Tuesday, April 19, 2005

A primer on HRMS evolution

OK – so I promised a “primer on HRMS evolution” so here it is. I’m not actually talking about HRMS evolution as much as I’m talking about the purchasing trend that’s going on right now.

Back in the good old days (the 1990’s) everyone was trying to buy as huge an ERP as possible. Most went with PeopleSoft HRMS if they were in the US, or if not, then SAP HRMS. (As usually I’m talking about big companies – I really don’t know what goes on in the small and mid markets). In the very late ‘90’s everyone started to outsource. Then in the early 2000’s, everyone started going to point solutions (best in class applications focused on a single function). So what happened and why?

ERP’s were great because enterprise computing really changed. Instead of having several huge mainframes that processed your data but didn’t do much else well, ERP’s provided a simplified user interface (we called them GUI’s back then), with complete integration across the organization, and improved reporting. For once, supply chain (SCM), customer relationship management (CRM), financials, HRMS, etc… were all tied into the same database.

Then came Y2K. This was a great time for software vendors as everyone tried to upgrade in ’98 and ’99, but it was also great for outsourcers. Enough in-house organizations decided that enough was enough and HR/PR outsourcing started to seep into the Fourtune 2000 market. Outsourcers were able to implement faster, standardize practices, and take some of the risk burden off.

Also around ’98, XML began making headway into the market as a viable technology. While software makers and outsourcers really didn’t integrate XML into their applications until after 2000, XML simply made everyone’s life easier. What it also did, was reduce the dependency on the huge ERP system. Rather than one huge system, you can now effectively take the best little pieces and connect them all seamlessly real time.

If you are Dub Dubs (like me), you get Oracle financials, PeopleSoft HR, SAP supply chain, Siebel CRM, Taleo ATS, Kronos TLM, Digital Think for learning, and wrap PlumTree’s portal around the whole thing. Whoa!!! You just can’t (easily) do that with old ASCII file interfaces. However, you can do that (more easily) with XML. The new model of purchasing is to get the best of what’s out there. Synchronous messaging allows us to finally do this without worrying too much about data transfers. (Michael Specht has a nice crosspoint on this. No arguments from me.)

What’s next? Well it’s already happening. If you take my 7 applications above, let some other vendor host all of them, wrap around the PlumTree portal, now you only have a single point of entry for all your applications!! Not only that, but you are not even managing the data interaction between the systems, your ASP is!!! Technology is getting more and more complicated, but it’s a good thing for us that it is also getting more and more invisible.