technology value matrix 2015 hcm

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THE BOTTOM LINE

In the six months that have passed since our publishing of the previous Matrix for human

capital management (HCM), most vendors that were in the Leader quadrant have kept or

bettered their pace in improving their solutions’ functionality and usability. Innovations in

predictive analytics and user interface (UI) design lead the charge. We see major

differences, however, in the types of clouds that HCM vendors offer, with large

implications for the future of this market.

User-friendliness and design of a UI are important, and so are the sophistication of

analytics. But the challenges of integrating sundry applications behind the UI continue to

occupy the attention of many vendors. Some players can’t change how many applications

reside behind their UI. These companies have developed a number of novel approaches

to corralling the data and strengthening the interfacing – with results that are still proving

themselves. We see this as a fundamental issue, and we believe less integration is always

better. All of this bears, meanwhile, on clear and present needs. For instance, employers

need to comply, right now, with the Affordable Care Act (ACA). Buyers must exercise due

diligence (Nucleus Research p37 WFM Vendors and Compliance with the Affordable Care

Act, February 2015).

NOT ALL CLOUDS ARE REAL CLOUDS

The superior return on investment of cloud technology versus on-premise technology is

compelling (Nucleus Research m108 Cloud Delivers 1.7 Times More ROI, September 2012).

But some HCM technology in the cloud isn’t in a real cloud. Vendors fall into three

categories:

Real cloud vendors: This is the kind of cloud capable of delivering the bevy of

benefits that all cloud vendors tout. All users are on a single instance of the suite –

i.e., the same, latest version – at the same time. Why? A real cloud is a public cloud.

Therefore, it is a multi-tenant cloud, which means everyone is on the same cloud,

simultaneously. Updates are automatic and cloud-wide. The delivery mechanism is

called software-as-a-service (SaaS): Via SaaS, users receive the latest through

RESEARCH NOTE

TECHNOLOGY VALUE MATRIX 2015 HCM

Document P62

April 2015

ANALYST:

Brent

SKINNER

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April 2015 Document P62

broadband Internet. The best real cloud vendors give clients the additional ability to

accept or reject elements of the latest single instance.

Pretend cloud vendors: This is hosting, not SaaS. It’s a single-tenant cloud, which

means each customer has its own cloud. Honest vendors call it a private cloud. But a

private cloud means little more than this: Servers for it reside someplace other than

the user’s premises. From there, these servers host the user’s HCM technology. In the

pretend cloud, a single instance of the solution doesn’t exist; instead, many instances

are live on the vendor’s many, many private clouds. For these and other reasons, the

pretend cloud is incapable of delivering the real cloud’s economies of scale.

Mixed cloud vendors: These vendors have some real cloud and some pretend cloud.

It’s a mixed bag. Some have this blend because they lack the technological prowess

to deploy and manage a real cloud. Far more are just trying to figure out the quickest

way to move their large populations of customers away from the premises. Most of

these vendors probably have the goal of eliminating as much of their pretend cloud

as possible.

So some of the pretend cloud exists because the market demands it. But even the

financially healthiest of vendors with significant numbers of customers in the pretend

cloud are in danger of dying a long, slow death.

Employers like to think that their HCM processes are unique and require advanced

customization only available in a private, tailored instance of the solution. Most of these

employers are wrong, and they will figure it out, eventually. Real clouds tailored to the

idiosyncrasies of several industries are available for purchase right now. Furthermore,

most reputable vendors of real clouds for HCM technology have mastered the art of

preserving the privacy of each cloud tenant’s data even as it is comingled with everyone

else’s, in a real cloud (i.e., public cloud). Employers on a pretend cloud out of concerns

over data privacy have little reason to avoid real clouds.

VENDORS CARE ABOUT USERS OF THEIR ON-PREMISE TECHNOLOGY – FOR NOW

Employers still using on-premise solutions must ask themselves, unflinchingly: How long

will their legacy vendors care about them? Right now, yes, the biggest legacy vendors

care, and in some cases, they’re exerting extra effort: In most cases, however, revenue

generated by their on-premise customer base fuels innovation solely in the cloud.

Eventually, every one of these vendors’ cloud-based suites will generate the revenue to

fund its own innovation. Vendors absorb huge sunk costs to maintain on-premise

solutions. For them, the pretend cloud isn’t much better. It won’t be long before they

look for ways not only to abandon the premises entirely, but, also, to scale back their

private clouds.

BUILD THE REFUGEE CAMPS

Users of on-premise solutions are, therefore, citizens of a failing state. Again, most

vendors have scaled back or outright ceased investing in premises-based product




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innovation, dedicating budget only for upkeep. That upkeep, which won’t last forever, for

now fosters a false sense of security among on-premise customers. Eventually, almost all

of them will face no choice but to flee to the real cloud. That exodus may be swift and has

the potential to become unmanageable. Vendors in the real cloud must begin building

the refugee camps now, lest their businesses grow too fast with the influx of new

customers. Some vendors have admirable strategies in place, right now, to help their

customers bridge the premises to the cloud. These vendors are reforming themselves into

a modern state, respecting all users, and building a path to citizenship in the real cloud.

HCM WILL MOVE TO THE CLOUD FASTER THAN ENTERPRISE RESOURCE PLANNING

Employers see HCM differently; that’s why. Information on a company’s proprietary

products and services, or on a business’ financial health, is sensitive. It’s also indigenous to

the organization. In contrast, an employee’s identifying data may not be indigenous, and

therefore may not be deemed as sensitive. Social Security numbers come to mind.

Although real cloud vendors can safeguard all comingled data from tampering, users

consider information related to enterprise resource planning (ERP) safer on the premises.

For these reasons, HCM – till now a laggard in cloud adoption – will move to the real cloud

faster.

EDGE APPLICATIONS WILL BE THE TROJAN HORSE INVITING HCM TO THE CLOUD

It’s because this Trojan horse is hiding good tidings. Many employers that currently have

their technology for core human resources or workforce management (WFM) on the

premises use at least one edge applications in the cloud. Many of these happen to be

talent management–related. Typically, the same people use both these applications. They

see the difference in usability and efficiency. The real cloud sells itself to these users. In

September 2015, as one of many steps to investigate this trend, Nucleus will publish its

very first Talent Management Value Matrix.




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LEADERS

Leaders in this Matrix include Infor, Oracle HCM Cloud, Ultimate Software, Workday,

Ceridian, IBM Smarter Workforce, and SuccessFactors, an SAP Company.

