Will the Affordability Care Act be a Catalyst for HCM Analytics?

PPACA_2HR leaders on the fence about investing in an analytics platform may now have the  justification needed for moving forward, courtesy of the US Federal Government and its impending Patient Protection and Affordable Care Act (PPACA), which goes into effect on January 1, 2014.  With complex requirements and potentially significant financial consequences, the PPACA will require many employers to move beyond standard tracking and reporting platforms to more advanced, real-time decision support tools to proactively manage the many aspects of this complex legislation.

Fundamentally, the PPACA is about reducing the number of uninsured Americans  (numbered at more than 50 million in 2010) while attempting to address the affordability and quality of that healthcare coverage overall.  State-level health insurance exchanges (HIX) are being formed to make available the minimum requirements across benefit coverage and cost-sharing standards, while employers grapple with tradeoffs in health benefit plan designs and premium costs vs. the federal tax credits and subsidies available to low- and middle-income workers.

For employers, the requirements of the PPACA quickly get complicated with look-back and ongoing calculations of hours worked and future hours, benefits eligibility vs. enrollment, premiums to wages ratios, and evidentiary reporting to government agencies.  Non-compliance with this still-being-clarified legislation can lead  to significant penalties for employers, not to mention the many downstream impacts on employee relations and employer brand.

For some organizations, calculating and paying the penalty will be the quickest route to compliance while others will want to weigh various workforce modeling scenarios to determine their best approach (provide coverage as intended, reduce worker hours for a percentage of employees, etc.).  Leading payroll and workforce management platforms such as ADP, Ceridian and Kronos are actively enhancing their software to deliver the calculations and reporting required by the ACA, often including the ability to anticipate when benefits eligibility will be triggered based on future labor schedules.

Across the many mandates of the PPACA, (employer mandates, healthcare tax credits and individual mandates), behaviors at work will change that will affect the costs – both direct and hidden – of compliance choices.  Shifting workers to part-time will result in increased unemployment claims; additional part-time staff may be hired to fill the gaps of the reduced workforce; turnover may be adversely affected; workforce tax credit eligibility can be affected and additional training and ramp-up time needs to be factored in.  As they evaluate the direct costs of their compliance alternatives such as benefits premiums, labor expenses and penalties, employers must also take into account these and other indirect or hidden costs associated with their choices.

Getting to a clear understanding of the direct and indirect costs requires complex analysis and modeling, a prime use case for an analytics platform.

One of the players in this market is Equifax,  which recently augmented its Equifax Workforce Solutions division with the acquisition of analytics technology provider eThority in 2011.  Leveraging the eThority platform, Equifax is introducing a new solution called the “Affordable Care Act Impact Analysis and Management” tool to help employers model and monitor the impacts of PPACA on their business. The tool enables employers to see costs (including labor, benefit premiums and potential fines) at group or detail levels based on different modeling scenarios. It also highlights the associated costs resulting from anticipated new hires and increased unemployment claims that can offset savings from those initial scenarios, a level of analysis that many traditional payroll and workforce software providers are not offering.  Equifax can also leverage the data reported to them by thousands of employers across the country, representing tens of millions of workers, to report on labor and payroll trends across regions, industry and other segments, further augmenting the modeling scenario evaluations.  As desired, Equifax also provides additional consulting services including evaluation of new assumptions as well as overall program management and audit support.

The modeling platform is interactive, adapting to changes in law and assumptions. Delivered via subscription or available on premises, employers can access data beyond their own workforce data to make better, more informed choices with regard to how they will achieve compliance with PPACA mandates.

Investing in an analytics platform can bring more than just workforce insight and modeling capabilities: it can be a powerful tool in managing risk and compliance across the entire enterprise.  In the case of the Affordable Care Act, it may be the only tool that will effectively support employers in their daily need to monitor and manage the complexities of this legislation.  The requirements of PPACA actually begin before January 2014, with employers needing to make decisions and communicate benefit options, costs and coverage to employees during the Fall Open Enrollment schedule. Employers should be evaluating their options now, and the availability of new tools like the Equifax ACA Impact Analysis and Management solution are timely additions to the market.

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News Analysis: Infor Adds SaaS LMS with Acquisition of CERTPOINT

Proving it has not lost its appetite for acquisitions, on March 4th, 2013, Infor announced its planned acquisition of New York based CERTPOINT Systems, Inc., a SaaS provider of global learning management software (LMS) and learning content management software (LCMS).

