Hard to believe, but yet another HR Technology Conference is over and this year’s conference was the best yet. In what was the last stop in Chicago before moving back to Las Vegas for the foreseeable future, Conference Co-Chair Bill Kutik and the team from LRP Magazine Group pulled out all the stops to make 2012 a memorable experience for all.

The Highlights

This year’s conference was clearly the biggest yet.  With  approximately 4600 people at the conference between vendors, press, analysts, presenters and conference attendees, the show continues to grow larger every year.

This year was the first year the conference was located in the newer McCormick Place West building and nearly filled the space to capacity.  The facilities were top notch, a broad diversity of speakers brought a wide array of perspective that applied to not only larger companies but mid-sized and smaller firms as well.  WiFi was pervasive throughout the facility, enabling attendees to stay connected back at the office while participating in the show.

While walking the exposition hall floor it was clear that the unofficial theme of the conference was The Cloud.  Whether it was called SaaS, Subscription, OnDemand, or another variation of cloud computing it was well represented in nearly every booth and in the majority of the sessions I attended.

In addition to cloud, mobile was top of mind for all vendors.  As Josh Bersin correctly highlighted in his conference wrap-up the term mobile is a bit of a misnomer.  What historically has been thought of as lightweight user experiences for limited bandwidth connections on devices with tiny screens is no more.  The typical smart phone is 4″ in size and growing, tablets are becoming more pervasive, as is high-speed data connections via 4G networks.  As a result, the “mobile” experience is quickly becoming more feature-rich and equally (if not more) engaging than the traditional browser experience.  We’re quickly moving to the reality of a ubiquitous experience.

As buyers walked the show floor, they were bombarded with messaging regarding the benefits of the cloud -  frequent updates, rapid innovation, lower cost, and escape from reliance on internal IT.  There’s no denying the impact that Software as a Service has had on the Human Capital Management software market – as, HR was one of the early adopters of cloud computing along with their sales counterparts.

Amongst the numerous press releases and product announcements the central themes to be found were mobile, social, big data and cloud.  Recruiting, Talent, Payroll, and HR administration solution providers all focused on these two themes.  Even the largest non-software vendor announcement at the conference was about the cloud – Knowledge Infusion being acquired by Appirio to create the world’s largest cloud-powered HCM consultancy.

Oracle’s co-president, Mark Hurd was the featured speaker Wednesday morning – a big get so to speak, representing the senior-most executive from a large software company to ever speak at the event.   While Oracle has always maintained a strong presence at the conference, on the heels of several acquisitions in the HR domain (Taleo and SelectMinds) they demonstrated an even stronger commitment to the market.  Clearly they’re gearing up for a long, protracted battle with emerging vendors like Workday and others.

In Summary

After many years in Chicago, consuming multiple venues in town (including three different buildings at McCormick Place) the conference is moving on.   Next year will be in Las Vegas, its new home.

With record attendance, terrific facilities, and reasonable weather (by Chicago standards) this truly was the best HR Technology Conference to date.  With the bar raised extremely high, I’m looking forward to seeing how the show can top 2012.

Between now and next October the conference continues virtually on LinkedIn where the HR Technology Conference Group maintains an extremely active and lively virtual conversation.  Additionally for those on twitter, you can also follow along by searching on the hashtag #HRTechConf and following the @HRTechConf twitter handle.

Kudos to Bill and the rest of the team on another job well done.

Technology when you want it, people when you don’t

Several years ago the US-Based internet car insurance company Esurance launched an advertising campaign which highlighted the benefits of their service delivery model – a model based entirely upon choices.  The campaign had the tagline of “technology when you want it, people when you don’t” to emphasize the fact that everyone has a different optimal service experience and they weren’t purely a self-service organization.  With this campaign Esurance focused on the customer experience over the price of the coverage, the breadth of their geographic footprint, or other traditional points of emphasis in insurance advertising.

The concept of choice in a service delivery experience makes perfect sense in a consumer-based model, but does that same thought process apply in how HR services are delivered to an organization?    Over the years I’ve seen a variety of HR service delivery models which are generally predicated upon efficiencies gained by way of automating routine inquiries and transactions.  Broad-based assumptions are made which impact financial modelling, assuming upwards of 80-85% of all inquires can be accommodated by way of self-service.