INFOR

The Infor suite is an amalgamation of functionalities covering a wide breadth of HCM and

adjacent areas of the enterprise. Some of these are native-to-Infor applications, whereas a

large number are acquired. Together, they span new-hire on-boarding, off-boarding,

Ceridian

PeopleFluent

SumTotal

Systems

Ultimate

ADP

SAP

SuccessFactors

Oracle HCM

Cloud

Infor

Saba

Silkroad

IBM Smarter

Workforce

HrSoft

Workday

Lumesse

FinancialForce

HCM

Kronos

HalogenU

sab

ilit

y

Functionality

Facilitator

Expert

Leader

Core Provider

Facilitator

Expert

Leader

HCM VALUE MATRIX 2015

With few exceptions, Leaders in the Matrix have made strides to improve their solutions’ functionality and usability: fortifying or introducing mobile platforms, streamlining user interfaces, adding modules related to talent management or at the edge of the employee lifecycle (e.g., recruiting), and tailoring their products to serve new niches. Several vendors in other quadrants have done likewise, just to a lesser degree or to less breadth. Additionally, vendors of note continue to improve their systems' ability to aggregate data in order to provide (or come close to providing) real-time information. As for on-premise solutions, hybrid combinations of them with the cloud and software-as-a-service play a legitimate role, to this day, in the mix of HCM solutions at buyers’ disposal. Most vendors, however, have signaled clear movement to the cloud - and away from the on-premise model. Caveats for customization persist, but the cloud is a competitive advantage, and vendors’ commitment to it affects their standing in the Matrix.




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employee rewards management, time and attendance, scheduling, absence management,

compensation management, goal-setting, learning management, advanced pre-hiring

assessment, financial management, and elements of an HRMS. Payroll (Lawson-based,

acquired in 2011) is a SaaS-wrapped, Cobalt-based system. Robust analytics underpin the

entire Infor suite, not just HCM, and surface relevant information to decision makers across

several disciplines within the organizations.

Whereas a few of its largest competitors run on proprietary data stores, Infor runs its cloud

on Amazon Web Services, HCM Xi is the vendor’s new cloud rollout for this market space.

Additionally, Infor has developed several cloud suites tailored for the typical needs of a

number of industry verticals. In doing so, the vendor presents a compelling

counterargument to existing customers who might otherwise cling to their premises-

based solutions for the customizations they have there. Meanwhile, this rich assortment of

cloud suites has the ability to attract net-new customers, too. Not all the core versions of

these vertical cloud suites offer prepackaged HCM, but any customer may elect to include

HCM, as an add-on.

For existing customers not yet in it, Infor has developed a path to the real cloud. Branded

as UpgradeX, the program, also a campaign, features many characteristics that help Infor

to engineer a methodical migration for any customer, who may retain the extent of

premises-based functionality it wants, for now. Infor then recommends a mostly cloud-

based scenario for the customer’s next upgrade. Middleware by the name of ION

maintains the durability of integrations between these customers’ new Infor-sourced cloud

applications, their existing Infor-sourced premises-based applications, and anything else

that needs to be connected, too.

The emphasis is twofold. For one, Infor focuses on surfacing the most relevant

information to the most pertinent person within the organization. This individual may or

may not work within the HR department. In this way, Infor analytics help to show the

value of HCM-related information organization-wide. Second, predictive analytics help

organizations using Infor to make the right decisions in several key areas of the enterprise

touched by HCM. One of these, perhaps the most notable, is in new hiring. Talent

Science, as the company calls it (PeopleAnswers-based, acquired in 2014), arms the

process for talent acquisition with a sophisticated instrument designed to assess

candidates’ ability to fit within the hiring organization’s workplace culture. Specifically,

Talent Science determines how well job candidates hew to the general characteristics of

high performers already working within the hiring organization.

As with several other vendors in the Leader quadrant, Infor contends with the challenges

related to sprawling arrays of separate applications operating behind the UI. Nucleus

expects Infor to continue its good job in describing how it expects to address these

challenges. In the meantime, unlike some of its competitors, Infor continues to invest

innovation into a number of its premises-based solutions. Furthermore, Infor has provided




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its legacy customers with a clear path to the cloud and shown deference to the desire they

may have to retain the premises-based solutions they use right now, for now. Because of

this nuanced approach’s clarity, Nucleus expects that customers of Infor will experience an

evolutionary, well-managed, smooth transition to the cloud.

ORACLE HCM CLOUD

Maintaining its standing as a Leader, Oracle HCM Cloud comprises the following:

Oracle Global Human Resources: Automating benefits management, pay

management, and workforce planning

Oracle Talent Management: Native functionality including sourcing, recruiting,

employee development, performance management, and retention predictors and

indicators

Unlike with a number of vendors in this market space, a social network indigenous to

Oracle fosters interactivity across the HCM ecosystem, in several ways. Additionally, for

instance, predictive analytics can show future trends in attrition. Plus, these analytics are

able to draw on an extensive database of Oracle-powered recruiting solutions to provide

deep insight into a kaleidoscope of theoretical scenarios regarding new hires’ success.

As the previous Matrix concerning this market space noted, under the auspices of Oracle

HCM Cloud, the company provides all the functionality of Oracle’s HCM-related solutions

for the premises. In other words, Oracle HCM Cloud provides a great deal of breadth,

touching essentially every aspect of HCM. These are the characteristics landing Oracle

HCM Cloud in the Leader quadrant. And they give existing customers of Oracle’s on-

premise solutions for HCM – no longer a part of the HCM Value Matrix – a legitimate

argument to stay with Oracle, for HCM.

The Oracle HCM Cloud suite of applications relies on interfaces to integrate three separate

data models: Taleo Learn, Taleo Recruiting, and Fusion. Notably, all applications on

Fusion occupy a single platform. A portal for central access to the entire system unifies

the user experience. Other vendors, too, must corral separate data sets, behind the UI.

Many that do so are Leaders, just like Oracle HCM Cloud. The Oracle HCM Cloud roadmap

includes plans to create a single data model. Plus, Oracle expects to eventually employ a

single data model across the entire ecosystem, not just HCM Cloud.

