This past week I had the privilege of attending isolved’s Connect annual user conference at the Diplomat Beach Resort in Hollywood, Florida. The event marked a few firsts for me personally: my first time attending isolved Connect and the first time I have traveled for an in-person event in 18 months. It was great to get back to meeting and connecting with vendors and buyers face to face again!

Considering current events, the conference was quite well attended, with isolved confirming a 70% increase in conference attendance y/y from 2019 – which speaks to the value its HCM platform and extended HR services are enabling for its buyers and partners. isolved has done a lot to keep that value flowing, maturing its solution through product development and select acquisitions. 

isolved’s strategy, tactics & roadmap

On the strategic side of the platform, isolved quickly put its recent purchase of AI-enabled analytics platform provider TrenData HR to work, launching isolved Predictive People Analytics at the event. The offering provides leaders access to AI-driven predictive insights against data from across its People Cloud suite of modules, surfaced through configurable dashboards and augmented by a voice-enabled virtual assistant.

From a tactical perspective, isolved introduced People Cloud Expense Management, which becomes available in Q4, and offers two levels: Essential and Premier. Both will offer isolved’s Adaptive Employee Experience, which includes a mobile-first UX, OCR for receipt capture, and full transparency into the process through to payment. For leaders, the solutions each provide automated workflow approvals, company-wide reporting, and dashboards for drill-down insights and control. Further, the Premier edition will support organizations with more complex expense management features, including credit card transaction importing, job and project costing, and deeper GL export capability.

isolved is focused on continuing its growth by maturing its technology and deepening its service offerings. Its roadmap looks to advance its talent management capability, including enhanced onboarding experience, support for total compensation management, career and succession planning, LMS integration to its wider engagement and talent products, and more tools to support reward and recognition. From a services perspective, isolved is focusing on supporting health and wealth, with benefits a key area of growth, and will launch a benefits brokerage capability and offering in 2022. 

isolved will also continue to expand its partner network: both its payroll services reseller partners and its marketplace partners. isolved is working to further expand its marketplace of integrated partner solutions to address white spaces within its offerings, and further support its adopters in addressing unique needs and growing their businesses.

Key observations & takeaways

Throughout the week, I spoke with multiple isolved clients and partners (in many ways, clients themselves, commonly leveraging isolved’s platform to enable their own managed services offerings). Something that stands out in conversations with clients is their collective confidence in isolved, its executive leadership team, and the technology itself. Every firm I spoke to indicated lengthy tenures with isolved, commonly over five years, which speaks to the value, customer experience, and care isolved places on long-term relationships and retention of their clients.

I also noticed in my conversations just how much work SMBs need to do to mature HCM practices and support their planned growth as they also navigate today’s challenges as the future workplace continues to evolve. I think it’s indicative of the attendance increase this year, as many have important HCM buying decisions to make to address key gaps and futureproof their HR operations for continued growth. The challenges they face, while smaller in scale, align with those seen by their up-market peers. Top operational concerns I heard this week centered on enabling HR to support growth plans and strategic initiatives more efficiently and effectively for their businesses, finding and retaining top talent, and maintaining compliance.

Looking ahead, isolved’s leadership is keeping its foot on the gas in terms of innovation, platform maturity, and client adoption and retention. A key area of opportunity for the platform is talent management, which will see capabilities advance through its roadmap in 2022. The acquisition of TrenData HR fills a gap in cognitive capability which has enabled its predictive analytics offering and will support further AI-driven capabilities, which will be key for deepening talent insights and supporting an eventual talent marketplace offering. Further, isolved has some work to do to expand its partner integrations, particularly to deepen its capabilities to support unique client requirements and sector challenges and meet the growing demand for multi-country solutions by emerging SMBs. 

With its platform and clients maturing, isolved is on a positive path to continue its growth trajectory. The challenge will be helping SMB buyers realize the need and value in adopting these more advanced capabilities and embracing technology to modernize their HCM practices and advance their business initiatives.

This is Part Two of a three-part blog series covering my perspectives on the payroll market based on NelsonHall’s latest annual market analysis, Payroll Services: Globalization and Digitalization. Part One features the payroll buyer perspective, including the buyer view of the impact of innovation available today. In this part, I look at the managed payroll service providers currently pushing the pace of innovation.

Managed payroll services: providers & solutions to watch

With payroll at the heart of the employee experience (and housing some of the richest and often underutilized data sets in the organization), and taking account of the shortcomings and learnings from the pandemic, firms across sectors are prioritizing investments to futureproof their payroll operations for greater resiliency and empowering its shift from simple processor to strategic center of expertise.

The renewed focus on payroll has managed service providers rapidly proliferating digital solutions to modernize and automate this historically manual, time-consuming process, dedicating on average ~19% of annual revenues toward technology and innovation, with roadmaps focusing on enhancing the user experience (mobile first/only, deeper personalization and augmentation through AI/ML/NLP); enabling digital payment solutions such as on-demand pay; advancing automation toward fully autonomous, "touchless" payroll processing; and enabling deeper predicative payroll reporting and insights.

Here are some of the managed payroll service providers and solutions pushing the pace of innovation in payroll services and technology, which I will be keeping a close watch on as we move ahead.

HCM technology providers

HCM technology providers have gotten serious about payroll in recent years, somewhat creating their own category of payroll solutions. With technology at the core of their business, supported by sizable annual investments to advance their platforms, these providers have brought a virtual ''cannon to a knife fight'' in a historically innovation-starved market. Their technology is powerful, deeply integrated with core HR, time and benefits, and progressing rapidly – placing traditional payroll providers on notice while mutually benefiting those that can integrate and supplement the HCM's capability (most often multi-country providers).

UKG

The newly merged firm (Kronos and Ultimate Software) paired their deep WFM and HCM technologies to form what will eventually become a tightly integrated, comprehensive global workforce solution. The firms also merged their North American payroll services capability and more recently opened their offering to provide standalone payroll.  Since loosening their HCM offering, UKG has seen strong growth and uptake for its payroll services driven by its advanced digital payroll capability, not only with full HCM platform adopters, but increasingly as a standalone led by several notable enterprise adopters.

