Strength From The Core: Why Bolted-On BI Doesn’t Work For HR

My friend and industry colleague Bill Kutik, a leading expert on human resources technologies, asked me some time ago why I had left the analyst world and joined Workday. Were the industry watchers correct, he asked, in assuming Workday hired me to help it build out the best talent-management suite in the world?

I set the record straight with Bill then, but it’s worth reemphasizing. While part of his question was correct—we are creating world-class technology management capabilities—there is no “suite” to this story. Because the last thing the market needs is yet another talent-management suite.

We are focused on delivering a comprehensive view of the workforce, including HR data, talent, performance, compensation, and cost. Think of it as unified human-capital management, or UHCM (see “Delivering Value to the Business: Why Your Current HR Systems Hold You Back”). UHCM makes it possible for business leaders to manage their single largest expenditure and most critical element for success: their people. That move from supporting administrative functions to supporting business decisions is, I believe, the only way that HR—whether as a department or a process—can meaningfully contribute to the execution of an organization’s overall business strategy.

Modern business needs to know: Do I have my best people working on my most critical initiatives? What are the labor costs of a specific product or service, and how can I lower costs? Where do I find the best talent, and what are characteristics of employees who stay and succeed? What are my risks due to turnovers and impending retirements? Where are the gaps in the leadership pipeline? And managers should be able to ask these questions, easily and at no additional cost, from within the core HR system.

But you can’t achieve this utopia of business-and-HR alignment using traditional HR systems, with or without bolted-on software for talent management, benefits, contingent labor, payroll and projects. Sure, you can “integrate” these systems in the sense that some data moves from one system to another, but this doesn’t address disjointed user experiences, interrupted processes, and the inability to perform real-time, actionable analytics from within a single system. (see “Why HR Needs Actionable Analytics,” which includes research and input from leading analysts on this topic).

The architectural make-up of transactional systems lies at the root of the problem, since the information they hold is often based on disparate data models and software update schedules. So workforce performance ends up being managed separately from the workforce data, and those two are managed separately from projects (the work the workforce is doing) and payroll (the cost of the work). Call this monster what you want, but it’s not UHCM.

There is just one thing right about the old model: the HR system-of-record is at the core. But it doesn’t work using HR systems built for just streamlining administrative processes–rather than solving business problems—and based on antiquated programming logic and technology architectures. Dynamic, productive, business-aligned UHCM isn’t possible if the core is rotten.

We’ve already seen tremendous success with our approach to UHCM—letting customers ask questions and instantly develop graphical reports based on workforce, talent, and spend data from within their HR system of record–but there’s a lot more innovation coming. Our SaaS delivery model is so important to this innovation cycle, as customers continually get the best of what we have to offer as part of their subscriptions, without having to fuss with another HR, payroll, or talent management upgrade.

It’s time to make HR a business-results-driven operation. To help the company uncover potential problems related to the workforce, plan for the future, and predict outcomes from financial and productivity investments. And the only way it’ll get there is through a unified approach to human capital management.