maximize your talent with oracle hcm’s unified … your talent with oracle hcm’s ... evaluate...

Maximize Your Talent with Oracle HCM’s Unified Solution:

A Brief History, Analysis, and Overview of Your Options

By Alexia MartinDirector, Research and Analytics

SponSored by oracle

© Copyright 2010 CedarCrestone, Inc.

Table of Contents

Part 1: A Look Back and Defining the Unified Talent Model ......................................................1 A Look Back at ERP-based Human Capital Management (HCM) as a Talent Management

Solution Source ..................................................................................................................1 What Does a Unified and Integrated HCM Solution Look Like? ............................................2 One Single Profile and Competency Management ..........................................................4 Analytics ........................................................................................................................4 Social Media Provides Collaborative Work Solutions ......................................................5 Integration ....................................................................................................................5Part 2: ERP-based HCM and Talent Evolution – Innovation and New Strategies .......................6 Innovation Creates Value ....................................................................................................7 Workforce Productivity ..................................................................................................7 Employee Engagement ..................................................................................................7 Leadership Development ................................................................................................8 New Strategies Create Value ..............................................................................................9 Vendor Consolidation .....................................................................................................9 IT Complexity Drives up Costs and Lowers Productivity .................................................9 Risk Mitigation/Vendor Viability .................................................................................... 11Part 3: Exploring Your Choices for Talent Management .......................................................... 11 Continue Upgrade Path with Existing PeopleSoft and E-Business Suite Investments .... 12 Evaluate Fusion Talent Management ............................................................................ 17 BPO and Hosting ......................................................................................................... 18 Evaluate SaaS Talent Management Niche Solutions Carefully ...................................... 19The Choice is Yours ...............................................................................................................20

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Part 1: A Look Back and Defining the Unified Talent Model

A Look Back at ERP-based Human Capital Management (HCM) as a Talent Management Solution Source1

The Human Resource Information System (HRIS), also known as a Human Resource Management System (HRMS), became prevalent in the 1980s with the popularity of Enterprise Resource Management (ERP) applica-tions and the move from mainframe systems to client server technology.2 The first truly innovative HR manage-ment system (HRMS) vendor, PeopleSoft introduced the first graphical user interface (versus the old “green screens”) on client server in 1987. By the mid-nineties, PeopleSoft was the market leader in HRMS systems and introduced PeopleSoft HRMS 8.0 using Pure Internet Architecture in 2000. Oracle’s E-Business Suite HRMS offering was starting to come into its own as a part of the overall Oracle E-Business Suite offering by 2000 as well.

In terms of talent management, by the mid-nineties countless small vendors had Internet-based applications for single functionality such as recruiting or learning. Oracle with its E-Business Suite and PeopleSoft with its HCM and “e-Applications” both began offering talent management functionality as part of their respective HRMS self service offerings starting in the early 2000s. For Oracle E-Business Suite, this ultimately included recruitment, performance management, compensation management, succession planning, and competency management. Oracle also had a learning management solution considered a “challenger” by Gartner, but not a leading prod-uct.3 PeopleSoft offered eRecruit, eCompensation, ePerformance as part of the HCM system, and a learning management solution on a separate database. But few of these modules were top rated compared to what was available from smaller vendors. For example, in 2005 Gartner4 gave the PeopleSoft ePerformance a “positive” rating but not the “strong positive” given to niche vendor solutions at the time.

The talent management applications from Oracle E-Business Suite and Oracle PeopleSoft Enterprise—along with SAP HCM—had 23% of the talent management market, at least in terms of respondents to the CedarCres-tone annual HR survey in 2008,5 behind a number of “best of breed” vendors which were still mostly single-func-tion talent management application providers. These included SuccessFactors (strong initially in performance management), Taleo (strong initially in recruiting), Saba (strong initially in learning management), Workscape (strong with its compensation management functionality), and a host of others offered exciting functionality with enticing user experience, a hallmark of best-of-breed vendors.

1 With thanks for support in historical time-lining to Naomi Bloom, independent analyst, Managing Partner at Bloom & Wallace and Bill Kutik, independent industry analyst, columnist, co-chair HR Technology Conference, host of the The Bill Kutik Radio Show ® along with contacts at all vendors mentioned in this section.

2 Human Resources Software History and Evolution, http://www.erp.asia/hr-evolution.asp3 Gartner, Magic Quadrant for Learning Management Systems, 2005; http://www.gartner.com/DisplayDocument?doc_cd=1318224 Gartner, Magic Quadrant for Employee Performance Management Software, 2005; http://www.pdftop.com/ebook/

magic+quadrant/5 �CedarCrestone�2008–2009�HR�Systems�Survey:�HR�Technologies,�Deployment�Approaches,�Value�and�Metrics�11th�Annual�Edition

(http://www.cedarcrestone.com/research). Note in the latest CedarCrestone HR Systems Survey report, the percentage with an ERP-based talent management solution has increased to 27%.

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In order to capture more market share, many of these talent management vendors began to offer their solutions as a Software as a Service (SaaS), which tended to cost less than licensed, on-premise solutions, the dominant model prior to 2005. SaaS-based solutions came into the HRMS market in the mid-2000s, with Ultimate being the first publicly traded organization to come out on SaaS in 2002 with a HRMS solution. Meta4, with its sophisti-cated architecture that supports global workforces, garnered non-US-based market share. Workday, led by CEO Dave Duffield—also a prior PeopleSoft CEO—shipped its first HRMS product in 2006. Altogether, good talent functionality plus lower-cost deployment models contributed to a rise in market share for these niche-talent vendors.

For the past five years, talent management vendors have continued to innovate on multiple fronts, from additional functionality, improved graphical user interfaces, integration of multiple talent management functions, and the addition of social networking functionality. But today, the ERP-based HCM vendors are catching up with and, in some cases, passing talent management functionality available from the niche or integrated talent management suite vendors. Further, the past two years of economic decline have forced organizations to review the costs of their HR application portfolio. Their tally of costs for the ERP core record keeping and talent management sides has been eye opening and, in 2009 specifically, many large organizations began to consolidate vendors as part of a move to best practice and to reduce costs.6 Additionally, the market has begun to understand the need for integrated talent management—integrated not just within the talent management applications, but more broadly. Specifically, the market is beginning to understand that talent management functionality must be unified and integrated to the HRMS, business intelligence (BI) infrastructure, other technologies such as security and social media/collaboration solutions, and to other ERP applications such as financials and supply chain. This then is the genesis of a unified and integrated HCM solution. CedarCrestone has done numerous ROI and business case projects over the past 10 years and consistently documents the lower total cost of ownership of these unified, integrated solutions.7

A�leading�US�insurer—forecasting�the�cost�to�integrate�from�a�niche�compensation�management�solution�at�over�$1�million�plus�development—chose�to�upgrade�to�9.1�and�implement�the�People-Soft-based�compensation�solution.�The�projected�costs�of�integration�far�outweighed�the�cost�of�an�upgrade!�The�release�of�9.1�and�the�available�talent�management�enhancements�allowed�the�organization�to�easily�change�its�direction�and�return�to�an�integrated�HCM�and�talent�manage-ment�solution�based�on�PeopleSoft.