Ceridian

No HCM technology provider is more serious about multi-country payroll than Ceridian. Dayforce is now natively supporting seven countries (U.S., Canada, U.K., Ireland, Australia, New Zealand, and Mauritius), with Mexico and Germany on the horizon. Its recent acquisitions of APAC specialists Excelity Global and Ascender drastically accelerated its multi-country payroll capability and further supports its up-market aspirations. Further, Ceridian's Dayforce Wallet, a native on-demand pay and financial wellness solution enabled by its continuous calculation capability, provides early earned wage access to employees, and supports alternative pay methods, including the Dayforce Prepaid Mastercard. Dayforce Wallet has seen rapid uptake in the U.S., as the EWA trend continues to escalate and is targeted for launch in Canada and the U.K. next (later in 2021).

Paychex

Although not a traditional HCM technology provider, Paychex has quietly developed its FLEX technology into a digitally-focused platform offering that spans the employee journey and punches above its weight in HCM technology maturity, including robust COVID-related workplace tools paired with an expansive, one-stop-shop of modern HR and payroll solutions and services, curated to support the needs of growing small and mid-sized businesses. Examples include comprehensive payroll funding and payment solutions like on-demand pay, real-time payments, same-day ACH, and payroll protection through Paychex Promise, which can extend payroll funding collection by up to seven days.

Multi-country payroll providers

Multi-country payroll solutions are greatly benefiting from advances in digital innovation. Modern cloud platforms are standardizing and centralizing payroll to a single control center and dashboard globally, enabled by integrations or APIs capable of bi-directional data transfer that has enabled real-time, consolidated global payroll reporting. Further, advances in integration have enabled providers to cover the globe, supplementing capabilities through the integration of third-party country engines, enabling support for >150 countries through a single governance model and user experience, supported through increasingly localized delivery models. 

CloudPay

CloudPay provides global payroll and treasury services through its digitally-focused, technology-enabled operating model. Through Connect 2.0, it provides a deep set of certified HCM technology integrations, which it continues to expand with additional platform providers. Further, CloudPay offers a full suite of analytics tools that help organizations visualize and understand their payroll data, including benchmarking capability to leverage the collective data of its entire client base (to provide clients with KPIs for benchmarking elements of payroll efficiency against peer organizations). CloudPay plans to launch and roll-out a dedicated mobile app including employee-facing ESS/MSS capabilities, along with expanding its highly adopted treasury and global payments services to offer alternative payment methods, including support for on-demand payroll capability, pay cards, and digital payment solutions.

Immedis

Purpose-built for global payroll, the Immedis platform focuses on unifying payroll to a centralized view globally while driving out traditionally manual activities through digital capabilities like perpetual data validation. The AI-enabled tool identifies gaps in payroll data that impact payroll completion, surfacing data management issues, continuously checking and subsequently validating the data quality and completeness, surfacing gaps in global payroll data for any country in real-time. A recently launched feature leveraging its perpetual data validation is its new Country Specific Information tool (Immedis CSI), which validates country-specific, regional, and local data to ensure all information is up to date and accurate, thus avoiding potential issues during processing.

HR BPaaS providers

Buyers are increasingly looking to payroll providers to take on an expanded scope, seeking to adopt and bundle processes closely linked with payroll. Further, with compliance a key challenge, remote work and talent acquisition spanning the globe, the appetite and demand for localized HR compliance advisory support are steadily increasing, which is inching payroll vendor offerings slowly toward a deeper HRO capability. HR BPaaS providers are well-positioned to support this trend and have opened up offerings to be more flexible in recent years, enabling firms to pick and choose the service components that best fit their requirements.

The HR BPaaS provider group has also pushed hard on technology and innovation investments, seeking to enable a deep digital offering to meet the needs of a wide range of buyers, with a focus on technology-enabled, platform-based offerings, real-time payroll insights, and automation to advance the critical process forward. 

ADP

ADP has made sizable technology investments in recent years, leading to its Next Generation HCM and Next Generation Payroll engine, each maturing in digital capability and underpinned by the ADP DataCloud, ADP Marketplace, and ADP Mobile app. The cloud-native Next Generation Payroll engine currently enabled for the U.S., Canada, Australia, and Mexico, will see country localizations for Ireland and New Zealand next. ADP's roadmap will advance its digital pay capability, with support for touchless payments, expanded security for e-payslips, and enabling a native on-demand pay capability within its Wisely solution. ADP also launched a new offering called Roll by ADP, an AI-enabled SMB payroll offering that provides a mobile-first, app-based payroll solution, providing a personalized, augmented experience entirely within its mobile app, for managing payroll anywhere, anytime, and with limited or no experience.

OneSource Virtual

Workday specialist OSV offers full lifecycle BPaaS services exclusively for Workday customers and is now supporting ~40% of the HCM platform's payroll module adopters. With payroll a central component in OSV's managed services offering, it has expanded its client-facing, in-tenant service delivery solution OSVAtmosphere with a set of web apps designed to provide clients with real-time actionable insights at each step of the payroll process through to tax, garnishments, and payroll funding. OSV plans to expand the solution with additional apps due 2021, aligning to its broader HR service offering, which includes dedicated apps for workforce data management, benefits, and COBRA administration. With Workday adoption accelerating outside of the U.S., OSV will enable some of the apps to support clients in Workday-supported countries beyond North America, including a payroll app-enabled for the U.K. and Ireland due in early 2021. 

Next week, in Part Three, I will give my perspective on the managed payroll services market's outlook and what to expect as we move forward.

As expectations of what is possible in the digital world have grown exponentially, Capgemini is aiming to close the widening gap between consumer experience and employee experience.  It is looking to digitalize workplace interactions while keeping the warmth, emotion, and uniqueness underpinning company culture.

It has built a Digital Employee Operations (DEO) practice over the last four and a half years, which brings customer service to a new level in the field of HR. DEO aims to bring everything into one place: knowledge, help, and information through a "one pane of glass" digital window.

This is only possible through tighter technology partnerships which support more robust integrations with more industrialized processes and more standard services.

What's New?

In 2020, Capgemini selected ServiceNow as a strategic partner for its digital employee operations. Importantly, this is not positioned as a call center. Its Digital Employee Operations clients use a digital-first strategy.

