WHITE PAPER Reining in Workforce Management Fast-growing technology trends such as cloud computing, IT consumerization, and big data give new meaning to workforce management software, and offer more value to the business. FORCES BEYOND IT S CONTROL ARE INFLUENCING BUSINESS REQUIREMENTS and, subsequently, IT spending. Users are more tech-savvy than ever before, thanks in large part to IT consumerization. That, along with big data and cloud computing, offers a number of business benefits. The challenge to IT is to harness these trends to reap their value, but ensure proper governance, security and compliance. Innovations in workforce management software enable IT organizations to do just that. Vendors are incorporating capabilities and features to take advantage of these trends, to the benefit of both the business and IT organization. Introduction to Workforce Management Software Today s organizations are faced with a number of challenges related to labor and personnel management. Labor is an organization s most valuable asset and its most controllable expense, yet many continue to rely on manual, semi-automated or disparate systems to manage their workforce. But there is a better solution: Automated workforce management software allows for consistent application of rules and policies to control labor costs, increase workforce productivity and minimize regulatory compliance risk.
2 WHITE PAPER REINING IN WORKFORCE MANAGEMENT Workforce management software provides visibility and control over labor-related metrics. This helps to control labor costs, particularly overtime. Managing overtime is one of the most difficult things to control. Managers need to understand who is approaching overtime and who is not. Workforce management software provides this visibility. Organizations can save millions of dollars in overtime by calling in the right person the person with the appropriate skill set and available work hours. At the same time, workforce management software helps improve productivity by matching labor to volume and QUANTIFYING WORKFORCE MANAGEMENT The Kronos Workforce Central suite provides solutions to help manage key workforce-related functions and processes, including time and attendance, scheduling, absence management, human resources, payroll, hiring, and labor analytics. To quantify the benefits of the Kronos Workforce Central suite in the cloud or installed on premise, Kronos commissioned Forrester Consulting to conduct a Total Economic Impact (TEI) analysis. After speaking to four Kronos customers, Forrester created a composite 4,500-person multinational company, Acme Group, to serve as the model for the study. Organizations have several objectives when acquiring a workforce management solution. The primary objective is to control labor costs by automating a manual, paper-based process of collecting, calculating, recording and tracking time and attendance information. In addition, organizations also seek to centralize and standardize workforce management processes to gain greater control and insight into HR and payroll functions. Another driver is to improve compliance with government and/or local labor laws and regulations through a more accurate, automated and integrated workforce management system. Finally, organizations wish to increase productivity of administrative staff and managers by automating and standardizing integrated HR and payroll systems. As a result of its TEI analysis, Forrester estimates that organizations deploying Kronos Workforce Central can expect to experience a risk-adjusted three-year savings of $3.9 million. These savings can be realized as the result of several benefits delivered by the workforce management software. Forrester found that Acme Group can expect a significant increase in general productivity; considerable reductions of overpayments due to early ins, late outs, and buddy punching; reductions in overtime spend; and fewer payroll errors. In addition to the benefits Acme Group can expect by using Workforce Central, Forrester identifies additional benefits and savings when the solution is deployed in the cloud. Forrester estimates that Acme Group can achieve a 69% higher return on investment in the cloud. Additional benefits include hardware cost avoidance, which amounts to a total of $18,000. Improved IT productivity results in the reallocation of one full-time employee, a $60,000 savings. Not having to allocate an internal team to support an on-premise implementation saves $118,269. Similarly, a shortened implementation time and accelerated time to value delivered by Kronos Cloud Services results in a $14,000 estimated savings. Because Kronos Cloud Services upgrades all hosted Workforce Central implementations to the latest versions of all applications on the customer s preferred schedule, software upgrade cost savings equal $19,000. The software also provides a 50% reduction in potential exposure to penalties for noncompliance. Finally, Kronos in the cloud allows the IT organization to avoid the costs of performing internal backups, and archiving and storing data in a safe, off-site location. SOURCES: Forrester Consulting, The Total Economic Impact of Kronos Workforce Central Suite, a study commissioned by Kronos Incorporated (Forrester Consulting, August 2011). Forrester Consulting, The Total Economic Impact of Kronos Cloud Implementation of Kronos Workforce Central, a study commissioned by Kronos Incorporated (Forrester Consulting, June 2012).
