As every human resources leader knows, to be successful requires the presence of what I call the three Ps: skilled...
people adopting sound policies underpinned by good products. This article focuses on the third P, products, because technology has become pervasive to the extent that, for many employees, an HR portal has become the face of HR.
And that face these days comes predominately from cloud HR software. Any company that, for reasons such as a merger, end of product support or acquisition of a vendor, needs to replace its aging HR system knows it will have to move to the cloud. Cloud software-as-a-service (SaaS) HR vendors number in the dozens, but this article focuses on the three major vendors -- the ones more likely than the rest to be included in a customer's vendor shortlist: Oracle, SAP and Workday.
Oracle HR grows Fusion
Since acquiring PeopleSoft a decade ago, Oracle has become the world's HR software market leader. After realizing that maintaining several HR product lines -- PeopleSoft, Oracle E-Business Suite and JD Edwards -- is costly and unsustainable in the long run, Oracle has developed a new HR system, called Fusion, which is available both on premises and as cloud HR software. Fusion will be of interest to companies that have invested in Oracle products and can use that investment as a credit to acquire Fusion.
Another advantage of Fusion is if you want to have your own system environment and not share it with other clients for security reasons or the need to customize your product, Oracle offers that option. In addition, Oracle now offers easier support conditions for any interfaces to an existing PeopleSoft implementation -- for instance, if you want to move your HR system to the cloud but retain PeopleSoft payroll, which is on premises.
Fusion's weaknesses, on the other hand, are serious and have hampered the growth of its customer base. For one, not all HR areas are available in Fusion; for instance, for recruiting, Oracle recommends Taleo -- another acquisition. Many Oracle HR customers would rather stay on PeopleSoft payroll than adopt Fusion payroll. This means you would have to juggle different products built on different technologies and data models -- not something many companies will relish.
Fusion also has poor business-process functionality, which will be a concern for companies that have complex processes and want to be able to adapt them as they evolve. And the fact that Fusion is not a true SaaS system may not appeal to companies looking for cutting-edge technology.
SuccessFactors boosts SAP cloud offerings
The world's largest business software vendor took a page from its main competitor, Oracle, and also went down the acquisition road, buying SuccessFactors -- mainly to spruce up its cloud HR software credentials. SuccessFactors will appeal to customers who already use it for their talent needs, such as performance or learning, and want to replace their HR system -- often based on the traditional SAP Human Capital Management -- with the SuccessFactors equivalent known as Employee Central. Although still young by industry standards, Employee Central has grown in the past few years, as it gains more robust functionality.
However, the SuccessFactors platform suffers from two main weaknesses: First, it was not developed organically, but by the integration of several bits and pieces acquired either by SuccessFactors or SAP. Thus, its learning system is based on Plateau, which is not a true SaaS offering -- it can be deployed in-house or in the cloud, whereas a SaaS system can be deployed only in the cloud.
Second, SuccessFactors has yet to develop its own payroll module, relying instead on interfacing to SAP's traditional, on-premises payroll, now hosted under the misleading name, Employee Central Payroll. No full HR system has come to market without its own payroll, so the jury is still out on whether SAP HR can be the exception that proves the rule.
Workday's next-gen cloud HR software
The newest kid on the block has managed in less than 10 years to become the cloud HR software thought leader and the darling of Wall Street, while receiving rave reviews from the analyst community and retaining strong loyalty among its fast-growing customer base. Workday has attained this remarkable achievement by largely rewriting the book on HR systems and doing it in a true SaaS environment -- single codeline, all customers on the same release, no customization but configuration and several releases per year.
Starting with a clean slate -- unlike SAP and Oracle, which have to struggle with a customer base in the thousands -- Workday has been able to develop a product based on next-generation technology, such as object and in-memory, with a consumer-grade user experience, including mobile, second to none; robust functionality; and covering all HR domains, bar one (see below). As an HR leader looking at replacing your legacy HR system -- especially PeopleSoft -- Workday is now, if not the front-runner, at least part of any vendor shortlist.
Despite all the cheers, it is good to remember that Workday HCM is still stronger in the HR administration and payroll segment than in the talent space; although, with its new, best-selling recruiting product, it is making fast progress in that area. Developing its own learning product will reinforce Workday's leadership position. Workday also needs to beef up such products as time tracking to allow for more complex scheduling functionality. Also, it's vital that, for a product targeting global companies, more localized payrolls be brought to market -- so far, only two are available: U.S. and Canada.
If a company already uses an Oracle product, it makes sense to consider Fusion. If you are an SAP cloud shop, then SuccessFactors is unavoidable. In either case, Workday also should be considered. Base your final selection on in-depth use cases, customer testimonials and a clear understanding of what "hides under the covers" of the offering. You also should have a good grasp of the product roadmap and the vendor's viability. Remember to do your homework and due diligence, bearing in mind your company's overall choices and constraints.
Questions to ask when buying HR software
To choose the right HR software, decide on features first
Account for extra time, cost when moving HR to the cloud