After all the number crunching and analysis, there often remains large barriers to achieving the desired levels of utilization based largely upon the overall user experience of the technology and supporting capabilities.  This isn’t purely a technical issue, although the technical user experience is a large contributor to the experience. 

The Service Experience

Service experience is defined by technology, process design, logical structure to system data, the manner in which systems are accessed by users, the structure of the support model – phone, portal, in-person, etc.

A well designed service experience becomes an enabler of transformed business operations. Conversely, a poorly designed service experience can not only be a critical point of failure in the service delivery model but ultimately result in less efficient operations.

Getting to the Point!

When working to design new systems, processes, and/or operating models, maintaining a customer-centric (employee or manager) mindset in the design becomes one of the most critical success factors.  In order to deliver this optimal experience, keep in mind the following items:

1. Include non-HR stakeholders in the overall design process by way of focus groups at a minimum.  Ideally you have business stakeholders embedded into the design team to help ensure the needs of the customer remain front and center.
2. View efficiency gains not just from a HR perspective, but from the perspective of the employee and/or manager
3. Design system values such as job codes, department codes, locations, etc to be meaningful to the primary user (which isn’t HR).  Use of “smart codes” should be avoided at all costs
4. Make all solution design decisions as holistic as possible and replicate values across related systems.  This means that finance and HR have the same definition of items such as headcount, organizational structures, etc.
5. Think about the future when designing processes and systems – be sure that design decisions don’t limit you in the future.

In the end success lies not in making something technically work, but in enabling the desired outcomes.  In order to drive user adoption experience matters.

Imagine for a moment that you are the CFO of an electronics company and just learned that nearly 67% of your product inventory was either partially or completely at risk of becoming a warranty liability – meaning that it is already broken or close to being broken before the warranty expires.  In that circumstance, you likely would immediately seek to address the risk by addressing the at risk inventory and reassess your supply chain, raw material providers, component assembly functions, and your quality processes.

Additionally, stringent quality controls would be put in place to prevent at-risk product from entering inventory in the future.  To do anything different would expose your business to entirely too much financial risk, jeopardizing the ongoing viability of the firm.  Most Chief Human Resource Officers face a very similar situation, with 69% of the average workforce being either partially or completely disengaged according to a 2011 study of employee engagement by Blessing White Research.

A bit tongue in cheek, any workforce can be viewed in three distinct categories; fully disengaged workers (The Dead) , partially disengaged workers (Zombies) and engaged workers (Zombie Slayers).  The Dead population are those workers who do the bare minimum to get by, occupying a chair and collecting a paycheck.  The Zombie Slayers are those who are actively driving the business, pushing the envelope, making things happen – a population that can never be large enough for any company.  The rest of the population are somewhat in the middle – they do what they need to do, may go above and beyond, any may not even realize that they aren’t fully engaged – much like a Zombie may not realize that they’ve become the living dead.  You can easily identify the dead and the Zombie Slayer populations in your workforce, but the Zombies often are more difficult to spot.

As with any good Zombie movie, the goal is to either slay the Zombies or find a way to bring them back from the living dead .  To that end, after assessing the engagement levels of their workforce, many companies attempt to put in place programs which prove to be ineffective or worse yet aren’t funded.  The end result is often a Zombie population who is neither slayed nor “cured”, they simply maintain status quo, blissfully unaware that they have become the living dead.

Exacerbating the situation, companies will exclusively focus their engagement programs  upon the existing employee population.  This results in  little to no thought to the workers joining the company by way of external recruitment.  Failure to effective screen for potential Zombies is likely to result in growth of the Zombie population within your company.

What’s an HR Pro to do?

Employee engagement is the byproduct of competent people doing work that fulfills them for a company they admire.  Unfortunately there is no simple screening mechanism to identify a disengaged candidate.  It’s not a skill, competency, or behavioral characteristic which can easily be measured by way of a survey or assessment.  It can only be identified through personal interaction, careful screening, and an honest assessment by the recruiter as to whether the company is really the right fit for the candidate as much as whether the candidate is the right fit for the company.

