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        Ventana Research Analyst Perspectives

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        Oracle Cloud HCM: Tackling the Tough Requirements Pays Off

        In my recently published Analyst Perspective “Selecting an HCM System? Include the Tougher Use Cases in Evaluations,” I highlighted a few HCM systems use cases that have historically been under-supported across the vendor/product landscape. My view on “critical HCM use cases” is the same today as when I led global HR and HR technology initiatives: use cases flow from the business imperatives faced by nearly every organization and their associated workforce-related implications. These HCM business imperatives range from elevating organizational agility—which I define as the ability to rapidly respond to both potential business risks and opportunities with optimal workforce-related actions and decisions—to delivering a superior employee experience or “EX” which directly correlates with a great customer experience and therefore business performance, to continuously focusing on ways of improving employee productivity, as even modest productivity gains can translate into major value creation.

        The pursuit of operational and technological innovations (they often run together) is essential as it’s a common path to achieving better results related to all three business performance levers above: organizational agility, the EX and productivity. Additionally, while every enterprise must be concerned with managing costs downward and gaining efficiencies, I personally don’t know many that have ascended the ranks of their industry sector by making it their top priority to excel in these regards. The use case examples highlighted in the “Selecting an HCM System” piece directly intersect with all three of the business imperatives or performance drivers detailed here, and are therefore in need of appropriate data, intelligent automation and ideally, prescriptive analytics support.

        While certain HCM use cases have long been challenging for even market-leading vendors to ably support, the tide is turning. This is attributable to a confluence of factors. For example, the infusion of HCM products with AI and machine learning has enabled prescriptive guidance to employees relative to achieving their career goals, guidance to the HR department on the best sourcing channels for filling certain jobs, and guidance to the compensation team around when salary levels above market rates are business justified. When a system has the intelligence to dynamically detect patterns in the data and recommend optimal actions and decisions, and do so at scale so that large data sets are only an asset not an operational speed bump, this is of major consequence. Then, when this capability is coupled with a digital assistant or bot that interacts or nudges using natural language, the ability to react to data signals and insights is only further enhanced.

        In the case of the Oracle Cloud HCM suite, the enterprise software vendor has noticeably been prioritizing use cases involving the three business drivers or themes noted: Elevating organizational agility (to mitigate risks and capitalize on opportunities, both with alacrity); delivering a great employee experience (to attract and retain top talent) and enabling employees to be more productive (by addressing their skill gaps, highlighting critical skill/job relationships, and removing a range of potential impediments to employee engagement). These themes now permeate a raft of considerable new functionality across the suite’s Global HR, Talent Management and Workforce Management product components; and the advances in functionality are supported by what Oracle calls “HCM Cloud Common,” based on the concept of an experience design studio that powers “nudges” and workflow triggers to ensure attention is given where it’s needed the most, or simply needed quickly. This might relate to a manager approving working overtime multiple days in a row, or an internal job posting that might be of interest to certain employees. The design studio also enhances user experiences in the form of having the system react to what it learns about the user’s preferences, tendencies and hot button issues, knowledge that Oracle’s digital assistant then uses to compress its own learning and “user personalization” process, in multiple languages, no less.

        Let’s turn to how Oracle Cloud HCM is supporting two of the more challenging use cases in selecting an HCM system. The first is the ability to evaluate an employee’s or candidate’s skills against a skills database with ever-changing definitions, skill/job relationships and required proficiency levels. This can easily result in an incomplete picture of the most important and relevant skills needed to perform well. The other use case is the entire HCM planning and modeling arena, from strategic workforce planning as covered in my recent analyst perspective called “Workforce Planning: Seizing the Moment Strategically” to total compensation planning, that similarly revolves around distilling many internal and external (market) data points into optimal workforce decisions and strategies. Sophisticated planning and modeling capabilities have long been the Achilles’ heel of the HCM systems domain, and Oracle Cloud HCM is endeavoring to reverse this dynamic.

        Oracle Cloud HCM is taking a new approach with respect to skills management, one that encompasses skills identification or inferences from unstructured information like cover letters and resume text, skills relationships (including ontology and taxonomy) and overall skills management in relation to not only an organization’s workforce but in the market overall. Included in this approach are gig workers and the fact that insights and inferences into skills are not simply a function of job title but also to duties and activities in the context of project work. This is a big deal given the vendor’s “opportunity marketplace” functionality, a one-stop shop for both employee and gig worker opportunities. Oracle’s skills management-related functionality also includes the use of its digital assistant, which effectively doubles as a “skills assistant” and is designed to handle the dynamic nature of information as it continues to evolve within and outside of organizations. Machine learning is at the center of all this. Executing on this vision allows Oracle Cloud HCM customers to not only manage the relationships within an ever-expanding skills and job title universe, but guide employees in what they need to be more mobile and marketable inside and outside the organization. Talk about a great EX!

        As for product nomenclature, a key component of Oracle Cloud HCM’s skills management portfolio, Oracle Dynamic Skills, is Skills Nexus. Formerly called Skills Assistant, Skills Nexus is a deep learning engine that sources, detects, normalizes and relates skills so organizations can focus on talent alignment while managing their ever-evolving skills inventories. Oracle also works with customers to ensure their “unique skills language” is reflected in this tool. Skills Nexus is complemented by a capability set Oracle is now calling Skills Advisor. The Skills Advisor tool enables AI-based matching of people, jobs and resources based on contextual similarity rather than an exact match. Oracle refers to this process as “skills enrichment,” designed to enhance candidate and employee profiles with related, inferred and potentially missing skills, as well as be discovered for opportunities. There is also the capability to import skills from LinkedIn profiles directly into the Oracle Talent Profile and serve as the “pre-enrichment” starting point. These capabilities became available to clients in release 21b, which started shipping in April 2021.

        As mentioned, Oracle Cloud HCM also tackles what has often been the avoided “third rail” of HCM systems requirements: planning and modeling. The cloud HCM suite offers the ability to link hiring plans and options organically and dynamically for addressing staff and skill gaps to ongoing financial performance, as well as adjacent and downstream customer experience and supply chain processes and systems. This is huge, as traditional workforce planning product capabilities needed such incremental capabilities to even be considered “strategic.” By crossing over into total compensation planning and modeling, Oracle ranked first overall in our 2020 TCM Value Index market report, due in part to the ability to plan, model, budget and allocate total rewards using a variety of methods deemed appropriate and defensible by the end-user organization.

        These product enhancements are accompanied by others new on the scene such as the combination of Oracle Work Life Solutions and Oracle Journeys, both aimed at improving the employee experience of productivity and engagement by helping align their work and personal lives and strive to achieve greater satisfaction in both. Work Life Solutions can “track, recommend or nudge” in relation to wellness goals and activities, community involvements such as volunteering, family issues such as finding suitable elder care, or aid in building a personal brand. The approach is designed to leverage third-party systems and content.

        The result of all these investments is paying off for Oracle Cloud HCM. As is often the case, positive market momentum directly follows an intensified effort to help HCM customers address long-standing business problems and challenges, in other words, tackling some of today’s toughest HR/HCM use cases.


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