Ultimate Software held its annual global customer conference and analyst day  recently in Las Vegas, where more than 1,300 attendees got to hear about the company’s plans for 2013.  Ultimate, founded in 1990, is a human capital management (HCM) vendor that provides human resources management systems (HRMS), payroll management, talent management and workforce management products to organizations primarily in the United States and Canadian markets – though it is announcing an international expansion.  The majority of Ultimate’s customer base is in the HRMS and payroll management space – areas in which Ultimate offers strong products – and it has many customers who have been using these products for many years, both on premises and in the cloud, including Adobe Systems, Major League Baseball, The New York Yankees Baseball Team, Pep Boys and Texas Roadhouse.

Ultimate CTO Adam Rogers opened the conference with an overview of Ultimate software and made several announcements about initiatives designed to make Ultimate more competitive against key rivals such as Oracle and SAP.  Rogers discussed the size and growth of Ultimate’s customer base, which is now at 2,500, with a total of 10 million people in its payroll system.  He showed the company’s 2012 system availability statistics – 99.95 percent in 2012, up from 99.3 percent in 2011.  In Ventana Research’s next -generation workforce management benchmark research, organizations ranked reliability as the third most important item in their selection criteria for vendors.

Ultimate’s most important announcement was its plan for expanded global human capital management and payroll capabilities.  The plan comprises expanding the UltiPro product to support 28 additional country localizations in 2013 and a partnership with Celergo to process international payroll with its partner providers.  Ultimate will also make its payroll connector available to other payroll providers, so customers are not exclusively linked to one vendor for international payroll.  These additions should make the enterprise UltiPro offering stronger in the international market, especially for U.S. and Canadian organizations with international operations.  That said, the plan leaves out an important point for some customers, namely the opening of international datacenters.  Some international customers are likely to have concerns about having their employee data housed in the United States and Canada.  Ultimate is Safe Harbor-compliant and has said it will work with international customers on any issues, but likely some will still see this lack as a potential roadblock.

A second major announcement was an expansion of Ultimate’s alliance with Informatica to build out what they are billing as “Integration-as-a-Service.”  This expansion means UltiPro customers will have pre-created, configurable templates that let them use Informatica’s extract, transformation and load (ETL) cloud services to more easily move data from Ultimate’s HRMS and payroll systems to third-party benefit providers, international payroll providers (such as Celergo), technology partners (such as CertPoint, which provides learning management system (LMS) with Ultimate) and other third-party systems.  This service should let customers deal better with having multiple vendors that need to use human resources information.  Informatica will let Ultimate customers more effectively deal with master data management (MDM) around HR data and, as of Informatica’s April 2013 release, Informatica will also provide cloud data masking capability to help secure sensitive or confidential data. My colleague Mark Smith attended Informatica’s analyst summit and posted an update about what to expect from Informatica in the coming year.

While at the conference I got a briefing on Ultimate’s talentvr_totalcompbusiness_compensation_management_goals and workforce management products.  The talent management offering has somewhat basic functionality by comparison to some vendors who specialize in that area, but it covers most areas, including performance management, development planning, succession management and recruiting (which Ultimate is expanding), and the company will add compensation planning this year.  The compensation planning product is scheduled to include global salary planning and multi-currency capabilities, and will integrate with the company’s current talent management products.  Our benchmark research on total compensation management found that improved efficiency was the top benefit of adopting a compensation management system, and that the top two systems that get integrated with compensation management are payroll (69%) and HRMS (56%). These factors should strengthen the case for current Ultimate customers looking at the new compensation product.

Ultimate showed several improvements to products within its talent management system.  One key improvement is the addition of a risk-of-loss score for employees within the succession planning product. The score, which is broken into three parts, is based on a calculated algorithm. Ultimate is also adding continuous goals and development planning to its development product.  In addition to these improvements to the talent management offering, Ultimate also demonstrated two improvements to the core UltiPro HRMS product. Customers can now add custom fields in the HRMS system via a configuration tool in the cloud product, and the fields persist through standard upgrades. The software also gets a full HTML 5 employee profile that displays well on tablets and other mobile devices and includes a nicely implemented Facebook-like timeline of all employee activities (hire date, performance reviews, raises, etc.). My upcoming next-generation payroll management benchmark research will outline some of the most compelling capabilities for HRMS and payroll systems.

Organizations that are looking for a single-platform solution and that do not require advanced functionality in talent management may find Ultimate’s integrated solution a good match.  Ultimate’s plans and announcements for 2013 move the company in the right direction to improve its competitive position.  However, given the capabilities of competitive products such as Oracle Fusion Global Human Resources and others, Ultimate must deliver on its current announcements and continue to innovate to maintain a strong market position.  Ultimate Software has solid experience and products worth looking at for organizations that need core HRMS, payroll, talent management and workforce management systems.

Regards,

Stephan Millard

VP & Research Director