Business Situation:  In a slow growth economy, it is difficult to get approval to hire new employees.  However, there is a strong desire by CEOs to grow the business and innovate.  How can HR help the organization with conflicting goals of controlling costs, yet innovate and return to growth?

Practice: Crowdsourcing – This is not a new idea.  It is explored in great detail in books like “Crowdsourcing: Why the Power of the Crowd Is Driving the Future of Business” “Wikinomics: How Mass Collaboration Changes Everything”, and “The Wisdom of Crowds”.  However, it is not a practice that is in the typical talent management toolkit of most HR/Recruiting organizations.  Crowdsourcing allows you to leverage talent that is not part of your organization to achieve your objectives.

Examples

TopCoder – Here is a description from their site:

Our business brings clients into the TopCoder community to get their work done in a new way. These projects range across the full spectrum of software and digital work. They engage our community in a range of disciplines: creative design, software engineering, and analytics. These projects are focused on innovating and implementing new products, releases, and features. At the core of this work is competition – each task is completed by members competing with each other to be the best at that task.

We believe that customers should be able to focus on what they want to build and create, not on measuring how many hours someone spent on a task. We believe engineers and designers should be free to chose when and if they work on a project or task, and be rewarded based on the quality of the results they produce. Empowering individuals to make their own decisions generates the most value for all parties.

When customers and members are brought together in a community and a market based approach is used to getting work done, there is no limit to what they can accomplish.

TopCoder has more than 300,000 people in the community.  That talent pool is significantly broader than one employer could build on its own. LendingTree uses it as a virtual software factory on an ongoing bases to supplement its own website development efforts, for example.

InnoCentive – InnoCentive also provides a platform for what it calls “challenge driven innovation”.  In that sense, it is similar to TopCoder, but is used for a broader problem set.  Here is an example from its website:

Roche’s challenge was to find a means of better measuring the quality and amount of a clinical specimen as it is passed through one of its automated chemistry analyzers. Both Roche and its partners had been wrestling with the challenge for fifteen years. So the company devised a test. It posted the challenge on InnoCentive.com, and through the power of crowdsourcing, exposed the challenge to a diverse, global, and open network of problem solvers. Within two months of posting the challenge, nearly 1,000 unique solvers from around the globe had signed on to the project, and a total of 113 proposals were submitted to Roche.

The result? Roche solved a challenge that had been plaguing it for fifteen years in sixty days. And interestingly, the submitted proposals replicated the entire history of Roche’s research and development program into this particular challenge. In other words, all of the solutions Roche had tried over a fifteen-year period had come in.

Think about that for a minute from a talent perspective.  Roche was able to find nearly 1,000 people for two months to work on its business challenge.  The prize for the winning solution was $20,000.  That was a pretty cost-effective source of talent.

Of course, crowdsourcing is not appropriate for every talent need.  However, HR needs to get outside of the box that says that talent is limited to just employees or contractors.

How many sourcing professionals in your HR/recruiting organization are leading the charge in working with these kinds of solutions (especially if you are not hiring anyone right now)?

The focus of the day was on Workday technology.  There was a spirited discussion of the end-user benefits of SaaS (for more information, see here, here, here, and here).  I actually have a little sympathy for Josh Greenbaum’s point of view (see the first link above) as I had posted a thought experiment of how a single tenant provider could offer similar benefits to customers.  My conclusion though is that it is very hard for an existing vendor to move to a single tenant version of SaaS without great upset to its business model.  Only three vendors that I am aware of, Ariba, Concur, and Ultimate Software, have made the transition from an exclusively on-premise, perpetual license model to a primarily externally hosted/subscription license model successfully.  The reality is that every new vendor I have seen for the past 3-4 years has utilized a multi-tenant SaaS model.  So, the argument is really can, and should, the providers of on-premise, perpetual license solutions move to a SaaS model?  At the end of the day, I think you will see most offer both and some will try to transition as best they can to the newer model once it is well-established.

Workday shared a lot about its development model (its development lifecycle to deliver 3 releases per year), its technology (in memory database – with a DBMS for persistence only, model-driven, object-based, with embedded analytics), its scalability (horizontal and vertical as well as performance tuning), and its vision (administrative ERP, device-agnostic, faceted employee search, social capabilities).  We covered a number of these things off in Workday 10 for Human Capital Management Emerging as a Global Alternative (subscription required).

