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2003 Workforce Technologies Survey 6th Annual Edition

2003 Workforce Technologies Survey 6th Annual Edition*

By The Cedar Group who can be contacted on www.cedargoup.com/usa

1. Introduction

The Cedar 2003 Workforce Technologies Survey asks worldwide respondents about strategies, use, and plans for workforce technologies. This year’s questions focus on technologies such as core record keeping, benefits, payroll, time and attendance, and performance measurement technologies in addition to our past focus on employee and manager self service, portals, and knowledgebase solutions. The results are analyzed on a worldwide and macro region basis, and highlight variations by industry and employee size. The analysis of responses include the following:

2. What’s new in 2003

The focus continues on the quantitative results from using workforce technologies and the resulting impact on return on investment, cost of transactions, cycle time, employee satisfaction and so forth. New this year, the response analysis is expanded to report on the relationships between HR staff to employee ratio for Web and service center service delivery approaches. Additionally, data analysis is provided on the relationships between workforce technologies usage and key financial measures such as earnings growth and current economic value add.

Throughout this research report, significant data points are provided as "findings." A total of 24 findings are derived from the survey results and represent key data points and trend analysis when compared to prior year data. Statistical testing has been performed to substantiate these findings as accurate representation of the survey data collected. Findings are ordered based on appearance in the report and do not follow any priority or ranking.

• Strategic objectives

• Quantitative results

• Service delivery methods

• Software solution types and build vs buy choices

• Vendor solutions in place and planned

• Applications in use and planned

• Security approaches

• Levels of investment

• Barriers to deployment

• Factors of successful deployment

3. Executive Summary

This year’s results point definitively to how organizations achieve competitive advantage through Web and service center solution deployments across the workforce. The Human Resources function continues on its mission to transform and become a value adding, strategic business partner to the enterprise. The survey data illustrate that technology solutions are delivering on their promise to provide a solid foundation to support and accelerate this transformation. As HR transformation initiatives continue to gain organizational priority, the impact of technology to better serve the workforce stemming from HR initiatives is being recognized. HR technology initiatives that address workforce needs not only benefit HR transformation, but also showcase the HR function as a technology and process leader in the organization and for its contribution to the bottom line.

As the HR transformation movement grows in momentum, the desired end state of the transformation is coming into focus—Human Capital Management (HCM). HCM reflects a growing need to manage human capital with business discipline to maximize opportunity and positively impact overall business results. The survey data suggests that organizations are placing emphasis on the areas that bring them closer to the HCM state (i.e. deploying manager self service and strategic applications).

The survey reports data specific to portal activity and the results support growing interest in the portal approach to service delivery. The buzz around "portal" has, unfortunately, created a great deal of confusion in the marketplace as vendors use the term portal to their individual benefit. Cedar fully supports the portal concept as a critical tool to deliver knowledge and improve the decision-making process. Key characteristics of a sophisticated portal framework include bringing applications together in a single view, delivering information in a role-based format that is personalized to the user, with search capabilities and self service transactions. Independent of market confusion on this term, we believe that migrating HR services to a portal framework is essential and will be the dominant delivery channel. This will be supported by activity at the greater enterprise level to migrate all enterprise knowledge and decision making to a portal framework.

4. Key Findings

Survey data analysis generated 24 findings related to current status of workforce technologies and the movement in trends associated with these technologies. These findings illustrate an environment of increasing overall activity to move HR to a digital format, accelerating the pace of solution deployment and increased clarity of business results and strategic goals that drive this activity. The report fully details the data analysis that supports these findings. The majority of the individual findings can be classified within three groups of "key findings" as follows:

# KEY FINDING 1: Planning and budgeting activities for workforce technologies are increasingly important to success and are driven by a more sophisticated business case tied to organizational objectives.

• Securing adequate budget to cover the total cost of ownership (TCO) continues to top the list of barriers to workforce technology deployment (Finding 23)

• HR is increasingly joined by IT in funding workforce technologies. With this collaboration comes new discipline in securing funding (Finding 22)

• Business cases that link investments to organizational objectives are mandatory (Finding Workforce technology investments are successful in meeting objectives (Finding 3). The measures of success include improved HR staff leverage, ROI in less than two years, and impact on key financial metrics

• Change management is the critical success factor to combat resistance to workforce technologies and achieve success (Finding 24)

• Web-based technology expenditures increase in 2003 overall by 27% over 2002 levels: Change management expenditures increase over 150% and investment in application service providers increased by 75% (Finding 21)

# KEY FINDING 2: Deployment activity is surging around strategic applications and the pace of implementation is accelerating.

• Deployment of strategic applications focused on the attraction, development, and retention of key talent has grown most dramatically (Finding 8)

• Rapidly accelerating adoption of manager productivity applications encompass labor and cost control solutions which are impacting key financial metrics of earnings growth and economic value add (Finding 10)

• Performance measurement and analytics technologies are the next frontier to achieve competitive advantage (Finding 12)

Key Finding 3: Technology continues to play a critical role in business transformation with a growing shift to product solutions and emphasis on total integration in a portal format.