What Does a Unified and Integrated HCM Solution Look Like?CedarCrestone, in its annual HR Systems Survey white paper, has used an HCM Application Blueprint to explain the breadth of functionality within an HCM solution. In our latest report,8 we introduce the Unified and Integrated HCM Application Blueprint which encapsulates HCM functionality, including core administrative, service de-livery, workforce management, talent management, and business intelligence/workforce optimization applica-tions within an ecosystem that provides further data sources and functionality. What is important about all these categories and applications is that in�order�to�use�technology�to�truly�optimize�the�workforce�contribution�to�the��

6 The Hackett Group: Maximize the IT Organization’s Effectiveness by Reducing Complexity in the Application Portfolio; http://www.thehackettgroup.com/hpn/metrics/MMIT0410.pdf

7 CedarCrestone ROI Studies (2000–2010). Contact author.8 CedarCrestone�2010–2011�HR�Systems�Survey,�http://www.cedarcrestone.com/research (September, 2010)

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organization,�it is important that all functionality be unified end to end and integrated within an ecosystem that provides:

1. Access to and support of other services such as social and collaboration tools, service-oriented architec-ture (SOA) middleware, electronic content management, and others in the light orange ring. These should ideally be architected for seamless integration rather than available as add ons.

2. Access to other information sources, including financial and customer-facing information, at the lowest total cost of ownership. This often means that integration must be direct and ideally real time rather than through batch interfaces.

You hear a lot about the importance of an integrated talent management solution that enables you to share and use data from one talent management process to another. An example is being able to integrate from a per-formance management process, perhaps to identify profiles of high performers to then use that information in recruiting or workforce planning. However, integrating the data directly with other information sources such as finance or customer-facing repositories is also important to do workforce analytics to show how the workforce impacts financials or customer results. Further integrating talent with project costing, time, scheduling, absence management, activity-based costing, pay, and more ultimately enables workforce optimization. CedarCrestone believes that talent management—or in fact any aspect of human capital management—must interplay as seam-lessly as possible with all these other organizational resources to provide the strongest value and the lowest total cost of ownership. Oracle solutions offer this environment today.

Figure 1: CedarCrestone Unified and Integrated HCM Application Blueprint

Source: CedarCrestone 2010–2011 HR Systems Survey

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Backlog, Pipeline, Customer Satisfaction

FIN General Ledger, Purchasing, Budgeting, Travel & Expense

SCM Vendor Management

Projects Project Costing, Contracts, Grants

CRM SOA Bus. Process Mgt. Electronic Content Management ETL

Social and Collaboration Tools Workflow Security

Talent Mgt. Excellence

Service Delivery Excellence Administrative Excellence

Workforce Mgt. Excellence

Performance/Workforce Optimization Excellence

Business Intelligence Tools HR warehouse

Reporting/dashboards Middleware

Talent Management Competency Mgt., Recruiting,

Learning Mgt., Performance Mgt., Compensation Mgt., Succession

Mgt., Career Planning/Dev.

Workforce Management Time Record Management,

Absence Management, Labor Budgeting, Scheduling and

Forecasting, Task Management

Workforce Optimization Workforce Planning, Workforce Analytics, Predictive Analytics

Core HRMS/ERP Foundation Data for Roles and Competencies (Profile Mgt.), Position Management,

Payroll and Benefit Administration

Portal Framework With Identity Management and single sign-on

Self Service and Workflow Benefits, pay, personal data

Promotions, transfers, salary actions Approvals and notifications

Service Delivery/ Service Center

HR Help Desk, Workforce Communications,

Onboarding


Let’s dig even deeper into some characteristics of a unified and integrated HCM solution. These include key parts ranging from profile management and competency management, analytics, social networking, as well as the seamless integration with the entire ERP ecosystem.

One Single Profile and Competency ManagementProfile management is the foundation of talent management. The concept of profiles consists of not only a repository for competencies but encompasses much more, such as characteristics: certifications, experience, interests, travel preferences, personal goals, and more. These characteristics are useful for supporting work assignments, conducting performance management, identifying learning paths, career development, succession planning, workforce scheduling, and organization-wide workforce planning. In a truly unified system, profile information is used for assigning resources to projects, scheduling call centers, optimizing sales engineers, etc. Talent profiles are the foundation of not just HR and talent management but the operational effectiveness of the business.

A key component of the profile is competencies as these are the connection between talent management appli-cations and workforce management. From both competencies and other components in a profile, an organization can determine who has what skills, experience, availability, and desires, etc. Competency gap analysis is a way for organizations to programmatically review who has what skills and experience today, assign and schedule personnel with the right mix for the future, and thus recruit for needed competencies, develop curricula for em-ployees to expand their competencies, and plan for the acquisition of competencies needed for the long term. A rich set of variables, available in the profile beyond just competencies when conducting this gap analysis, is very useful. Using analytics is also useful in terms of optimizing the workforce to find the competencies and attributes that really result in higher performance in a role. For this, integration with data sources containing performance information such as financial systems or customer-facing systems is also needed. When coupled with an analysis of pivotal roles, organizations can improve and fine-tune their performance.

AnalyticsAnalytics is another foundation of a unified and integrated HCM solution. The talent management environment needs integration with not only the core system of record, but with the BI infrastructure and even the larger eco-system of data sources for analytics. With this integration, analysis of workforce performance is possible and issues identified can result in actions back into the system of record so that execution of strategic goals is pos-sible. To do meaningful analytics to optimize the use of the workforce, organizations must integrate workforce data with performance information from other data sources: finance, customer relationship management, project management, and operational data on key processes such as supply chain management or supplier relationship management. Without a pervasive integration juxtaposing the financial and operational data with workforce data to enable workforce performance measurement and fine tuning, meaningful analytics are not possible. That is what delivers workforce performance and optimization excellence.

In�HR Analytics: Driving Return on Human Capital,9�we�cite�two�case�stories,�a�major�financial�ser-vices� organization�and�Pernod�Ricard� and� its� journey� to� provide�workforce� performance�metrics� and�analytics�that�depend�on�this�comprehensive�integration.

9 HR Analytics: Driving Return on Human Capital; http://www.cedarcrestone.com/research.php

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With pervasive talent management analytics seamlessly integrated with the larger ERP ecosystem, organiza-tions can link results of acquisition, development, performance, and compensation processes with the business results. They can help managers make better decisions. For example, managers, in partnership with HR, can better understand whether to invest more or less in recruiting efforts vs. development efforts.10 They can un-derstand whether salary increases or other rewards can maximize workforce performance. Working with HR, managers can best decide how fine-tuning talent processes should change in reaction to economic, regulatory, and competitive changes.

Social Media Provides Collaborative Work SolutionsThe “we-ness”—or the whole is greater than the sum of parts notion—through social media is another part of the foundation of a unified and integrated talent and HCM solution. Providing a way for individuals to share informa-tion about themselves (skills, goals, hopes, values) so both the individual and the organization can make deci-sions about their mutual futures is key. This sharing must be a sticky, helpful process. Many organizations are currently utilizing commonly available social networking applications outside their firewall for recruiting and brand awareness, but early adopter organizations are starting to use these social media solutions internally (behind the firewall) for knowledge capture and sharing, informal learning, formal and informal collaboration, communication, and engagement.

An Aberdeen Group study of more than 500 organizations released in June 200911 notes that more organiza-tions have workforces not located under one roof, spread out project teams, and workgroups that often include vendors and customers. The study concludes: “Business executives (HR and non-HR) are realizing that these new realities require a rethinking of the talent management lifecycle and of the new tools they can use to manage this diverse and dispersed workforce.”12 And, as we will discuss later in the value section, social media plays a valuable role in driving employee engagement and other benefits which in turn deliver shareholder value.