On several fronts, other aspects of Oracle HCM Cloud fare well against the vendor’s

competition, in the Leader quadrant. Nucleus expects Oracle to continue to capitalize, for

instance, on its potential to best the competition in depth of functionality for HCM-related

point solutions – retaining its status as an innovator. Likely to bolster these efforts are

improvements in store, revealed in Oracle’s product roadmap for 2015, across several

disciplinary areas pertinent to the HCM suite.




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ULTIMATE SOFTWARE

Ultimate Software continues to improve the UltiPro HCM suite, with a stated $112 million

invested in research and development supporting a bevy of new features for 2015. Among

these are new functionalities in organizational modeling and in the analytics surrounding

employee engagement.

Last time, for the Matrix, we expected Ultimate Software to work toward increasing the

value of its applications by infusing the UltiPro HCM suite with more predictive analytics.

Since, the vendor has done so, notably in the form of functionality that now supports and

facilitates organizational modeling. The solution, called Organization Modeling provides

ways to visualize an organization from many perspectives – i.e., outside traditional

hierarchies – enabling leaders to model and implement changes. Ultimate says it plans,

eventually, to incorporate engagement scores and other information to help align team

cultures, thus extending the new functionality’s utility and accuracy.

Also in place now or in store, for 2015, is an array of additional predictive analytics

pertaining to performance and retention, to support decision making with suggestions.

These capabilities draw on the preponderance of data that UltiPro already gathers,

throughout the suite, on employee engagement. Predictive analytics help to forecast

whether a given employee intends to stay or leave within the next 12 months, for instance,

enabling management to take action, in the present, that might ward off attrition or

prevent it altogether. Additionally, predictive analytics reveal who among the

organization’s employees are the highest performers now or could be, later. These

analytics are now presented contextually at the level of individual employee and soon,

through a new predictive console, will be accessible in a rollup level. Future plans include,

also, an engagement index embedded in the smart dashboard and pervasive, suggested

actions for the manager to take.

For organizations that want more administrative learning and content delivery, a standard

connector to LMS vendors – including Certpoint LMS, from Infor – supports learning

management. In addition, several prepackaged integrations enable users to employ

elements of UltiPro as point solutions to complement functionality they may already have

in place, from other vendors. Aside from these integrations, a single application for HCM,

in the cloud, comprises much of UltiPro, one of the primary factors contributing to its high

placement along the usability axis of the Matrix. A notable exception is time and

attendance, which resides on a separate line of code. Though not in real time, data from it

feeds into the rest of the system as needed, typically via scheduled batches. In 2014

Ultimate incorporated time and attendance into the UltiPro development lifecycle with

several improvements in the overall experience. Further unification is in the works.

Shortly prior to the publishing of this Matrix, Ultimate announced that it had entered a

strategic partnership with NetSuite. The alliance signals an integration of UltiPro HCM with

the NetSuite ERP suite, which, notably, includes robust financials-related functionality.




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Because of the flexibility of cloud-to-cloud integration, this one creates potential

competition for not only SAP and Oracle, but also Workday (Nucleus Research p54 New

Partnerships Add New Hues to Competitive Landscape in HCM, March 2015).

WORKDAY

In the previous Matrix, we noted that Workday had recently released new applications for

recruiting, financials and Big Data–focused analytics. Additionally, the vendor had just

launched a higher education–tailored version of its suite. All this has complemented

existing capabilities in HRMS, benefits, talent management, workforce planning and

analytics, payroll, and time tracking. At the time, we noted that Workday needed to add

much-needed depth to its capabilities across the suite’s admittedly impressive breadth. To

that end, Workday has made some strides.

Movement comes namely in the release of Workday Insights Applications. The suite draws

on advanced data science and machine learning algorithms to help users improve their

financial and workforce decision-making. Much like functionality provided by other

vendors in the Matrix, the application is predictive. The system’s proprietary intelligent

information engine, however, called SYMAN, is differentiated from other offerings in that it

automatically normalizes data and combines structured and unstructured data to map like

data definitions. Insights works in the background, pushing to users the information that

they most likely need and drawing conclusions for them, in the form of recommendations.

Vendors that provide this functionality spare users the avoidable cost they might

otherwise incur from making decisions based on incomplete information, or on

information lacking valuable context.

As for payroll, the vendor’s calculation engine for it sits in the application. Benefits

information, pertinent life events and terminations, all captured in the core system-of-

record for worker data, pipe into payroll as necessary. Users see payroll inputs as part of

the general ledger. Additionally, the Workday suite maintains security roles and can report

on all data across payroll, HCM, and financials. Those running payroll can see the costs of

all worker types globally, including contingent workers, set up automated audits and,

within the audit, drill into details and modify any payments. As noted in the last Matrix,

Workday wisely provides an array of prepackaged integrations designed to accommodate

interoperability across an enterprise that might comprise more than one vendor’s

applications. This includes global payroll, for which there are pre-built, certified

integrations for ADP, NorthgateArinso, AON Hewitt, and several others. These

integrations are configurable, bi-directional (i.e., they display payroll results within

Workday), auditable, and controllable.

Much of the wrangling among cloud-based Leaders in the Matrix rests on differing

requirements found in their service-level agreements (SLA). Take their fee structures, for

instance, as just one example. Attractive to investors, Workday requires customers to pay

for implementation at the time the SLA is signed. Other vendors instead ask for payment




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only upon successful implementation, or at least upon an up-front, mutually agreed-upon

date for implementation. Nucleus has learned that the more flexible fee model has

factored into competitors’ ability to win deals against Workday. In the event of delays,

however, the latter model also potentially limits cash flow for these vendors – lending

apparent credence to the Workday approach. It is worth noting, too, that Workday

implementation tends to be fast. Shortly after a contract is signed, Workday customers

gain access to the vendor’s Business Process Framework functionality and the capabilities

to begin prototyping with their data, in the live environment.

Workday remains, unequivocally, a Leader in the Matrix. We see the company facing

stiffer competition in the coming years. Additionally, we expect Workday to continue

innovating its analytics capabilities and expanding its stable of industry-tailored suites.

CERIDIAN

Ceridian’s Dayforce HCM is a cloud-based, SaaS-delivered HCM solution comprising core

HR, payroll, HR document management, benefits administration, time and attendance,

talent management, and recruiting. All of Dayforce HCM rests on a single application

running a single data set and just one rules engine, sparing Ceridian the challenges, which

many other vendors in the Matrix have, in integrating separate applications, behind the UI.