While there’s no silver bullet so to speak, in recruiting candidates I’ve found those that perform the best and remain engaged satisfy three simple observation points:

1. The work that the position requires addresses a personal need of the candidate – i.e. professional fulfillment, personal desire, etc.
2. The candidate has a clear and realistic expectation of what the job entails and the operating environment of the company
3. There is a strong cultural fit between the candidate and the company

If you as a HR pro are looking for ways to directly impact the financial performance of your company – look no further than your hiring practices.  Hiring a candidate based on the best set of skills, the lowest price candidate, or some other set of attributes which don’t address the three bullets above may result in growth of your Zombie population.  And unlike in the movies, Zombies in your workforce don’t eat brains, they eat profits.

Happy Zombie Hunting!

According to the Second Edition of the 20-volume Oxford English Dictionary the English language contains 171,476 different words.  Add to that number approximately 47,000 obsolete words which have all but disappeared from daily use.   In all, that provides us with over 218,000 different words in which to communicate, express ourselves, make a point, or otherwise interact with our fellow man.  With all those options available to choose from, its somewhat surprising that one of the most powerful words in the English language is a mere 3 letters long – WHY.

Typically when you think of a management consultant you think of a well-educated, highly experienced professional communicating in some sort of esoteric code – full of both buzzwords as well as high letter score words from scrabble.  Consultants immediately fall into this trap, partially in a way to validate to their clients that they’re well worth the high hourly rates they charge, and partially as a way to simply keep up with their peers who also choose to communicate using similar prose.  Having grown up in a Big-4 environment, I found myself doing the same thing out of fear more than anything else.  Fear of appearing simple-minded, fear of not fitting it, and fear of not impressing the partners I worked for.

With all the pressure to speak using greater numbers of complicated words, I have found over the years that one of the most effective ways to get impactful results is to rely upon this simple, three-lettered word.  Its elegantly simple, devoid of any pretense, and amazingly powerful in its ability to cut to the chase.

My four-year old son has mastered the art of using the word why.  While he uses it as a way to understand boundaries, question authority, and learn all at the same time, it has the amazing impact of forcing me to consider why things are as they are.  Absent any good reason that comes to mind immediately I find myself uttering the same words my parents uttered to me “because I said so”.

In ancient Greek culture Socrates was one of the most powerful minds of that time yet he didn’t author countless theories, wasn’t credited with amazing discoveries, and didn’t invent anything.  Rather it was the manner in which he engaged in dialogue to discredit ignorance which became the foundation of the Socratic Method – using questions and answers to arrive at a common understanding of what is correct and incorrect.  For Socrates it was not only normal to question everything but he felt it was his duty to do so.

In a business setting, the same thing happens.  While driving process improvement or transformation the simple act of asking “Why do we do this?”  or “Why is this necessary?” can help to cut through the clutter and get to the heart of an issue related to resistance to change. When you ask why, you quickly can determine what’s really necessary, what’s perceived to be necessary, and what’s simply a thinly-veiled excuse to resist change.

By simply asking why I’ve seen highly complex business processes dramatically simplify.  Asking the question of why can help to save money, avoid unnecessary work, and deliver a more positive experience for all.

When embarking upon any technology-related deployment, process improvement, or other initiative designed to help simplify, streamline, and/or enhance your work environment, remembering to slow down and ask simple questions can deliver impacts far beyond those of any technology.

Detroit Public Library

I’m not sure if you’ve noticed, but it appears that the economy is slowly recovered from the depths of the worst recession in the last 75+ years.  Sales are up, earnings are up, fortunately the Dow and everyone’s 401(k) balances are up, and the employment picture is beginning to shake the off the cobwebs.  While many signs point towards better times ahead, if your neighborhood is anything like mine there are some signs of the toll the economy took on the housing market.