Oracle has embraced a full set of social media from social networking to collaboration aids as evidenced by the recent release of PeopleSoft 9.1 and PeopleTools 8.51, which provide internal capabilities for blogs, instant mes-saging, discussion boards, and many other features, as well as the very recent introduction of Fusion HCM which includes brand new modules completely designed to make social networking an integral part of how organiza-tions conduct HR business.

Integration Delivered integration is another part of the foundation of a unified and integrated talent and HCM solution. Many organizations that choose a best-of-breed approach to talent management using solutions from multiple ven-dors, fully intending to create custom integrations back to their core HRMS, never do. Integrations are costly to develop, implement, and maintain as we indicated with the example of the insurance organization earlier. Without integration, organizations are faced with double data entry and decreased data integrity.

10 Ibid.11 Aberdeen, HR Executive’s Guide to Web 2.0: Cracking the Code for Talent Management, http://www.aberdeen.com/aberdeen-

library/6070/RA-web-social-media-talent.aspx12 SHRM India, Developing a Business Social Network, http://www.shrmindia.org/developing-social-business-network

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Integration comes explicitly with a single Oracle environment—or at least with minimal setup. One of the most valuable aspects of E-Business and PeopleSoft HCM and their talent solutions is that they integrate with other Oracle products at the lowest possible costs compared to any integration from non-Oracle products to Oracle solutions. Data models are similar, if not identical for some areas, making it very easy to move data from one ap-plication area to another. The underlying integration technologies available as part of the Oracle standard toolset/middleware compared to the typical batch approach necessary to interface non-Oracle products to Oracle solu-tions is like day and night. Within its Application Integration Architecture, Oracle offers data replication if needed, native interfaces, transaction interfaces through web services, composite business flow process-centric integra-tion across multiple applications, and user interface layer integration. Forrester reports that 73% of organizations have lower maintenance and operating costs by having a comprehensive integration solution to handle needs.13

Further, there are a variety of valuable technology solutions in the Oracle sphere for enterprise use such as portal, security, electronic content management, risk management, and SOA that provide useful and needed functionality which are seamlessly integrated (see Figure 1). Native integration of all these components results in lower total cost of ownership.

Integration is exceedingly important, especially as organizations look to engage in metrics-based management where they can enable managers to correlate workforce information with financial and customer-facing data to get the truest possible picture of workforce performance to optimize even further.

With�Oracle�E-Business�Suite�applications�and�our�shared�service�centers,�we�have�standardized�pro-cesses�across� the�system,� reduced� IT� resource� redundancies,�extended�visibility� into�our�operations,�and�fine-tuned�our�supply�chain,�human�capital�management,�and�financial�processes�to�yield�new�levels�of�operational�efficiency.�Integration�of�our�talent�and�HR�processes�with�deep�insight�through�business�intelligence�allows�us�to�better�optimize�the�workforce�and�deliver�higher�quality�of�care.

Jason DeSantis, Division Chief Information Officer, Information Technology & Solutions

Part 2: ERP-based HCM and Talent Evolution – Innovation and New Strategies

Oracle has innovated not only with its talent applications but also with its workforce management and overall Web 2.0 collaborative technologies. With its E-Business Suite 12.1 and PeopleSoft 9.1 applications, Oracle has increased the focus on user-centric processes. Simple enhancements such as a task-oriented user interface within the Compensation Workbench of E-Business Suite, or providing step-by-step metrics within eCompensa-tion in PeopleSoft 9.1, assist the manager through the process of allocating compensation.14 These Oracle HCM and talent processes contribute to both improved workforce productivity and increased employee engagement.

13 2010 Update: Evaluating Integration Alternatives, Forrester Research, Inc., January 2010; http://www.forrester.com/rb/Re-search/2010_update_evaluating_integration_alternatives/q/id/55599/t/2

14 Delivering Value with EBS 12.1 HCM Whitepaper, http://www.oracle.com/us/products/applications/057153.pdf and Delivering Value with PS 9.1 HCM Whitepaper, http://www.oracle.com/us/products/applications/peoplesoft-enterprise/hcm/delivering-value-ps-hcm-075955.pdf

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Between benefits from these innovative contributions and a strategy of application vendor consolidation and re-ducing IT complexity, the value of a unified and integrated talent and HCM solution is clear.

Innovation Creates ValueWorkforce Productivity An easy-to-use technology solution ensures use and productivity benefits. Nowhere is that more true than with employee and manager direct access to transactional services and talent management processes. Research conducted by CedarCrestone over the past ten years indicates that most all transactional services benefit from automated direct access. For example, a manager conducting a performance review online will take less time than the related manual activity.15 Worker productivity extends well beyond automating manual tasks. Recognizingthat informal activities are a growing part of business, technology solutions are evolving to consider users and the information they need to do their job rather than just transactions.

Oracle’s introduction of the most innovative versions of Oracle Applications Technology and PeopleTools (8.50) has facilitated product-wide improvements in usability, user experience, and productivity. Oracle E-Business Suite and PeopleSoft HCM products now include a wide array of enhancements directed at increasing productivity. These include in-context pop-up windows, look ahead capability in lists of values, pull down navigator menus to reduce clicks and load times, and faster navigation through redesigned menus.

Within the HCM product lines, Oracle has continued to improve the efficiency of employee and manager self ser-vice functions for automated transactional services and talent management processes. PeopleSoft 9.1 delivers new self service functions in eCompensation, Career Planning, Succession Planning, and Profile Management, along with redesigned pages throughout the system to help improve access and productivity. E-Business Suite HCM 12.1 introduced new features throughout the product suite to improve workforce productivity such as offline appraisals and line of sight objectives in performance management, major enhancements in compensation work-bench, and recruitment communications and employee referrals in iRecruitment.

Employee EngagementOrganizations with effective service delivery and talent management processes contribute to employee engage-ment and the ultimate value of employee engagement is improved shareholder value.

Cox� measures� employee� engagement� and� has� seen� that� rise� 5%� as� its� comprehensive� HR�systems� transformation� project� continues� to� provide� employees� with� benefits� such� as� self�service,� better� insight� into� career� paths� and� goals,� and� visibility� to� corporate� strategy� that� �affects� everyone.16� Cox� has� all� HR� information� in� one� place� enabling� it� to� analyze� the� work-force,� adjust� processes,� and� plan� for� the� future.� All� business� processes� are� connected,� not�siloed,�which� enables� visibility� into� how�workforce� processes� flow� and� impact� each� other.� By�standardizing�on�Oracle’s�PeopleSoft�HCM�applications,�Cox�has�significantly�reduced� its� total�cost�of�ownership�while�proactively�managing�every�aspect�of�the�employee�lifecycle.