CERTPOINT backgroundinforcertpoint

Founded in 1996, CERTPOINT (formerly Vuepoint) offers comprehensive learning solutions including LMS, LCMS, content authoring, competency management, integrated web conferencing, mobile access and social learning to more than 1300 clients across more than 80 countries.  Marquis customers include Toyota, Honda, Motorola, Ralph Lauren, LANCOME and Weightwatchers. Like Infor, it boasts a hybrid offering, delivering on-premises, hosted and SaaS-based offerings; the majority of its clients, however, utilize the SaaS applications, consistent with adoption trends in the human capital management (HCM) market.  CERTPOINT also provides consulting services including content development, implementation and strategic consulting.  It currently employs approximately 50 staff, most based in New York.

The acquisition expands two key areas for Infor:

  • With the CERTPOINT acquisition, the Infor Human Capital Management (HCM) suite delivers a comprehensive end-to-end offering. Tarik Taman, the GM of Infor HCM, noted that, “The acquisition of CERTPOINT will enable Infor to offer customers an end-to-end HCM solution, delivered to help maximize access and business insight and achieve breakthrough performance. In addition to complementary functionality, the acquisition of CERTPOINT sends the signal that Infor intends to be atop the leaderboard of SaaS Enterprise Human Capital Management solution providers.”
  • Point of View (POV): As Infor continues to move its HCM suite of products fully to the cloud (watch for their announcements in this area in the Summer of 2013), the acquisition of SaaS-based CERTPOINT completes the suite with solid LMS capabilities. And in today’s global, virtual and mobile work environments, CERTPOINT’s delivery of personalized electronic content to mobile devices is precisely the type of capability required for business performance.  Integration via Infor’s technology framework, Infor ION, will focus on the HCM products (Lawson HRM, Talent Management and Service Delivery), but will also extend to other Infor solutions to meet strategic opportunities. WebEx Communications is the current partner to CERTPOINT for delivering integrated web training and conferencing; Infor does not currently have a competing offering but I expect this to be an area of development for the Infor ION team in the future. From an end-to-end perspective, Infor is one of the few providers of HR Service Delivery (having acquired this from Lawson/Enwisen in 2011).  The Infor Enwisen platform has served as a unifying solution across all Infor Lawson HCM products, delivering portal, knowledgebase and multi-tiered support across the suite. Integration with Enwisen will bring rapid value-add to CERTPOINT customers.

  • CERTPOINT fortifies Infor Healthcare solutions with critical learning capabilities. Certification and compliance training are mission critical activities in the healthcare industry.  Combined with the verticalized solution for Healthcare from Infor HCM, clients will be able to move beyond certification and compliance to the creation of high performing healthcare organizations.
  • Point of View (POV):  Infor gained a major presence in Healthcare with the acquisition of Lawson software in 2011, and so CERTPOINT’s Healthcare industry solution is a natural launch point for showcasing the combined offering. Infor has, in fact has already begun this push, as it positions richer capabilities for the Healthcare industry as well as increased thought leadership with the hiring of a Chief Medical Information Officer (CMIO) to oversee the Infor Healthcare suite. Other industries such as Automotive, Food & Hospitality and Manufacturing  will be early solution targets as well. One of Infor’s points of differentiation is its micro-vertical strategy: beyond the standard 21 or so industry vertical classifications, Infor recognizes the unique needs coming from more than 2000 micro-verticals within these broader industries. CERTPOINT clients will benefit over time from Infor’s micro-vertical focus as this specialized knowledge infuses and expands the capabilities of its nine current vertical offerings.

Bottom Line:  Infor Advances its Move to the Cloud

Today,  Infor is the third largest provider of enterprise applications and services, with a valuation of $16B and five consecutive quarters of double-digit license revenue growth. It doesn’t just compete with Oracle and SAP, however; it increasingly competes with the likes of Workday and Ultimate as clients look to the cloud for Enterprise HCM.  The acquisition of CERTPOINT not only completes the Infor HCM suite, it does so through a SaaS offering that enables rapid, low cost deployment and frequent innovations in a business-critical area.  Additionally, CERTPOINT provides support for the extended enterprise – training for partners, suppliers and customers – including eCommerce capabilities for companies that deliver training for profit. With Infor Ming.le, Infor’s social platform still in development, CERTPOINT’s social learning will also be a welcome and timely addition to the Infor HCM suite.

As always, the devil is in the details, but given that CERTPOINT today integrates with many HCM solutions (including its strategic partner, Ultimate Software), the initial phase of the Infor/CERTPOINT integration should come to market quickly, with more strategic points of leverage following in subsequent iterations.  Infor clients will benefit from this acquisition through the additional depth of learning capabilities; CERTPOINT clients will have a new, integrated path to consider as they evaluate the upgrade or replacement of their current HCM infrastructures.