ServiceNow brings a case management platform designed for HR with a prebuilt data structure that is HR-centric, combined with prebuilt security. One of the differentiating features is that this product enables not only service agent interactions, but employees can interact and collaborate across the organization; for instance, product enabling managers and employees are able to engage on a case.

Before reaching this partnership, Capgemini supported operational customers in its DEO practice with the ServiceNow platform for a number of years. Its first ServiceNow customer was AECOM, which went live in Q4 2018, and it has built a significant practice over the years. Today, Capgemini's DEO supports more than 20 languages for more than 250K lives in 90 Countries on ServiceNow. The formal partnership now takes this model and approach to a new level.

Applying chatbots in HR and adoption levels

In Capgemini, chatbots have a high adoption rate, with ~20% of its clients leveraging or launching virtual agents/chatbots. Chatbots offer iterative functionality, and Capgemini sees varying deployment approaches across clients.

Some add a virtual agent/chatbot alongside live human chat support. This expedites the learning process for a bot by having a log of live interactions to drive and map intents and responses accurately to employee queries. An alternative approach is where there is no history of live chat. As an input, the bot simply requires more effort and assumption in intents and interactions. This approach involves more humans validating questions and answering questions the bot could not address.

Why a strategic partner?

Having selected a dedicated human resources “hire to retire” services solution, Capgemini can now drive larger benchmarking data sets to evaluate process improvements through comparative trend analysis. Benchmarking is critical for a mature operation that looks for a competitive advantage. Capgemini offers benchmarking in two ways:

• Sharing of knowledge and experiences learned across clients to benchmark what is leading practice, and applying and sharing lessons learned and continuous improvements across clients
• External benchmarking against non-DEO clients less than 15% of its current client base have engaged with that additional offer.

NelsonHall Viewpoint

Its first truly joined-up DEO contract on ServiceNow was 12 months ago. Over the next three years, NelsonHall expects a service approach to HR transformations will be increasingly important as organizations look for more than just an HCM technology deployment and/or support partners.  Organizations will likely look for more robust and holistic service-based HR business cases to ensure savings and ROI are achieved through end-to-end digital transformations. They will likely increasingly assess their own operational capability to drive the change to achieve a digital-first approach to help drive more consumer-like HR services.

Although many organizations have leaped to mobile-first employee experiences through HCM platform deployment, few have addressed the experience of inquiry support and how HR operating models and interactions need to uplift. Rather than treating this as an afterthought, proactive HR directors with ambitions to reshape companies in 2021 are expected to evaluate service delivery models on a more holistic level, looking more at people and digital and how they come together through technology.

Capgemini's offering maturity is evidenced by the fact it now has 30-40 pre-packaged HR services and a deep service partnership with ServiceNow. This puts it is in a strong position to take this maturity to the next level of sophistication.

The recent impacts of the COVID-19 pandemic exposed many HR and payroll service delivery models as being unequipped and unprepared to pivot to remote work, access the data needed to obtain government support, and move money to employees in a timely and compliant fashion. The pandemic also accelerated an already intensifying push toward digital HR and payroll adoption, particularly as the “work from home” response has turned into the “work from anywhere” norm.

With so many employees now working remotely, the employee experience and employee engagement are more critical than ever before and require modern technology to keep employees connected while ensuring timely, accurate, real-time information, and facilitating reliable outcomes throughout the HR delivery model.

While cloud HCM technology remains the vehicle for HR digitalization, existing solutions often lack the ability to support the HR service delivery function in-platform. Thus, integrated HR service delivery technology is key to extending the HCM capability and enabling a next-generation delivery model and user experience, one that facilitates critical HR support activities in real time, such as knowledge and inquiry management, document storage, process monitoring, and automation. 

As a result, more organizations across sectors are considering managed HR and payroll services as the lever and pathway to modernizing their HR delivery models and advancing their digital capabilities, tapping into the innovations HRO providers have proliferated in recent years in preparing for the “future of work.”

Here, I take a look at how HR and Finance BPaaS provider and Workday specialist OneSource Virtual (OSV) is leveraging its proprietary service delivery technology, OSVAtmosphere, to differentiate its managed services, providing its clients access to the types of next-generation apps required to enable a resilient, modern HR service delivery model and user experience.

OSVAtmosphere

In line with its mantra and branding, "Make the day more doable", OSV maintains a relentless focus on supporting its clients with integrated solutions that maximize their Workday investments while elevating the HR service delivery experience.

OSV enables its service delivery in support of ~800 clients through OSVAtmosphere, which provides real-time, in-application service delivery capabilities leveraged by OSV resources on the back end for HR and payroll process administration, as well as by its client administrators on the front end. This is key, as both the client and back-office OSV resources remain in lockstep in real time throughout key processing and service delivery activities, enabling OSV to operate as a tightly integrated extension of the client's HR delivery team.

For its client-facing OSVAtmosphere solution, OSV has developed a bundle of web apps aligned to its core managed services offerings (HRO and FAO).  With >500 of its clients adopting its managed payroll services, OSV has focused its recent app development around providing its clients with real-time actionable insights at every step of this critical process through to funding.

OSVAtmosphere currently offers five fully responsive web apps that include support for the following processes:

• Payroll: a centralized control center for end-to-end payroll administration (on and off-cycle), providing client administrators real-time, in-flight updates and push notifications on the status of their payroll(s) as it progresses through the entire cycle, up to employees receiving their pay-slips

• Tax: provides a control center for tax liabilities and remittance processing. Post payroll submission, the necessary tax data, and details are automatically drawn into Atmosphere from the client tenant, providing full visibility into tax activities conducted by OSV on behalf of the client. Clients have access to both summary and detailed tax jurisdiction details with drill-down capability for more in-depth analysis and actionable insights, designed to identify downstream exceptions and errors for proactive client notification and resolution, with correspondence capability in-application. OSV has also enabled the Tax app in support of COVID-19 compliance activities, providing clients with access to details and insights into deferred tax codes, deferred tax liabilities, federal tax credits, and supplemental form data

• Garnishments: enables real-time visibility into the fulfillment and payment side for client garnishment orders and wage attachments across their workforce. RPA and OCR technology automate the loading and interpretation of court orders, as well as the remittance of outgoing letters and payments, including electronic copies attached to the client Workday tenant for reference, resulting in a near touchless process   

• Treasury: provides clients real-time visibility into the timings/deadlines for payroll liability funding and money movement, including activity details and historical check registers for identifying cashed and uncashed checks

• AP Invoicing (for FAO clients): provides clients real-time visibility into their invoice coding and supplier updates to drive invoicing accuracy. The app includes the ability to code and search by keywords, to pinpoint line items within Workday finance, with the ability to code by keywords as well as other standard factors.