I live amongst many newer housing developments, many of which were incomplete as the recession really took hold in 2008.  As a result of the sharp drop in new home sales there were several developments that didn’t get started and others that remain semi-complete because builders went bankrupt, sales halted, and lenders stopped the flow of money that earlier fueled the growth in the housing market.  To compound the matter, many lost their jobs for an extended period of time, resulting in a skyrocketing foreclosure rate.  The visible remains of this situation are abandoned homes that seem out of place in a nicer neighborhood, unkempt lawns, un-shoveled driveways, and hedges in need of some trimming.

It’s been 132 days since I last authored a post on here.  And as much as I hate to admit it, some might believe that my “online home” here appears to be abandoned just like some homes in my neighborhood.  While I’m clearly not properly keeping up the property, I’m also not  quite ready to declare the property abandoned.

Why I’ve neglected my blog lately:

1. Daily life has consumed more of my time than I have available.  While I can make various excuses as to what I’ve been spending my time on lately, I would prefer to be honest.  When I’ve had available time, I have chosen to focus my energies on other things.  Reconnecting with my family, catching up on the “Honey Do” list at home, and other personal commitments.
2. Lack of creative energy to consistently write blog entries.  I am a confused Human Resources / Information Technology consultant who happens to have many skills of which creative writing is not one.  Writing doesn’t necessarily come natural to me as I’m much more comfortable with a dry erase marker and/or powerpoint.  I often speak in 140 character sound bites or in links to the works of others
3. I create in different media.  I’m often still on twitter, linkedin, facebook, and other social media outlets.
4. I’ll be out presenting more in the future.  I have sessions coming up in April and May with plans for more in the second half of the year.

One thing is certain – I will begin writing again, and likely somewhat soon.  I encourage you to keep an eye out for new content soon.  Meanwhile, trust me…payday loans online this is no abandoned property.

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The other day I was reviewing a press release from one of the numerous vendors in the HR Technology market which stated “the new release incorporates highly flexible analytics to deliver key business metrics business leaders are demanding”.   That quote (along with a very lengthy delay on the tarmac at O’Hare) got me thinking .  Can a HR Technology Vendor deliver meaningful analytics that business leaders are demanding?

What analytics exactly are business leaders demanding?

If I’ve learned nothing else in the 15 years I’ve been in this space, its that HR generally doesn’t know what business leaders are demanding.  Not to be negative, but HR has historically been viewed as a highly administrative function which serves a supportive role to the business.  Very few HR organizations are actually viewed as strategic business partners and have been able to successfully answer the questions that the C-Suite is really asking.  Those that have, generally can demonstrate the following:

• Direct impact on talent-related programs and processes to top-line growth
• Comprehensive understanding of which talent-related levers can be pulled to adjust the overall financial performance of the organization
• How specific talent practices directly contribute to the levels of agility within the organization (effectiveness of core competencies, impact of development programs, bench strength in key roles, hiring talent beneficial to the organization not just people skilled to fill the role for which they applied, etc.)
• What impact incremental investment in HR practices can have on top-line growth
• Impact to both the top-line and bottom-line as a result of speeding up or slowing down hiring

Needless to say, being able to provide meaningful insights into ANY of the points above requires information which goes far beyond that contained within nearly any HR-specific application.  For a HR product vendor to claim out of the box business analytics is pure bunk, unless there is a data warehouse capability inherent in the solution.  Last time I checked,  other than the ERP-based solutions only one HR vendor that I am aware of really offers such a possible solution.  In all such cases, the use of a overlay analytics solution is necessary to deliver meaningful business analytics.  None actually do this native within the core business application.

What analytics do HR vendors provide?

While its highly unlikely that HR-centric solutions will provide meaningful analytics which answer the exact questions emerging from the boardroom, there are a multitude of rich, meaningful, and helpful analytics which can be produced.  These nuggets of knowledge, coupled with financial data can go a long way towards producing some simple, yet meaningful analytics such as:

• Your time to fill metric combined with average revenue per employee per day (annual revenue / headcount / 365) demonstrates the opportunity cost associated with your average vacancy.
• Turnover rate coupled with replacement cost (30% of annual salary is an average benchmark) can be used to speak to the financial cost of turnover.  This along with divisional or managerial level detail can help to pinpoint specific segments of the organization needing additional attention.
• Combining individual revenue details for those in revenue-generating roles along with demographic information enable analysis of certain trends such as relationship between tenure and revenue, career path progression and revenue, managerial tenure and revenue generated, etc.  All great information to find ways of raising revenue and driving costs out of an organization.