Workday is growing at a rapid pace (bookings growth up 200% and average deal size greater than $1 million – for typically a three year or longer term).  They are looking to double their headcount by the end of 2011.  If our inquiries are any indication (and they often are), interest in Workday has dramatically increased thus far in 2010.  It is hard for Workday not to be on the radar screen of various HCM competitors given its pedigree, but a totally different competitive posture is required when customer adoption starts to accelerate.

Have you had a chance to do a deep dive?  What do you think?  Is Workday ready to take on the ERP and Talent Management Suite providers?

I also had the opportunity to attend a Social Recruiting workshop in the afternoon put on by Thomas Boyle from SilkRoad and Rob Humphrey from LinkedIn.  It was a good introduction for attendees to Facebook, Twitter, and LinkedIn.  Most of the attendees had some level of experience with social networks and were very interested in best practices in leverage those tools to improve recruiting effectiveness.  Unfortunately, I was not able to attend the entire workshop so I was not able to see how things turned out, but clearly, based on the attendance, there was a lot of interest in this topic.

As with most user conferences, a lot of the value was in the networking and you could see customers starting to connect with each other at meals and breaks and sharing experiences.  That is really what these events are all about.

I was not able to attend the whole conference so if you did attend and have more to add on your experience, please feel free to comment on this post and add to this report.

Hiring/Onboarding – Performance review scores can provide insight into who was a good hire or not.  Without them, some feedback would still be required to understand if a new hire was a good hire.

Learning/Development – Performance reviews can be useful for identifying developmental opportunities, but a rating is (or subsequent calibration of ratings are) not required to do this.

Career Path/Planning – Reviews can be useful to discuss next steps in careers and what career path/plan makes sense.  However, again, a rating is not required to do this.

Succession Planning – Performance reviews by their nature designate top performers.  This is useful for determining who is a candidate to be in a succession pool.  However, a talent review and/or nomination process does not need to include a formal performance rating that is shared with the employee (this point is arguable because some insist that successors know that they are successors).

Compensation – This is the primary area where a performance rating is used.  Performance ratings enable equitable distribution of scarce compensation funds.  At least, that is the theory.  However, if the performance reviews are not perceived as fair, it makes the rewards either also seem unfair (if the guidelines are strictly enforced) or it makes the review process look like a sham (people get paid at rates that are higher or lower than the performance rating warrants).  So, it is unclear if tying pay to performance really achieves the objective of fairness and differentiating rewards between high and low performers, especially when forced rankings (for more on this see “Thinking of Forced Ranking Your Employees? Tread Carefully”, Gartner subscription required) are involved. 

So, where does that leave us?  There is still a need for performance feedback.  Individuals need get benefit from feedback for development (though it does not need to be differentiated – high performers vs. low performers).  It is also needed for other processes (hiring effectiveness, succession pool creation, etc.).  This feedback does need to be differentiated.  So, we could call it something different, but the net result would be the same. 

The answer, to me, is not to get rid of the performance review.  It is to do a better job of appraising performance and communicating with employees.  What might you do?

Get rid of forced ranking, but keep calibration – It is possible to have performance not fall in a normal distribution without grade inflation.  If you only hire top performers, you should expect to have a higher percentage of top performers.  Calibration keeps you honest.  It forces managers to have a good justification for a rating and ensures consistent grading (to prevent grade inflation).

Make sure that total compensation aligns with performance, value delivered, and the market – If you have more high performers, there will be less differentiation in compensation because there are finite pools to allocate for merit increases and variable pay.  That is ok because it at least is fair.  The key is to make sure you understand market pay (it may not be just the market rate for a specific job, but also other jobs that have similar qualifications) and reward appropriately.  There is a lot of data freely available to individuals about market pay rates that was not available even a few years ago.

Find other ways to recognize the highest performance other than just compensation – This can happen in a myriad of ways, but would include promotions, development opportunities, additional job responsibilities, etc.

Keep an ongoing performance dialogue going – If you are discussing performance just once or twice a year, then you likely do not have a very effective performance management process.  Frequent communication, expectation setting, and support are crucial to keeping employee engagement high.

The bottom line is that I do not think performance reviews will go away because the feedback loop is critical to talent management success.  What needs to improve is the performance conversation.  Technology can help in some respects, but managers and executives need to step up their game.