Roadmap and future apps

As a central technology to its service delivery and omnichannel support model, OSV is focused on deepening OSVAtmosphere's capabilities and continues to invest in roadmap initiatives that will produce additional next-generation apps.

OSV has plans to expand the solution with additional apps due in early 2021, aligning to its broader HR service offering, which includes dedicated apps for workforce data administration and maintenance and benefits and COBRA administration services, including apps for both client administrators and employees. 

With Workday adoption accelerating outside of the U.S., OSV will enable some of the apps in support of clients in Workday-supported countries beyond North America, including a payroll app enabled for U.K. and Ireland due in early 2021. (OSV's Treasury service is not currently offered outside of the U.S. and Canada.)

Aside from continual UI/UX enhancements, OSV also plans deeper collaboration and correspondence capabilities between the client and OSV across all of its process apps (similar to its Tax app capability) to boost communication and speed issue resolution. It also plans on expanding its back office automation through RPA, which is already present against several critical payroll use cases.

Longer term, OSV plans to explore the infusion of AI in OSVAtmosphere to address key use cases and drive deeper predictive capabilities, as well as adding KPIs for potential benchmarking and process improvement insights and recommended actions.

Earlier this month, Kronos held its annual client event, KronosWorks, in Las Vegas, drawing >3k attendees from around the globe. 

Much of the attention at KronosWorks centered on the launch of InTouch DX, an intelligent time clock offering that incorporates advanced digital capabilities including an LCD with touch-enabled access, facial recognition, and integration with Kronos Workforce Dimensions for workforce management insights. However, many attendees were there to learn what Kronos has planned for its HCM platform offering.

If you are familiar with Kronos, you likely know their long history and body of work as a workforce management software provider. It offers an extensive time & attendance and scheduling capability that is not only leveraged by thousands of clients of all sizes and industries globally to address complex workforce management requirements, but the solution is also leveraged or resold by several leading HR services and technology providers as their "go-to" integrated, advanced WFM solution (e.g. SAP/SuccessFactors, ADP, etc.)  

However, over the past three years, Kronos has also been quietly developing two cloud-based, next-generation HCM platform solutions that are now serving nearly 4k clients globally and have experienced a sizeable adoption increase of >30% in 2019 (a growth rate comparable to its HCM technology peers in the space, many of which focus exclusively on HCM and launched solutions several years prior).

Kronos HCM offering at a glance

Kronos' HCM offering includes two cloud-based platforms, both localized and targeted to organizations headquartered in nine countries: U.S., Canada, Mexico, U.K., France, Belgium, the Netherlands, Australia, and New Zealand. Together, the platforms now support >3m HCM users and an additional >35m users on its WFM solutions. The Kronos HCM platform offerings are:

• Workforce Ready: generally targeted to organizations with <5k employees, but with the capability to support organizations >5k
• Workforce Dimensions HCM: targeted to organizations with >5k employees; generally, those operating in industries with high populations of hourly workers or having a complex workforce management requirement (e.g. unions, global presence, etc. – which may also include organizations below 5k).

The two HCMs have aligning infrastructure and are built on the Kronos D5 cloud platform enabled by Google Cloud technology. Therefore, both platforms share essential functionality and capabilities (currently >90%) across their HCM modules.  

A key element to the Workforce Dimensions platform, and where its capability differentiates from that of the Workforce Ready platform, is its complex workforce management and planning capabilities. Kronos also offers this as a standalone solution and is often adopted by users of both Kronos' HCM platforms, as well as integrated with other leading HCM solutions. Workforce Dimensions (WFM) is currently configured to support 17 languages. Additionally, the platform offers deeper functionality to support key requirements inherent to operating in industries such as healthcare, manufacturing, retail, staffing, distribution, government, banking, and education.

What’s new and next

Kronos continues to push hard on the advancement of its HCM offering, directing a sizable portion of its annual R&D spend toward its HCM platform development. In addition to advancing its HCM capability, Kronos is also investing in a significant marketing blitz aimed at shifting its brand awareness from that of a WFM technology provider to a provider of comprehensive, platform-based WFM and HCM technology solutions.

Central to the Kronos HCM roadmap and platforms’ future is the infusion of AIMEE, an artificial intelligence and machine learning engine that provides predictive and prescriptive guidance for employees and managers. AIMEE supports tasks and insights such as predicting employee "flight risk", identifying employee success potential, measuring employee fatigue, and supporting succession planning by analyzing employee trends. 

At the event, Kronos launched a new Advanced People Analytics offering powered by AIMEE. The offering, which is available now for Kronos Workforce Ready and due in 2020 for Kronos Workforce Dimensions clients, provides access to three data science tools for decision-based actions:

• Insights Powered by AIMEE: enables strategic data views in planned areas such as absence management, flight risk, leaves, onboarding, performance, and recruiting 
• Insights Explorer: a data exploration tool that simplifies the dissection of data from across the employee lifecycle, leveraging a descriptive analytics engine to “connect the dots” between engagement, performance, and productivity with multiple datasets 
• Insights Dashboard: provides visualizations through Insights Explorer to provide leaders with a single view of critical people insights.

Moving ahead, Kronos is focused on enabling deeper user personalization and insights across both platforms’ suite of modules and will do this by expanding the use of AIMEE AI to address additional use cases and tasks with predictive and prescriptive guidance – as well as leveraging NLP technology and chatbot capability to address a wide set of everyday HR tasks.

Kronos plans the continued expansion and development of its vertical solutions to address use cases unique to buyers of key industries such as retail, manufacturing, and healthcare. It also plans to expand its native payroll capability beyond the U.S. and Australia (integrated through Payroll Metrics Australia) to include Canada in 2020.

Further, Kronos is committed to rapidly expanding its network of integrated partner solutions to address white spaces and extend the value of their platforms beyond HCM. Recent examples include PayActiv for on-demand payroll capability, Unum Group for leave management administration, and integrations with Cornerstone OnDemand's talent management solutions.