Related posts:

Event Report: #InforSummit Reveals More Than a Redesigned Infor

Seven Ways Infor is Advancing HCM (Hint: Lawson is but One)

IBM Connect 2013 First Take: Will Watson be the future of HCM?

The messages at this morning’s IBM Connect keynote event were clear: The future is “Social” and the new language of business is “Analytics”. Welcome to the future.

All morning these messages were evangelized and demonstrated, from IBM executives and their demo teams, to clients like Bosch, Caterpillar and Regeneron Pharmaceuticals, and even from a Hollywood star-slash-collaborative film development entrepreneur.  Each spoke on the transformational role that collaborative, social engagement is having in our business and personal lives, changing how we work, play, create, engage and in some cases even how we’re paid or rewarded for our efforts.

For me, one of the most intriguing aspects of the keynote came at the end, when Mike Rhodin, SVP IBM Software Solutions Group, spoke to the future and the intersection of social, analytics and people processes.  He spoke of cognitive systems like IBM’s Watson and its ability to filter through the terabytes of data created every day to see patterns, unlock the real truth about business, employees and customers, and to weave intelligence into every aspect of the fabric of a business.

Watson meets HCMFor example, Rhodin asked that we imagine a central “employee center” for global organizations – one which becomes a trusted career advisor from pre-hire through advanced roles in the organization through the continuous analysis of formal, informal, social and other inputs (structured and unstructured) to present a highly personalized, dynamic and guided  path for each individual. Not the static, pre-defined career paths of the past, but truly intelligent, contextual and adaptive guidance to the individual all throughout their career with a company.

Long term future vision?  Not as far off as might be imagined.  Today, Watson is being used in select healthcare use cases such as analyzing patient records and myriad information sources to surface recommended treatment protocols.  Applying similarly deep and broad analysis across the ‘big data’ of the enterprise, with a lens on employee success and value creation for the organization, makes complete sense.  Only big data analytics will be able to effectively interpret all the signals an enterprise may receive around its employees and drive meaningful insights and decision support – for managers and the employees alike.  Embedded cognitive systems are the necessary next step as we evolve our talent technologies and processes from transactional systems to systems of engagement and, ultimately, transform them to the experiential systems necessary to thrive in the future of work.

Of course – the answer isn’t just pure analytical power.  Human engagement and analysis will still be needed.  Even in the Watson-recommended healthcare protocols referenced above, the physician and other caregivers use the results to inform and guide their actions; ultimately the healthcare provider makes the final decision.  Likewise, in the career management and other employeee-oriented engagement scenarios, the cognitive system-delivered paths will serve as guides to inform individuals; Watson won’t replace the person-to-person conversations and analysis that will ultimately drive the employee’s action.  What’s transformational, however, is the richness of information that will inform those individual actions, that can make recommendations based on previously hidden patterns and connections, all because of the capabilities of real-time analysis of vast quantities of seemingly disparate information.

Many announcements are underway here at IBM Connect and the opportunities for the  HCM market are numerous; more to follow in upcoming days.  Meanwhile, let me know what you think about the idea of Watson and related systems and the opportunities for HCM.

Will a Move to the Cloud Make IT Irrelevant?

An impressive number of IT and Business leaders from across EMEA have converged  upon Dubai this week to participate in Oracle’s CloudWorld, an executive event focused on the disruptive technologies of social, mobile and, of course, Cloud.  The Dubai event is the first in a series of conferences that will take place in select cities across the globe through April 2013.

One of the common conversations taking place amongst conference delegates is the impact of these technologies on the IT organization – fundamentally, is cloud making IT irrelevant?

The reality is actually just the opposite: embracing cloud and other disruptive technologies enables the IT organization to rebalance its investments in core infrastructure to embrace more strategic investments in integration, intelligence and innovation.

Constellation Research has published extensively on this topic, and I presented on it as well throughout 2012. Embedded below is one such presentation, taking a look at the evolving role of IT organizations as the Future of Work unfolds, including top priorities, key challenges and required shifts in thinking. Whether focused on Infrastructure, Integration, Intelligence or Innovation, the “I” in the “IT” Organization is morphing to match the needs of the organization, taking a more business-focused point of view.

Click here to view the presentation:  The Evolution of IT Organizations in the Future of work

For additional thoughts on the hybrid IT environment that is likely emerging in your organization as a result of partial cloud adoption, check out this article and published research, also by Constellation.

Contact us at Constellation Research if you would like to discuss our research on this topic in more detail.