I could not help thinking during these sessions of a software joke told to me by Brian Sommer a long time ago.  It goes like this:

Think about the answer to two questions: “Can I see it?”  and “Does it exist”?

• If I can see it and it does exist, then it is Real.
• If I can see it, but it does not exist, then it is Virtual.
• If I cannot see it, but it does exist, then it is Transparent
• If cannot see it and it does not exist, then it is in the Next Release

So, let’s ask these questions again about Fusion Applications now.  Can I see it?  Last year, I answered “yes, sort of”.  Oracle did demo parts of the solution at OOW last year.  I have had the chance to see more since last year so I know there is more to it, but as I indicated in my earlier blog post, I have not seen the full HCM suite (or full suite of any Fusion Applications).  So, the answer is “yes, to some degree”.

Does it Exist?  Last year, I said:

That is probably the more interesting question… Certainly there are “edge” applications such as Social CRM that do exist… However, based on the information provided to date, it is difficult to know exactly how much of the Fusion Application Suite is built.

It is still difficult to know.  We know the planned scope at a broad brush, but the detailed feature/functions have still not been communicated.  Last year, I also said:

there was no firm commitment on delivery dates for the first release of the Suite or any indication of early customers that were implementing the Suite.

There is a firmer delivery date (sometime in 2010).  We also know that some customers have been testing the solution.  However, testing parts of the solution is not the same as implementing it.  As I said last year, early customers that implement and go live are the real litmus test for “does it exist”.  So, does the first release of the full suite of Fusion Applications exist?  Not yet.  Will it exist in 2010?  I think it will.  However, they need to start implementing early customers soon to make that a reality.  Hopefully, Oracle will provide more details soon about the detailed functionality that will be delivered in version 1.  Customers want and need this information to make informed decisions about their application strategy.

What do you think about Oracle Fusion Applications announcement?

Step 1: Upload your presentation or case study document to an appropriate site (if it is not already already on a site) where you can control the use of the document.  Scribd and Slideshare are good examples.  I do not intend to store copies of case studies in the database, just URL pointers.  These sites will provide you a URL to directly access the document.  Also, vendors and consultants can also add case studies to the database and pointers to their web sites (please indicate if there is any sort of subscription required as shown in the Gartner examples already populated).

Step 2: Enter information about your case study.  Below the list of existing presentations, you will see fields to provide a summary of your case study and a link to the site where the case study is stored.  The contact name and e-mail address (and phone number if provided) will not be publicly displayed.  I have asked for that information if follow up is needed with the person submitting the case study for technical reasons.

After you enter the required information, you can add additional descriptive data about the case study including: organization size, industry, geographic scope, project phase(s), functional scope, vendors and consultants/systems integrators used

Step 3: Search the database for relevant case studies using the provided filters.  Obviously, the more case studies added to the database, the more useful the searching mechanisms will become.

I have added a link to a page on my personal blog as a permanent access point (with these instructions).  Also, you can link directly to the database as well (it is probably easier to enter the data by following the link than it is to use the embedded version in this blog post).  I can also provide you the code to embed it on your site if you would like to make it available (like I have embedded it into this blog post).

Please let me know if you think this is a good idea or how it might be improved via comments to this post.

I provided some context about how the user needs are changing and what they can do to better align with those needs.  The reaction of the audience was relatively subdued (I hope it was not my delivery!).  There were a few people who asked questions afterwards who seemed to feel this was an issue for them.  However, many, I think, felt that this was not that big a deal.  They were working with the users and understanding their needs.  I have seen enough self-service projects stumble to know that just dealing HR or Finance users is not enough, you have to reach the ultimate end users.  Am I overstating the importance meeting these more casual user needs?  Do you think IT is doing enough to understand these needs?