The outlook for Kronos’ HCM offering

With its HCM platforms currently supporting employees in ~85 countries (and quickly expanding), the company is looking to the U.K. and Australia (Australian Payroll is now available through a partnership with Payroll Metrics) as part of its international expansion plans to drive further HCM adoption, where it has a sizable WFM client presence and is already seeing strong HCM adoption in line with its U.S. growth trajectory. To support its international growth plans and help it scale, Kronos continues to rapidly expand its network of global implementation partners that can deploy its HCM platforms on its behalf.

The challenge for Kronos will be increasing its cloud HCM technology "at-bats" with potential buyers seeking to modernize their HR operating models. Kronos is betting on its media blitz to help address this issue, including targeted TV and radio ads, sponsoring professional golfers from the PGA and LPGA (some of which were at KronosWorks), and conducting field events and tradeshows, while also building out its advisory and broker alliances. Further, Kronos will also look to its base of >8k Workforce Central and other legacy WFM clients globally as potential converts to its broader HCM platform offering.

As Kronos heads into 2020, it brings with it strong momentum for its HCM platforms, which remain distinctly positioned in the space against competing HCM-centric peers, offering one of the only fully-integrated, vertically-enabled HCM and WFM solutions available from a single technology provider.  

This past week Workday held its 13^th Workday Rising client event in Orlando, Florida. The platform’s annual event continues to grow substantially, with more than 13k in attendance this year, up from ~10k attendees in Las Vegas at the 2018 event.

The growth in attendance points squarely to the continued steady adoption of the Workday platform, which is now supporting >2.8k HCM and >700 Finance adopters, and 40m users globally across a client base represented by 40% of the Fortune 500 and 50% of the Fortune 50, with 70% of its clients live and operating at a 97% CSAT rating. Recent newly live client examples include Lowes, Quicken Loans, and Renault.

This year, Workday extended its innovation keynote to 120 minutes to accommodate the depth of new features being launched across HCM, Finance, and Planning. Workday introduced multiple new HCM features, each geared toward supporting businesses and their workers in navigating the changing shape of HR and supporting the future of work. Central to Workday’s roadmap and future is the infusion of machine learning (ML) across the platform to augment users, personalize their experience, automate tasks, and deliver deeper insights in context and in the flow of work.

New HCM key features

Workday People Experience (March 2020): a new user interface which leverages ML to enable highly personalized support for the user’s unique journey, designed to enable employees to conduct day-to-day HR activities without needing to know exactly where to go in the platform to complete a specific task.

The new Workday People Experience includes the Workday Assistant, an NLP-enabled personal assistant, and is integrated with leading collaboration tools like Slack and Microsoft Teams to support employees “where they work”.  Additionally, Workday introduced a new case management and knowledge management tool, enabled with a case solver capability to support timely case management, resolution, and issue prevention.

Workday People Analytics (available for subscription in 2020): an AI and ML-enabled augmented HCM analytic offering designed with predefined business metrics and KPIs set around key workforce trends and topics delivered through a story view (a capability enabled by Stories.bi which Workday acquired in 2018). Additionally, Workday has also enabled Discovery Boards, its drag-and-drop data discovery capability for all HCM clients as part of their standard subscription.

Skills Insights & Talent Marketplace: leveraging its previously launched ML-enabled Skills Cloud (>200 client adopters and taxonomy of >200k skills), Workday introduced two key talent management capabilities. First, Skills Insights, which enables HR to assess existing skills and identify skill gaps within the organization through real-time insights; plus a new Talent Marketplace, which provides a platform for talent mobility, enabling workers to match their skills to roles, projects, and gigs, as well as being identified for opportunities where their skills are a fit.

Workday Credentials: a blockchain-enabled credentialing technology that is designed to address the historically manual and time-consuming process associated with verifying employee credentials (e.g. work experience, education, certifications, etc.). Further, Workday introduced the WayTo mobile application, which empowers users with capability to manage and share their verified professional credentials as and when desired throughout the application and screening process.

WFM & Payroll Updates

Although much of the product news centered on UX, talent management, and analytics, Workday highlighted multiple key features shaping its next generation workforce management (WFM) capabilities, all designed to drive greater user efficiency and effectiveness by leveraging automation, AI, and ML.  

Most notable was Workday’s demonstration of the progress it has made towards its “zero touch” payroll capability, which was met with highly positive approval from the payroll practitioners in attendance. The solution pairs a continuous gross-to-net calculation engine (which processes payroll results 24x7) with Smart Payroll and Smart Retro processing capability which automatically processes retroactive actions and only processes payroll for workers with payroll impacting changes. Smart Audit rounds out the capability to compare payroll results and surface exceptions for review automatically.

Workday expects to expand on its payroll capability with Instant Pay (2020) which provides an on-demand payroll capability allowing workers to request payment incrementally for hours worked and approved. Additionally, Workday demonstrated a new RPA capability (2020) enabled through partner integration with Automation Anywhere, which is aimed at reducing the historically manual efforts for key payroll inputs; initial use cases including payroll input automation and stock administration automation are both due in 2020.

Looking ahead

Clients I spoke to throughout the week (varying sizes and industries, many of which have been operating on the platform for a few years) indicated high satisfaction and value realization overall. I noticed this year there were many more full-suite adopters with both HCM and Finance in place, some of which were deploying, or at least considering adding, Planning to the mix in the near term. Those without full-suite adoption expected to expand their use to include more HCM, most commonly on the talent management side, but also some considering adding payroll where it has been left to an outsourcing provider and not yet on the platform.

Not surprising was the fact that many Workday clients I spoke to still haven’t solved (or even begun addressing) global payroll yet, a clear opportunity for Workday’s global payroll partners which I noticed maintained highly active booths all week, as this issue is clearly front of mind for many cloud HCM adopters.

However, maintaining its rapid platform adoption and historically strong revenue growth ($2.82b, +31.7% y/y for FY’19) is now the challenge for Workday which is driving towards a target of $3.59b in total revenues in FY’20. To maintain its strong adoption and growth results, Workday continues to invest heavily in platform features and innovations, dedicating ~30% of revenues annually to R&D compared to ~15% on average by its legacy and peer cloud competitors.