Kicking Off 2013 in the Hot Seat

What can you cover in 20 minutes on a radio show with a provocative host?  A lot, apparently.SoMoCloHy

I had the pleasure of joining Bill Kutik, well-known HR industry analyst and founding Co-Chair of the annual HR Technology Conference, on his biweekly program, the Bill Kutik Radio Show, sponsored by Knowledge Infusion. It was Bill’s 118th radio show to date, but his first show of 2013, marking the second time in a row that I’ve been honored to be Bill’s guest on his “New Year kickoff” episode.

For 20 minutes, and with no-holds-barred, Bill peppered me with questions spanning some of the hottest topics in HCM:  SaaS, Social, Mobile and Hybrid HCM.  A few of the questions we discussed – and at times, debated – were these:

  • Are social technologies delivering business value?  Have they found their place as ‘real tools’ or are we still just connecting and sharing?
  • Is SaaS winning because we’re doing less diligence? Are switching costs really less for SaaS vs. OnPremises solutions?
  • Is Hybrid HCM (the combination of OnPremises and SaaS deployments) part of the journey to the Cloud, or a destination in itself?  Why would you go that route?
  • Mobile – is there real enterprise value here, or is mobile really just for a few targeted processes such as time & labor?  Where is it making a difference?

Click here to listen to this highly interactive session.  For a full roster and links to Bill’s many other radio interviews, visit KI OnDemand.

Disclosure: neither Bill Kutik nor Knowledge Infusion are clients of mine or of Constellation Research, Inc., but I am not above buying them (or letting them buy me) a drink, coffee or other refreshment when our paths cross in exchange for great industry conversation and insights. 

“Ok, Now You’ve Scared Me.”

CarnacA few weeks ago, I participated in a virtual panel focused on “The Future of Work”, providing my views into the changing landscape of work, not just as we enter 2013, but looking further out to 3, 5 or even 10 years from now. The discussion, sponsored by Cornerstone OnDemand, is available here for playback.

I began the session by sharing my view that the future of work, first and foremost, is already here. Organizations have long been affected by and responding to the dramatic changes coming from disruptive technologies, rapidly shifting worker demographics and dynamics, and new competitive pressures from an especially dynamic business climate. The challenges are real and taking place today. Looking to the future of work, one could sum up the anticipated impacts in a single word: More. More intensity. More pressure. More change. More risk. But also, more opportunity. More engagement. More transparency. More impact.

This “more” concept translates to a change in all aspects of work: namely, the Who, Where, When, What, How and even Why of work needs to be rethought:

  • The “who” of work: Who are your workers?  What generation do they represent? Are they employees or free agents? What is the composition of your workforce from a diversity perspective and how are practices in attracting, engaging, motivating, developing, measuring and rewarding the workforce evolving?
  • The “where” and “when” of work: Work takes place at the office, at home, on the go; in connected or disconnected modes from laptops, tablets, smartphones and desktops; face-to-face with our local colleagues or virtually across the globe; in shared coworking spaces where our cubicle neighbor may not even work for the same company. What systems are we using to ensure access to the people and information necessary to get work done? To drive engagement and crank up innovation?  In today’s business climate, are we fostering results from any place, at any time, from any device, or constraining people and results with a traditional mindset to work?
  • The “what” and “how” of work: The very nature of work is changing as the lines between employees, customers and suppliers blur and technology transforms work to more interaction-based engagements.  Big data insights and predictive analytics provide new views of influence and impact while social network analysis helps us understand the flow of knowledge in the enterprise and how work is getting done.  We’re just scratching the surface on better insights into the what and how of work in today’s social enterprise; what role will HR play in this new world of big data?
  • The “why” of work: Motivations differ by generation and by individual; they span pay and benefits, career advancement, skill development, recognition and increasingly,  social responsibility and altruism.  Are the rewards and recognition systems used in corporations today resonating with these very diverse workforce motivations? Do our company cultures sustain the drivers of the emerging workforce?

I riffed a bit on the sweeping changes required in business due to the above and received my favorite response of the hour from Cornerstone’s VP of Corporate Development and Strategy, Jason Corsello.  His comment?

Ok, now you’ve scared me.”

Jason is wicked smart. And he is anything but ‘scared’ about the future of work, as he and his colleagues work to guide Cornerstone’s strategy and disrupt the legacy market with cloud, social and mobile technologies. But his off-the-cuff comment was a good one, highlighting that despite all the advances we’ve made in processes and technology, there is still much more to do; more to plan for, to learn from, to capitalize on,  to embrace.

More.

Are you ready for the future of work?

Read a summary of the full panel discussion or listen to the event directly.  Be sure to catch the latest research on the Future of Work, Consumerization of IT and the New C-Suite, and other critical business themes at Constellation Research, Inc..