15 CedarCrestone ROI Studies (2000–2010). Contact author.16 Cox Communications Transforms Human Resources Processes to Boost Efficiency and Engagement, Oracle Case Study;

http://www.oracle.com/customers/snapshots/cox-communications-pse-case-study.pdf

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Organizations with an effective talent management process also contribute to improved employee engagement with the same link to improved organizational revenue. In a recently published research bulletin from Bersin & Associates, this link is clearly seen with a large global financial organization that was able to correlate critical goal attainment in both its corporate and financial business units to employee engagement—and ultimately tied improved engagement scores to organizational revenue.17

Organizations are also increasingly using social media to engage their diverse and dispersed workforce and the promise of organizational value is strong. In a recent article in the IHRIM Workforce Solutions Review, Towers Watson reports:18

Self�service�technologies�were�designed�to�reduce�HR�administrative�work�to�allow�HR�to�have�a�more�strategic�focus�and�become�a�true�“business�partner.”�Now,�HR�needs�to�develop�creative�ways�to�align�with�key�business�drivers�to�further�solidify�the�seat�at�the�executive�table.�Improving�employee�engagement�and�productivity�could�be�the�ticket—and�social�media�technology�will�play�a�significant�role.

Social media, especially when used at an organizational level, is correlated to higher financial performance ac-cording to the latest CedarCrestone HR Systems Survey.19 And other research organizations corroborate this finding:

Aberdeen�Group�has�published�research�briefs�focusing�on�employee�engagement�where�they�found�that�building�engagement�was�the�top�strategy�for�best-in-class�organizations.�They�found�that�organizations�utilizing�blogs,�wikis,�and�internal�social�networks�saw�a�26%�year-over-year�improvement�in�employee�engagement.20

Towers Watson also says that companies with highly engaged employees generate more marketplace power than their competitors.21

Leadership DevelopmentCareer and succession planning, natively integrated with compensation and performance, allow organizations greater visibility into leadership and development gaps. But they cannot be truly successful if they are not con-nected to the core HRMS in order to track basic employee information along with career and development plans. Both E-Business Suite and PeopleSoft HCM use the Person Profile to allow organizations to connect core HR data to talent management and provide this necessary and important view for each employee. For example, the career planning process provides the structure for development activities focused on advancement as well as a feeder into succession planning with PeopleSoft.

17 Measuring the Business Impact of Talent Strategies, Bersin; http://www.bersin.com/Lib/Rs/Details.aspx?Docid=10331262018 Transforming HR Service Delivery with Collaboration and Social Media, Towers Watson; IHRIM Workforce Solutions Review,

http://www.ihrimpublications.com/amember/WSR_Archives/WSR_AugSept10.php19 CedarCrestone�2010–2011�HR�Systems�Survey, http://www.cedarcrestone.com/research (September, 2010)20 Aberdeen Group, HR Executive’s Guide to Web 2.0: Cracking the Code for Talent Management, 2009; http://www.aberdeen.com/

Aberdeen-Library/6070/RA-web-social-media-talent.aspx21 Towers, Watson, Turbocharging Employee Engagement; http://www.towerswatson.com/assets/pdf/629/Manager-Recognition_

Part1_WP_12-24-09.pdf

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Organizations�in�the�IT�industry�are�notorious�for�having�high�staff�attrition�rates.�PeopleSoft’s�human�resources�solutions�help�us�nurture�our�staff�by�recognizing�their�key�competencies,�providing�the�right�training�and�identifying�new�opportunities�to�advance�their�careers�at�this�company.

Guruprasad Murty, Vice President, IT & S, Microland Limited22

New Strategies Create ValueVendor ConsolidationVendor consolidation brings about tangible monetary savings23 through reduced vendor fees associated with maintenance; fewer specialized IT resources needed to maintain multiple packages or at least their interfaces; reduced training costs for IT, HR professionals, and managers/users; and reduced staff time spent on vendor relationship management required to maintain contracts with varying renewal dates. Perhaps more importantly, however, is that with a unified data model encompassing the core system of record, talent management—and business intelligence—data complexity is removed. There is no need to maintain multiple employee databases in both a core system of record and any niche talent management applications. All reporting, whether through standard operational reports or higher levels of business intelligence reporting and analytics, are available with little or no added integration required—also a significant cost savings in comparison to what is required with integration from and to a niche solution. A single unified and integrated system, with fewer vendors providing tal-ent management functionality, results in improved data accuracy and security and data privacy is improved and simplified as well.

IT Complexity Drives up Costs and Lowers ProductivityThere is one key metric for CIOs to watch, according to The Hackett Group: the number of enterprise software applications per 1,000 end users. Best-performing organizations have an average of 20 applications, whereas all others have an average of 39. This metric is important as a high number signifies a complex technology environ-ment such that IT cannot quickly respond to changing business needs as its time is spent supporting so many applications. “By contrast, a low number implies an efficient environment and strong alignment between IT and overall business objectives,” reports The Hackett Group.24

Organizations with lots of applications suffer from complexity in their technology infrastructure, data models, and software maintenance, and presumably suffer from the costs of integration—if done at all. As a result, it is diffi-cult for the organization to scale up or down quickly with business climate changes. Many organizations failed to be able to react agilely during the recent economic crisis, and keeping a slimmer application portfolio with fewer unintegrated solutions makes the best business case.

The CedarCrestone�HR�Systems�Survey noted that during the economic downturn of 2008–2009, organizations that used to have a variety of best-of-breed talent management solutions are now getting that functionality from

22 Oracle Customer Snapshot http://www.oracle.com/us/corporate/customers/microland-psft-case-study-173313.pdf23 Forrester, Consolidating Vendors Brings Operational Benefits As Well As Dollar Savings; http://www.forrester.com/rb/Research/

consolidating_vendors_brings_operational_benefits_as_well/q/id/46127/t/224 The Hackett Group: Maximize the IT Organization’s Effectiveness by Reducing Complexity in the Application Portfolio;

http://www.thehackettgroup.com/hpn/metrics/MMIT0410.pdf

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their ERP solution.25 Hackett, too, notes this trend. According to Hackett, the trend reversal in IT spending is a reflection of historical investments made by world-class organizations, which began consolidating their applica-tion portfolio, rolling out a common ERP platform, and rationalizing their IT service delivery model and IT infra-structure earlier than the peer group. They are now harvesting the benefits of this investment, allowing them to deliver more business value at lower cost per end-user.26

Figure 2: Historic and projected IT cost per end-user trend, 2009

A few recent cases highlight this move to ERP-based solutions: • Talent Management. A major analyst firm replaced both SuccessFactors and Taleo with an integrated

Oracle E-Business Suite HCM talent solution.• Performance Management. A leading global provider of integrated logistics abandoned its prior perfor-

mance management solution and moved to Oracle E-Business Suite Performance Management 12.1 for a fully integrated HR and Performance Management System.

• Learning Management. A leading medical supplier replaced Saba Learning with PeopleSoft Enterprise Learning Management.

• Recruiting Management. A global freight and logistics management company, a major international church, one of the largest heavy-duty truck manufacturers, a major European bank, the largest manufac-turer of thin film solar modules, and one of America’s leading retailers all replaced Taleo or Vurv recruiting solutions and moved to PeopleSoft Recruiting Solutions.

25 CedarCrestone�2009–2010�HR�Systems�Survey:�HR�Technologies,�Deployment�Approaches,�Value�and�Metrics,�12th�Annual�Edi-tion; http://www.cedarcrestone.com/research.php

26 The Hackett Group: Information Technology Metric of the Month, IT Cost per End User Trend, May 2009 http://www.oracle.com/ocom/groups/public/@ocom/documents/webcontent/061653.pdf

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Risk Mitigation/Vendor ViabilityWhile not the most critical selection criteria for Human Resources, over 60% of the 1,289 respondents to the CedarCrestone�2010–2011�HR�Systems�Survey (released September 2010) indicate that vendor stability is im-portant in their vendor evaluations.27 Organizations need not fear for the viability of Oracle as they may with al-ternative solution providers. Oracle has proven HCM solutions with 14,000+ customers in 140 countries, serving over 40 million workers with close to 500,000 HR professionals. Additionally, unifying on a common system of record reduces data complexity and data entry errors, thus lowering risk.