Workday leadership emphasized its commitment to “doubling down” on ML as the game changing technology it expects to drive its platform innovation, client value, and platform adoption in the future, innovation that will enable value for users by addressing the key HCM and business challenges organizations face today. While Workday and its peers are pushing out advanced capabilities faster than ever, the challenge now will be in helping clients keep pace with the level of change, digesting and adopting practices that put these advanced capabilities to use.

This past week ADP held its annual analyst day event at its innovation lab in Chelsea, NY, where its executive leadership provided updates on the progress of its latest portfolio of next-generation HR and payroll solutions. The event was noticeably more crowded than in previous years, not only from a strong analyst community turnout but also from the growing ADP product leadership team, which is indicative of its focus and commitment to developing next-generation technology products.

Commitment to HR technology & innovation

If you weren’t already aware, ADP is serious about becoming an HR technology company, and to that end has quietly made significant investments in advancing its cloud HR and payroll platform capabilities in recent years.  According to their FY 2018 annual report, it allocated $1bn (up from $863m in FY17) toward systems development, maintenance, and purchases of new software and software licenses.

Its commitment to technology and innovation was further emphasized earlier this year when ADP launched a new branding campaign, introducing a new tagline and mantra of “always designing for people”, underscoring its focus on designing solutions that enable a “better way of working” to support organizations and their human capital to reach their full potential.

Recent investments aside, ADP has a legacy of innovation in the HR space, from inventing payroll outsourcing, and delivering the first payroll automation, to the introduction of the first mobile HCM app (ADP Mobile), and the first app marketplace (ADP Marketplace). Looking toward the future, CEO Carlos Rodriquez emphasized that ADP is "all-in on HCM, and on becoming a technology company".

Over the past three years, ADP has been developing two new "next-generation" cloud platforms: a highly extensible, AI/ML and predictive analytic embedded HCM platform called ADP Next Gen HCM which has been purpose-built for the dynamic team structures rapidly evolving in workplace today, and  a new policy-based, event-driven payroll engine which is capable of supporting both traditional employees and freelance gig workers.

ADP has made substantial progress bringing both platforms to life and has been piloting each over the past year, and is now live with a select group of early adopters like Golds Gym which just went live on ADP Next Gen HCM this past month. ADP reached its goal of 15-25 North American-based clients live on Lifion by the end of FY’19 (July), with plans to reach as many as 75 in FY’20. Further, it expects its next-generation payroll engine to be supporting a “few hundred” clients by the end of FY'20. 

Driving adoption

With its next-generation platforms now in place and ready for primetime, ADP’s challenge will be driving adoption for its new HCM technology. Its first challenge will be targeting and convincing new clients to consider ADP Next Gen HCM over other well-known HCM platforms in the marketplace. Further, it has the mammoth task of convincing its  ~810k existing clients to consider migrating to ADP Next Gen HCM as well.

However, as it continues to add early adopters and enable transformational outcomes that drive referenceable clients, adoption should follow; at the event, ADP announced it had already signed a new ADP Next Gen HCM client (its largest to date) for a North American transportation company with ~65k employees.

ADP is also leaning on the design of ADP Next Gen HCM to differentiate the platform and drive adoption; first, with what ADP calls “extreme personalization” enabled through an “AI anywhere” approach leveraging AI/ML and NLP, and underpinned by the depth of the ADP Data Cloud, for a prescriptive and predictive user experience throughout the platform. Next, ADP plans to enable clients to comingle external business data with HCM data for deriving holistic workforce analytic insights.

To personalize the experience further, ADP is betting on "mini-apps" enabled through its flexible, low-code architecture and design. ADP has empowered clients to build apps and tools to expand their capabilities to fit their unique needs and HR environment.  ADP demonstrated the ease of configuration for its mini-apps, which incorporates a drag-and-drop style experience. ADP currently has ~115 mini-apps in production and growing rapidly, with plans to expand this to third-parties longer term.

While ADP has been keenly focused on advancing its platform technology in recent years, its HR and payroll services remain at the heart of its offering and brand, and will need to play a significant role in driving adoption for its new platforms. I expect adoption for ADP Next Gen HCM to initially be driven from new HR services clients seeking both modern next-generation technology as well as a managed services engagement. 

With a comprehensive HR services portfolio that spans the entire employee lifecycle and can support clients through a single vendor solution, enabled by next-generation platforms and paired with one of the deepest and most robust sets of human capital management data in the world, ADP is poised to gain momentum with HCM technology buyers, and I expect will likely exceed its adoption goals in FY’20.

Last October at Workday Rising in Las Vegas, OneSource Virtual (OSV) introduced RPaaS, a Robotic Process as a Service offering, and the first HR-focused robotic process automation as a service solution targeted toward the mid-market buyer.

RPaaS is a 'turnkey RPA solution’ that eliminates the need for adopters to make substantial investments in developing advanced automation capabilities, making the emerging capability more affordable and accessible to midsized organizations seeking to leverage the technology to enable digital HR transformation. (For more background on RPaaS, see my blog dated November 2018: 'OneSource Virtual Delivers Turnkey RPA with RPaaS.com’)

With Workday Rising 2019 weeks away, and marking the first anniversary of RPaaS' introduction, I checked in with OneSource Virtual’s executive leadership to see how the offering has progressed so far, and its roadmap and future plans moving ahead.

RPaaS progress

In June, OSV announced it had finalized its selection of an automation platform for RPaaS, engaging Automation Anywhere as its go-to-market partner for RPaaS. 

Since its launch last year, OSV has been quietly piloting the RPaaS original library of bots to support HR use cases for payroll data validation, timekeeping, life event monitoring, and 1099 data scrubbing. Over a multi-week timeframe, four early RPaaS adopters from OSV’s client advisory board piloted the bot capabilities.

With the success of the initial pilot and increasing demand from both its existing client base and prospective buyers, OSV released a soft launch of RPaaS for general availability beginning September 1^st, with a more formal launch to occur by the end of September. 

The initial launch will include five clients for RPaaS, all Workday adopters, derived from a mix of middle and large market organizations, and all new client labels for OSV. The initial five clients will begin working with OSV later in September to roll out the bot library against select use cases for operation by their internal HR team.

