo. But the DHB is also a very early adopter, having implemented Taleo in 2003, long before Oracle acquired the company in 2012.

Recruitment and retention manager Don Fulford said the DHB runs Taleo's recruitment module, which manages job approvals, advertising, interviews, correspondence, and job offers. Over time, this develops into a valuable talent database that can be searched as needed.

Fulford said it allows the organisation to be a lot more analytical about where talent is coming from and what recruitment channels are working and not working.

An "on-boarding" module was added two and a half years ago, but is still being tested by another DHB. This will manage paperwork, security passes, and Inland Revenue Department requirements all the way through to system logons for new staff, he said.

SaaS HCM benefits

•  Consistent talent and performance management
•  A single source of truth
•  Centralised control
•  Uniting fragmented systems and processes
•  Eliminating manual processes
•  Cost efficiencies
•  Cutting HR workloads through enabling self service
•  Gain independence from IT in selection and implementation

Fulford describes Taleo as robust and scalable, and also "hugely configurable". It's a bit like lifting the hood of a Ferrari, he said. What's inside can look very complicated, so you need help to get it running properly. The system will only be as good as the decisions made during implementation will allow it to be, he warned.

"It's a tool, and you need to understand how it works and how to use it."

It would be easy to implement the system and fail to use it effectively, he said.

The DHB has developed a network of subject matter experts in Taleo, but, even after a decade of use, the DHB is still regularly learning something new about Taleo and how it can be used.

Fulford said IT was fully involved in the selection of the system, and the dialogue with IT is ongoing, particularly around access networks and speeds.

"Capacity issues need to be sorted," he said.

Taleo has real strength in delivering reporting, which is important in such a large organisation, he said.

The bottom line is that each of the four businesses have derived benefits from SaaS HCM solutions. Benefits include consistent talent and performance management, centralised control, cost efficiencies, and enablement of employee self-service (see box above).

Typically, the HR leaders in the businesses that ZDNet reviewed led the functional assessment of candidate SaaS solutions, but called on the IT team to validate whether the preferred options would work within existing IT architectural standards.

A common refrain of the businesses interviewed is that SaaS-based HCM transformations don't just happen; they must be managed, and it's important that there's a project owner, and investment associated with that. Above all, most SaaS HCM offerings are highly configurable, and HR leaders must be proactive in choosing the setup that best suits their business.

All in all, SaaS HCM for each business has passed its probationary performance appraisal.

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