Part 3: Exploring Your Choices for Talent ManagementOracle Talent Management solutions are offered via multiple delivery models to best fit customer functionality requirements and cost constraints: on-premise, hosted (OnDemand/BPO), and now SaaS with the Fusion ap-plications, either directly from Oracle or through partners. Depending on your current situation and your strategic requirements, we offer the following review of options. The options all enable organizations to meet functionality and ease of integration requirements and pay attention to cost cutting.

Figure 3: Talent Management Options by Current State

Your Current State Your OptionsPeopleSoft 9.1

E-Business Suite 12.1

• Continue upgrade path with your existing HCM applications investment; apply Family Packs to add additional functionality as they become available

• Evaluate Fusion Talent Management for additional talent functionality PeopleSoft 8.9, 9.0

E-Business Suite 12.0

• Continue upgrade path with your existing HCM applications investment; apply Family Packs to add additional functionality as they become available

• If on PeopleSoft, consider Talent Management Integrations for immediate talent needs

• If on E-Business Suite, evaluate the Family Pack or point releases and apply as warranted, or upgrade to the latest release

• Evaluate Fusion Talent Management for additional talent functionality PeopleSoft 8.8 or earlier

E-Business Suite 11.5.10 or earlier

• Upgrade to the latest release to avoid losing support or paying for extended support

• Evaluate Fusion Talent Management after upgrading to the latest release

Prospective buyer • Evaluate both PeopleSoft 9.1, E-Business Suite 12.1 and Fusion HCM, and implement required talent management functionality

In the following sections, we cover the key points from the table above.

Continue Upgrade Path with Existing PeopleSoft and E-Business Suite InvestmentsFor customers on the latest releases of E-Business Suite and PeopleSoft, there is comfort with the known ven-dor stability of Oracle and the regular and consistent release cycle and Feature Pack/Family Pack updates that include enhancements/new functionality, legislative and regulatory changes as required, and usability improve-

27 CedarCrestone�2010–2011�HR�Systems�Survey; http://www.cedarcrestone.com/annual_survey.php

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ments—these are planned for annual release. But there is much more. Continuing to move to E-Business Suite 12.1 and PeopleSoft 9.1 is the best option for immediate talent management needs. And many customers are al-ready doing so. Gartner reports approximately 5% of E-Business Suite 12.0 or E-Business Suite 12.1 customers have completed their upgrades and experience with 12.1 is positive.28 In the year since PeopleSoft HCM 9.1 was made generally available, Oracle has seen adoption by hundreds of customers, with hundreds more evaluating an upgrade. According to the latest CedarCrestone�HR�Systems�Survey,�there are numerous E-Business Suite and PeopleSoft customers that remain with and plan to remain with Oracle. Together, these customers dominate the worldwide HCM market with just a few moving to alternative solutions at the same time that both product lines gain customers.29

The underpinning of what works includes the core HRMS record keeping system and smooth, fast, large-scale implementations. Despite accusations that once Oracle acquired PeopleSoft that it would be discontinued, the truth is that since then new versions of applications on both PeopleSoft and Oracle product lines have been released; new versions are on the horizon; and all are backed by Oracle Lifetime Support. PeopleSoft 9.1 is the third release since acquisition with current indications of a 9.2 upgrade. E-Business Suite has released three point releases since 12.1 was introduced in 2009, also with every indication a 12.2 release is soon to come.

Underlying HRMS FunctionalityThe underlying HRMS functionality from both E-Business Suite and PeopleSoft HCM provide core HR record keeping, payroll, and benefits administration along with service delivery components that can support global or considerably smaller organizations. The October 2008 Forrester Wave puts E-Business Suite HRMS 12 in the top position for large multinational HRMS installations.30

Catholic�Healthcare�Partners� (CHP)�ensures�best�practices�and�reduces�Human�Resources�Manage-ment�costs�with�a�centralized�IT�platform.�CHP�is�the�largest�health�system�in�Ohio�and�one�of�the�largest�nonprofit�health�systems�in�the�United�States.�It�operates�34�hospitals�in�nine�geographic�regions�to�meet�the�healthcare�needs�of�people�in�Ohio,�Tennessee,�Kentucky,�Pennsylvania,�and�Indiana.�Each�of�CHP’s�hospitals�joined�the�group�with�its�own�human�resources�information�system�platform,�making�it�difficult�to�assess�staffing�needs�across�the�organization�and�hindering�the�implementation�of�a�shared�services�model.�CHP�standardized�on�Oracle’s�PeopleSoft�Enterprise�Release�9.1�Human�Capital�Management�applications.�It�is�creating�a�centralized�HRIS�infrastructure�that�is�saving�US�$200,000�annually�in�payroll�labor�and�transactional�costs.�The�organization�is�also�reducing�benefits�administration�support�staff�and�improving�regional�collaboration�around�best�practices.

Agility�(formerly�PWC�Logistics)�is�a�leading�global�provider�of�integrated�logistics.�The�company�consists�of�three�key�business�groups:�Global�Integrated�Logistics,�Defense�and�Government�Services,�and�In-frastructure.�Agility�operates�more�than�550�offices�in�120�countries.�E-Business�Suite�HCM�12.1�human�resources,�self�service,�and�performance�management,�along�with�HR�analytics,�has�allowed�Agility�to

28 Gartner, Oracle EBS Release 12 Upgrades: 12.1 is Ready for Wider Adoption, but is Still a Major Upgrade, July, 2010; http://www.gartner.com/DisplayDocument?id=1402416

29 CedarCrestone�2010–2011�HR�Systems�Survey,�http://www.cedarcrestone.com/research30 The Forrester Wave™: Human Resource Management Systems, Q4 2008, http://www.forrester.com/rb/Research/

wave&trade%3B_human_resource_management_systems,_q4_2008/q/id/45873/t/2

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implement� a� global� enterprise-wide� human� resource� management� system� within� one� 24x7� available��database.�This�transformation�has�reduced�the�time�required�to�collect�summary�data�from�six�weeks�to�a�few�seconds,�with�access�to�consolidated�data.�Agility�expects�to�save�US�$5.3�million�over�the�next�five�years�due�to�improved�data�accuracy�and�increased�employee�efficiency.�

Talent ManagementTalent management offerings of both product lines have rich functionality and recent user experience enhancements:

• According to Forrester in its June 2010 report,31 the four pillars of talent management are recruiting, compensation, learning management, and performance management. While many vendors offer full functionality in all of these, only two vendors—Oracle being one of them—offer not only these but have product offerings in all aspects of talent management (recruiting, onboarding, workforce planning, learning management system, skills/competencies, performance management, succession planning and compensation).

