The Human-Capital Factor

The many varieties of HCM software allow companies to manage the employee life cycle.

Learning-management systems are based on foundational software that acts as a database or administrative hub, tracking employees, course content, and other components. On top of that may sit content-creation tools and other middleware that helps distribute content. And then there is the training content itself, which can be developed in-house or obtained from a universe of third parties.

As for ROI, companies can expect savings simply by making training materials available electronically rather than on paper, as well as by eliminating travel to a central training facility. “Cost avoidance can be a primary reason for deploying learning systems,” says Charlie Gillette, CEO of learning-systems vendor Knowledge Anywhere Inc. Yet efficiency is just one argument. As Bersin notes, “Sometimes you can’t do something without a learning system. You may need to quickly train your sales force prior to the launch of a new product, for example. That’s where there is real value in the technology.”

Plateau, SumTotal Systems, Intellinex, Saba, and Convergys are among the vendors in this space.

Performance and Compensation Systems

Practically every organization regularly reviews the performance of its employees, a chore that most managers happily confess is the bane of their existence. The aim of performance-management systems is to both automate the employee-review process and link reviews to organizational performance. Are employees taking definitive steps to achieve their sales goals? Are there succession plans in place for top managers? What kinds of skills will the organization need in the next two years? Those are the kinds of questions that performance-management systems put at the desktops of both managers and employees.

Performance-management systems often include or feed into compensation systems. Ned Albee, vice president of human resources at Lancaster General Hospital in Pennsylvania, says a performance-management system from San Mateo, California-based SuccessFactors enables the hospital to more equitably distribute merit-based pay increases. Before deploying the system, managers reviewed employees annually around their date of hiring. The result, Albee says, was that sometimes well-deserving employees wouldn’t get the increase they deserved simply because the pool of available money had already been spent by the time they received their reviews. With the current system, all 4,500 employee reviews are completed at the end of the fiscal year. “We can now also manage the merit expense budget by reviewing all performance scores before distributing the pay increases,” Albee says.

Other managers say the systems are useful for obtaining a 12-month view of employee performance, versus focusing too closely on the period that immediately precedes the review. Some vendors offer “succession planning” software that builds on performance and training systems to identify likely candidates for jobs further up the food chain.

Along with SuccessFactors, leading vendors include Authoria, Halogen Software, Workscape, Callidus Software, Centive, Ceridian, Softscape, Kenexa, and ERP giants SAP and Oracle.

Workforce-Management Systems

If organizations view employees as assets, then it follows that those assets should be allocated effectively. In general, “workforce-management software involves staffing, developing, tracking, and rewarding employees,” says Michael DiPietro, vice president of product marketing at Kronos Inc., a leading vendor of workforce-management software. In practical terms, such software schedules employees based on business volume and also tracks labor activities, projects being worked on, work orders, hours, and how workers should be paid.

Workforce-management software grew out of time- and attendance-monitoring systems and can now address many facets of the workforce, from making sure that assembly lines are adequately staffed on the third shift to identifying the best salespeople to tackle a new account and making sure they are rewarded properly.

According to DiPietro, CFOs who sought to streamline their supply chains in the 1990s should be able to relate to workforce-management systems. “Back then, CFOs were looking at critical factors affecting inventory,” he says. “Workforce management is similar; it’s all about managing workforce resources in the context of business goals and demands.”

Workforce-management software vendors include ADP, Softscape, Workbrain, 360Commerce, and CyberShift.

As for cost, at the low end, a single module of, say, an assessment-management system may cost $5,000, while an enterprise learning-management system deployed for a global company can run in the millions. The software-as-a-service model, however, is popular in this space.

Companies such as SuccessFactors, Employease, Authoria, and others typically charge a per-module/per-employee/per-month fee that can minimize up-front costs (and deployment times) and scale as needed. Customers should explore how such services integrate with internal systems, and with other outsourced services they may rely on.

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