2012 HCM Budget Observations

January 27, 2012

I recently served as a panelist on a webinar which discussed the 2012 HCM budgets.  The survey was done by IHRIM (International Association for Human Resource Information Management), and some interesting results appeared on the survey which caused me to do additional research on how the past few years of a difficult economy has impacted HR and HR systems budgets.

The good news is that 82% of those surveyed had their 2011 budget kept at the 2010 level or increased.  For 2012 that number is going up to 85%.  While we are still struggling with the economy, it shows that corporate leaders are realizing that they need to begin to invest in their technology infrastructure.  As companies have tried to hold down their expenses, their systems have continued to age and may not be taking full advantage of the technologies being used by  newer groups of employees.

Use of the 2012 budgets appear to be in the Talent Management areas (Recruiting, Performance Management and On-Boarding).  One interesting area of increase is with Business Intelligence, which corporations have realized can help them make better decisions about running the business.  32% of all respondents said they would be looking at some sort of Business Intelligence this year.

Spending on HR technology continues to grow in 2012 as organizations begin to see the economy moving.  There are still many areas which could impact the economy and corporate spending, but if you have allowed your technology and HR systems to become out dated, this needs to be rectified sooner instead of waiting for a full economic recovery.  If you haven’t already done so, you should begin to create an HCM technology strategy roadmap to best use your budgeted funding.

2012 HCM Technology Implications

January 25, 2012

Note: On December 14 HRchitect conducted its traditional year-end WebMingle. Matt Lafata (President), Ron Hanscome (VP HCM Systems Strategy Consulting) and John Hinojos (VP Consulting Services) spent a lively hour discussing major HCM technology events that occurred in 2011 versus what we predicted last December, and delivered a fresh set of predictions for 2012. Part 1 reviewed major events of 2011 and how our predictions panned out, and Part 2 covered what we expect will happen in 2012. This post will wrap things up by discussing what HRchitect believes this all means for companies looking to invest in HCM technology solutions over the next 12 months.

When all is said and done, 2011 was certainly an eventful year for the HCM marketplace. The frenetic pace of merger, acquisition and investment activities has certainly validated the strength of the market, along with strong organic growth experienced by many vendors. Fundamentally, the HRchitect team views the following as the major HCM market implications that every potential customer needs to consider in order to increase the chance of a successful outcome:

  • Even though consolidation has reduced the number of vendors, the complexity of decision making remains as high as ever – following all of the moves/adds/changes can be a time consuming, bewildering experience for those who follow HCM providers on an intermittent basis. In many cases, all of the market activity has only traded one kind of complexity (number of providers) for another (product & technology integration, product strategy). Current and potential users of HCM technology will get significant value from guidance provided by those who regularly follow the twists and turns of this market.
  • Implementation timeframes have become somewhat extended – there are many factors driving this, including disruptions due to acquisition (changes in vendor product strategy, exodus of implementation resources), extended configuration/design phases as customers struggle to include leading-edge features (e.g., social, mobile, analytics), and greater than expected change management activities. Potential customers should take this complexity into account as they build cost estimates for their implementation plans.
  • More than ever, potential customers of HCM technology solutions need a robust framework for selection decision making – with every vendor marketing their “latest & greatest” features, it’s important for customers to understand what is most important to their business and HR function, and to have a methodology for ranking vendor solutions. HRchitect provides a “Decision Drivers” framework that our clients use for this purpose – access a white paper that outlines this methodology here (Note: registration required for download).
  • HR is still recovering from the downturn – the impact of 2008 and the uneven recovery since then has definitely affected the HR team in most organizations. Staff cutbacks have forced many HR teams to do more with less, and run a “bare bones” operation that is focused on getting processes done instead of gathering and analyzing information to drive business decisions and outcomes. It will be critical for those implementing HCM technology in 2012 to allocate some headcount to establish and extend the metrics framework to deliver information of value to the organization.
  • Strategic linkage is critical – any potential purchaser of HCM technology needs to start with their organization’s business strategy, goals and objectives, and check the HR strategy for alignment. Only then can an HCM technology strategy be developed that supports the overarching HR strategy, which will then support the business. HCM project teams must understand the business at a deep level in order to make this happen.
  • Be careful, integration can be a real “gotcha” – with all of the acquisition activity there are fewer HCM vendors that deliver an organically developed integrated application on a single platform. Recent acquisitions will take between 18 and 36 months to be completely integrated into the vendor’s main platform. Make sure that your evaluation process tests the extent of integration that exists between modules, as well as the robustness of integration tools for 3rd party and enterprise applications. Remember also that project teams typically underestimate by at least 15% the time and cost required to integrate all the products needed to deliver seamless HCM processes – so build some cushion into your project plan.

We hope that you found this series of posts valuable as you move ahead into 2012. We’d love to hear about any questions or comments you may have, so fire away!

If desired, you may access the full audio of the WebMingle here. You can also find some very helpful supporting content (white papers and vendor summaries) here.

Don’t Miss Thursday’s HRchitect WebMingle with Lynne Mealy and Nov Omana of IHRIM

January 4, 2012

The HRchitect WebMingle is designed to give you some insight into the puzzling world of HR technology, talk about upcoming events in our industry, and provide insightful interviews with people of our industry – who they are, what they do and why you should care. The WebMingle has become the most popular live weekly Internet show in the HR technology industry!

The WebMingle has truly redefined how people get information about vendors, trends and really anything related to HR technology and we are very proud of that.

This week’s guests, the first of 2012, are Lynne Mealy, President and CEO of IHRIM, and Nov Omana, Chairman of the IHRIM Board of Directors.

Formed in 1980 from informal gatherings when HR and IT professionals found themselves needing mediators, IHRIM has become the world’s leading clearinghouse for the HRIM (Human Resource Information Management) industry. Today, IHRIM is a community of experts – a dynamic group of practitioners, vendors, consultants, students, and faculty that continues to grow, not just in numbers, but in its scope of knowledge and information.

Lynne Mealy currently serves as the President and CEO of IHRIM, inc., a nonprofit membership organization whose mission is to education and inform its members on the use of HR information technology. Lynne holds an MBA from Suffolk University and achieved her Human Resource Information Professional (HRIP) Certification from IHRIM in 2010. With more than 28 years’ experience in human resources, with a focus on HR information systems and strategic management, Lynne is a published author and presenter.

Nov has been in the HR Technology arena for over 35 years.  He is known for his thought leadership, his understanding of combining and leveraging technology in new ways, and his strong knowledge of the vendor community surrounding HR technology.  His reputation is “connecting the dots” between technologies to create new solutions and solve business problems. Nov is currently on the International Human Resources Information Management (IHRIM) Board of Directors (Chairman), IHRIM Educational Foundation Board (Vice Chair), an advisor to the Oracle HR User Group Board (OHUG), ClearView Management Advisory Board, and EpicHR’s Advisory Board. Nov also is a certified Human Resources Information Professional, HRIP, since 2010 and winner of the prestigious IHRIM Summit award in 2007.

Visit http://blogtalkradio.com/mattlafata to listen live this Thursday, January 5 at 2pm CST. If you missed any of our previous 90 or so WebMingles, you can also access them from that page.

We look forward to welcoming Lynne Mealy and Nov Omana with IHRIM to the HRchitect WebMingle and hope to have you join us as well.

If you would like to be considered as a guest on an upcoming WebMingle, please contact Tiffany Appleby at tappleby@HRchitect.com

Matt Lafata, HRchitect


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