Last time, Nucleus expected Ceridian to continue investing in measures designed to help

leaders in their HCM decision making and to broaden the breadth and deepen the

functionality and usability of Dayforce HCM. Since, the vendor has taken several steps in

these directions (Nucleus Research p51 Fortifying its Position, Ceridian Expands from the

Epicenter of HCM, March 2015).

In March 2015, Ceridian announced its acquisition of RelatedMatters, Inc. Through

application of a proprietary methodology that assesses employees’ communication style

and current mood, the solution, TeamRelate, helps improve the relatability of teams.

TeamRelate functionality is accessible via any device, mobile or other, with Internet access.

Team harmonics are among the most important factors that drive organizational success.

We see TeamRelate as indispensable to the Ceridian product.

As is the case with other large players in this market space, many of Ceridian’s customers

remain on legacy technology, which the company calls its heritage products. Ceridian

continues to invest in the upkeep of these solutions and, with MyMove, provides these

users with a clear path to take to the cloud, at their own pace. Revenue related to heritage

products fuels cloud-based innovation at Ceridian.

An updated UI for Dayforce HCM, based in HTML5, is tablet-friendly, and an ever-present

employee card displaying pertinent information is viewable to the user at all times.

Ceridian has focused additional innovation of Dayforce HCM in streamlining workflow, in

reducing the risk of error – which helps immensely in compliance with the ACA and other




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employment law – and in boosting functionality in recruiting, onboarding and

performance management. Highlights include the following:

Scheduling: Within the ESS, employees can request a personal day and reason for it.

The system automatically informs the employee of whether the time is available. Shift

trades are available, too. A built-in optimizer tells administrators whether an

employee’s schedule matches the employee’s preferences. Additionally, the system

enables administrators to specify the amount of time an employee should have off,

between shifts.

Performance Management: Designed for continual performance management, the

system accommodate these and moves away from conventional, annual reviews.

Employees can see their history, including goals they’ve set and their progress in

reaching them. Managers and others permissioned to do so may see this information

for team members. The ecosystem supports social collaboration, enabling employees

and their managers to communicate in real time.

Recruiting: The UI’s home screen gives statistics on open requisitions, how many

people have applied, and their information. Furthermore, the system aggregates a

newly hired employee’s resume into a profile and feeds the information elsewhere, as

needed. Onboarding specialists can see new hires’ progress and forms. This includes

I9 data, which remains separate.

Furthermore, Dayforce HCM provides deep functionality and usability related to

compliance with the ACA. The application automatically tracks look-back periods and

standard measurement periods, etc. – all tasks critical to following this law. Because all the

information pertinent to these calculations resides in a single data set, from the beginning,

Nucleus expects that employers using Dayforce HCM run a better chance of complying

with the ACA than they would by using systems lacking this attribute (Nucleus Research

p37 WFM Vendors and Compliance with the Affordable Care Act, February 2015).

Complementing its strong value proposition for retailers, Ceridian is increasingly targeting

additional vertical markets and sectors, such as grocery, manufacturing, and hospitality.

Ceridian has also begun targeting small- and medium-size businesses (SMBs) employing

100 to 500 in staff. Built on the same code as Dayforce HCM, the related product,

Dayforce Go, is tailored to SMBs and combines pay, time, and HR with or without benefits

administration.

Ceridian has shared an ambitious product roadmap for the next two years. Nucleus

expects the vendor to achieve a good deal of it and, thus, increase further the breadth of

functionality for Dayforce HCM, already a highly usable system. Being a vendor to have

built its current HCM solution not only entirely in the cloud, but also starting with WFM

and core HR on a single application, Ceridian is positioned especially well to provide deep

analytics that connect all of HCM, as well as operations. Nucleus believes this single

application will continue to amplify the vendor’s potential.




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IBM SMARTER WORKFORCE

IBM Smarter Workforce is a collection of applications, much of it constituting the former

Kenexa – acquired by IBM in 2012 (Nucleus Research m104 IBM Purchases Kenexa to

Support a Smarter Workforce, August 2012). The suite comprises sourcing and recruiting,

compensation and rewards, employee engagement, learning, employee assessments,

onboarding, and workforce performance management. Within the system, previously

Kenexa’s components help to automate talent acquisition and front-end HR processes

through talent pooling and sourcing, requisition queuing, forms automation,

communications tracking, employment branding, social media integration, and pre-

screening (Nucleus Research o21 IBM Releases Kenexa Talent Suite, February 2014).

These are largely solutions for talent management, which accounts for the vendor’s

leftward movement this time, within the Leader quadrant; typically, to be a Leader in the

Matrix, a vendor must display much breadth across the entire HCM spectrum. That

notwithstanding, the longer-term, grander vision for IBM Smarter Workforce is a melding

of it with IBM Smarter Commerce, Business Analytics, and Social Business (Nucleus

Research n13 IBM Connect 2013 Defines the Smarter Workforce, February 2013). To those

ends, one of the advantages of IBM Smarter Workforce is the ability users have to

combine these talent management processes with IBM operations management.

Supporting these capabilities to cross-pollinate these two areas of the enterprise are

powerful analytics that provide a bridge between these elements of HCM with operations.

Additionally, as we noted last time, the centralization of non-analytical processes in HCM,

on IBM’s analytics engines, reduces users’ dependence on integrations.

Nucleus expects IBM’s prowess in analytics to continue to differentiate Smarter Workforce

from its competition. IBM has made great strides in developing analytics platforms that

outpace competitors’ offerings. Related, in our latest Analytics Matrix, IBM is the most

functional and most usable among Leaders (Nucleus Research o247 Technology Value

Matrix Second Half 2014, November 2014). Recently, too, the vendor announced Watson

Analytics, a cloud-based service bringing together an improved user interface, predictive

analytics, data optimization, reporting, dashboards, and natural language (Nucleus

Research o220 IBM Announces Watson Analytics, October 2014). Furthermore, as we noted

in our last Matrix, the vendor is building what appears to be a PaaS foundation for the

development and deployment of solutions. BlueMix, for instance, enables users to

develop native-to-the-IBM-infrastructure management and optimization programs, even

as IBM analytics powers these.

SUCCESSFACTORS, AN SAP COMPANY

Residing primarily in a multi-tenant public cloud – with the exception of a single-tenant

scenario for payroll – SuccessFactors, an SAP Company, comprises a wide breadth of HCM.

This is a primary factor placing the vendor firmly in the Leader quadrant.




