1. Transform to the power of digital Cloud Watch on HCM Cloud Solutions Summary Version July 2013

2. Contents Introduction A sneak peek at the Market HRMS application footprint Contact Details 2 3. Copyright 2013 Capgemini Consulting. All rights reserved. Objectives, Approach and Context Objectives and approach Provide a single source of information on leading HR solution providers across the globe Identify leading players across HRM SaaS functionalities The study uses publicly available information sources: Company websites Text line searches Industry reports Analysts reports Context Cloud computing is the availability of hardware, software and data via the internet and it represents the network of connected computers Software as a service (SaaS) is one of the service models offered in cloud computing along with Infrastructure as a service (IaaS), Platform as a service (PaaS) and Network as a service (NaaS) SaaS is a growing phenomenon in the market and has made a successful penetration into mainstream Enterprise IT Earlier, licensed on-premise software was the dominant deployment model in production, but with time, on premise vendors have also begun to offer SaaS based solutions Coupled with the buy side objective of reducing the cost of ownership, the SaaS revolution is bound for exclusive growth across all forms of a business Globally, Capgemini Consulting helps many of its clients on the use of Software as a Service solutions, and this document intends to provide a single source of truth about HR SaaS solutions currently available in the market, with a focus on the European market 3 Version Status Final Authors CC India, Research services Delivered in Q2, 2013 4. Contents Introduction A sneak peek at the Market HRMS application footprint Contact Details 4 5. Copyright 2013 Capgemini Consulting. All rights reserved. A sneak peek at SaaS industry (1/2) 5 Workday launched Workday 19 with embedded analytics for financial management Peoplefluent launched Peoplefluent TalentUnity, an enhanced version of its recruiting and contingent Workforce Management solutions SumTotal introduced elixHR, a powerful HR data engine enabling one comprehensive view of employees ADP launched ADP Plan Health Review, a tool to help ADP Retirement Services clients measure the retirement readiness of their employees Successfactor partners with Kronos to help deliver on integrated Workforce Management, human resources, payroll, and Talent Management offerings in the cloud Cornerstone OnDemand partners with Cloud provider, Appirio to help Appirio broaden its Talent Management portfolio ADP acquired Payroll S.A., a provider of human resource outsourcing, payroll and employee benefits services across Chile, Argentina and Peru SilkRoad partners with HR survey/analytics authority, Nobscot Corporation July, Q2, 2013 Partnerships, alliances and M&As Vendor corner 6. Copyright 2013 Capgemini Consulting. All rights reserved. A sneak peek at SaaS industry (2/2) 6 July, Q2, 2013 SuccessFactors ranked a Leader in The Forrester Wave(TM): Talent Management, Q1 2013 for its Performance & Goals, Succession & Development, and Learning Solutions SumTotal named as Champion in McClean & Companys Talent Management suites vendor landscape report Silkroad has been recognized as the 2013 HRO Today TekTonic Awards winner in the HRMS Suite category Saba was the winner at the Customer and Partner Excellence Awards HR Tech Europe 2013, Europe's leading conference and networking event for Business, HR and IT Leadership will be held in Amsterdam from 24th -25th October, 2013 Oracle Open World, a conference for Oracle customers and technologists, will be held in San Francisco from 22nd-26th September, 2013 Peoplefluent will host WISDOM 2013 Global Conference in Orlando, 22nd 25th September, 2013 IHRIM's 2013 HRMS Strategies Conference and Technology Expo took place on June 2-5, 2013 at Disney's Contemporary Resort, Lake Buena Vista, FL Events Analysts speak 7. Copyright 2013 Capgemini Consulting. All rights reserved. Some examples of Lessons Learnt based upon Capgeminis experience in implementing HCM Cloud Solutions 7 Communicate, communicate, communicate! Implementing a HCM (Cloud) Solution is not only an IT project, but needs to be approached in an integral way covering technology, processes, organization and people HCM Cloud Solutions can be tailored to meet (most) requirements of the organization by means of configuration delivered within the solution This provides great opportunities for standardization, and minimizes maintenance efforts It is important to understand and communicate these benefits along with the restrictions such as no customizations of a HCM Cloud solution Good mix of internal and external resources in terms of availability, knowledge and expertise Internal (project) resources: To provide quality data and organizational context, ensuring ownership of a sustainable solution External resources: To provide the knowledge and expertise for implementing HCM Cloud Solutions, scaling up of project capacity and the outside- in view Start simple Implement in waves and consider the learnings after every wave It is always better to Keep it simple and not add too many functionalities in the first implementation itself Strict project management is the key: Stick to deadlines, frequent updates on progress on deliverables, be strict on the three iterations during implementation Manage dependencies between the project streams as well as external dependencies Lessons learnt from implementation of HCM cloud solutions 8. Copyright 2013 Capgemini Consulting. All rights reserved. Some examples of pitfalls based upon Capgeminis experience in implementing HCM Cloud Solutions 8 Lack of common (global) definitions relating to data elements, processes and KPIs Underestimation of the effort involved in data cleansing and data migration