The future for RPaaS

OSV is also planning to roll out the RPaaS capability for use within its own delivery model, in support of its existing clients. It will work with clients to opt-in (requires security access for bots to client Workday instances, similar to that of a traditional back-office resource), and begin rolling out the capability by the end of October to client adopters.

OSV will also begin rolling out bots in support of its managed garnishment services offering, an inherently high-touch, complex, and compliance-impacting process. The bots, combined with optical character recognition (OCR) and machine learning, will scan and extract garnishment order details for processing. OSV will begin using the capability with ~10 clients by October, with plans to roll out the capability against all managed garnishments clients’ longer term. 

From a roadmap perspective, OSV will continue to develop its RPaaS capability, aiming to address key repetitive HR and payroll tasks and inquiries through automation. OSV plans to expand its bot library, with the target of delivering ~100 bots and use cases by the end of 2020.

RPaaS’ next wave of use cases will center on automating repeatable HR and payroll audits to eliminate rework, drive compliance, and allow practitioners more time to focus on value-added tasks.

OSV envisions enabling RPaaS with 'digital workers', which leverage a group of 5 to 8 task bots that can be aligned to a specific set of activities commonly managed by humans. Examples include a 'payroll digital worker’, focused on automating repeatable activities throughout the payroll process, including pre-processing, gross to net processing, and post-processing reports, audits, and validations. OSV is also targeting enabling a 'HR compliance auditor' to automate auditing the full employee lifecycle of activities that can trigger compliance-related risk. Longer-term, OSV sees an opportunity to enable deeper automation for repetitive activities associated with benefits and recruiting administration.  

Looking ahead, the success of RPaaS not only can provide OSV with a new revenue stream; it also has the potential to enable a pipeline of potential managed services buyers. By engaging an organization with a standalone offering such as RPaaS, OSV can expand the relationship longer term to include a range of managed HR, finance, and Workday support services, as the client grows, or its needs shift.

Longer term, OSV  may have an opportunity to further its RPaaS reach and brand recognition by enabling the solution for potential consumption through the application marketplaces of its key partners such as Workday and Automation Anywhere.  

The challenge for OSV lies in navigating the inherent difficulties associated with launching and commoditizing next-generation solutions like RPaaS as an early entrant.  However, given OSV's history of disruption in the HR services space, I expect RPaaS will be a success and should provide OSV with deep expertise it could leverage longer term to establish a consulting practice and offering aimed at helping organizations navigate and establish digital HR centers of expertise.

OSV is already seeing increasing interest in the offering from both existing clients and external Workday buyers seeking to leverage intelligent automation within their HR delivery models.  I expect OSV will see its RPaaS adoption steadily escalate in the coming 12-18 months, driven by organizations continuing to invest in digital transformation enablers.

Organizations of all sizes continue to pursue digital HR transformation to achieve an optimized HR delivery model – one that enables their leaders to focus their efforts on strategic activities associated with attracting, developing, and retaining top talent for the business rather than spending valuable time on repetitive administrative tasks. To a large extent, this is being acheived through advances in self-service, mobile HR apps, and a fundamental shift in workers taking more ownership in managing their data and careers. 

However, despite the significant strides brought about by today’s HR technology, there is still a great deal of opportunity for process optimization within HR, payroll, and finance delivery models, where teams working in these areas have traditionally operated in a manual, labour-intensive, and inefficient process environment.  

Advancements in RPA and AI are having a major impact on the efficiency of HR organizations, and the progression of automation in HR is being driven by outsourcing firms who seek to offer clients “next generation” HR technology, solutions, and digital transformation enablers.  

RPA as a Service

NelsonHall’s research finds that while demand for intelligent technology capabilities is steadily increasing across organizations of all sizes, many are still uninformed of the possibilities and capabilities of RPA and AI and their potential impact on HR. Further, unless an organization is fairly large, with deep sets of data, pools of FTEs, and with the capability and funding to support internal RPA programs, deriving a business case for investing in automation for unique HR use cases is unlikely to happen.

However, last month at the Workday Rising event in Las Vegas, OneSource Virtual (OSV) introduced Robotic Process as a Service (RPaaS), which aims to solve this issue by delivering a turnkey RPA solution. The offering eliminates the need for buyers to make large investments in developing automation capability or sustaining deep data sets to support AI progression. This makes RPA more affordable and accessible to the middle market buyer.

With RPaaS, OSV will develop robots to support a library of processes that address common, high-volume tasks for HR and finance. OSV clients (all of which operate on the Workday system) can license the bots through a SaaS model directly from OSV, immediately benefiting from the automation capability integrated within Workday, as well as OSV’s patented service-enabling technology, Atmosphere.

The bot library, which OSV is building and leveraging internally, begins with use cases derived from OSV’s experience delivering payroll and tax services for its clients. Items such as data validation, invalid address formatting, invalid SSNs, negative wages, or invalid characters present in HR data are all targets for RPA robots in the early days. Further, at Workday Rising, OSV conducted the first of a series of brainstorm sessions through RPaaS.com, where its clients can weigh in and vote on future use cases and shape OSV’s bot development – a process which mirrors that of Workday’s engagement with its customer community for future platform enhancements.

The roadmap & outlook for RPaaS

By January 2019, OSV plans to have ten use cases in its library when the offering becomes generally available to its client base for subscription. Looking further ahead, in addition to ongoing development of its bot library and use cases, OSV will seek to engage its existing client base with the solution, with plans to expand this to non-clients as a standalone offering in the next 18 months. While the solution is currently purpose-built for Workday, OSV sees the potential of expanding this to include integration with additional leading cloud HCM platforms in the longer term.

Over the past ten years, OSV has established itself as a disrupter in the HR services space, becoming the first HRO provider to anchor its services entirely to a major cloud platform in Workday. And OSV is again disrupting the space with RPaaS – the first HR-specific Robotic Process-as-a-Service solution targeted toward the middle market buyer. With a deep set of tech savvy Workday customers willing to leverage next generation technology in their HR delivery models, OSV should see solid demand for the new solution. 

Further, with the rise in demand for open platforms and marketplaces for apps and extended solutions through APIs, OSV’s RPaaS is well-timed. With the ability to offer the solution via the partner marketplaces of technologies such as Workday, the range of customers it will have exposure to can greatly increase its brand awareness and connect OSV to a deep pool of customers seeking to enable digital HR transformation through RPA and AI.