3 WHITE PAPER REINING IN WORKFORCE MANAGEMENT reducing under-scheduling. The burden of overtime should not repeatedly fall to the same people, risking burn out. Instead, the workforce should be leveraged to ensure the right person is in the right place at the right time. Reduction of over- and under-scheduling helps minimize the impact of workforce costs on the bottom line. Productivity is also improved through automation of processes such as collection and calculation of time. This reduces the burden of low-value activities and frees up personnel to perform higher- value activities, improving workforce productivity. Organizations must comply with numerous laws and regulations pertaining to labor and the workforce. For example, in the United States, minors must take a break after working a specific number of hours, depending on their age and the nature of the work. In health care, caregivers may not be allowed to work with certain patients if the employee s certification has lapsed. Workforce management software can help minimize the risk of noncompliance with regulations like these by providing centralized policy administration and local policy enforcement. Regulatory requirements are built into the software and compliance is automated within the system. A manager cannot schedule a minor who is about to go over allotted hours for the week, and a manager cannot assign a nurse to a specific job if a skill set has lapsed. This automation and enforcement helps alleviate penalties to minimize the cost of labor as much as possible. The development of cloud computing has transformed how workforce management software can be deployed and managed, giving businesses added flexibility. IT is no longer limited to hosting and maintaining workforce management software on premise. Workforce Management Software and Cloud Computing Cloud computing is the delivery of computing resources or storage capacity as a service. With software as a service (SaaS), hardware and software are managed by a provider, and the user pays for the use of the application. These services can be easily procured by anyone with a credit card and access to the Web. Many providers even offer free accounts for minimal use of their services. As a result, cloud computing services are a convenient way to acquire technological capabilities without involving IT. Users might prefer to bypass IT with SaaS to get immediate availability, or access to services denied by IT because of corporate policy. For example, online storage services like Dropbox and ADrive allow users to store work documents on the Web and access them from home. This scenario is called shadow IT. As with IT consumerization, IT has no control over the services in use and cannot easily ensure they adhere to security and regulatory policies. Even where shadow IT isn t an issue, users are accustomed to the cloud s immediacy and low cost. When applications are available at the click of a mouse for little or no cost, it can be difficult for IT to justify why it takes weeks to approve and provide that same application in-house. The cloud puts pressure on IT organizations to deliver applications faster and cheaply. Given the increasing need to comply with regulatory requirements, lower labor costs and improve workforce productivity, workforce management software provides a real value to today s organizations. But that s not all it offers. By also incorporating the three most prominent IT trends cloud computing, IT consumerization, and big data workforce management software provides even greater value to both the business and IT. Despite these drawbacks, IT organiztions are looking to take advantage of several benefits that cloud computing offers. Forty-four percent of respondents to a Forrester survey ranked their use of SaaS as critical or high priority in supporting their firm s business goals. 1 That s not surprising, considering how SaaS reduces operational and capital expenditures by eliminating the need to procure and maintain IT infrastructure. It also enables a more agile business 1 Forrester s Forrsights Software Survey (Q4, 2011)
4 WHITE PAPER REINING IN WORKFORCE MANAGEMENT environment because services can be efficiently acquired to address changing business needs. The development of cloud computing has transformed how workforce management software can be deployed and managed, giving businesses added flexibility. IT is no longer limited to hosting and maintaining workforce management software on premise. Software can be implemented according to the organization s immediate needs on-premise or in the cloud for organizations of all sizes. The ability to procure software as a hosted and managed service is a tremendous benefit to already overburdened IT organizations, especially for small and midsized businesses, which tend to have very limited IT resources. When IT organizations are limited or redeployed to other strategic projects, cloud-based workforce management software can affordably remove the burden of maintaining a back-office system. The software