A pretty good article in the San Francisco Chronicle on Christmas day about On-Demand software. More or less a primer on On-Demand, it profiles a number of SaaS (Software as a Service) companies including RightNow, Salesforce.com and NetSuite. Here’s a snippet from the article in which On-Demand is explained. My favorite part is at the end, when the approach is compared to buying electricity from a power plant instead of installing a generator at your business:

The movement sweeping the business software field is known by a pair of interchangeable names, "on demand" or "software as a service." These refer to a change in the way software is sold. Instead of software that is delivered by CD or bought in a bulky package, on-demand software is delivered over the Internet.

The software resides on servers operated by the company that sold it. That allows many users to have access to the software at the same time. It also allows the company to update the software whenever it wants or needs to, without hawking an expensive upgrade.

Sometimes companies pay up front for this service, but often it’s sold as a subscription: Companies pay a monthly fee for however many users they want to have access to the software, and the host keeps the system working.

Michael Topolovac, CEO of Arena Solutions, offers the analogy of the power industry. If you don’t have power, you could buy a generator. As your business grew, you’d establish a generator room, have fuel trucked in and keep mechanics on staff to run it. But wouldn’t it be nice if someone would establish a power plant and run lines to your business, so you don’t have to have all that distraction?

"On-demand software," he said, "is the power plant." 

The seeds of an interesting conversation are planting themselves here with this post called "So that’s why my peformance reviews sound like they were written by a robot" and here at systematicHR (especially in the notes by our good friend regina.)

The topic, in regina’s words: "technology can be an enabler of creating an engaged culture but for me it is doubtful that when a mgr. can pick phrases about perf from a database that this will create engagement. This kind of stuff keeps managers and employees detached vs. engaged."

Since this discussion was spurred by a CFO magazine article that is talking about our client Kimberly-Clark, I thought I’d get out in front here and try to give a little background on this. So I spoke with Randy Reynolds, our senior director of product management to try to get some of our thinking about the nature of pre-defined phrases (aka robot reviews). Here’s what Randy had to say:

Using our pre-written review text or coaching text is in many cases the best feedback some employees have ever received from a manager.  Certainly, all employees would like to receive well-thought out specific feedback written only for them by their managers.  The reality is that managers often don’t take the time to do this.  In the absence of automated tools, they resort to meaningless phrases like “Max did a great job on the ACME project”; or “keep up the good work”; or “writing skills could use improvement”.  In some cases automated text that has been selected by a manager – not a robot, is better than no feedback at all. 

From a best-practice standpoint, we recommend using the automated text as a thought starter, not necessarily as the verbatim feedback that should be given to an employee.  People often find that editing a written document is easier than starting from scratch.  That is how we recommend using our writing tools.  Start with a pre-written sentence that roughly conveys the feedback you want to provide.  Add specific examples of positive or negative behavior that supports the pre-written text.  This shows the employee that you have taken the time to provide specific feedback while gaining a short-cut through the use of the automated text.

Bottom line, every bit of feedback is important and valuable to employees and not every manager has the skills to construct meaningful feedback.  Automated writing tools help bridge this gap.

In this way, these tools do truly support engagement by helping to provide feedback in places it would not ordinarily be found. Some well-chosen feedback, even if pre-defined, is most certainly better than poorly constructed feedback or no feedback at all.

Over the weekend, Newsday – a NY newspaper – published an article called "Hey, boss, improve those performance reviews" that quoted some of the stories that have been submitted to our Worst Review contest. The article is about some of the reasons reviews are often so poorly given and poorly received and talks about some ways we can make the whole experience a little better.

Some tips from the article: 

Nothing in the review should be a surprise. That means bosses have to give more frequent feedback and hop on problems as they happen. Hard to do with so many other obligations? Of course, but remember what Stephen Covey says in his legendary book "The Seven Habits of Highly Effective People": You’re far better off making time for issues that are important but not urgent – so they don’t go on to become urgent.

As for those whiny, self-aggrandizing, argumentative employees – the ones supervisors want to avoid – you might consider what Paul Baard, a professor of communications and media management in the graduate business school of Fordham University, has to say: Draining as it may seem, your regular feedback can actually wear down those challenging types – he calls it "systematic desensitization."

Learn language that elicits constructive responses. As Baard says, "People don’t like to be ’should’ upon." You could tell someone he really annoys his colleagues – or, you could say: "Bill, you’re tremendous in sales. And I want to help you be that strong in interpersonal relations."

