Oracle Demonstrates Innovation in Human Capital Management

The 2013 Oracle OpenWorld in San Francisco was unique in several ways. Against the background of the America’s Cup yacht races on the bay, which Team Oracle won in an amazing comeback, this was the first year in which OpenWorld dedicated a separate track to the full aspects of human capital management (HCM). This emphasis helped to demonstrate Oracle’s increased commitment to HCM. That and several important innovations in the company’s Oracle HCM Cloud product suite led us to select Oracle as winner of this year’s Ventana Research Technology Innovation Award for HCM. (For some background, see my colleague Mark Smith’s assessment of Oracle at its analyst day last spring.)

The overall theme of OpenWorld is that Oracle addresses business issues and opportunity, and this was evident in the HCM track. In their keynotes for the track, Chris Leone, senior vice president of applications development, and Gretchen Alarcon, vice president of product strategy, covered the strategy, the current state of the Oracle HCM products and the future roadmap. Their presentations showed that Oracle has a strong commitment to and understanding of the HCM market and the current trends within it. The picture they drew was of Oracle as a market leader with a great deal of resources available to compete effectively both to gain new customers and to help existing PeopleSoft customers advance and migrate to Oracle Human Capital Management Cloud.

In the presentations, the Oracle HCM team showed how these products can meet the needs of organizations looking for standard core HR applications as well as those that have next-generation HCM technology requirements. Oracle has learned from its competition and centered its HCM message around cloud computing, specifically in terms of the capabilities of the Oracle Human Capital Management Cloud. Speakers differentiated its HCM Cloud by offering more flexibility than some competitors, allowing customers to stay one release behind if they wish. From HCM Cloud, the presenters branched out to three areas where the company is focusing development: mobile access, social collaboration, and big data and analytics (counted as one). All of these are top technology trends explored in our business technology innovation benchmark research and first ranked priorities with Analytics being the highest in 39 percent of organizations.

In the area of mobility Oracle’s major enhancement is improvements to Oracle Tap that appeared in release 7 of HCM; this native mobile application for Apple and Android smartphones and tablets is generally available now and provides an intuitive, feature-rich mobile experience for managers and executives.  Oracle Tap integrates talent management information, such as employee profiles, goal attainment and key performance indicators, with Oracle Taleo Recruiting Cloud Service in one mobile application. It also includes an intuitive org chart called a “spinner” that uses a set of concentric circles to show any person in the organization and their relationships to others in the organization. Beyond Oracle Tap, Oracle’s presentations and demos emphasized mobility, insisting that this is an important component of the products.

On the social collaboration front Oracle demonstrated how it is embedded in current Oracle Human Capital Management Cloud applications. To provide collaboration and social media capabilities within the HCM suite, Oracle begins with the established Oracle Social Cloud infrastructure, which provides standard services that each of Oracle’s HCM applications can use. To that end, several of the presentations showed HCM applications with embedded discussion threads. Two major releases in social media were announced at the show. First, the next release of Oracle Taleo Social Sourcing Cloud Service is integrated into the Oracle Taleo Recruiting Cloud Service product and enables recruiters to use social media channels and social networks of fellow employees to market open positions. This functionality is important because it moves Oracle from offering only applicant tracking toward recruitment marketing, a direction that I see as increasingly important. Social sourcing products such as these help companies identify new talent pools, one of the top factors driving use of social media in companies according to our benchmark research on social collaboration and human capital management. Even so, I think that Oracle needs to do more in recruitment marketing; there are compelling new technologies on the market that help improve candidate flow and market more effectively to internal networks. I look for further progress here.

The other major step in social media for Oracle is the announcement of Workforce Reputation Management. This new product will provide a way to track key social metrics about employees such as influence, clout or influence and to provide behavioral incentives via gamification to improve online reputations, which my colleague Robert Kugel provided some perspective on. On the whole, I think Oracle has a good approach in both collaboration and social media. Using Oracle Social Cloud to socially enable the HCM applications provides uniformity in the user experience and will help people better connect the social information.

For big data Oracle announced two upcoming products that will help differentiate it in the market. One, part of the Workforce Schedule product, is a predictive modeling tool that can map future performance and chances of attrition based on a model that uses approximately 120 elements. This tool also includes what-if capabilities and scenario management based on Oracle’s core strength in analytics and big data; it should be useful for HR leaders. In addition, Oracle has taken the large set of Oracle Taleo recruiting data (which Oracle claims encompasses 15 percent of all U.S. hires in 2013) and created a recruitment benchmarking tool, Big Data Benchmark Modeling. Oracle’s differentiator here is that this is not survey data but actual statistics cut from its data, giving it a more factual basis. Recruitment and HR managers can use it to see how well their recruiting programs are doing relative to industry KPIs. These tools are similar to some of the big data tools I have written about. Oracle is one of the few vendors that understand and sell core big data applications and hardware and is in position to take advantage of that for HCM. I should note that the recruitment tool is more of a benchmarking tool than a strict big data tool.

It is clear from the general sessions in the HCM track that Oracle has made strong investments in its products, and improving its value to its customers. While I don’t see this as a mission accomplished on the HCM products, it is important progress. Competitors like SAP have strong products in cloud-based HCM, have socially enabled many of their products, and have intuitive embedded analytics; in addition many best-of-breed solution vendors have innovative products in their own areas, so Oracle needs to continue to stay on the path of innovation. It is equally important to be able to implement and support those products for customers consistently and as promised.

A couple of Oracle HCM customers at OpenWorld told me that Oracle is making strong efforts to ensure successful implementations of the Oracle Human Capital Management Cloud products. One of the same customers also said that it learned important lessons during the implementation, specifically that it is important when using a deployment partner to make sure that the Oracle account team pairs you with a knowledgeable implementer. Oracle HCM Cloud is a relatively new technology, and apparently not all partners as yet have the expertise required to ensure the implementations happen on schedule and meet customer requirements.

Oracle’s investment in cloud-based human capital management has been impressive thus far, with technology solutions in the core HR areas, payroll and talent management; workforce management is scheduled with release 8, coming in the first quarter of 2014. Investments in new technologies such as big data, social collaboration and mobility will help its products appeal to more customers than its conventional ERP human resources applications would have. If you have not looked at the Oracle HCM Cloud applications, which are available on-premises or in cloud computing, they are worth considering in your organization’s evaluation process.

Regards,

Ventana Research