Thomas and I also had some briefings with the product strategy folks for both EBS (Anand Subbaram) and PeopleSoft (Tracy Martin along with Paco Aubrejuan the new GM of the PeopleSoft BU). From a PeopleSoft perspective, I admit I was actually pleasantly surprised.  Even though 9.1 is a little later than expected, they plan to add quite a bit of functionality including cascading goals in Performance Management as well as a new Succession Management capability (delivered with core HR — so no additional licensing required).  In addition, Oracle is revamping compensation management in 9.1 (re-writing and adding to the existing capabilities and better integration to ePerformance), adding new Talent Management Dashboards to its Workforce Analytics product (the one based on OBIEE), and bringing out a new employee survey tool (tentatively called Workforce Connect) which leverages customer survey tools from the Siebel CRM solution.  Also, in terms of leveraging Siebel CRM, Oracle is creating what it termed “Fusion Edition” applications the first of which will be what is called Talent Pool Management (TPM).  Fusion Edition applications are edge applications meant to work with PeopleSoft, EBS, and Fusion.  The name is a bit of a misnomer as it is really focused on Candidate Relationship Management (marketing and communicating with passive candidates) not talent pool management as one would think of it in Succession Management.  The next Fusion Edition application expected is Talent Review (sometime in 2009).

Speaking of sometime, that is when PeopleSoft 9.1 is expected in 2009 (though indications were that it would not be the beginning or end of 2009 so expect it to be released over the course of Q2/Q3 for new customers).  However, some of the most interesting things going on were with PeopleTools.  PeopleTools 8.50 includes a number of noteworthy features, but the one with the most immediate impact is the new Ajax-based User Experience.  PeopleSoft 9.1 is built on PeopleTool 8.50, but it is backward compatible to previous application releases.  So, 8.9 and 9.0 customers that want to enhance the user experience can do just a PeopleTools upgrade to get the necessary capabilities.

For those EBS customers out there, things are a little more definitive.  Version 12.1 is coming in Q109.  It too will include new succession management functionality (as well as Profile Management based on the design from PeopleSoft 9.0).   There are a number of incremental enhancements across the rest of the product line from interview management in iRecruitment to setup enhancements and better market data integration in Compensation Workbench.

I also went to Gretchen Alarcon’s presentation on Oracle’s HCM vision.  She did a good job laying out the trends (thanks for the plug) and how Oracle is looking at opportunities around workforce planning and modeling and predictive analytics.  It was a pretty good size crowd and it was a little surprising to see no one was really doing anything with predictive analytics.  There is tremendous potential business value in the right applications of planning and analytics.  What do you think?  Will the hype around social software and HCM overshadow the emergence of workforce planning and analytics? 

• Complete. Open. Integrated — This is the main theme for the conference which I saw repeated in a number of presentations.  Here is my take on what Oracle intends it to mean:
  • Complete — Oracle is very focused on industry solutions.  That is, providing a comprehensive footprint for specific target industries.  It used the Communications industry as an example and cited its footprint in 2004 and how it has done a number of acquisitions which it has integrated together since then to fill out its solution map (the solution map is not an original Oracle concept, but it has been put to good use)
  • Open — Oracle has been pretty consistent in its support for a variety of standards and allowing customers to “plug and play” where possible.  It has created an abstraction layer in Oracle Fusion Middleware (OFM) that includes common business objects, web services, and reference process models that customers can use out of the box or adapt with the tools as necessary.
  • Integrated — This is where Oracle’s Application Integration Architecture (AIA) comes into play.  Oracle has taken industry standards along with a modern integration architecture (leveraging process model-driven integration with an enterprise service bus and standard integration definitions).  Oracle had a number of customers touting the benefits they thought they would achieve, but almost all were still in the process of implementing (this is not a new topic, it was hot for Oracle at the last OpenWorld).
• Delays
  • We knew this from pre-briefing prior to OpenWorld, but it pretty much is official now (and has been suspected for far longer).   There will be no suite of Oracle Fusion Applications delivered in 2008.  We published this (Gartner subscription required) in 2007 based on an interview with John Wookey about Fusion Applications.  Oracle had indicated at that time the first release of the suite would be in 2008.  Then, we published this (Gartner subscription required) when we started to have concerns about whether or not Oracle would deliver Fusion Applications in 2008 when John Wookey left Oracle.  The first phase will be edge applications, like the Social CRM applications, which have been delivered in 2008.
  • PeopleSoft Enterprise 9.1 will not be delivered in 2008.  I do not know if Oracle committed publicly to this date, but they had been indicating privately that 9.1 would be delivered in 2008, not 2009.  HCM is the first pillar to be delivered in 9.1 and given the scope of the release (including new applications such as Succession Management and a rewritten Compensation Management), it is understandable that it would take some time.  However, release 9.0 became generally available in December 2006 (see Oracle’s Lifetime Support Policy for more details).  So, it is going to be well over two years before the next release.  In a market where new releases from Talent Management application vendors come out as frequently as monthly, that is a very long time.  More to come on version 9.1 in a later post.
• Social Software Strategy — I am not going to discuss this too much now as I am still trying to understand Oracle’s strategy here.  Suffice to say that there are a number of products out there including Oracle Collaboration Suite (been around for a long time), Beehive (announced today and prominently placed in the opening keynote), WebCenter (the UI for Fusion Applications that includes some elements of social software), and PeopleSoft Enterprise Portal (that also now has some elements of collaboration included with it).  As soon as I get to the bottom of it with some clarity, I will post again.
• Upgrades — As I was communicating with my colleagues and attending sessions, it became clear that sessions which discussed Applications Unlimited (Oracle EBS, PeopleSoft, JDE, etc.) product vision/roadmaps and upgrades were among the most popular.  I think that supports what we have been seeing in our inquiries in terms of the primary concern for customers:  is this the right time to upgrade and if so, to which release should I upgrade?  There are some sessions on Wednesday around Fusion applications.  I would imagine they will be popular for similar reasons.