Loosen up when appropriate. With today’s pressures, you may have misread a person’s contribution – and if she comes up with examples proving you wrong, "you should not be too proud to admit having made a judgment error," Baard says.

Also, remember that it’s not just about the employee’s compliance. Sometimes see where you might bend a little. Boyle says that if an employee is consistently late, she looks to adjust the person’s start time. "I tend to be flexible."

Sometimes all the high-level talk about performance management can leave you – how should I put this? – wanting more. Today I sat through a 45 minute webinar that left me thinking – "alright, I know you CAN do it, and it SHOULD work – but can you show me HOW TO do it, and that it DOES work?" I mean, where’s the beef? Show me the money! Is any of this actually real?

Well, in that vein I came across some data today showing that one of our customers with about 4,000 employees is saving half a million dollars per year on recruiting costs (because they are able to identify and promote more people from within), and has identified 40% more successors than before implementing the technology. I’m not bringing this up to toot our SuccessFactors horn (alright, maybe just a little) but instead, to show you some beef.

It’s easy to get caught up in the jargon and sales pitches when you’re talking about enterprise software. Don’t forget to ask about the beef.

Interesting report from AMI Research showing that On-demand HR applications are taking off among small and medium sized businesses. There’s a very strong case to be made for software as a service (SaaS) use among SMBs – low upfront costs, easy implementations, high configurability, super-quick time to real value and so forth. We released a couple of completely new products recently to serve these markets – Professional Edition and Manager’s Edition. I’ll spare you the commercial (you can click on the links if you’re interested).

From the report’s press release:

According to Sau Lam, Research Analyst at AMI-Partners, “Several factors are fueling this trend. Traditional on-premise HR applications are often too costly, time-consuming and resource-intensive for most SMBs to deploy and manage. Full-service HR outsourcing can also be too expensive. Plus, it requires that customers sacrifice visibility and control. Web-based solutions can potentially provide SMBs with a more viable option for servicing their HR needs,” Ms Lam continued. “At the same time, SMB HR needs are growing. They need to automate operations to meet increasing regulatory requirements, and compete more effectively to maintain a dwindling supply of skilled personnel in a shrinking labor force.”

Much has been made about the Internet as a force of democratization, and that’s true even in the world of enterprise software. As a former small business owner, I loved SaaS applications becuase they gave me functionality that similar sized competitors could only dream of. In that way, they lent a real competitive advantage. That advantage is especially true with HR software.

Workforce performance management is, in some ways, more impactful in smaller companies in which there is less margin for error. Good HR applications can reduce administrative burdens that can bog you down. They can also provide the benefits of goal alignment and performance management processes that make sure everyone is pulling together and that the company is getting the most out of its employees and vice versa.

Jason Corsello asks the question about SAP after attending the company’s Industry Analyst Conference in Las Vegas.  Apparently, not much time was spent on it – Jason says 15 minutes out of two days. Then, DubDubs wonders about Oracle – saying that the HR track at OracleWorld was left until the last day – resulting in a lot of irrtated HR people.

Jason also makes mention of SAP’s platform, NetWeaver, that I think supports the ideas in yesterday’s post on purposeless platforms:

Although SAP is outpacing their arch-nemesis Oracle in the applications space, and their ESA (Enterprise Services Architecture) vision is a solid strategy for existing customers that have already sank millions in SAP, I was quite surprised in their lack of focus on what many customers are demanding today — applications that can be easily turned on and off with highly configurable options and rapid payback (I actually saw one slide that stated a payback in 3.4 years).  Instead, they are singularly focused on offering a business process platform (NetWeaver) bundled with hundreds of Prue-defined "services" combined with zaps (a fancy name for packaging customized application functionality). 

It supports Greg Gianforte’s point that the big guys are focused on delivering purposeless, behemoth platforms instead of applications that address business needs, are easy to deploy, easy to configure, and quick to return value.

If a rising tide raises all boats, a turning tide is bound to sink some.

Frank "The Proposalnator" Lynn (author of this recent post) points me to an article in Fortune called "For Happier Customers, Call HR." It echoes something I heard recently at a talk given by the legendary Jac Fitz-Enz – namely that unless marketing backs up its taglines with some customer service people who drink the kool-aid, what you get is a load of customer experiences that don’t match with customer expectations.

The article tells the tale of customers of T-Mobile who were told they would "Get More," but instead got long hold times and clueless reps. So guess how you solve the problem? Put HR and Marketing together to make sure the people being hired match the values being promoted.

