Ventana Research Analyst Perspectives

"Configurable" has historically been used to describe the degree to which enterprise software, such as HCM systems, can readily adapt to a customer’s business and process requirements, ideally with no (or only modest) involvement from software experts or IT teams. The term will likely always have considerable value when evaluating HCM systems because, while not always top of mind with buyers, the level of configurability in applications is essential for achieving key strategic goals, such as elevating organizational agility. Configurability is the means, but when an enterprise can react or adapt to indications of potential business risks or opportunities with quick, decisive workforce actions and decisions, this is the true business opportunity in the configurability and flexibility equation. Organizational agility is one of the most reliable paths to sustaining competitive advantage. Think of the situation where a large consultancy has determined they can successfully bring a new service offering to the market. They must quickly and effectively execute a broad range of workforce-related activities including, in some cases, conducting a type of analysis or tracking some information for the first time. Their agility is clearly aided by having an adaptable HCM system.

Payroll management is one of the six major focus areas in the Human Capital Management research and advisory practice at Ventana Research. The umbrella term “continuous payroll” is used to connote the always-on nature of a modern payroll function and related demands of supporting technologies. It’s an appropriate term, especially considering that one of the most significant advances in payroll management in decades is “on-demand pay,” also known as earned wage access, which is as continuous as you can get.

Many organizations are having a difficult time selecting what they believe to be the “best fit” HCM system for their particular strategic workforce goals and priorities. This is due in some cases to the very different evaluation lenses or criteria used by IT and HR teams involved in the process. The former tends to emphasize technology-specific selection considerations such as whether the system meets well-defined usability, performance and reliability criteria such as number of clicks needed to navigate, speed of database calls or system uptime thresholds, respectively. In contrast, many users from HR and other non-IT departments seek freedom from “IT dependency” in influencing the way the system presents itself and meets their business requirements, also referred to as the system’s configurability by end-users. This is the essence of the Adaptability evaluation dimension in Ventana Research’s Value Index market reports.

There is a sea change happening in the Human Capital Management systems market. Historically, the predominant orientation of human resources departments has been about mission and goals from an employer’s perspective, spanning areas such as regulatory compliance, workforce costs, efficiency and effectiveness levels, and actions needed to improve skills and overall impact. This rather one-sided focus is now in the rearview mirror of many successful organizations. There’s a new orientation or operating lens as it relates to the enterprise’s workforce: “What does a worker need to be extremely effective but also have a high-quality ̶ if not positively memorable ̶ experience at work?”

The joining forces of two sizable companies, in this case totaling over 12,000 employees, can be expected to elevate both business risk and business opportunity. The risk side of the ledger typically impacts employees and customers. Employees become distracted or have their productivity dip until they know exactly how they will be impacted and what is changing, or even leaving voluntarily. Similarly, a segment of existing and potential customers view a merger as a net positive down the road but face fear, uncertainty and doubt about when those benefits will be achieved. Delays can lead both employees and customers to hitch their wagons to other horses as it were.