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Continuing apace are investments in usability, including the solution’s applicability to the

typical HR professional’s workflow. Near-future updates are numerous. Later this year, for

instance, the vendor plans to introduce a new homepage for the UI; a more responsive,

employee role–based profile for employee self-service and manager self-service; and the

next generation of its portal for IT administrators.

Currently, the company has made it a priority to provide functionality specifically for

mobile devices. That effort includes native mobile applications. Notably, too, search-

driven navigation, informed by natural language, now complements menu-based

navigation. Though not yet available in native mobile applications, search-driven

navigation is available on the Web application, regardless of entry point (e.g., via

traditional computer or tablet) and mimics popular online search engines’ behavior – i.e.,

predicting users’ intent with likely suggestions, as they type. Customers can configure the

system to respond to and accommodate search terms that match the colloquialisms and

lexicon of their workplace culture.

In tandem, SAP has implemented an array of changes to JAM, its social media platform to

facilitate business collaboration. One has been to create an array of previously

nonexistent APIs. Many are targeted for HCM-minded developers. Additional evolution of

JAM includes the solution’s growing ability to create repeatable work patterns, thus

assisting with the productivity of employees and managers.

As for analytics, the system pushes only the most relevant information to users, always

striving to sort through Big Data behind the portal. Here, SAP draws on a noteworthy

strength: The vendor placed in the Leader quadrant of our latest Value Matrix for analytics

(Nucleus Research o247 Technology Value Matrix Second Half 2014, December 2014). Data

from SuccessFactors, the rest of SAP, and third-party sources surfaces where business

users and HR need it. This minimizes pressure on IT to produce new reports and analytics.

With the decision to deploy an HCM solution from SAP – or, in some cases, other vendors

of similar heft – comes the ability to inform HCM-related activities with pertinent data

from across the enterprise, through native integrations. For example, users of

SuccessFactors have visibility into Fieldglass, an SAP-owned application for managing a

continent workforce. The capabilities of S/4HANA to process data very quickly from

disparate applications within (and outside) the SAP landscape assist in rendering

information culled from cross-pollinations useful. Notably, S/4HANA does not contain an

HCM system; customers use Employee Central or connect it to an existing HCM system.

To the extent that they wish or must, users of HCM-related, on-premise solutions from

SAP or from other vendors may integrate with SuccessFactors-based cloud applications.

SAP has announced that, for its on-premise HCM offerings, the company will invest only in

upkeep from this point forward. Furthermore, whereas customers of other SAP solutions

for the enterprise, on the premises, will have the option to migrate to a private cloud, for




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HCM, the only cloud option will be SuccessFactors, a public cloud. Integrations are

available between SuccessFactors cloud and SAP’s ERP HCM, which is on-premise, and

more are planned. Nucleus foresees these developments compelling a sizable subset of

the vendor’s vast base of on-premise customers to reach out to SAP for guidance in what

comes next for them. Against the backdrop of analogous moves that other vendors have

made regarding how their on-premise solutions fit into and behave in their product mix,

Nucleus interprets SAP’s strategy as yet another sign that the eventual demise of on-

premise technologies has again accelerated.

In the last HCM Value Matrix, Nucleus expected the vendor – as it continued investing in

the HANA platform – to foray into offering a platform-as-a-service (PaaS). SAP appears to

have since moved further in that direction. In February 2015, the company announced

that it encourages customers in the SuccessFactors public cloud to develop applications

not only tailored to their own needs, but to be available, potentially, to anyone else

operating in it. We see this as a piece of the puzzle, once solved, that could transform

perceptions around the SAP brand. Meanwhile, from a practical standpoint, the new

direction at once improves the vendor’s usability and functionality, fortifying its position in

the Leader quadrant this time.

EXPERTS

Experts in this Matrix include SilkRoad, ADP, and PeopleFluent.

SILKROAD

SilkRoad focuses on mid-market customers, for whom the vendor tailors Life Suite, a

broad array of applications pertaining mostly to talent management: recruiting,

onboarding, performance management, learning management, social collaboration, and

content management. SilkRoad also offers core HR, and as a differentiator targets core HR

automation to the mid-market: Earlier this year, the vendor launched a new HRMS

designed for SMBs (Nucleus Research p26 SilkRoad Announces HRMS Targeted for SMB

Market, February 2015).

As noted, in the previous Matrix, applications offered by SilkRoad suite operate mostly

independent of one other. At the time, we expected SilkRoad to pursue a stronger

integration strategy. Signs of this have since surfaced, notably in the vendor’s decision to

standardize the Life Suite on Microsoft Azure. To additionally counter this characteristic of

the suite’s applications (i.e., to work separately), the vendor has expanded its social

collaboration tool, Point, suite-wide. This has helped to increase employee engagement

and develop best practices for use of the platform. Furthermore, a strengthening of

standard reports and dashboards helps to combat attendant lack of unity in analytics.

Another observation we made, the last time, is that the individual strengths of Life Suite’s

point solutions provide a strong basis for further improvements, and we expected




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SilkRoad to capitalize on this. To that end, the vendor has since released significant new

functionality, some of it through the latest update to Life Suite. Notably, too, SilkRoad this

year launched a cloud-based talent application exchange. Through the Talent App

Exchange, users gain access to additional functionality by way of partners’ applications,

which are pre-integrated into the SilkRoad suite. These partners’ applications cover key

areas such as benefits, time off, content, payroll, compensation and background screening.

ADP

ADP is now several years into targeting the mid-market. When we published the previous

Matrix, we pondered ADP’s ability to influence apparent perceptions among SMBs of its

being a more conventional, traditionalist payroll provider. To this and other ends, the

company has invested heavily in major overhauls to its UX and the design of its UI.

Depending on the product – which the previous Matrix delineates (Nucleus Research o215

Technology Value Matrix Second Half 2014 HCM, October 2014) – ADP runs a different,

often complex set of applications behind its UI. Some of ADP runs on Kronos, branded as

ADP. For instance, for WFM, mid-size companies use ADP Workforce Now Time &

Attendance – which, through a longstanding integration, runs on Kronos Workforce Now.

These circumstances often necessitate a consultative approach designed to help ADP

customers understand how to implement and use the vendor’s solutions. ADP excels at

this (Nucleus Research 014 ADP: A Consultative Approach to HCM, January 2014).

Over the next several months, through much of 2015, ADP will be rolling out several new

UX designs for its various products. These will be significant.