From the article:

Sounds like common sense, doesn’t it? But surprisingly few companies do it. "We call the gap between HR and marketing the ‘white space’ in organizations," says Don Schultz, founder of a think tank at Northwestern University called the Forum for People and Performance Management. "The customer-contact people don’t report to anyone in marketing or have any contact with them." Neither does anyone in HR, so HR isn’t able to put customer-service people in place who can deliver on the marketers’ message. Northwestern’s latest research (see ROI of Integrated Marketing at www.performanceforum.org) shows that both HR and marketing managers are well aware of the white space: "We started studying this because people from 40-odd big companies like Honeywell, GE, and AT&T asked us how to fix it." 

Read more for how T-Mobile addressed the problem. 

Greg Gianforte from RightNow Technologies published a piece in BusinessWeek Online today about the validity of the software "platform" concept. In his mind, a platform (like Oracle’s upcoming Fusion) is something customers don’t need or want and that doesn’t solve any real customer problems. In his parlance, it’s "marketecture," a marketing creation that does no service to anyone but its creator.

He even goes so far as to hurl this terminology at Salesforce.com, which is really interesting to me. Usually we on-demand guys are all teamed up fighting off the traditional software vendors of the world, but the assertion – that Salesforce’s new AppExchange is ultimately just another attempt to control the playing field without the accountability for the 3rd party stuff that will run through it – is reasonable.

His answer to the platformation of the world? On-demand and open source. From the article:

First is the on-demand delivery model. On-demand eliminates the need to create a proprietary technology platform as a competitive differentiator. By taking the operating system, database, application server, Web server, and all the other programs known as the "IT stack" off the customer’s hands, the on-demand model renders identity of the individual components meaningless.

After all, the IT stack exists only to support applications. The applications themselves must be capable of being integrated, customized, and scaled as required — but the underlying "platform" shouldn’t be the customer’s headache.

The second part of the answer is open source. Open source commoditizes the stack. MySQL replaces Oracle. Linux replaces Windows. TomCat and JBOSS replace Websphere and NetWeaver. Vendors that are still trying to differentiate themselves in these commodity businesses are headed in the wrong direction. Yet that’s exactly what platform vendors continue to do.

Here’s another link to the full article 

One of my favorite 80’s TV shows was Sledge Hammer.  Hammer was an offbeat cop in the Get Smart/Monk tradition who had a great tagline: “Trust me.  I know what I’m doing.”  This was the ultimate ironic statement because his wacky, unconventional methods didn’t exactly reinforce to the viewer that he knew what he was doing, nor that he should be trusted.  To organizations looking for Workforce Performance Management software, vendors sound like Sledge Hammer.  They all claim to be trustworthy, but the proof is in the pudding.

As SuccessFactors’ Proposal Manager, I deal with trust issues on a daily basis.  Many RFPs and Technical Questionnaires have questions that center around data security.  In today’s post-HIPAA, post-Sarbanes-Oxley environment, safeguarding data and implementing comprehensive controls has become a top priority.  Risk Managers and IT Directors are under a lot of stress.          

In addition to developing a comprehensive suite of Workforce Performance Management software solutions, SuccessFactors has taken steps to ensure that your organization’s Risk Management professionals can sleep better at night, including:

·        A fully redundant, secure network infrastructure with backup and failover capabilities
·        Intrusion Detection and Vulnerability scanning
·        24×7x365 Live operator monitoring
·        Configurable user group and data access permissions that allow you to comply with data privacy laws

Additionally, we are Safe Harbor Certified by the US Department of Commerce.

As a Software as a Service provider with an industry-leading 98% renewal rate, we recognize the importance of earning and keeping the trust of our customers.  That’s why we allow them to perform infrastructure and application vulnerability testing – to have every assurance that their data is safe in our system.

SuccessFactors’ is the industry leading Trusted Advisor that supports organizations in achieving their objectives of rapidly aligning, developing, motivating, and maintaining their high-performance workforces.

Trust us.  We know what we’re doing.

As a followup to a previous post on forced ranking, I thought you’d like to see this article at workforce.com. It reprints an appendix from Dick Grote’s new book called Forced Ranking: Making Performance Management Work.

It’s a memo from a CEO to his company explaining the benefits of an upcoming forced ranking process and how it will work. It’s easy to see how communicating this well can remove some of the fear from the process and highlight the win-win aspects of the initiative.