Ventana Research Analyst Perspectives

Enterprise resource planning (ERP) is a software category that includes an array of business applications that includes human resources and finance. Workday is a vendor at the center of a new generation of ERP. My colleague Robert Kugel recently covered that company’s advances in finance using cloud computing to operate its platform. And I recently attended Workday’s technology analyst summit, where I got a deeper view of the technology under its applications and its efforts to perfect its processing potential. The company’s platform can support a broad range of applications, and it is advancing its efforts in analytics, collaboration and business planning. Today, however, only Workday itself is allowed to build applications on the platform, a situation that contrasts with many other ERP providers that make theirs available to third-party software developers and consultants.

Historically workforce management has been centered on tracking time and attendance, absences and leaves. Organizations view the time and attendance system as the top priority to integrate with the payroll system; in our payroll management benchmark research half (51%) of organizations called it very important. However, only one in five have integrated the two to streamline processes. So limited an administrative and operational focus does not contribute to improving worker productivity or manager efficiency. Moreover, such an approach can foster employee turnover and undermine worker satisfaction and loyalty. Our research analysis underscores that paying insufficient attention to the worker experience can degrade employees’ sense of accomplishment and in some situations also degrade the customer experience.

Ventana Research defines a human resources management system (HRMS) as the set of applications and associated processes that store and manage the employee information used by an organization’s human resources department. New technologies make it possible for the HRMS to perform better and be easier to use by HR professionals and members of the workforce. The range of evolving technologies impacting the development of the HRMS include business analytics, big data, cloud computing, mobile technology, business collaboration, social media and wearable computing. These advances enable organizations to streamline the processes that the HRMS supports and more efficiently take advantage of competencies that already exist in the workforce. The changes are so substantive for organizations and their HR departments that we have undertaken new research calledNext-Generation Human Resources Management Systems.

As organizations look to improve the competency and skills of their workers, learning management system (LMS) technology can help improve their efforts. Our latest benchmark research in next-generation learning management systems finds a range of progress in this regard. Our Performance Index analysis places organizations almost evenly between the two lowest (51%) and the two highest (49%) of four levels of performance. The results differ by size of company as measured by number of employees. For example, only 8 percent of small companies reach the highest Innovative level of performance, compared to 26 percent of very large companies, the largest percentage of any size. Analyzed by industry, the Finance, Insurance and Real Estate sector performs best: Two out of three (65%) are at the top two levels. We attribute this in part to the finance industry’s focus on processes and its need to comply with regulations and teach employees how to do so.

It is more important than ever for businesses to attract and retain the best talent, and managing compensation effectively is an essential tool for doing so. Obviously companies must pay well to compete, but managing salary, merit pay, variable pay and incentives for employees, tracking their hiring anniversaries and conducting accurate performance appraisals make total compensation management a complex process. All of this must be managed within budget and policy guidelines. As organizations grow and require more employees, the challenges multiply and the difficulty increases. Our benchmark research finds that inconsistent execution is the top impediment to effective compensation management for nearly half (47%) of organizations. Software designed for this purpose can help.