provider maintains hardware, software, and the databases to ensure users do not experience performance degradation. The provider may also monitor interfaces that are written between the workforce management software and the organization s other systems, such as HR and payroll. All of this frees up IT time and resources, allowing them to focus on projects that offer the business more strategic value. Cloud-based workforce management software also provides IT organizations with expandability and performance for growing and changing business needs. Procuring additional servers and user licenses may take weeks for on-premise software, but cloud-based workforce management software can accommodate a growing user-base in a matter of minutes. And the organization pays for only what it uses. IT organizations are looking for new ways to store data and make sense of it. Nearly 70 percent of respondents to Forrester s survey ranked increasing the use of business intelligence, analytics and decision-support tools and services a critical or high priority in supporting their firm s current business goals. management, and maintenance for on-premise deployments. Most IT organizations are not in the workforce management business. Nor do they have to be with cloud-based workforce management software. The provider serves as the expert and ensures not only that the software is running properly but also that the customer receives the greatest benefits from the software. Workforce Management Software and Big Data Today s businesses generate more data than ever before and, when properly harnessed, this data has a lot of power. But the sheer amount of structured and unstructured data that companies create renders traditional database management tools inadequate. Simply loading data into a relational database for analysis is out of the question. As a result, IT organizations are looking for new ways to store data and make sense of it. Nearly 70 percent of respondents to Forrester s survey ranked increasing the use of business intelligence, analytics, and decision-support tools and services a critical or high priority in supporting their firm s current business goals. Organizations are spending a lot of time investing in and consolidating data into a location where it can be sliced and diced to make better business decisions. Today s workforce management software can help. Some workforce management systems offer a module that lives in the data mart that ties analytics into the workforce management database. Through a dashboard, users can look at trends pertaining to attendance data, cost centers, point-of-sale data and acuity. This data can also be pulled into a business intelligence platform for further analysis, to examine how many people to schedule for a holiday, or how absenteeism impacts productivity, for example. Today s workforce management software offers many advanced capabilities, and while it is user-friendly, the IT organization must be proficient in its implementation, Analysis of labor data can provide great value to organizations by lowering labor costs. Based on historical data, workforce management analytics can forecast sales for
5 WHITE PAPER REINING IN WORKFORCE MANAGEMENT an upcoming department store sale and necessary staffing for increased business. This way, the organization ensures customers are serviced well, but the company isn t spending unnecessarily on labor. Workforce Management Software and IT Consumerization Technological innovations historically originated in business. Only after devices like the PC became a commodity did consumer usage become the norm. IT consumeriza- tion reverses that trend. Today s technology, like smartphones and tablet computers, is gaining traction in consumer markets and infiltrating business environments in the hands of the user. IT consumerization disrupts corporate IT in numerous ways. Because IT is no longer the sole purveyor of technology within the organization, governance is an issue. IT doesn t have control over what technology is used, how it is used and how it s managed. IT s inability to manage risk and ensure regulatory compliance, as a result, is the cause of much concern. An outgrowth of IT consumerization is the bring your own device (BYOD) trend. It is becoming increasingly popular for users to bring their personal smartphones and tablets to work and expect to be able to connect to the corporate network. This puts IT in reactive mode as it struggles to accommodate users and enable secure access to the corporate network. IT consumerization has also transformed user expectations for software. Users are accustomed to ease of use, personalization and intuitive user interfaces in their consumer applications. They expect the same from corporate applications. They also expect to be able to use these applications on the mobile device of their choice. If they can access Gmail from their Android phone, why can t they access their corporate email? Companies that adopt BYOD policies can benefit from cost savings when users provide their