Analyst Perspectives

Human capital is most organizations’ largest investment and one of their largest differentiators against the competition. So it follows that those that take advantage of the compelling, game-changing technology now available in human capital management (HCM) will place themselves at a competitive advantage.

HCM has for the past several years been integrating and continues to integrate under one roof what have been different processes and technologies. In addition, HCM product developers have now incorporated several powerful technologies from other areas to improve the analytic power and usability of HCM tools for all users – technologies such as mobile access to systems, social collaboration platforms for learning, recruiting, performance and other parts of HCM, and powerful analytics and big data capabilities to help managers and executives make better human capital investment decisions. I believe 2013 will be the year in which we reach a tipping point for some of what are now being viewed as “next generation” technologies – the year in which they are shown to deliver compelling returns on investment to organizations and so will increasingly be adopted and will enter the mainstream.

I’ve designed my 2013 research agenda to explore the most significant HCM-related business and technology innovations and issues facing organizations. It will enable HR professionals, managers and executives to understand how to address problems facing their business so they can be maximally competitive while helping them to find best practices to apply to the practical core-HR issues that most every business faces. This human capital management practice will cover three main areas in 2013:

We will look from several different angles at how mobile and social collaboration technologies will transform the workforce. How, for example, are social collaboration technologies being used and how can they be used to engage managers and workers more effectively across the organization? Ventana Research will examine how the relationship between learning and the use of social collaboration can lead to greater business effectiveness. In 2013 we will conduct benchmark research focused on social learning and performance to explore how organizations have been using these technologies effectively and what kinds of challenges they have faced. Drawing on the 2012 benchmark research on social collaboration and HCM, we also will look at the emerging impacts of social collaboration and media technologies on the important human capital process of recruit-to-perform.

In addition, as we found in our 2012 next-generation workforce management benchmark research, many organizations are either planning to or already deploying tablets (44%) and smartphones (71%) across their organization to increase access to workforce management technologies. This year we will expand on this research, in our next generation HR technologies benchmark research looking further at how both early adopters and mainstream organizations are starting to use smartphones and tablet-enabled applications to make HCM more accessible and effective.

The second focus area for 2013 will be researching how managers and workers can improve many of their current human resources activities through changes in process, technology and better access to information. Over the past decade we have seen many advances in process automation in the workplace and in human resources. Some have resulted in a streamlining of business and some have not. Recent technologies such as social media, predictive analytics, big data, mobile platforms and workforce management hold promise to greatly improve the way workers and managers can manage an organizations human capital.

Social media, for example, will be one key technology that will have impact across the spectrum of HCM. In 2013 we will investigate further how social media can improve recruiting by optimizing marketing and candidate-related hiring tasks. We also see workforce management as being key to HCM success. In 2012 Ventana Research laid the groundwork with our benchmark research on next-generation workforce management, which investigated how organizations are responding to their changing workforce management needs. In the coming year we also will introduce a value index to evaluate these next-generation workforce management software offerings.

Another process innovation we will be researching in 2013 is task and activity tracking across several aspects of human capital management. Task and activity tracking has been offered for several years in workforce management applications, with activity tracking tied into scheduling and time and attendance applications. Now, however, it has evolved to have a presence in social performance management software products to make it possible for employees and managers track individual goals more effectively, and we will cover it as part of our social learning and performance benchmark research.

Another important development in human capital management is the recent introduction of predictive analytics and big data. These technologies have applicability across HCM applications and many vendors have started to introduce products that bring the power of this technology to different parts of human capital management, from analytics that address one point need to full workforce planning systems. In 2013 Ventana Research will be launching both new benchmark research and a Value Index for Human Capital Analytics to assess best practices and organization adoption patterns as well as the utility and maturity of the market offerings. Our most recent assessment of workforce analytics found that organizations face significant challenges in the efficient use of technology and the optimization of workforce processes. Also relevant in this area is the finding in our research on social media and recruiting that workforce metrics can be used to justify new investments; indeed, quality of hire is the most important recruiting metric in 79 percent of organizations.

The third main area we will address in 2013 is the issue of change management in HCM processes and technology. After all, the pace of change in human resources has accelerated in recent years and I predict this increase will continue in 2013. Many, if not most, orga­ni­za­tions are working to simplify and streamline their processes and use to their advantage the most promising technologies. For many this happens first in their core people processes, usually through unifying their talent management and core HR processes. In addition, as compensation is the single largest controllable expense in most organizations, streamlining the efficiency and effectiveness of payroll and compensation processes is often an important change management effort in HCM. Our total compensation management benchmark research found that improvements are still needed to increase the efficiency of analytics in compen­sation and our 2012 Value Index in Total Compensation Man­age­ment identified a short list of vendors that are capable of meeting organizations’ needs. This year we will conduct benchmark research looking at payroll optimization to understand how payroll systems are evolving to become a more strategic part of HCM by being integra­ted into compensation and other key areas.

One of the most powerful and transformative technology trends, and one where HCM has been a leader, is cloud computing. Cloud computing has dramatically changed the economics of businesses and has also had a strong impact on change management across organizations by improving the time-to-value of HCM and transforming the way software solutions are implemented and supported. This technology change has made perhaps its strongest impact on the relationship with Finance and the CFO, improving the way organizations use their capital to invest in HCM solutions and ultimately improving their ROI. We will explore the transformative value and the economics of cloud-based HCM in our benchmark research on next-generation HR technologies.

The pace of innovation looks to continue 2013 for human capital management. In my view, those organizations that embrace this pattern of change and do a reasoned but determined job of evaluating and implementing the most promising technologies will be able to lead in improving worker effectiveness. Taking the steps to unify your HCM applications, using the economics of cloud computing and applying enabling technologies like mobile platforms to increase reach and access of applications potentially will deliver to the businesses that invest in them a long-term competitive advantage over those that choose to stay with dated technologies and processes.

Come read and download the full research agenda.

Regards,

Stephan Millard – VP & Research Director