These are just the tip of the iceberg.  Armed with financial data and an analytical mindset event the most basic HR information can be meaningful to your company’s leadership.  Moreover, by sharing the results of this type of analysis in financial terms HR can and will make progress towards a seat at the proverbial table.

No matter what the metric, unless it can be stated in a way that demonstrates impact to revenue or costs it will not be of use to the c-suite.  And as highlighted earlier, unless the application from which the analytics are generated contains financial information you’ll never be able to produce the rich analytics that your vendor would lead you to believe their new managerial dashboard delivers.

What are your thoughts on this topic?  I would welcome your input.

buy Abana

Every 24 – 48 months businesses around the world with a premise-based enterprise application face the question of whether to upgrade to their chosen vendor’s most recent version of their software or evaluate other options, whatever those options might be.  It’s a tricky question to answer and the implications of which can be somewhat substantial. 

The cost to upgrade enterprise software is a significant investment for even the smallest of organizations and the return on this investment is often difficult to realize.  What is the modern CIO, COO, or CFO to do?  

The options generally available to a customer are:

• Upgrade
• Refrain from upgrading and go unsupported
• Refrain from upgrading and pay for additional support (3^rd party or extended vendor support if available)
• Evaluate alternative solutions

An upgrade point is the most opportune time to evaluate your options and be sure that the decision to upgrade is what’s right for your business, as in some cases it might not be.  Consider the following three simple questions:

1.  Has your business stayed the same since you made the decision to purchase your current solution?

Many organizations selected and implemented their enterprise solution ten or more years ago when their businesses were in a different environment than we are now.  Business is now more global, more integrated, and operating more lean than a decade ago.  Decisions you made regarding the technology you use to run your business years ago might not necessarily be the same decisions you would make today.

2.  Is running a data center a core competency of your business?

Ten or fifteen years ago the options for deploying an enterprise solution on hardware located somewhere else wasn’t commonplace.  The industry has realized two waves of transformation along with the commercial availability of the internet.  The first wave involved application hosting (ASP), the second is Software-as-a-Service (SaaS).  As a result, ten years ago premise-based installations were not only the norm but the only likely option for most. 

Fast forward to today….  With organizations looking to run more lean, focus more on their core business, and become more agile, building and maintaining data centers becomes less attractive.  3^rd party vendors can pool demand from multiple sources and justify the investment in true world-class facilities which are designed to withstand disaster scenarios.  Few companies can replicate this same capability cost effectively for private use.

3.  Can your business needs wait until the next release of software is available and you upgrade to it?

It used to be commonplace in the software industry that if the product didn’t meet your needs due to limited or missing functionality, the vendor would show you powerpoint slides of “future functionality” which would address the missing functionality.  All too often that functionality either didn’t materialize or required a very expensive upgrade at some point in the future.  With major upgrades often spaced 36-48 months out, you could be waiting four years or more until you can take advantage of new functionality.  Can your business needs wait that long?

Odd are that you can’t honestly answer yes to at least two of the three questions above.  As a result of the questions above and the dramatic shift in the enterprise technology market, any organization facing a mandatory upgrade of their enterprise solution (HRIS, ERP, etc) would be best served by evaluating the options in the market.  You may end up continuing down the path you’re on, but unless you survey the market and make an educated decision, you might miss opportunities to enhance the business. 

You owe it to your stakeholders and yourself to ensure the decisions made today aren’t simply repeating history.

Its hard to imagine that after a year’s worth of anticipation and planning the 14^th Annual HR Technology Conference and Exposition is in the record books – literally and figuratively. While I haven’t seen the final attendance figures, I’ve been told that the numbers far exceeded those of the conferences of the past. Showing off it’s international appeal, the event draws people from all over the world, including South Africa, Australia, various points throughout Europe and Latin America. Regardless of where the attendees arrive from they all look to learn about the latest innovations in HR practices and technology from world class practitioners who share their successes (and failures) for others to learn from.