• Both E-Business Suite and PeopleSoft HCM have improved their talent offerings over the last few years, with the most recent releases being the most robust when it comes to talent management. Particular areas of focus in the latest releases include an improved user experience, compensation, performance management, and career and succession planning enhancements.32

• Oracle E-Business Suite HRMS 12.1 delivered a new Talent Profile feature with dashboards for HR staff and department managers to give a comprehensive view of each employee, useful for all talent man-agement processes such as providing the ability to compare employees during compensation review. iRecruitment was expanded to include a portal for HR recruiters, hiring managers, and applicants. Portal dashboards now provide daily summaries of action items so stakeholders can view the entire recruitment progress. Another enhancement was the support of “line-of-sight performance management” that merg-es personnel information with corporate goals to show individuals and managers how the employee’s objectives mesh with organizational objectives.33

• Release 9.1 of PeopleSoft Enterprise was the largest one ever with over 9,000 enhanced pages, 270 new features, 83 new web services, and 8 new solutions. Specific talent management enhancements added succession planning, career planning, business objectives management within ePerformance, and talent management dashboards. Further, the talent management functionality of 9.1 can be integrated to prior versions without having to upgrade.34

In a recent integrated talent management vendor analysis by IDC, both PeopleSoft HCM and E-Business Suite HCM are positioned in the “Major Players” category and have shown positive progression over a prior 2008 report.35

31 Forrester, The Four Pillars Of Talent Management, http://www.oracle.com/us/corporate/analystreports/enterprise-application/forrester-talent-mgmt-083868.pdf

32 Delivering Value with EBS 12.1 HCM Whitepaper, http://www.oracle.com/us/products/applications/057153.pdf and Delivering Value with PS 9.1 HCM Whitepaper, http://www.oracle.com/us/products/applications/peoplesoft-enterprise/hcm/delivering-value-ps-hcm-075955.pdf

33 Ibid.34 Ibid.35 IDC Marketscape: Worldwide Integrated Talent Management 2010 Vendor Analysis http://www.idc.com/getdoc.

jsp?containerId=221561

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Smooth and Fast ImplementationIn terms of smooth and fast large-scale implementations, within three to six months of announcing E-Business Suite 12.1 and PeopleSoft 9.1, Oracle tracked hundreds of customers that were live or in process of upgrading.

Ricoh�Electronics,�Inc.,�a�leading�supplier�of�advanced�office�automation�equipment,�went�live�on�the�first�deployment�of�PeopleSoft�Enterprise�HCM�9.1�in�just�six�months,�implemented�by�Opti-mum�Solutions,�an�Oracle�Platinum�Partner.�A�company�on�the�cutting�edge�of�technology,�Ricoh�Electronics�faced�an�upgrade�path�spanning�multiple�“intermediary”�steps�to�move�from�version�8.3� to�9.1.�Ricoh�Electronics�also� sought� to� align� its�PeopleSoft�Enterprise�HCM�9.1�upgrade�project�with�the�strategic�goal�of�expanding�its�PeopleSoft�Enterprise�HCM�footprint�by�deploying�additional�modules�to�its�entire�user�population.�By�taking�advantage�of�the�expanded�functionality�in�the�latest�PeopleSoft�Enterprise�HCM�9.1�release,�eliminating�customizations,�and�further�auto-mating�manual�processes,�Ricoh�Electronics�is�gaining�efficiencies�from�a�fully�integrated�solution�that�will�increase�user�productivity�and�reduce�costs.

Genworth�Financial,�Inc.�(formally�GE�Financial�Assurance),�a�leading�financial�security�company,�completed� the� functional�portion�of� their�upgrade� from�E-Business�Suite�11.5.10.2� to�12.1.2� in�three�months.�Genworth’s�upgrade�included�core�HR�functionality,�self�service,�and�time�and�labor�along�with�talent�management�modules�for�learning,�compensation,�and�performance�manage-ment.�

Genworth’s�main�business�drivers�to�upgrade�were�two-fold:�first,�they�wanted�to�stay�up�to�date�with�software�and�avoid�paying�any�extra�costs�for�support;�and�secondly,�they�wanted�to�take�ad-vantage�of�new�functionality—mainly�enhancements�in�self�service,�learning�management,�time�and�labor,�and�performance�management.�Performance�management�was�very�key�for�them�and,�coupled�with�some�customized�development,�enabled�Genworth�to�meet�some�critical�business�requirements�in�talent�management.�They�have�been�able�to�totally�revamp�their�appraisal�pro-cess�and�next�year�they�will�update�their�objective�setting�processes.�

CedarCrestone, another Oracle Platinum Partner, has brought customers rapidly up on the latest releases through its Upgrade Lab solution. The CedarCrestone Managed Services (CMS) Upgrade Lab36 solution ac-celerates client upgrade processes while reducing total client resource commitments and costs. CedarCrestone focuses not just on bringing a customer live on the technology, but through the related change management to ensure the solution is optimally used.

Plexus,� the� Product� Realization�Company,� has�more� than� 25� years� of� experience� turning� cli-ents’�concepts�into�world-class�products.�Dedicated�to�staying�on�the�leading�edge�of�technology,�including� taking�advantage�of�best-in-class� functionality�and�embedded�business�processes�of�PeopleSoft�as�its�system�of�record,�it�has�successfully�upgraded�to�the�latest�release�of�Oracle�PeopleSoft�Enterprise�HCM�9.1�through�CedarCrestone’s�Upgrade�Lab�solution.�This�latest�up-grade�enables�Plexus�to�expand�use�of�Profile�Manager�for�key�job�accountability�and�enhance�the�performance�review�process�for�international�sites.�CMS�Upgrade�Lab�provides�an�off-site,�lab-based�upgrade�option�for�completing�PeopleSoft�applications�upgrades.�Amy�Merfeld,�HRMS

36 http://www.cedarcrestone.com/i-sol-cms.php

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Manager�at�Plexus,�states,�“Truly,�this�is�an�amazing�accomplishment.�Plexus�will�be�the�envy�of�every�other�company�that�wants�to�be�on�9.1�but�just�can’t�seem�to�figure�out�how�to�get�there�with-out�breaking�the�bank�or�setting�aside�all�of�their�other�work�for�a�year�or�more.�CedarCrestone��got�us�there�in�seven�months,�to�a�brand�new�release,�with�not�a�single�issue�along�the�way…AMAZING.”

For Oracle E-Business Suite HCM, CedarCrestone conducted an upgrade in 13 weeks that included not only HR, but substantial functionality such as Time and Labor and Cash Management.

The�City�of�Arvada�has�successfully�completed�an�upgrade�from�Oracle�E-Business�Suite�10g�11.5.10.2� to�Oracle�E-Business�Suite�11g�12.1.2.�The�project�was�completed�within� the�sched-uled�time�of�13�weeks�and�completed�under�budget.�The�applications�included�the�following:�HR,�Performance�Appraisals,�Payroll,�Projects,�Purchasing,�Payables,�Assets,�Receivables,�General�Ledger,�Public�Sector�Budgeting,�along�with�the�increased�footprint�of�Oracle�Time�and�Labor�and�Cash�Management.