efforts, especially with a view to historical data Lack of clear governance regarding data, definitions and the project Lack of single source of truth Lack of clear criteria and governance body regarding deviations of the agreed configuration In principle, only deviations due to regulatory compliance and legislations should be catered for Lack of proper and timely alignment with the stakeholders and the lack of involvement of the stakeholders Lack of a clear reporting scope Too little focus on defining and embedding proper support processes and its organization Pitfalls of implementation of HCM cloud solutions 9. Contents Introduction A sneak peek at the Market HRMS application footprint Contact Details 9 10. Copyright 2013 Capgemini Consulting. All rights reserved. HR solution SaaS can be categorized into Core HR, Workforce, Talent, Learning, Recruitment Management and Compensation & Benefits 10 HCM Cloud Solution Footprint Source: Embrace Future Trends To Deliver HRM Business Impact, Forrester 2012; CC India Analysis Learning Management HCM Solutions (Cloud & Mobile) Core HR Workforce Management Talent Management Compensation & Benefits Recruitment management Employee Records Payroll Benefit Administration and Enrolment Salary and wage structure Jobs and positions Employee Engagement Compliance Organizational structures Time reporting Workforce scheduling and assignments Attendance Productivity Analysis Paid Time Off Labor Cost Distribution Absence Management Employee Performance Goal Management Career Planning Competency Management Succession Planning Talent Review Retention ManagementLeadership Development Learning Course Administration Content Management Mobile Learning Mentoring Collaboration Social and Informal Learning Professional Certification Bonus Programs Commissions Stock and Long Term Incentives Employee Recognition Base Salary Administration Wellness Retirement and Savings Market Pricing and Equity (Strategic) Workforce Planning Requisitions Sourcing and Social Recruitment Candidate Engagement Applicant Evaluation Diversity & Compliance Onboarding 11. Copyright 2013 Capgemini Consulting. All rights reserved. HCM Solutions (Cloud & Mobile) Core HR Although the comprehensive HCM Solutions in the market span the full breadth of HR, their strength lies in the core transactional processes, compliance, and structures Core HR 11 Core HR Vendor Landscape Licensed on-premise software remains the dominant deployment model in production with SaaS based solutions contributing only 18% of Core HR segments revenues1 Description Vendor Example HCM Solutions footprints to gain in- depth Talent Management, analytics, and global capabilities The depth of functionality has improved in several areas Vendors are improving their depth through acquisitions - Oracle acquired Taleo - SAP acquired SuccessFactors Outsourcing vendors and ERP vendors are introducing mobile HR apps Outsourcing and ERP vendors are introducing mobile HR capabilities to their clients Introduced new benefits and flexible spending account functionality to its ADP mobile solutions application Trends Completeness/Strength of the offering; Note: 1 Includes product revenues (i.e., licenses, maintenance, and subscriptions) Source: Embrace Future Trends To Deliver HRM Business Impact, Forrester 2012; The Forrester Wave: Human Resource Management Systems, Q1 2012; CC India Analysis; HRM Solutions: Traditional Models clash With Next-GenerationProcesses And Technology; Forrester Employee Records Payroll Benefit Administration and Enrolment Salary and wage structure Jobs and positions Employee Engagement Compliance Organizational structures 12. Copyright 2013 Capgemini Consulting. All rights reserved. As one of the major trends, many of the retailers & public sector industries are relying on WFM solutions to improve productivity Workforce Management 12 Description Vendor Example Strong demand for Mobile WFM There is an increase in adoption of mobile based Workforce Management solution Kronos licensed WFM solutions to more than 250,000 employees across a wide variety of industries Demand for WFM solutions in retail Growing demand for WFM in retail industry, it is estimated to have a CAGR1 of 3% till 2015 Reflexis claimed that it has signed 30 new clients in retail over 1 year Increasing instances of public sector usage WFM Counties and other departments are extensively relying on WFM solutions to streamline utilisation Boulder county implements Kronos WFM to control labor costs, minimize compliance risk and improve productivity Workforce Management Vendor Landscape Trends SaaS adoption has slowly started to evolve, as the leading vendors have now begun to offer both on-premise and SaaS solutions Completeness/Strength of the offering; HCM Solutions (Cloud & Mobile) Workforce Management Note: 1 CAGR refers to Compound Annual Growth Rate Source: Embrace Future Trends To Deliver HRM Business Impact, Forrester 2012; CC India Analysis;Factiva Time reporting Workforce scheduling and assignments Attendance Productivity Analysis Paid Time Off Labor Cost Distribution Absence Management 13. Copyright 2013 Capgemini Consulting. All rights reserved. Integration challenges with Core HR, growing importance of social Talent Management are the key trends in Talent Management Talent Management 13 Vendor Landscape Description Vendor Example Growing importance of social Talent Management Organisations that want to be at the forefront must now shift their HR practices towards social media capabilities such as social sourcing, earning, etc. An organisation's social HR strategy reflects its culture, it can enhance productivity within an organisation and also collaboration and connectivity IBM acquired Kenexa so that IBM could leverage Kenexas social media capabilities Integrating challenges with Core HR Lack of usage of an integrated