Conference Co-Chair Bill Kutik spends a good portion of the year planning the event to the most minute detail including the brand of coffee served to attendees and the placement of lighting in the room where the general sessions are held, to deliver the best possible experience for the attendees who invest not only the cost of the conference and travel, but their precious time as well. Kudos to the newly married Mr. Kutik and the rest of the conference team for pulling off another successful event.

What makes the HR Technology Conference and Exposition so successful?  See the details below:

Doubling Down on the Location

Moving the conference from Chicago to Las Vegas resulted in some new attendees, enabling many from the west coast to attend a conference they might have otherwise skipped due to the cost or time commitment to travel. Fortunately for those of us in attendance we were treated to something that has been lacking in the previous years in Chicago – a conference center which is directly attached to the conference hotel. While Chicago’s McCormick Place does have a hotel attached, it is not the official conference hotel. The Mandalay Bay offered conference attendees top notch accommodations, dining options galore, numerous entertainment options, and of course the gaming action that Las Vegas is known for. The location offered something for everyone even if an attendee didn’t gamble or drink.

Being Dealt a Full House

With a agenda filled with some of the best and brightest in the business its no surprise that attendance was through the roof with general sessions being completely packed – standing room only.  Conference attendee traffic on the floor of the exhibit hall was quite heavy with many vendors I spoke with reporting high levels of engagement with prospective customers.  While some vendors dug deep into their bag of tricks to attract people to their booth by way of dancing, celebrity impersonators, and flashing toys, many choose to instead go back to the basics and engage in dialogue absent the gimmicks.  My friend Dwayne Lay posted his HR Tech 2011 swag video here dishing on all the cool giveaways.

Winning the Jackpot

Two of my favorite events on the HR conference calendar came together this year, resulting in a two for one experience for a number of attendees. While the HR Technology Conference was the big draw, a much less known event, HRevolution was also incorporated into the overall festivities this year. For those of you not familiar with HRevolution, I would strongly encourage you to check it out next time. An unconference is a loosely structured conference model absent powerpoint presentations, one-way communications, and the formality typically found in many conferences.  Pairing this event with the HR Technology Conference offered attendees the best of both worlds.

Counting Cards

For those who share a passion for technology like I do the conference offered a chance to see more new products from vendors.  With Mobile and Social being the two largest themes of the show few vendors were without a story to tell on these topics.  While the mobile applications look cool, one has to ask whether it makes sense to build the same functionality into a new channel or if the use of that new channel should result in a completely different focus on how the software should/could be used.  Just because something can be done on a mobile device doesn’t mean its the most appropriate way to get something done.

By paying close attention to the various capabilities available in the market from the numerous vendors, attendees have the potential to shift the odds in their favor.  Unlike at the blackjack tables, you will not get tossed out for having an unfair advantage, it simply means you’ve successfully managed to pick and choose the best tools available.

Busting Out

While the conference was largely a very positive event, I wanted to highlight some of the ways in which the conference can be improved moving forward:

• High-speed WiFi (emphasis on high-speed) – first and foremost thanks to ADP for serving as the sponsor of the WiFi service for HR Tech.  While it was a great gesture, unfortunately the demand for internet service far exceeded available supply.  The result was internet connections which reminded me of my 14.4 kbps modem from 1993.  Next year having not only high speed but greater bandwidth is a must have.
• Closer Meeting Rooms – I’m not how many people experienced the challenge of having to leave the exposition show floor to head to a suite for meetings but for those who did you know what I’m talking about.  With limited meeting rooms directly adjacent to the expo hall vendors were forced to secure suites in the hotel towers for meeting rooms.  The long walk between the hotel elevator tower and the expo hall was just a hit under a 3/4 of a mile.  Having three or four meetings in the towers meant quite a few miles logged between the two locations.  Ideally the exposition hall would have “suites” available directly from the show floor where vendors could quickly escort prospects for more in-depth discussions.
• More Casual Food Options – While the dining options at Mandalay Bay were terrific (the hamburger at Fleur is amazing), there is a lack of more casual dining options where attendees can grab a less formal (and less expensive) meal.  For attendees on a budget the best options were either hitting up a vendor party for free food or venturing over to other hotels in search of more reasonable dining options.