Lower Total Cost of OwnershipAnd then we come to the lower total cost of ownership of these solutions within the entire Oracle technology ecosystem. In the CedarCrestone HCM Blueprint (Figure 1 displayed earlier in the white paper), we convey the richness of functionality and the scope of integration inherently available in all these solutions. For greatest value, any talent management solution needs to be integrated to a multitude of data sources, from all the talent manage-ment processes, to the HRMS for workforce data, and to financial and customer-facing data in order to enable any kind of meaningful workforce optimization. In addition, customers benefit from the use of various technology solutions also available in the Oracle ecosystem ranging from Web 2.0 (for social media and collaboration sup-port), workflow (for routing and approvals), security (for secure roles-based access), BPM (for continuous pro-cess improvements), governance, risk management, compliance, and even SOA services (for insertion of new process automation)—many embedded in the latest PeopleSoft and Oracle HCM products. The cost of integra-tion is less than that of integration to alternative best-of-breed talent management solutions or niche technolo-gies. As mentioned earlier, CedarCrestone has done numerous ROI and business case projects over the past ten years and consistently sees the lower total cost of ownership of these unified, integrated solutions. For example:

With�a�major�worldwide�pharmaceutical� firm,�CedarCrestone� found� that� the�estimated� cost� of�moving�from�several�best-of-breed�talent�management�solutions�to�an�upgraded�PeopleSoft�HCM�system,�plus�adding�Oracle�pre-built�business�intelligence�solutions�vs.�a�“build�your�own”�BI�solu-tion,�would�save�over�half�a�million�dollars�and�be�completed�in�six�months�less�time.37�

Organizations such as Texas Children’s Hospital find continuous savings from an integrated and unified solution as well. Texas Children’s Hospital saved $400,000 annually through increased operational efficiency and visibility by integrating and consolidating disparate systems.38

37 A Strategic Approach to Justification: Based on a Total Cost of Ownership Portfolio Assessment, IHRIM Link, http://www.ihrim-publications.com/Public_Link_Archives/vol_9-4/articles/IHlink_AugSep04_p01_02.pdf

38 Oracle Customer Snapshot, http://www.oracle.com/us/corporate/customers/texas-childrens-hosp-psft-hcm-ss-076543.pdf

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Oracle’s�PeopleSoft�Enterprise�applications�are�instrumental�in�our�efforts�to�improve�operational�efficiency,�so�that�we�can�apply�those�funds�to�patient�care�and�capital�initiatives.�With�PeopleSoft�Enterprise,�we�were�able� to� integrate�and�consolidate�nearly�14�disparate�systems�across�our�organization,�while�increasing�automation—enabling�us�to�save�hundreds�of�thousands�of�dollars�annually.

John Henderson, Director of Enterprise Systems, Texas Children’s Hospital39

In addition, Oracle continues to innovate its product lines. One key aspect of product maturation is that newer re-leases address industry-specific requirements helping reduce common customizations. Further, despite allega-tions by industry pundits to the contrary, the Applications Unlimited policy means Oracle is continuing to innovate its product lines indefinitely, Fusion included.40

Implement PeopleSoft Talent 9.1 and Integrate to Prior HCM Releases Customers can also license and deploy PeopleSoft Talent 9.1 applications without an upgrade and integrate with HCM 8.9 and 9.0.41 With this solution, customers can achieve benefits of state-of-the-art talent management available from PeopleSoft 9.1 described above.

Talent Integrations use EIPs (Enterprise Integration Points) to move data from the core HCM release over to the Talent 9.1 instance and, in some cases, to move data back to the core release from Talent (in the cases of the eCompensation and Recruiting integrations). With these, organizations’ existing HCM 8.9 or 9.0 systems remain the system of record for core HR data. An organization deploys Talent Management applications as a separate HCM 9.1 instance. Data will move between core HR data and the new HCM Talent Management applications. The organization installs a separate HCM 9.1 Talent instance and then enables and schedules integrations from the core HCM instance to the Talent instance. For example, with ePerformance the organization configures user roles and permissions for access, uses ePerformance templates and approvals processing, and utilizes and creates ePerformance reports in the HCM 9.1 Talent instance. Other integrations available include Career and Succession Planning, eCompensation, and Recruiting Solutions. This is actually a well-proven solution. Enterprise Learning Management (ELM) has always been capable of in-tegration to prior releases due to it being a separate instance. Oracle has taken this same approach with these new integrations and tested and packaged them. Many PeopleSoft customers have been doing this on their own for years; Oracle has simply formalized the integrations and provided them “out of the box” to any current customer to enable them to take advantage of the latest talent functionality without having to upgrade their core HCM system.

Pre-8.8 integration is available through Oracle Consulting Solutions and from partners. Moving to a niche vendor would require integration as well. The difference with any of these Oracle approaches is that the integration to

39 Ibid.40 Oracle’s Applications Unlimited Commitment to Customers and Benefits http://www.oracle.com/us/products/applications/035482.

htm and http://www.oracle.com/us/products/applications/054165.html41 PeopleSoft HCM 9.1 Solution Factory – Talent Integrations tab http://launch.oracle.com/?psfthcm9.1

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the underlying PeopleSoft system of record is maintained with a shared data model (employee, demographic, and hierarchy information), continued single sign-on, unified security, and a universal user interface with similar navigation, enabling consistent communications with reduced training costs.

Evaluate Fusion Talent ManagementIn September 2010 at OpenWorld, Oracle committed to a controlled release of its much anticipated Fusion in Q1 2011. Oracle Fusion Applications are a portfolio of software products across all pillars, including Financials, Human Capital Management, Supply Chain Management, Customer Relationship Management, Procurement, Project/Portfolio Management, and Governance, Risk and Compliance Manager. Its HCM components include: core human resources management, global payroll, benefits, workforce lifecycle manager, workforce predic-tions, and the following talent management components:

• Oracle Fusion Talent Review is an interactive meeting tool that supports the end-to-end process of strategic leadership review meetings. Fusion Talent Review gives organizations both a macro- and micro-level view of their talent. At the macro level, leadership teams can identify trends, biases, and risks. At the micro level, they can assess individual progress and potential for growth. The visual and interactive nature of Fusion Talent Review enables the management team to easily see what’s important to them, discover answers to new problems, and make decisions on the spot. Unlike existing talent applications, Fusion Talent Review is not focused on a transaction, but is an interactive meeting tool that spurs strate-gic conversation rather than data entry.

• Oracle Fusion Network at Work is an internal network embedded within the enterprise software sys-tem. It is built on the Oracle Fusion Middleware WebCenter People Connections platform and designed to cut across all kinds of work, such as completing projects, closing sales deals, and conducting research. It includes such capabilities as searchable tags, social bookmarking, status updates, activity streams, collaborative group spaces, and network connections. Unlike stand-alone networks, Fusion Network at Work is connected to enterprise data such as goals, location, jobs, certifications, and contact informa-tion. It seamlessly combines the way in which people use networks to get their job done with enterprise processes and data.

• Oracle Fusion Goal Management supports the ongoing tracking and alignment of performance and development goals. It enables workers to set their goals in context and track progress year-round; man-agers to share and assign goals to direct reports and track team progress; and business leaders to com-municate strategic initiatives and monitor organizational alignment and overall progress.

• Oracle Fusion Performance Management supports the end-to-end process of conducting performance evaluations. It provides workers and managers with intuitive task navigation and supporting information for easily and intelligently completing evaluations, and it gives business leaders visibility for monitoring the performance process and how people in the organization are performing.

• Oracle Fusion Workforce Compensation empowers organizations to attract, motivate, and retain tal-ent through strategically planning, allocating, and communicating compensation. It features embedded analytics and a total compensation view of an employee or a group of employees at the same time, re-gardless of their geographic location or pay package components. As part of the overall integrated talent management solution, it enables pay for performance.

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• Oracle Fusion Workforce Directory Management is a next generation self service framework for find-ing, locating, and viewing unified information about workers.