In March of last year, ADP opened an Innovation Lab in New York City. The first fruits of

this effort went live in September 2014, and regular updates are running. Notably, ADP

hired primarily from outside the HCM space in order to staff the design team at its NYC

Innovation Lab. This tactic brought a diverse set of perspectives to the roles. The lead

designer, for instance, comes from MTV. It’s an approach in keeping with ADP’s stated

shift in focus: to become a design-focused firm. Investments fuel an innovation-centric

culture, and all design is consumer-driven. All new UX design updates will eventually

overlay the entire ADP backend, and ADP is able to update the UX regularly without

affecting the back end’s array of APIs.

Visually, the newly designed UIs are aesthetically pleasing and crisp. One highlight is that

it gives users of ADP in the United States an interactive, straightforward way, from any

type of device, to understand their take-home pay. In keeping with related improvements

we’ve seen from other vendors in the Matrix, the new UX will tailor to typical and probable

user behaviors. For instance, there is no menu. Depending on the employee, the

dashboard may look entirely different. Much of the UX is more action-verb focused, too,

and the experience is very much directed. There is little room for the user to wander

astray of apparent or computer-inferred tasks at hand.




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As well, significant enhancements are in store, this year, for analytics. For instance,

analytics benchmarks right now pull natively from ADP data. In the fall, these will begin

pulling from outside sources, too. Additionally, the vendor launched the ADP Marketplace.

Via a secure cloud platform, clients, partners and application developers gain access to the

vendor’s APIs, which enables them to share data across applications and to integrate

complementary or niche solutions (e.g., applications) that meet their needs.

Nucleus expects the overall effect of these enhancements and improvements to help ADP

affect perceptions around its brand – i.e., that of being a traditional provider of mainly

payroll solutions. In the meantime, work remains to be completed in corralling data from

ADP’s many applications to unify all the functionality and align these processes with the

newly unified UI. It’s a challenge that ADP shares, to various degrees, with a number of

other vendors in this market space, shown in the Matrix. Notably, the spring 2015 release

of ADP Vantage HCM includes real-time integration with talent modules.

PEOPLEFLUENT

PeopleFluent is another vendor focused largely on talent management. The suite,

MIRROR, comprises an array of applications. Many of these are native to vendors that

PeopleFluent, once Peopleclick Authoria, has acquired over the past half-decade. The

vendor possesses wide breadth within the scope of talent management, among the widest

in the Matrix, yet manages to cover compliance and a few other elements of HCM, too.

As we noted, last time, MIRROR is a collection of independent applications sharing a

common, single sign-on UI and the challenges common to integrated solutions. Last time,

we noted our expectation that the vendor would take measures to combat these

drawbacks by aggregating its modules’ disparate data sets into a common store – in the

cloud, to amplify their ability to inform decision making. Notwithstanding limitations

found in the interfacing of independent applications, data does flow from application to

application relatively freely, aiding visibility across most of talent management, to the

benefit of managers. Employers fare best when they combine MIRROR – all or some of it –

with other vendors’ solutions for core HR and additional aspects of HCM.

In the past several months, PeopleFluent has infused MIRROR with new functionality and

improved usability. For example, an enhancement to leadership development capabilities,

within the system, is underpinned application-wide with means for social collaboration.

Additionally, recruiting benefits from application-specific improvements to the UI, as well

as onboarding-specific social collaboration. Furthermore, recruiters and anyone else

involved in talent acquisition may now vet candidates with video-based questionnaires

and embed video-based job descriptions wherever conventional ones exist.

In the previous Matrix, Nucleus expected PeopleFluent to add functionality improving

MIRROR’s reporting statistics on workforce behavior. Toward these ends, PeopleFluent




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released a pay-for-performance module, pulling together analytics with video and social

collaboration, juxtaposing and combining these functionalities with additional MIRROR

capabilities in compensation, performance management and succession planning.

Nucleus expects more improvements in functionality and usability over the coming year.

Additionally, PeopleFluent will be part of the Talent Management Value Matrix, scheduled

to be published this September.

CORE PROVIDER

Core Providers in this Matrix include FinancialForce HCM, HrSoft, and Saba.

FINANCIALFORCE HCM

A viable option for users new to the need for HCM, FinancialForce HCM is an easily

deployable solution that covers most of the functionality traditionally associated with a

full-service HCM suite. To provide a measurable level of effectiveness for organizations

employing them, the components require little in the way of user training. These

components include, for instance, global HR, benefits, leave and absence management,

talent and performance management, succession planning, workforce collaboration,

reporting, and social feedback. The most notable exception is a key element of payroll

processing. For payroll, users must use a feature called Payroll Connect in order to feed in

payroll-related data from the provider they use. Among the payroll vendors compatible

with FinancialForce HCM are ADP, Paylocity, and several others. Each pay period, for

gross-to-net calculations, the FinancialForce HCM–compatible payroll provider receives a

one-time sending of information from FinancialForce HCM–produced time and

attendance. All benefits administration, as well as everything else that touches payroll, is

handled within the FinancialForce HCM suite.

All of FinancialForce HCM is written natively on the Salesforce1 platform. On account of

this, Chatter, the Salesforce.com-based social collaboration tool, embeds into the entire

FinancialForce HCM suite; it becomes the social feedback–related element. This sets

FinancialForce HCM apart, as a number of vendors in the Matrix provide non-native,

outsourced social collaboration functionality (via Yammer, for instance). Though

Salesforce1 is a selling point, FinancialForce HCM is fully deployable outside of that

platform, too, making the suite attractive to employers that do not have Salesforce.com or

wish not to use it as the basis of their HCM.

Developers built FinancialForce HCM from an intuitive place, beginning with core HR.

They then moved to time and attendance before creating a front end for applicant

tracking and recruiting. Later, they added functionality such as performance and goals.

Lastly, drawing on Chatter, all social aspects were overlaid. Notably, a performance

feedback feature works within Chatter. Managers pull in all related data at the time of an

annual performance review. The system can lend itself to emerging approaches to




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performance management, too, which reject yearly assessments in favor of promoting

year-round, continual performance-related feedback.

At the time of this Matrix’s publishing, version 15 of FinancialForce HCM had just been

released. Included in version 15 is a toolkit designed to help employers manage their

workforce vis-à-vis the ACA. It’s a development influencing the movement of

FinancialForce HCM’s placement along the functionality and usability axes this time.