Disclosure: Cornerstone OnDemand is a client of Constellation Research, Inc.

Moving Payroll to the Cloud? Join the Crowd.

wordcloudIf you’re considering a move to the Cloud for your payroll technologies, you’re not alone.  In a recent survey by Constellation Research, Inc. partner Computer Economics, 40% of companies considering payroll technology investments reported such investments involved a move to the Cloud.

Why the mass migration?  In a recent webinar on the topic, I outlined six key benefits of Cloud-based Payroll.  In short, organizations moving their payroll to the cloud are doing so to reap the many benefits of SaaS while ensuring the core objectives of Payroll are met:

  1. Quality.  Innovations arrive faster and are adopted more rapidly in the Cloud than with traditional on-premises and hosted software.  With true, multi-tenant SaaS, clients are always on the latest release of the software, enabling organizations to move from periodic jumps to continuous innovation in user experience, workflows and capabilities. If you think this doesn’t matter to user experience, think again.  Organizations routinely report higher levels of  satisfaction with the usability of SaaS solutions over traditional offerings across all user roles (end users, managers and administrators).
  2. Cost optimization.  An immediate value to organizations – and a large factor behind the movement of technology buying from IT into the line of business – is how easily and quickly SaaS solutions can be deployed to solve immediate business needs.  SaaS solutions are implemented on average 82% faster than on-premises solutions and require only 22% of the resources in ongoing staff compared to on-premises shops, freeing up members of the payroll team to focus on more strategic initiatives. (Source: CedarCrestone 2012-13 HR Systems Survey, 15th ed.)
  3. Risk Mitigation. While many still cite security concerns as a top reason for keeping payroll technology in-house, the reality is that SaaS providers typically excel in security measures (including access controls, backup and recovery, and myriad other potential vulnerability points) due to the large volume of disparate clients continuously pushing their own systems audits and inquiries. SaaS Payroll providers also take on responsibility for ensuring all legal/regulatory changes are applied, tested and available.  With tens, hundreds or thousands of customers utilizing these services, it ensures many more eyeballs watching for and reporting any occasional “misses” from the provider and an accompanying rapid response to such issues.
  4. Control.  Managing payroll on premises does not guarantee that the payroll organization has the controls it desires over its technologies and processes. (If you’ve ever waited for your IT organization to apply an update or manage an enterprise upgrade, you know this all too well.)  Outsourcing payroll further reduces an organization’s span of control, especially with regard to timing of process flows and reporting/analytics. With SaaS, the payroll organization gets full control over process timing (data entry, audits, check runs, quality checks, adjustments, etc.); anytime access to data, analytics and reporting; and the assurance that the software is always at the latest release with the most recent changes in legs/regs applied and tested.
  5. Flexibility.  SaaS solutions, by design, support the dynamic nature of a business – the ability to rapidly scale hardware needs to support dramatic increases or decreases in resources are inherent to these solutions.  But flexibility in the payroll world also means the ability to quickly integrate to local payroll solutions across the globe, to respond to ever-changing time and pay regulations, and to meet the dynamic needs and priorities of the company.  SaaS-based payroll solutions leverage the emerging best-practices in cloud-based integrations, ensure the fastest time to readiness in response to changing regulations, and provide the foundation for business agility in global operations.
  6. Insight.  Multi-country payroll almost demands a SaaS solution, as it invariably requires integrations to local payroll providers in countries where a smaller number of employees reside or where major payroll providers have not yet standardized an offering.  Those myriad integrations frequently lead to delayed  visibility into the actual payroll costs across the globe, causing surprise ‘hits’ to financials. Just over 50% of global organizations today report having a global system of record, and hence are hampered by not having all the global data transparency necessary for timely, strategic decision making.  SaaS Payroll providers can rapidly integrate and manage a global view of the payroll activities of an organization, both minimizing financial risks while making available a broader base of data from which to glean additional insights.

Furthermore, when part of a broader global SaaS HRMS platform, SaaS Payroll moves from an administrative to a strategic play as it provides the ability for organizations of any size to dynamically scale operations and to securely plug into global capabilities, and thus engage and compete on a global scale.

Many other facets of SaaS Payroll are explored in this webinar, including a view into social enablement of payroll processes as well as how SaaS can future proof the career of today’s payroll leadership.

The question of SaaS for Payroll, or for any other HCM related initiative, has clearly moved from “Why” to “Why Not?”

Catch the webinar replay here:  The Changing Landscape of Payroll: Moving to the Cloud

Disclosure: this webinar was sponsored by Workday, a client of Constellation Research, Inc.
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