This past week, I attended two HR events at opposite ends of the Las Vegas strip: HR Technology conference and SuccessFactors’ SuccessConnect client event. Together, they attracted ~14k HR leaders, practitioners, vendors, analysts, thought leaders, and clients, and had the common theme and purpose of showcasing the latest HR technologies and innovations that are enabling employers to compete for, engage with, and maximize the impact of today’s top talent – in a vastly different workplace than we knew just five years ago. 

Here are my key takeaways on the HR technology trends showcased during the past week.

Advances in employee UI/UX

Not only is the employment market starving for skilled workers and top talent, there is a sharp focus on bringing about innovations that fundamentally reshape the way HR manages its human capital and engages with employees. HR applications are being developed with a ‘user first’ focus, whereby the employee experience is heavily influencing and shaping roadmaps for future enhancements.

At both events, the drive toward more consumer grade HR applications came through consistently. Each vendor I spoke with is laser focused on delivering robust HR capability, but also a world class UI/UX that will provide employees with experiences that match their personal life experiences and offer preferred channels of connection to the organization (particularly mobile).

HR tech vendors remain steadfast in their efforts to create a simplified, guided, and prescriptive user experience. AI, machine learning, NLP, and prescriptive analytics have become table stakes in today’s HR tech, and are driving advancements in UX design and performance.

Example:

SAP introduced a new digital assistant for SuccessFactors. Leveraging the SAP CoPilot Web application bot framework and SAP Leonardo machine learning, the digital assistant learns and comprehends user needs and acts accordingly. The digital assistant is further enabled to support conversational interaction with the HCM platform by leveraging NLP, allowing users to engage the platform through verbal commands. Further, the assistant integrates with popular collaboration apps Slack and Microsoft Teams and is mobile-enabled through Apple and Android apps.

Talent management technology

Without doubt, the key priority for many organizations today is competing for, acquiring, developing, and retaining top talent, in what has become a highly competitive marketplace. Thus, organizations are focused on boosting their talent management technology, with an emphasis on talent acquisition, performance management, and learning management. Providers are bringing to market broader, more capable talent management solutions and insights into their platforms and offerings.

Examples:

• Paychex launched a new LMS (Learning Management System) module, further deepening the talent suite of their Flex HCM platform. In addition to hundreds of pre-loaded learning modules, clients can upload their own learning content, create new content, and import content or materials from external sources (e.g. YouTube). Further, the learning application is available in full native form by mobile
• Infor introduced an update to its Talent Science solution and Predictive Talent Analytics, which supports recruiters and managers in sourcing top candidates by leveraging machine learning and predictive analytics. By leveraging behavioral and performance data, the application uses a data-driven process to identify success drivers within the business and identifies internal and external candidates who share those success drivers.

App marketplaces are rapidly expanding

While all modern HCM platforms currently offer robust APIs (integrations) which connect critical business applications to the HCM platform and extend its capability, the demand for more robust options for connecting solutions, services, and applications is in high demand. 

Open platform approaches are becoming standard with HCM providers, allowing for clients, partners, and third parities to connect APIs for consumption through a marketplace/app store-style delivery system. This open approach is allowing for integrations to a deep pool of external solutions that extend the power of the HCM platform, allowing clients to connect the apps that make the most sense for their unique business needs and user population.

Examples:  

• SuccessFactors announced that it intends to triple its marketplace apps in the near term. Additionally, it launched a new HR community which builds on its existing SAP App Center and offers connected partner solutions around six key areas: well-being, pay equity, real-time feedback, unbiased recruiting, predictive performance, and internal mobility 
• Namely launched the Namely Connect Marketplace, which offers its clients access to partner solutions for recruiting, learning management, employee feedback, identity management, etc. and includes vendors such as Okta (identity management), Greenhouse (applicant tracking), CultureAmp (employee feedback platform), and Vestwell (401k).

Not everyone is sprinting to the cloud

Throughout the week, I spoke to companies of different sizes and complexities, and from various industries. Most were either in the process of moving their HR to the cloud or were planning the move in the next 12 months.  

However, what stood out is just how many companies still haven’t made a move to a cloud-based HR solution or are doing so with a modular approach (but are not starting with core HR). For example, I spoke with a handful of mid- and large-sized enterprise employers who said they had deployed a mix of cloud-based modules across their landscape, most commonly talent-focused modules. When asked what they use for core HR, the response was often “a leading on-premise platform”. When I asked why they hadn’t done so for core HR or payroll, the response was often “I’m not sure” or “We plan to get there… eventually.” 

This is consistent with findings in NelsonHall’s recently published market analysis, Cloud & Multi-Process HR Services: Journey to the Cloud and Beyond, which reveals that only ~40% of the multi-process HR services market is operating in a cloud environment. This could be attributed to client apprehension, but also to vendor solutions being geared to incremental moves to the cloud rather than a single shift. For example, SuccessFactors’ Upgrade2Sucess targets its on-premise customer base, enabling a move to the cloud, but as and when it makes sense for the business. This modular approach allows the client to reduce risk and realize ROI incrementally along their transformation journey.

HR innovation is no longer just for “HR companies”

Human capital management has become a very profitable market in the past several years, and only seems poised to continue its growth as organizations become more talent-focused. Historically, innovation in the HR space was left up to the HR vendors and tech providers themselves (e.g. ADP, Ceridian, Kronos, etc.) – i.e. those directly serving the HR practitioners with services and solutions.

However, this has changed as the largest, richest, and most capable software companies in the world (e.g. Google, Facebook, Microsoft) are targeting, developing, and selling human capital management solutions and stepping up the competition across the industry. 

Examples:      

• Google Hire: an AI-enabled talent acquisition platform for G-Suite
• Workplace by Facebook: Mobile-enabled tool for workplace communication, collaboration, including groups, chat, and video call capability. With integration to HR platforms including, ADP, Kronos, and Paychex Flex
• Microsoft Teams: Workplace collaboration tool which combines chat, meetings, notes, and attachments with integration to Office 365 and leading HCMs (e.g. SuccessFactors)
• Microsoft Dynamics 365: cloud-based ERP and CRM solution with HCM capabilities, including Core HR, talent acquisition, and onboarding.