Nucleus sees ACA functionality as a major factor on any vendor’s utility (Nucleus Research

p37 WFM Vendors and Compliance with the Affordable Care Act, February 2015). An

additional influence on that movement, in the future, would be any decision by the vendor

to bring payroll entirely in-house.

Reiterating our opinion, stated in the previous Matrix, we believe that FinancialForce HCM

has great potential for movement in future Matrices. Key to our reasoning is the vendor’s

capacity, at some point, to provide a complete suite for operational management. For

reasons similar to those we shared in recent research (Nucleus Research p54 New

Partnerships Add New Hues to Competitive Landscape in HCM, March 2015), we also see

FinancialForce HCM, given its sister suite, FinancialForce ERP, as posing serious potential

competition, in the future, to SAP, Oracle, Infor, and other players that provide wide

breadth of functionality across the enterprise.

HRSOFT

A solution largely for talent management, HrSoft includes applicant tracking,

compensation management, and performance management. An additional module

enables users to manage incentives, base pay, recognition, medical and insurance benefits,

retirement plans, work-life programs, training, continued education, and other

employment-related programs via self-service. A content management system (CMS)

helps in centralizing HR resources, also via self-service. Another module helps hiring

managers and recruiters develop metrics, during the interview process, designed to

identify candidates likely to stay longest, once hired.

Notably, as is the trend among vendors in the HCM market space, the applications found

in HrSoft are designed for any role of end-user within the customer’s organization – i.e.,

not just the HR practitioner. All modules are in the cloud. For users, automated

provisions, within the system, make it a straightforward process to change configurations.

A wizard-style approach guides users. Alternatively, customers may elect to have HrSoft

administrators do the work.

As mentioned, in our last Matrix, the HrSoft CMS supports social collaboration and, in

much the same way that SilkRoad uses the Point module, HrSoft’s approach fosters

interaction among employees for the purposes of unearthing best practices, administering

benefits management and wellness programs, and developing strategies for retention. In

the previous Matrix, we also shared our intuitive expectation that HrSoft would continue to




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invest in its hiring analytics. Moving forward, Nucleus sees HrSoft and other vendors

currently on this Matrix best fitting on the to-be-published Talent Management Value

Matrix, in September.

SABA

Saba began in learning content management for new-hire training and onboarding.

Expanding into the cloud, the vendor now offers Saba Cloud, which comprises an array of

capabilities supporting talent management, as well as automated processes for core HR.

Learning is part and parcel of every module across Saba’s suite. Additionally, analytics

alert users to attrition risks and unearth impacts of changes to the labor environment.

Algorithms gauge employees’ career goals to give them automatically determined,

personalized development paths. For this, HR need not intervene manually.

Since we published the last Matrix, Saba has released two updates to Saba Cloud, each

adding more functionality to the system. Notable among these is, for instance, an

extended ability of Saba Cloud analytics to help organizations retain top talent. Also new

to Saba Cloud is Compensation@Work, which draws on predictive analytics to help

employers sort through the complexities of salaries and incentive-based pay. Additionally,

improvements to Saba Cloud have deepened capabilities in facilitating employee growth

and assessment, make goal management more continual, and give hiring managers better

visibility into qualified internal candidates. Additionally, across much of the suite,

managers now have an ability to exercise more control via mobile devices.

Earlier this year, Saba announced that it had agreed to be acquired by Vector Capital.

Nucleus expects an attendant infusion of cash flow will enable Saba to fortify its offerings

and continue to expand upon its cloud-based solutions for talent management. Given the

vendor’s large focus on that area of HCM (along with learning), Saba is a good candidate

for the Talent Management Value Matrix, scheduled to be published later this year.

FACILITATORS

Facilitators in this Matrix include Lumesse, Kronos, Halogen, and SumTotal Systems.

LUMESSE

A provider of solutions for talent management and learning, Lumesse is another prime

candidate for the Value Matrix for talent management technology, in September. Notably,

the vendor also provides a solution for core HR. Able to integrate with other HCM

solutions, applications in the Lumesse suite eliminate redundancies that otherwise plague

core HR and talent management. This streamlines employee performance and document

management. Also streamlined is the UI, which smoothly toggles between various

modules. The number of dashboards is small, as are disparate workflows, relative to the

data users need to access. Lumesse delivers compliance-based talent management, too,

which benefits from the integration with core HR.




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In the time that has elapsed since Nucleus previously published the HCM Value Matrix,

Lumesse announced that TalentObjects, the Lumesse talent management suite, would join

Salesforce.com’s analytics cloud system. The news accounts for Lumesse’s movement, this

time, within the Facilitator quadrant of the matrix – and squares with our prediction, last

time, that Lumesse would continue to “push the boundaries of talent management.” It’s a

development that marks a boon, too, for users of TalentObjects as they endeavor to

improve the effectiveness of their workforce planning. Wave, the Salesforce Analytics

Cloud, is a sharp departure from the previous, limited analytics capabilities that Salesforce

had to offer (Nucleus Research p21 Four Ways Salesforce Wave Is Different, February 2015):

The fundamental make-up of its data structure is optimized for scalability. To a significant

degree, the system’s user interface accommodates smartphones and tablets. Furthermore,

users can interact easily – sharing findings, for instance – and analyze data collaboratively.

Lastly, the APIs of Wave connect to third-party data sources, likely a factor facilitating its

integration with TalentObjects – and with countless other vendors’ products, across myriad

industries.

KRONOS

As the vendor continues to invest in the functionality of its solutions, Kronos remains a

Facilitator. Since the publishing of our last Matrix for this market space, Kronos has

released key improvements and expansions of its solutions’ breadth. A cumulative effect

has fueled rightward movement for Kronos along the horizontal axis.

For enterprise customers, the Kronos solution is Workforce Central. For small to mid-sized

businesses (SMBs), the product is Workforce Ready. Workforce Ready is a cloud

application suite, whereas Workforce Central resides in a hosted environment. Workforce

Central is time and attendance, absence management, scheduling, analytics, activities, core

HR, payroll, talent acquisition, and project tracking. Workforce Ready is time and

attendance, absence management, core HR, payroll, compensation management, and

talent acquisition. Both Workforce Ready and Workforce Central are available via an array

of mobile devices, including tablets. Travel and expense functionality is available via a

marketplace partner to Kronos.

ACA tools have been a part of the Workforce Ready and Workforce Central since late 2013.