Talent Management solutions and not integrating Talent Management applications with their Core HR applications are some of the main reasons for integration challenges No information available Trends Talent Management 58% of the products revenues from Talent Management solutions are via SaaS based solutions Completeness/Strength of the offering; HCM Solutions (Cloud & Mobile) Talent Management Note: 1 Includes product revenues (i.e., licenses, maintenance, and subscriptions) Source: Embrace Future Trends To Deliver HRM Business Impact, Forrester 2012; CC India Analysis; Recruitment Aligns With Talent Management, Forrester, 2011 ; HRM Solutions: Traditional Models clash With Next-GenerationProcesses And Technology; Forrester Employee Performance Goal Management Career Planning Competency Management Succession Planning Talent Review Retention Management 14. Copyright 2013 Capgemini Consulting. All rights reserved. Learning Management has made the transition from on-premise solutions to SaaS and leading vendors indicate new deals coming in are heavily weighted towards SaaS Learning Management 14 Vendor Landscape Description Vendor Example New Players in Learning Management Talent Management solution vendors are looking to enter Learning Management market SuccessFactors is moving toward an informal learning offering through its acquisition of Jambok Lumesse developed a learning platform via its acquisition of ExecuTRACK Learning point solution vendors have built or acquired performance capabilities As learning has become central to employee development, vendors have responded to this change by expanding their solutions' existing functionality & adding Learning Management capabilities to it Cornerstone OnDemand, Plateau, and Saba had built performance solutions and now offer integrated offerings SumTotal added performance solutions through acquisition of Softscape Trends Learning Management In Learning Management, the SaaS model currently accounts for 45% of its product revenues Completeness/Strength of the offering; Learning Management HCM Solutions (Cloud & Mobile) Note: 1 Includes product revenues (i.e., licenses, maintenance, and subscriptions) Source: Embrace Future Trends To Deliver HRM Business Impact, Gartner 2012; The Forrester Wave: Talent Management: Learning, 2011; CC India Analysis Leadership Development Learning Course Administration Content Management Collaboration Social and Informal Learning Professional Certification Mobile Learning Mentoring 15. Copyright 2013 Capgemini Consulting. All rights reserved. Market consolidation and growth in the existing portfolio are the major trends in the field of recruitment management Recruitment Management 15 Description Vendor Example Market consolidation Acquisitions in the applicant tracking system (ATS) area mean fewer vendors and cater for the needs of both enterprise and SMB customers Kenexa acquired BrassRing, Cerdian acquired RSI, Sumtotal acquired Softscape and Cybershift Growth of installed bases of the existing players Many vendors have made acquisitions for intellectual property, advanced technology, and increase of customer base Oracle acquired Taleo to provide a richer recruitment application Recruitment management Vendor Landscape Trends 83% of the product revenues of recruitment solutions market was contributed by SaaS based solutions Completeness/Strength of the offering; HCM Solutions (Cloud & Mobile)Recruitment management Note: 1 Includes product revenues (i.e., licenses, maintenance, and subscriptions) Source: Embrace Future Trends To Deliver HRM Business Impact, Gartner 2012; Recruitment Aligns with Talent Management, Forrester Research, 2011; CC India Analysis (Strategic) Workforce Planning Requisitions Sourcing and Social Recruitment Candidate Engagement Applicant Evaluation Diversity & Compliance OnboardingTalent Pools 16. Copyright 2013 Capgemini Consulting. All rights reserved. Compensation & Benefits tools have become a component of broader Talent Management suites and there have been significant mergers & acquisitions targets in the market Compensation & Benefits 16 Vendor Landscape Description Vendor Example Compensation vendors leverage pay- for-performance Compensation specialists leverage the link between rewards and performance Workscape added performance to its Compensation & Benefits capabilities Mergers & Acquisitions There have been significant mergers and acquisitions in the compensation market during the past few years Kenexa acquired Salary.com and ADP's acquired Workscape Trends Compensation & Benefits SaaS penetration in the Compensation and benefits function has gained momentum and contributes 52% of this segments product revenues Completeness/Strength of the offering; HCM Solutions (Cloud & Mobile) Compensation & Benefits Note: 1 Includes product revenues (i.e., licenses, maintenance, and subscriptions Source: Embrace Future Trends To Deliver HRM Business Impact, Gartner 2012; Hype Cycle for Human Capital Management Software, Gartner-2011; CC India Analysis Bonus Programs Commissions Stock and Long Term Incentives Employee Recognition Base Salary Administration Wellness Retirement and Savings Market Pricing and Equity 17. Contents Introduction A sneak peek at the Market HRMS application footprint Contact Details 17 18. Want to know more? In the full version you will find which HR cloud applications have which functionality 18 Please get in touch with: Ronald van den Berg Principal Consultant People & Performance Mob : +31 (0)6 - 15030294 Secretary : +31 (0)30-6898844 Mail to : ronberg@capgemini.com Tim van der Wal Managing Consultant People & Performance Mob: +31 6 1503 0286 Secretary : +31 (0)30-6898844 Mail to : Tim.vander.wal@capgemini.com Lysette Kampman Managing Consultant People & Performance Mob: +31 6 29560779 Secretary : +31 (0)30-6898844 Mail to : Lysette.Kampman@capgemini.com