Ventana Research Analyst Perspectives

A decade ago, organizations were sold on best-of-breed technology stacks. In the world of human capital management, that meant a separate system for each of the myriad processes that make up a worker's life span with a company. The approach seemed to make sense because a single system cannot be the best at everything, can it? Is it realistic for a single provider to create the most advanced applicant tracking, onboarding, learning, payroll, compensation, performance management, succession planning, benefits management and off-boarding system – all in one platform. And so, individual process owners purchased the software that would perform its single task better than every other system, and the Monster Stack was born.

The piecemeal approach was not necessarily wrong, in spite of the challenges of integration, broken code and corrupt files in SFTP servers upending data uploads. When the purpose of the software was to optimize and automate processes, these individual and separate systems performed well. That said, technology has rapidly evolved. Where artificial intelligence was once a feature or function, it is now core technology. Cloud computing has overtaken on-premises deployments. API's have made data transfer easier and more complete. Equally important has been the evolution of worker and employer expectations of each other. Process optimization and automation are still critical, but they support a greater focus on experience and engagement. Interestingly, our research shows that leaders have mixed confidence in their human resources teams' ability to curate the best worker experience, but an employee's experience is an organizational responsibility, not just that of HR. It is an amalgamation of the culture, the role, total rewards, the opportunity to do meaningful work and how an organization creates and supports those opportunities. As technology permeates all aspects of work life, it stands to reason that when the siloes of data from independent systems are broken down and the information can be analyzed and acted upon as a single, continuous journey as opposed to independent and segregated components, the quality of experiences will naturally improve. The rise of the HCM platform built on a single architecture with readily accessible data has been precipitated by this need to create unified experiences over the entire worker life cycle.

This is not to say that point solutions have no place in a tech stack. To the contrary, advances in API's have made integrations much easier and more complete than in years past, and advanced analytics platforms allow data from disparate systems to be joined and evaluated in one place. Further, it is still difficult for any single system to be all things to all people. Organizations requiring specific functionality to support operating complexities may need to turn to point solutions to meet business objectives. The key to a successful HCM tech stack strategy is to ensure all systems are accessible and integrated into daily work life to the point that using the technology is the easiest, most natural thing to do, rather than seeking workarounds. If the software is doing its job, it will present itself wherever the worker needs to access it, rather than being a separate destination.

One way a single platform strategy has an advantage over integrated point solutions is in the consistency of the user interface. There is a reason there is a grand divide between Apple devotees and Android users. If you like the Apple user experience, it doesn't matter how many times an Android aficionado boasts of the customization capabilities of that platform that Apple simply doesn't have. The Apple user isn't going to budge. What is important to that user is the consistency of the look and feel and the seamless transfer of information and activities from device to device. Anything else is jarring. The same holds true for the single HCM platform versus the best-of-breed technology stack. It can be argued that there is considerable benefit in familiarity when a worker has a similar interface from the point of application through retirement and everything between, not the least of which is the time saved in user adoption. Still, many point solutions can overcome this through integration with the non-HCM systems that workers use every day, like MS Teams or Slack, for example. Consistent point of entry can also be a driver of user adoption, even if the UI inside each separate system differs.

There are clear benefits to both single platform and point solution strategies in the world of HCM technology. The key to choosing a successful approach is for organizations to ensure that these systems are integrated – not just with each other, but with the non-HCM systems workers, and that the underlying AI is smart enough to analyze and provide recommendations and insights based on the totality of the data, regardless of the source. Work life is a journey, and the technology that supports and enhances that journey should be part of the entire continuum, not just individual segments.

Regards,

Quincy Valencia