Fusion HCM applications are offered as both single- and multi-tenant. Oracle will offer a choice in licensing and delivery model. A customer can purchase a perpetual license and implement on-premise at one end of the spec-trum or as a complete SaaS deployment at the other end of the spectrum. The suggested adoption approach is a “co-existence strategy.” Customers just getting started with talent management may want all components described above; customers with some talent management functionality from their Oracle E-Business Suite or PeopleSoft solutions may want to augment these with the new functionality such as the Talent Review, Network at Work, and Workforce Directory Management, thus creating the co-existence model.

Oracle Fusion Talent Management will be delivered with integration to both Oracle and PeopleSoft product lines, so this option is appropriate for organizations evaluating talent management functionality for future needs. Cus-tomers can expect to see this integration out of the box initially to the latest releases, with integration to earlier releases depending on customer demand. Integration will not require the expense currently needed when an organization integrates a talent management solution that is not from the Oracle family of applications.

BPO and HostingFor those with cost cutting considerations, Business Process Outsourcing (BPO) and hosting should be evalu-ated. BPO and hosting can be important options for organizations wishing to cut labor costs for both technology and business functions while increasing operational efficiency through focusing on core business demands.

BPO is technically defined as giving a third party the responsibility of running what would otherwise be an inter-nally run HCM solution. For Oracle E-Business Suite customers, particularly those of mid size, BPO is an im-portant option for organizations wishing to cut costs. Instead of buyers needing to purchase a perpetual license and ongoing maintenance, with BPO the buyer essentially rents the software and pays on a per-employee basis.

Hosting is the transfer of responsibility for running an HCM application from a customer to a provider. There is a blurred line between BPO and hosting providers such as CedarCrestone,42 with one key distinction being that hosting clients bring their application licenses to the provider who offers more flexibility over BPO models and more choice as to how and where to deploy applications and integration solutions. Unlike with BPO or even SaaS solutions described on the next page, CedarCrestone hosted customers maintain ownership of their application stack without the need to vanquish in-house technical involvement. CedarCrestone manages change control in the production environment but the customer can continue development and enhancement support internally if it chooses. In a SaaS environment, only “SaaS certified” developers are allowed to do activities such as introduce interfaces. Since there are limited numbers of SaaS certified developers for each provider, having dependencies on this requirement for services drives up system support costs beyond what is openly stated by SaaS vendors. CedarCrestone provides a world-class architecture and can support an entire ERP footprint including business intelligence, along with state-of-the art hardware and supporting software (such as Fusion Middleware)

42 http://www.cedarcrestone.com/i-sol-cms-host.php

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which are continually updated to current technologies included in the contract pricing, enabling the client to avoid expensive capital hardware. Upgrade costs can be rolled into monthly pricing and spread out over the contract duration. Further we offer two-hour disaster recovery and a compelling service level agreement for a reduced price over what most clients maintain. Cost savings are a minimum of two to three headcount. CedarCrestone currently has 40+ hosted clients, many running multiple aspects of talent management.

Evaluate SaaS Talent Management Niche Solutions CarefullyOrganizations may also wish to evaluate SaaS-based talent management solutions for their functionality, us-ability, and pricing, but start first by looking at any existing Oracle shelfware (software functionality or modules purchased but not implemented) within your organization. Review your current license and determine if you have any shelfware and see if the currently available solution may offer exactly what you need as a starting point. You might be paying maintenance for something offered from a niche SaaS vendor that now is available from Oracle and is equal or better.

Then, depending on the timing of your talent management functionality needs, evaluate Oracle’s Fusion Talent Management offered in a SaaS multi-tenant model from Oracle and partners. The long-term picture indicates SaaS adoption is the fastest growing deployment choice for organizations, according to CedarCrestone’s latest survey.43 However, the combination of what you already own or Oracle Fusion Talent Management may offer not only the talent management functionality you need, but improved data security and control over timing of upgrades that is perfect for your organization—so start your evaluation with these solutions.

Certainly some industries will not consider SaaS. For example, according to Lisa Rowan, IDC, security-sensitive government agencies and large, complex businesses in fields such as manufacturing may wish to stay with the pure on-premise solutions.44 Fusion will be offered with both on-premise and SaaS delivery models.

As for pricing, Oracle announced “like for like” pricing for Fusion HCM for all existing products; new products are not yet priced as of November 2010. Many of the niche SaaS talent management vendors have been pushing multi-year deals that essentially resemble on-premise licensing arrangements. According to analyst Ray Wang, “the key tenets of SaaS—pay as you go, seamless updates, all-in costs—are being eroded for long-term con-tracts, termination for cause and pricier support programs.”45 The SaaS vendors will argue that their deals are, in fact, complex and thus the price is warranted. On the other hand, they may be just plain complicated.

Further, these solutions must be integrated back to your HRMS and other talent management solutions, as well as to your enterprise data sources (finance, customer relationship management, etc.) and the cost of integration may be prohibitive. In addition, consider the following when evaluating any SaaS solutions:46

43 CedarCrestone�2010–2011�HR�Systems�Survey, http://www.cedarcrestone.com/research44 Workforce Management, Special Report on HR Technology: In SaaS Battle, Customers Win, http://www.workforce.com/sec-

tion/10/feature/27/24/03/45 ZDNet, “SaaS Pricing Evolves: Should we be worried?” http://www.zdnet.com/blog/btl/saas-pricing-evolves-should-we-be-wor-

ried/3575746 IHRIM Workforce Solutions Review, “New Project Paradigms for SaaS HCM Implementations,” September, 2010;

http://www.ihrimpublications.com (IHRIM membership required)

19


• A SaaS implementation project, while marketed as taking less time than an ERP implementation, is still a project and requires activity planning, resourcing, and managing.

• SaaS software is not customizable; some offerings are configurable and all users are on the same re-lease cycle. While this is not a bad thing, you will still have to plan for the move to the upcoming release cycle. You will need to test your new configuration before releasing to your users. You may need training materials and even delta training.

• Every SaaS implementation will require a system administrator to maintain corporate-specific configura-tions and security access, and to build complex custom reports. Your organization will still be accountable for configuring the solution to meet your particular needs.

• SaaS software releases for the short term may have shorter release cycles as vendors close functionality gaps. Again, planning will be essential.

• SaaS upgrades are not all transparent. A change in user interface will necessitate a review of impact on the user community.

• The cost of changing business processes may require an internal policy or procedural change.• Change management will always be a necessity to ensure user adoption and will need to be more ef-

ficient than ever before. Allocate time and budget for this within your business case.

The Choice is YoursIn summary, we recommend you evaluate the cost of a mixed-vendor configuration vs. consolidation of talent management applications onto an Oracle E-Business Suite or PeopleSoft HCM platform—one size does not fit all, so calculate the short- and long-term costs and benefits carefully. Examine best-in-class IT trends—how important is talent and HR data unification across the enterprise to the organization’s strategic vision? Inventory your shelfware—what does your organization already own through existing contracts—and how does the func-tionality stand up to third-party vendors? Upgrade your existing E-Business Suite or PeopleSoft HCM solution to take advantage of the latest talent management functionality and/or, now that Fusion is available, evaluate its talent management functionality as it will offer a leap forward. If cost cutting is your primary requirement, also look at BPO and hosting options. The choice is yours. Make it carefully.

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