In closing, Thomas and I had a good chat with Charles D’Souza from Emirates Bank (HQ in Dubai).  It has implemented implemented core HRMS, self-service, learning management, performance management, some compensation management and succession management (which some of its own extensions to Oracle) on E-Business Suite R12.  It is also about to embark on an implementation of iRecruitment as well.  If you are an EBS customer looking for an understanding of what is possible (to support upgrade planning) in Talent Management on R12, this is a good customer reference.  

It is always good to get the customer viewpoint, I have a number of customer sessions on the agenda for tomorrow and Wednesday.  If you are an Oracle Applications customer, what do you think the highlights were for Day 1?

• MyTaleo (a portal-style user interface with personalization capabilities)
• Talent Scorecard (drag and drop dashboard widgets)
• Modal Usage (navigate in multiple ways through a particular screen — includes Table of Contents to navigate a requisition and Quick Filters to more easily narrow a long list of candidates)
• At-a-Glance Summaries (extends the Taleo Talent Card metaphor to recruiting)
• Outlook Integration (Taleo Inbox is extended to support Recruiters’ ability to capture candidates)

In Performance Management, Taleo has been quietly adding new functionality (for example, a “n-box” capability will be out shortly for succession management) as well as adding customers (they have licensed Taleo Performance to 12 customers).  In addition, it announced Taleo Business Edition (BE) Performance (available in November 2008) which is targeted at the SMB market (below 3,000 employees) and integrated with the existing Taleo BE Recruiting solution.

Another major announcement was Taleo’s equity investment in (with an exclusive option to buy) Worldwide Compensation (WWC).  WWC is a relatively new entrant to the compensation management software space, but started by building a global library of compensation and benefit regulations and practices (which WorldAtWork makes available to its members).  Once it had learned more about the requirements for global compensation, it built a software solution.

The vision also includes development planning.  Taleo does not plan to offer its own LMS, but plans to integrate with existing LMS.  What it wants to do is provide value around the LMS by offering solutions that focus more informal and experiential learning.

Thomas (via web conference) and I spent a lot of time with Taleo today going through Taleo Performance and WWC for the Magic Quadrant for Employee Performance Management (EPM) Software research.  I am not going to comment on our findings at this point (Gartner clients should feel free to set up an inquiry if interested) because we still have a lot of work to do including getting feedback from some of the early customers.

Speaking of early customers for Taleo Performance, Taleo had a panel of early adopters talk about their experience implementing the EPM solution as part of a broader talent management strategy.  The group, TeleTech (David Gilbert), Children’s Healthcare of Atlanta (Larry Mohl), and Freeport-McMoRan (Kyle Peavler), discussed the drivers for change in their organizations, the challenges they overcame, and the benefits they achieved.  It was interesting to hear them talk about the importance of usability in their decision to choose Taleo and how it was key for getting buy-in from various stakeholders.

How important should usability be as a selection criterion?  I have found the usability is a little bit like beauty.  It is in the eye of the beholder.  It depends quite a bit on what you are used to and what you want to accomplish.  It is different from organization to organization and from stakeholder group to stakeholder group (what HR and IT think is easy to use may not be the same for employees and managers for example).  What do you think?  Is usability overrated or underrated?