Earlier this year, Kronos announced enhanced functionality for tools, found in Workforce

Ready, covering talent acquisition and hiring, as well as compensation management’s

linkage with performance management. These and other improvements are part of a

recent push that Kronos has taken to expand the usable functionality of Workforce Ready

beyond core HR and WFM. These developments include, as well, a new UI more

responsive than its predecessor (which was rigid, we noted last time). In Workforce

Central, social collaboration now integrates with WFM, and, in Workforce Central and

Workforce Ready, talent acquisition–related capabilities are now accessible via mobile

devices.




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Another new innovation within the Kronos suites is the concept of gamifying managers’

and other employees’ compliance with policies pertaining to time and attendance.

Additionally, an enhanced solution to track production labor is available for the

manufacturing sector. For organizations that need it, professional project tracking is now

available. A related solution tailored for the public sector comprises not only project

tracking, but grant tracking, as well.

Some of Kronos’ solutions appear to be available solely via a single-tenant, hosted

solution. This would likely be a private cloud, or managed service – in other words, not a

public cloud. At the same time, the vendor claims to have 14,000 customers in the cloud,

with most on a multi-tenant solution. Nucleus believes Kronos is, therefore, a mixed cloud

vendor. We expect Kronos to continue to expand its suites’ functionality. Investments in

usability are evident, too, and will likely continue.

HALOGEN SOFTWARE

Halogen Software provides a talent management suite, TalentSpace, whose modules are

also deployable separately, as point solutions. Halogen’s position within the Facilitator

quadrant has moved favorably for usability and for functionality.

In the last HCM Value Matrix, we noted that Halogen Software had plans to deepen its

capabilities in e-learning. Though we still expect the company to do so, the vendor has

yet to announce anything pertinent to e-learning, since the last Matrix’s date of

publishing. Meanwhile, improvements to the UI are in store over the next several months.

This past year, the company has made several notable geographic expansions, too. Key

executive hires and team pick-ups have been attendant to that – including one team

previously affiliated with Taleo. Additionally, in Q4 of last year the vendor expanded the

applicability of its offerings by announcing a partnership to resell the behavior-based

competency library and leadership development content of Development Dimensions

International, which helps users to attract, assess, retain and develop leaders throughout

their organizations.

TalentSpace provides functionality in hiring to succession planning. Configurable by

customers, nine modules are implementable as a suite or as point solutions. The vendor’s

approach to support is consultative. Online, support is available via forums and directly

delivered advice, from Halogen. To assist managers and employees in understanding how

to increase their engagement, Halogen integrates the Myers-Briggs personality

assessment with performance management. This activity also leaves the user with

standard guidance for communications.

Performance management in TalentSpace draws on 360 reviews and multi-rater feedback.

A plug-in will pump this information into Microsoft Outlook, used widely by organizations.

Managers can track, based on history – which the system captures – whether interventions




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have a chance of succeeding. A dedicated portal delivers performance reporting data.

Multiple data views link to key performance indicators against the backdrop of additional

operational data, which can be correlated as desired. For performance evaluations, a 1:1

Exchange Module tracks conversations between managers and employees. For contextual

reviews, TalentSpace feeds social feedback into the process.

Through HRIS Connect, TalentSpace can integrate, yes, with HR systems for payroll and

benefits. Beyond a measure of mid-market-targeted core HR and WFM functionality

native to Halogen, however, the vendor has no plans to move outside talent management.

Along with a few others shown in this report’s quadrants, Halogen Software will migrate,

therefore, to a Talent Management Value Matrix to be published in September of this year.

We expect Halogen to place as a Leader there.

SUMTOTAL SYSTEMS

Approximately a week ahead of the previous HCM Value Matrix’s publishing, Skillsoft had

just completed its acquisition of SumTotal Systems. The news solidified and further

legitimized SumTotal’s future direction in learning-related innovation. Learning is a major

component of HCM, of course, and any vendor that aspires to enter the Leader quadrant

of the Nucleus Value Matrix must display breadth in its offering. This is chief among the

reasons that SumTotal, a Facilitator, moves closer to the Leader quadrant this time.

Through SumTotal Work, the vendor provides salient, enterprise-class functionality in core

HR and WFM. Under the auspices of TalentExpansion, an array of talent management and

learning functionalities operate within this ecosystem, too. SumTotal elixHR pulls together

and processes data from across HCM to produce actionable information. It’s a type of in-

memory data-crunching capability that we’re seeing elsewhere, in this market space and

among providers of technologies for other aspects of the enterprise.

Enhancements in capabilities around employee engagement, retention, and succession

planning constitute another reason for SumTotal’s movement. Since the previous Value

Matrix went live, SumTotal has rolled out these new capabilities to its TalentExpansion

suite. Among the improvements are the system’s ability to push contextual, personalized

HCM processes to other business systems within the organization. For instance, a

Salesforce.com application can now receive information from, and coordinate with, the

learning management system. Because of this, the learning system might now prompt a

salesperson to participate in training pertinent to an upcoming sales meeting. That

prompt can find its way to the salesperson via Salesforce.com. The employee would then

have the ability, within the UX for Salesforce, to schedule said training.

Through a partnership with iCIMS, best-of-breed provider of recruiting and pre-hire

onboarding functionality, SumTotal has complemented the dynamics of TalentExpansion

significantly (Nucleus Research p54 - New Partnerships Add New Hues to Competitive

Landscape in HCM, March 2015). The partnership, announced in late March, establishes a




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standing integration that pipes recruiting and pre-hire onboarding data from iCIMS

straight into TalentExpansion. SumTotal now provides a clear line of sight from the point

of candidacy, through the pre-hire onboarding process, and well into the post-hire

employee lifecycle. Holistically, the combined approach outpaces vendors whose

solutions comprise less of the employee lifecycle for talent management. We see breadth

of capabilities within talent management as a competitive advantage for vendors.

Additionally within the SumTotal ecosystem, management can now better allocate human

capital: Real-time what-if analyses and the workforce models they produce give leaders

an improved understanding of how proposed changes might affect the organization. To

help leaders understand the implications of change, the addition of Talent Book and

enhancements to the talent assessment process enable these what-if analyses and real-

time workforce modeling.

SumTotal is close to becoming a Leader in the Matrix. We expect the vendor to continue

in expanding the breadth of its offerings, which will help it in potentially crossing that

threshold, exiting the Facilitator quadrant. In the meantime, readers may additionally

expect to see SumTotal in our inaugural Talent Management Value Matrix, this September.


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