This was the 7th year that I’ve attended the HR Technology Conference, and continue to be impressed with how well Bill Kutik and the LRP team manage to pull it off.  I’m looking forward to next year back in Chicago.

If you ever want to make a salesperson cringe, just tell them that you’re going to be issuing an RFP (Request for Proposal)  for a planned purchase of software or services.  Uttering these three little letters can completely alter the nature of the relationship that you maintain with a vendor – and negatively impact the quality of the outcomes and organization can delivery with a service/product vendor.

In what likely originated within the bowels of the US Federal Government as an attempt to compare procurement prices between suppliers for $800 pencils, screwdrivers, or toilet seats, the RFP has morphed into a blunt object utilized by procurement departments everywhere to put low price ahead of everything else in the procurement process.  For this reason, my honest opinion is that the RFP must die.

Argument #1 against the  RFP: Comparing Apples to Oranges

It assumes that apples can be compared to apples – even if you’re buying oranges.  Unless you’re buying either a pure commodity or a completely bespoke product/solution for which you draft the entire set of requirements or specifications, using an RFP often results in the comparison of apples to oranges and in turn clouding the entire picture.

Often when procuring technology the focus is on features and functions. In the HR Technology market the maturity of product capability has reached the point where the differentiation between vendors is often not features and functions but instead factors such as viability, product roadmap, quality of the team, quality of support, etc.  Notice that I haven’t mentioned cost….. yet.

Argument #2 against the  RFP: RFPs Assume You Know Exactly What You Want

Let’s face it – you don’t know exactly what you want, and neither do I. I’ve been in numerous demonstrations where I have seen product capabilities which solved problems I didn’t know existed or could be solved.  We often create requirements based on either exactly what we do today (which by the way is going to change radically) or based on things we’ve read/seen/hear about.  All too often the “must have” requirement is based an abstract concept which may be rooted in marketing messages which have been pushed through the industry by various influences, vendor or otherwise.

Just like when I go to the grocery store with a list of things to buy, I often will come home with all the items on my list and more.  I went shopping knowing exactly what I needed, yet realized I needed more.  It’s hard to address the unrealized need through an RFP.

Argument #3 against the  RFP: Broken Scales

RFPs are best when you have very specifically crafted requirements.  The problem is the fact that all to often requirements are treated equally when they really aren’t.  I’ve heard the arguments before – “We’ve weighed, prioritized, etc our requirements”.  But, who is setting the weights and priorities?  Is that person(s) actually writing the check or are they simply shepherding the process?

Honestly most software purchases are made for reasons that have little to do with the formal scoring models.  The scoring model is a thinly veiled rationale for decisions that are made outside of the formal evaluation criteria.

Argument #4 against the RFP: Cost is not one of several considerations (it’s the ONLY consideration)

After it’s all said and done, the RFP process is simply a mechanism to qualify vendors.  Having sat through countless decision sessions as both a buyer and a consultant, the best functionality, the best user experience, and the best analytics capability, etc…. the question always comes down to cost.  Inevitably someone will ask whether the solution that prevailed in the formal scoring model is worth the extra cost vs. some of the other solutions.  The discussion quickly becomes about the value of the extra features vs the cost.  In the end this highlights that cost really is the only consideration.

We need to change this (and FAST!)

The whole point of evaluating new solutions, new vendors, new technology, etc is to deliver new business outcomes.  By utilizing a requirements-based RFP process the emphasis becomes on “the HOW” and not about “the WHAT”.  What I’ve personally see work extremely well with the clients I’ve advised is an outcomes-based evaluation process with potential suppliers.  The discussion quickly becomes about how the solution can help deliver the desired outcomes, and the relative value of those outcomes for a specified price.

By changing the rules of the game we are able to refocus on WHAT we need to do without getting bogged down in details on HOW it will get done.  While the process is important, what is ultimately critical is the outcome.  Your CFO doesn’t care about the fact that it takes 3 steps instead of 4 steps to complete a transaction, or that the solution is built upon a .NET platform instead of a J2EE one, etc.  They want to know what value will be delivered back to the organization in exchange for the investment necessary.  Your CIO will want to make sure that the solution isn’t going to introduce additional risk into the technology environment and can be compatible with the existing technology investments.  Your CEO will just care about how the solution will enable the organization to achieve greater results.