• Automation that slowed in 2002 regained momentum in 2003 with increased focus on shared service centers (Finding 6)

• Use of package solutions for Web initiatives have caught up with in-house custom developed solutions (Finding 13)

• Vendor product solutions usage shows leadership by PeopleSoft in all categories except time and attendance and knowledge base (Finding 14)

• External implementation support is used twice as frequently as internal implementation support for package software solution deployment (Finding 18)

• Business-to-employee portals show a continued and steady rate of adoption for HR services and increased adoption for financial applications. However, inclusion of "quality of life services" is declining (Finding 15)

# KEY FINDING 3: Technology continues to play a critical role in business transformation with a growing shift to product solutions and emphasis on total integration in a portal format.

• Automation that slowed in 2002 regained momentum in 2003 with increased focus on shared service centers (Finding 6)

• Use of package solutions for Web initiatives have caught up with in-house custom developed solutions (Finding 13)

• Vendor product solutions usage shows leadership by PeopleSoft in all categories except time and attendance and knowledge base (Finding 14)

• External implementation support is used twice as frequently as internal implementation support for package software solution deployment (Finding 18)

• Business-to-employee portals show a continued and steady rate of adoption for HR services and increased adoption for financial applications. However, inclusion of "quality of life services" is declining (Finding 15)

Technology is Fueling Transformation

Cedar survey data indicates that technology is playing a significant role in the transformation of not only the HR function but also in the way the workforce manages information, performs transactions and collaborates to drive competitive advantage. The topic of HR

Transformation and the areas of digital HR Service Delivery have been discussed for nearly two decades. The Cedar survey results suggest that even in the midst of economic challenges, organizations are turning talk into action and planning into results by delivering value-adding solutions that enhance workforce productivity. Along with this increased productivity, comes the opportunity to reduce operational costs and further build the employee-to-employer relationship via improved service delivery.

The profound impact the Internet continues to have on individuals and activities of daily life outside of the workplace cannot be ignored. The expectation for an "Amazon.com-like" experience is surfacing in the workplace and will continue to grow rapidly. Employee expectations must and can be met in this regard. The survey data clearly indicates a growing level of sophistication and rapid acceleration of digital HR Service Delivery initiatives.

HR Poised to be an Organization Leader.

This is an exciting time for Human Resources professionals and their Information Technology counterparts. The application of technology to deliver HR services provides significant advantages to organizations in achieving competitive success. As evidenced by survey data, HR technology is impacting the entire workforce and delivering significant financial returns.

As Human Capital applications continue to garner executive attention as vehicles for competitive advantage, HR is presented with a historic opportunity to position itself as a process and technology leader. HR departments must seize this opportunity provided by technology to transform themselves from administrative services overhead into strategic competitive resource builders if they are to support enterprise success going forward.

Finding 1: Workforce technologies investments are successful in meeting objectives

Finding 2: Business cases that link investments to organizational objectives are mandatory

Finding 3: Workforce technology investments deliver measurable results: Significant HR staff leverage and ROI in one to two years

Finding 4: Earnings growth and current EVA are positively impacted by manager productivity applications

Finding 5: Email and Intranet access, the foundations for service delivery, are pervasive

Finding 6: Automation that slowed in 2002 picked up again in 2003 with focus on shared service centers

Finding 7: Employee productivity applications reach 50% penetration

Finding 8: Strategic applications penetration grows dramatically

Finding 9: Accelerated growth since 2002 in retirement management applications reflects demand from baby boomers nearing retirement

Finding 10: Rapidly accelerating adoption of manager productivity applications encompass labor and cost control solutions

Finding 11: Strategic applications focusing on the attraction, development, and retention of key talent accelerate most strongly

Finding 12: Performance measurement and analytics technologies are the next frontier

Finding 13: Package solutions are poised to overtake in-house custom developed solutions

Finding 14: Employer-to-employee portals continue to steadily adopt HR services and expand further to include financial information, while inclusion of "quality of life services" decline

Finding 15: Off-the-shelf portal solutions usage increases

Finding 16: Value-added knowledgebase solutions hold steady as an enabler of service delivery

Finding 17: External implementation support is used twice as frequently as internal implementation support for package software solution deployment

Finding 18: Single sign-on is the most frequently planned security approach for the coming year

Finding 19: Web-based technology expenditures increase in 2003 overall by 27% over 2002 levels

Finding 20: Change management expenditures increase over 150% and investment in application service providers increase by 75% over 2002 levels

Finding 21: HR is joined by IT in funding workforce technologies and with this collaboration comes new discipline in securing funding

Finding 22: Securing adequate budget to cover the total cost of ownership continues to top the list of barriers to workforce technology deployment

Finding 23: Change management is the critical success factor to combat resistance to workforce technologies

* Reprinted by permission

Gary Watkins

Gary Watkins

Managing Director

BA LLB

C: +27 82 416 7712

T: +27 11 462 0982

F: +27 86 689 7862

Website: www.workinfo.com
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