Jim Holincheck

Given the economic climate, there was a good turnout at KronosWorks (I do not have official numbers — maybe Kronos will post a comment).  Opening remarks by CEO Aaron Ain focused on continuing to invest in products, employees, and support (though like everyone else they will be scrutinizing their operating expenses in the near term).  Aaron also stressed that Kronos continues to perform well financially (115th consecutive quarter of Y/Y revenue growth and 82nd consecutive quarter of profitability).  Kronos is focused on three main strategies:

• Global — Kronos has already invested in building operations in Brazil, India, and China (they already have 20-30 customers in China).  In addition, they acquired Captor last year which provided an entree into France, Belgium, and the Netherlands (to compliment its already strong business in the UK).  Also, Kronos has started to build a presence in the Middle East.  Kronos has always been strong in North American and Australia.  today, Kronos generates approximately 18% of its revenue outside the US (outside includes Canada).  There was quite a bit of interest in global implementations.  Dell and Dresser-Rand discussed their multinational implementations.  These sessions were well attended.

Jenine Bogrand presented the Dresser-Rand case study.  Dresser-Rand has 6,000 employees in 25 countries.  To date, it has implemented Timekeeping and Activities (WFC 6.0) in U.S. plants, France (it has not implemented Timekeeping here yet), and Germany.  The most interesting thing for me was the use of Activities to capture work order, operation, resource, and quantity completed data (using a combination of laptops and time clocks with bar code scanning).  It uses this data for more accurate product costing and to have more detailed labor effectiveness (especially understanding idle time) data.

Patty Powers from Dell discussed its global implementation.  It is using WFC 6.03 (looking at upgrading to SP8 or SP9) in a single global DB.  It has 50,000 employee users (5,500 manager users).  Dell has implemented (in English) in the US, Canada, Panama, Philippines, India, Poland, and Singapore.  It has started to implement in Malaysia (it is on hold right now) and plans to implement Ireland, Australia, Mexico, and EMEA emerging markets (27 countries).  Dell used Kronos for the initial implementation in the US.  However, it has done the other implementations itself.  That has caused some difficulties.  It plans to engage Kronos to review requirements in the future (but will continue to do the implementations itself).  Dell’s deployment of Java Runtime Environment (JREs) has been challenging and it has started to use Citrix for thin client deployments.  Patty discussed a lot of the local regulatory complexities.  The US was pretty easy for Dell (no unions, just state/local rules).  Other countries have proven to be more difficult.  It has taken typically 60-90 days per country to deploy (more complex countries are around 120 days).

• Talent Management — For Kronos, this primarily means "field-based" (hourly worker) recruiting.  Kronos (via the acquisitions of Unicru and Deploy Solutions) has a strong customer base in Retail.  However, only 12 customers are implemented on v8.x at this point (another dozen are in process).  It was interesting to hear about the experience of Lee Ann Lecheler at healthcare customer Cambridge Healthcare Management (a 750 employee provider of long-term care services).  It showed that the same principles of using assessments to target hiring people with the right competencies leads to better results (turnover was reduced from 72% in 2005 to 57% in 2007).  It also shows the solution is not just for large retailers.  However, there are large retailers that had good stories to tell as well. 

Steve Parrillo of CVS Caremark discuss its Workforce Recruiting v6 implementation at more than 6,300 retail locations (as well as 15 distribution centers).  It has more than 190,000 employees and has grown via acquisition.  It was interesting to see how fast it has been able to bring up acquisitions on the solution.  In fact, it has just agreed to acquire Long Drugs and plans to add another 520+ locations in Q408 (if the deal closes promptly).  It also had strong results.   It reduced turnover in key hourly roles by 5-10%.  It increased retention at the 90 and 120 day points in tenure (it knows employees retained for more than 120 days are retained for a longer time — high school and college students continue to work there throughout their time in school).  It also estimates that it has saved managers a significant amount of time in the hiring process.  It plans to upgrade to v8 (Deploy Solutions technology with Unicru assessments) in Q209.

• Workforce Management — This is the main business for Kronos.  It wants to move its emphasis from having the "best product" (focusing on functionality) to "easiest to own".  "Easiest to own" for Kronos means lower TCO (fast measurable ROI), easiest to use, and easier to integrate with other applications (specifically the large ERP solutions).  It was hard for me to get my arms around this entirely.  There were few concrete examples of how Kronos was going to do this.  The new Workforce Integration Manager introduced with WFC 6.1 (not available for TKC, iSeries or pre-6.1 WFC customers) was one concrete example.  It moves more functionality to the web and addresses some shortcomings of Connect (for example, configurable record IDs and variable error messages).  WFC 6.x has a revamped UI, but it is not clear where some of the new UI technologies (Ajax, Flex, Silverlight, etc.) would fit in.  Kronos ran usability labs throughout the conference so there may have been some preview there, but I did not see it (comments welcome if you know more details).  Kronos talked about simplifying the server environment so that the solutions were easier to run, but there was not a lot of detail provided.

All in all, it was a good conference with a lot of customers doing a lot of interesting things.  In the tough economic times, we probably will see a lot more companies focus on the basics and the opportunity to lower costs.  Workforce management will take center stage for many industries because of the possible quantitative labor cost savings.  Likewise, companies with large percentages of hourly workers will also want to look at recruiting, more specifically tax credits (for example, WOTC and WTW in the US), to impact the bottom line (many retailers literally get millions of dollars of these tax credits per year that go directly to the bottom line – as one of our retail clients pointed out though – you need to make sure that you turn on that functionality).  Kronos is well-positioned to help customers in both of these areas.