The Frog at the Bottom of the Well, or: How Integration is Changing the Face of HCM
By HCM-Oracle on Jul 07, 2014
By Jeff Haynes
A very well respected Singaporean HR professional (and a true friend!) once told me a story . . . a story of a frog sitting contently in the bottom of a well.
The tale goes something like this:
Once there was an old frog who lived inside a deep abandoned well.
The Frog was so happy with his home that he never came out.
He had no awareness of the outside world. All the Frog did, day after day, was sit on a lily pad at the bottom of the well, and appreciate the sky above his well.
He had no idea what might exist outside of his “silo”.
Might there be other wells? What about ponds or even oceans?
Eventually, our friend Frog met a turtle who showed him the world outside, and demonstrated to the Frog the importance of understanding and expanding one’s horizons, and integrating with others.
In the past, I have thought about this proverb as it pertains to corporations, and the various “corporate frogs” that manage within them. Let’s say the Frog was a Compensation Manager, I suppose he would:
- Design rewards without the full context of the global business strategy, and without regard for what other divisions are doing
- Never seek input from the Recruiting Manager on competitive offers; would never listen to the HR Generalist when she provides stories of inconsistencies and inequities.
- Not consider other industry’s practices or look for new ideas from the rewards community
- Always answer, “But that’s the way we have always done it”
But now, working for Oracle in HCM Transformation, helping our clients connect their Business and HR strategy with their Technology, I am beginning to see the Frog in the Well parable as an analogy for what is occurring in the HCM Technology space.
Historically, functional leaders in HR would search out “best in class” software to enable their programs when the Core HR or ERP for the corporation would not meet their needs. So, the Compensation Manager (Frog in well “A”) was very likely making a different technology decision than the Recruiting Manager (Turtle in well “B”), let alone what the Reporting and Analytics Manager (Whale out in the ocean) was building by way of a data warehouse. This left corporations with point solutions from various vendors that might have redundant functionality, limited or no process flows between them, and ultimately a lack of a complete view of the talent in an organization due to siloed data “wells”.
Now we see organizations taking an integrated approach to HCM - No more stand-alone wells, with Frog Managers only appreciating the sky above their wells, and never seeing beyond that cylinder. These organizations are looking at fully integrated solutions which provide for a comprehensive view of the talent in an organization.
In fact, according to Bersin and Associates organizations “are now willing to sacrifice functional features in any given module for the benefits of an integrated set of applications”. So, now that Frog Manager in Compensation not only sees the talent community around him, he is actually willing to forgo some functionality inside his “well” for the good of the talent community – what a well-informed, corporate minded Frog!
Why is this integration so important to an organization? It’s intuitive to see the benefits of integration when it comes to a complete talent profile. CedarCrestone (2014) estimates that “organizations who have integrated talent and HR systems are 18% better at attracting top talent, 19% better at developing the workforce, and 20% better at retaining key talent”. OK… but what does this really mean for the business in terms of top line or bottom line impact? Again, according to CedarCrestone (2014), organizations with integrated talent and HR systems have seen nearly 100% increase on net income per employee, and 33% increase in revenue per employee.
With all of this said, I believe the biggest trend I see right now in HCM is for HR and IS leaders to look for strong, well developed, integrated HCM solutions. As shown above, integration can change HR’s impact on the business – not so much by driving cost/expense containment, but by driving revenue and net income increases.
So – what do you think about the Frog in the Well? How does this parable fit relative to your organization?
Jeff has broad HR-related skills, with a special interest in HR technology, reward systems, performance measurement, incentives, and job structure. His work has strengthened workforce commitment and motivation, increased labor competitiveness and improved performance.
Jeff has over 20 years of both corporate and consulting human resources experience spanning a variety of industries, including telecommunications, high-tech, energy, manufacturing, healthcare, higher education and non-profit. Prior to joining Oracle, Jeff was the Solutions Consultant for Aon Hewitt’s Compensation Outsourcing Division. Jeff has also worked as an independent consultant and was the Principal consultant for Mercer HR Consulting in the Rocky Mountain Region. Additionally, he led the global compensation and benefits organization for Micron Technology, a global, high-tech manufacturing firm, and the compensation function of Qwest Communications, a major telecommunications corporation. He also worked for two other professional services firms: Effective Compensation Incorporated and Spectrum HR Systems Corporation.
Jeff holds a BA in Psychology from the University of Colorado at Boulder and a MBA with a concentration in Management from Colorado State University. He is a Certified Compensation Professional (CCP) and member of the Rocky Mountain Compensation Association (RMCA). Follow him on Twitter @CompWonk