own hardware. Mobility can improve user productivity. IT consumerization puts IT at a reactionary disadvantage. However, there are benefits to be had by organizations that harness the technology introduced by users. Companies that adopt BYOD policies can benefit from cost savings when users provide their own hardware. Mobility can improve user productivity. And an increasing number of IT organizations are coming to this realization. In fact, 55 percent of respondents to Forrester s Forrsights Software Survey (Q4, 2011) ranked investing in mobile apps on smartphones or tablets for employees, customers, or partners a critical or high priority in supporting their firm s current business goals. Modern workforce management software vendors understand the benefits of IT consumerization trends and have responded accordingly. Ease of use, personalization, and intuitive interfaces change the way users interact with software. Mobile applications allow users to access workforce management on their smartphones and tablets, many of which are provided by the organization to their employees. The software also presents data in a more intelligent manner; ensuring users get the right information when they need it. According to Forrester, Rich Internet application technologies are increasingly deployed in enterprise applications. Examples include rich graphical user interfaces (GUIs) from Dayforce, Kronos, and Workday; Dayforce uses Microsoft Silverlight while Kronos and Workday use Adobe Flex It s noteworthy that these new applications embed business intelligence in a variety of graphical visualizations like bar charts and boast interactive features like personalization of display preferences. 2 Introduction to Kronos An innovator in workforce management software, Kronos continually delivers on a commitment to develop the next generation of workforce management. Part of this effort involves leveraging trends in cloud computing, big data and IT consumerization. 2 Technologies will Drive Enterprise Applications and ERP to a Bright New Future, June 30, 2011
6 WHITE PAPER REINING IN WORKFORCE MANAGEMENT Kronos software in the cloud not only transforms the way workforce management solutions are accessed, it also allows workforce goals to be implemented faster for accelerated adoption and a rapid return on investment. Workforce management for medium to large enterprises allows IT to focus critical resources on critical business goals. Workforce Central Cloud Services from Kronos does this and more. The suite, for medium to large enterprises provides deep functionality for time and labor tracking, advanced scheduling, complex absence management, analytics, and much more. Optimized for your industry, it can be scaled globally and implemented in the cloud or on premise. Workforce management for SMBs: For a full workforce management suite that includes HR, time and attendance, and payroll, Kronos Workforce Ready is a cloud-based solution that allows today s small and midsized businesses to gain a competi tive advantage with comprehensive, realtime employee data, providing enterprise-class power at an affordable price. Today s modern workforce requires the ability to securely work over the Internet and through firewalls. Kronos cloud-centric computing environment includes Kronos With its workforce analytics solution, Kronos enables organizations to easily access and leverage their workforce data to identify, predict, and manage opportunities for cost savings and productivity gains. InTouch Time clock, which offers an unrivaled user experience that is reshaping the way organizations think about and employees interact with their workforce management system. value of their current BI investments. With its workforce analytics solution, Kronos enables organizations to easily access and leverage their workforce data to iden tify, predict, and manage opportunities for cost savings and productivity gains. Interoperability with existing business intelligence tools enables organizations to extend the Finally, the flexibility and productivity benefits of IT consumerization can be seen in Kronos mobility strategy. Kronos mobile applications give employees and managers flexibility in how they interact with each other and provide an anytime, anywhere, instant connection to Kronos software. In 2011, Human Resource Executive magazine recognized Kronos for its workforce mobile applications in the 2011 Top HR Product of the Year awards. It is easy to see why tens of thousands of organizations use Kronos workforce management solutions. A proven innovator, Kronos continually leverages IT trends to help organizations control labor costs, minimize compliance risk, and improve workforce productivity. n To learn more about what Kronos workforce management solutions can do for your organization call (800) 225-1561 or visit kronos.com. Copyright 2012 Kronos Inc. All Rights Reserved. CIO and IT World logos are registered trademarks of IDG Enterprise. Kronos and the Kronos logo are registered trademarks of Kronos Incorporated.