Monday, January 12, 2009

Workday builds out SaaS bellwether for human capital management services and costs controls

Responding to the need for agile compensation and incentives management in a tough global economy, Workday has delivered new versions of its innovative Human Capital Management (HCM) software-as-a-service (SAAS) solutions.

The new services offer richer costs and compensation management features, more business services like payroll, and also improved access to global process insights and analytics. These additions are designed to effectively and swiftly help guide employees through change and to improve business productivity and responsiveness.

Until now, talent management offerings have evolved as add-ons to legacy systems, creating new silos of information and an incomplete view of worker performance. Because Workday's on-demand business applications are built on a service oriented architecture (SOA), more coordinated services can be brought to the full human management equation.

Furthermore, by allowing for integration across the data from these services -- with centralized control even across global regions and disparate workforces -- a new element of business intelligence (BI) for human resources management becomes possible. [Disclosure: Workday is a sponsor of BriefingsDirect podcasts.]

I've not been alone in my viewing Workday as a poster child for where SaaS business applications are headed. The user interface, using Adobe technology, deep use of SOA infrastructure approaches, and philosophy that managing people well is core to almost any business process place Workday out in front of many business and IT trends.

But the new offerings also point up a burgeoning value of cloud computing. Easier but controlled access to centralized data provides the ability to apply analytics and advanced queries to more human resources and processes data. Better data in, better results out. This helps coordinate the managment of people more closely to the management of dynamic business goals. And it helps cut the lag between wanting to instill business change, and then finding the path to informing and incentivizing employees with less waste and confusion.

And, of course, secure access to employee trends data provides a two-way street: Derive insights through larger data sets analysis and BI, and also gain the abilty to hasten and promote business processes through the execution and enforcement of incentives and compensation management more fully and quickly.

Both of these values are essential in an economy rife with mergers and acquisitions, consolidation, workforce re-allocations, shifting customer requirements, new sales strategies and the need to be fleet in shifting incentives to align with dynamic market conditions.

Consider too that a SaaS approach to HCM improves the access to data sets that can align and automate the interplay between customer relationship management (CRM) insights (regardless of hosting models) and HCM change management. Isn't there a key relationship between what goes on with customers and what then need to go on with employees? Sure is in the sales department. Yet bringing intelligence, analysis and execution automation to these disparate functions has been manual, incomplete, difficult and murky.

That should soon change. Included in Update 6 from Workday, now in Pleasanton, Calif., are Pay for Performance and Worker Spend Management improvements.

Worker Spend Management means that spending activity is automatically tied to workers and can be linked to projects or activities via tags, called Worktags, so managers and business leaders have a complete view of total worker cost -- including both compensation and the resources used to get work done.

Previously, tying spending activity and behavior to individual positions, people, workgroups, teams and business purpose has been impossible without expensive analytic solutions or manual spreadsheets.

Pay for Performance features tie performance reviews, team performance and company performance to compensation -- providing managers with recommended targets based on a broad range of configurable variables and business results. Decision and assessment support includes target versus actual reporting and actionable analytics, enabling organizations and managers to achieve actual performance-based rewards.

Brnaching out into adding more business services to the HCM portfolio, Workday has also announced the general availability of Workday Payroll for the U.S. This offering delivers payroll processing coupled with the company's other solutions. And other payroll approaches --internal or via outsourced payroll providers -- will continue to be supported and integrated to the offerings, said Workday.

The Workday system, however, leverages a global calculation engine and payroll framework, allowing Workday to centrally localize payroll for regions and countries without the redevelopment efforts associated with traditional on-premise systems.

Also included in Workday Update 6 is a significant expansion of Benefits Network, a set of pre-packaged integrations with popular benefits carriers. The Benefits Network includes connections to 49 providers, with plans for 21 more in the next month.

Workday is an on-demand financial management and human capital management solutions vendor. It was founded by David Duffield, best known as the co-founder and former chairman of PeopleSoft, which grew to be the world’s second-largest application software company before being acquired by Oracle in 2005. Workday aquired Cape Clear Software in early 2008.

Whether you're implementing HCM solutions, I'd keep an eye on Workday's progress. They are moving the concepts on SaaS and cloud in a pragmatic way for such large businesses as Flextronics and Chiquta brands. I'm especially keen to see how the BI and analytics values help to undergird the SOA and cloud innovations that Workday has built into their systems from the very beginning.

It will, in the age of debates about SOA's relavance, be fascinating to see if on-demand providers can bank on the SOA efficiencies and agility, while leveraging cloud models to help customers gain better productivity while also cutting their internal delivery costs and promoting new abstractions of integration and BI.