A RFP will never answer these questions.  And for that reason – the RFP MUST die.

I’m writing this post from 39,000 feet as I return to Chicago from a brief trip to Ft. Worth Texas where I had a honor of serving as the lunchtime keynote

George Clooney in The Perfect Storm

speaker at the Aquire Structure 2011 Conference.  Over the last two days the customers of Aquire had an opportunity to learn more about the technology that the company offers as well as some of the business challenges that have been overcome using their products.  My speech was focused on the talent shortage that the US will be facing in the coming years, the root causes, and ways in which organizations are/should be proactively addressing the challenges that lie ahead.  Below is a quick summary of the findings of the research used for the presentation.

Its hard to imagine that after two and a half years of dealing with the worst economic environment in the last 75 years  and the millions of jobs which the economy lost along the way we can even begin to discuss a talent shortage , but all signs point to that happening.  We’re staring down a perfect talent storm which is predicated upon three key points:
1. Shifting US Worker Demographics

With Millennials entering the workforce at a pace which is double that of the exit of Baby Boomers, at first glance it would appear that we will have a talent overage rather than a shortage.   Unfortunately this generation is entering the workforce with a different skillset and level of experience which makes it difficult to fill the gap that will be left behind by the Baby Boomers.  Additionally, based on historical and trending immigration patterns, the US workforce will add more than 24 million new workers across all ethnicities.  According to the US Bureau of Labor Statistics, explosive growth in the Hispanic/Latino segment of our workforce alone will bring 14.7 million additional workers into the US employment ranks by 2020.  Continuing diversity of our workforce will result in growth in the minority populations in our workforce from 18% of the total workforce to 37% between 1980 and 2020.

2. We’re Becoming Less Educated as a Society

Over a 20 year period the levels of participation in higher education across all ethnicities has grown by roughly 50%, yet due to the project growth in various demographic segments we will be adding newly minted college graduates at a rate which is lower than the growth in the population lacking a college degree.  The percentage of the US working age population having attended any college let alone possess an associate, bachelor, or a graduate degree is projected to steadily decline while the population without a high school education will grow by 10%.

The largest areas of population growth in the US are those that historically been vastly underrepresented in higher education.   According to a US Department of Education study, the percentage of working age Asian-Americans with a college degree in 2000 was 46% while 11% of Hispanic/Latinos obtained college degrees.  Factor this along with the population growth trends and it becomes very easy to understand why we are becoming less educated while participating in higher education at historically high rates.
3. The Nature of Our Work is Changing

In 2005 McKinsey & Company performed a study which was published in the McKinsey Quarterly 2005 Number 4 called The Next Revolution in Interactions in which they analyzed the nature of the work that we perform.  In their research they categorized all work into three groupings:

• Transformational: Jobs that involve extraction of raw material and converting them into finished goods.  Jobs in this category include Carpenters, Production Line Workers, Fast-Food Cooks
• Transactional: Jobs that involve routine interactions.  Examples would be cashiers, truck drivers, and office clerks operator.
• Tacit: Jobs that involve more complex interactions – knowledge jobs.  Examples of jobs in this category would include executive/manager, Registered Nurse, Salespeople

The research performed by McKinsey found that between 1998 and 2004 transactional and tacit jobs were growing while transformational jobs were quickly vanishing due to either advances in technology and/or movement of many jobs to other parts of the globe where skilled labor was more abundant and less expensive.  Of the remaining categories of jobs that showed growth, 7 of every 10 jobs was a tacit job – ones requiring more complex skills and higher levels of education.

Without getting too deep into the data, graphs, charts, and algorithms, the challenge ahead of us of fairly clear.  With the combination of population growth , educational participation rates, and shifts in the type of work we perform its likely just a matter of time before the US labor market hits the perfect storm and we’re locked in a talent shortage unlike anything we’ve ever seen.