 Live from New York, it's theCUBE, covering Inforum 2016, brought to you by Inforum. Now, here are your hosts, Dave Vellante and George Gilbert. Welcome back to New York City, everybody. We're here at the Cavernus Javits Center. George Gilbert and I are really pleased to have Ben U-Banks here. He's a principal analyst at Lighthouse Research. Ben, great to see you. Thanks for coming on. Absolutely, yes, sir. So I'm really excited about the human capital discussion that we're going to have, or HR, whatever your favorite way to describe it is. But first of all, tell us about your background. You're a practitioner in human resources. So you're not just a theoretical analyst. You've been there, done that. Give us a sense of your background and tell us a little bit about Lighthouse, for people that don't know. Okay, so I've been at Lighthouse, just recently started at Lighthouse before that I've been the analyst space for a while. We work with different vendors in the HR space, talent acquisition, learning, talent management, just to get help companies really understand what's going on there and then doing product advisory as well, so really helping them to understand their client side. And before being an analyst, I actually worked in the HR space. So I was an HR director for a company where I live in Huntsville, Alabama. And so really have that practical hands-on kind of experience to rely on that ties it all together. When I see the data, I know how someone can actually implement it and make it work. A lot of changes obviously going on in that space. Certainly the cloud is a big one, just mobile. The whole renaissance of design and user experience is coming into force. There's the data component. So lay it out for us. What are you guys seeing as the trends? What's some of your research telling you? What are you focused on? Oh goodness, definitely, I would have to say, and it's big for the audience. Here's analytics is a big piece of it and really now that companies are getting the data that they want, they're having to understand how to read it, how to understand it, how to use it. And that's always been kind of a big challenge and a hurdle for a lot of people in HR space because people get into that. They advance through the ranks and a lot of the times they're not a business person that can speak the language of the business and understand the analytics and how they tie in. So it's really helping them to see through the data and the research that I do, helping these companies to understand that the trends and how those things work out because they have data on hand, they don't know what they measure, they don't know what to do with it once they get it. And for a lot of people, that first step, or the only step they think is, hey, I've got data, take a sigh of relief, we're done. And that's really just the first step. Then it's what do you do with it? How do you make better decisions? How do you improve what you're doing? Do it better today than you did yesterday and things like that. Definitely in the analytics, the big part. You said mobile, social, the changing nature of how we work and how we can fit the technology around that is a big piece of it as well. So talk a little bit more about what's changed in the industry. So Larry Ellison used to denigrate companies that wrote checks, not code. And then of course, with the PeopleSoft acquisition, things started to change slightly. But you've got a situation where obviously that was a big catalyst for consolidation. Rootmore recently, SAP buys success factors. Now they're trying to take core HR and bring it together with talent management. You've got workday exploding as the hot new shiny toy. And then Infor doing some interesting things, and other companies as well. But so lay out the horses on the track for us. Oh goodness. Well I definitely think you covered the big ones there. You know, Infor's definitely doing great things. What I like about Infor specifically, again, not just because we're here, but because it's a different kind of feel from the other analyst events that I go to, is a lot of the stuff that I'm hearing in the analyst track is not just about the HR stuff, which is what I'm familiar with, but it's how the financial piece of that ties in and how the ERP systems and everything else plugs in, because those things feed it. It's not done in a vacuum, it's all tied together. So that's what I really like about that part of it. A lot of the other companies, SAP obviously has that element as well, but Ultimate Software's another big one here in the US and they are only on the ACM side. They don't have these other things that tie into the other parts of the business, so you miss that part of the picture if you're looking at those things. Again, that's just what you're looking for. It's a good system. Definitely Workday as well. Another one that I hear a lot. At the same time, I've had some conversations with different people that are really looking for a technology that is not, doesn't look like it was designed in 1995. They're looking for something that is a little more sleek, intuitive, easy to use, and that's why I think some of the, that's why it's always the challenge that I have when I'm talking to people about the technology. When companies are trying to select what they're going to use because they're looking for something that's going to kind of hold everything together, but at the same time they're having to sacrifice on the user experience side because a lot of these things may not be as easy to use as they want them to, and you're not going to get the full value out of it if you don't have a system that people really want to get in there, jump in it, and use every day. So, I want to drill down on something you said about how Infor is doing really well in applying analytics in the HCM space but across some of the other modules because in the keynote today, Charles talked about how they, like in retail, they bought predictix and they want to sort of culture the teams to go across the other verticals. But in HR, so you need someone who knows HR, you need someone who knows sort of the math for the modeling, and then the data engineering. So it's very hard to take that and spread it across. How have you seen Infor be successful at that? It's a really good question. So, as far as, let me talk about it in more general terms. So, the companies that I talked to on the corporate side, the enterprise firms that are trying to put systems like Infor in place and do those things, they are approaching it. Again, I mentioned kind of the competency gap there for a lot of talent leaders is not getting the analytics part of that. So they're hiring a talent analyst, someone that will do that, that will handle that part of the business that can speak the language and understand the modeling, can understand where to get the data and how to analyze it, how to cut it and what ultimately it's going to feed down into down the line because again, everything we're doing with these systems, everything else, we're trying to prove some ROI somewhere down the line, otherwise we're just throwing money, throwing money and hoping for the best. So, companies, larger firms are hiring talent analysts dedicated to just handling the data for their ACM function to be able to have a good picture of that and understand what they can do with it. So what state of the art today? So, Infor talks about building beautiful software. So, obviously with the hook and loop acquisition, putting a lot of emphasis on UX, Workday's a good example of a hot startup from people who understand the business, obviously Duffield and Bushery know it. You see service now entering the space, not as a direct competitor of these guys, but somebody who can orchestrate all the requests. So what state of the art, from a customer standpoint, from a practitioner standpoint, what are they looking for? Is it simplicity? Is it accommodating a new sort of younger workforce? Is it blocking and tackling, connecting back to the main ERP systems? What is really state of the art? So I'll say two things, definitely. The first one's integration. They want to have their different systems talking to each other. One of the biggest reasons people change their HR technology from the studies I've seen in the last two to three years, one of the top two to three reasons every single time is it doesn't integrate with the other systems. I can't get it to talk to the... Which other systems? It could be just within the own, within the HCM arena itself. So people are changing their different, hey, I'm changing talent management away from this one because I want this. A core versus talent management. It's something as simple as that, but okay. So that's a big reason people, because we want the data together. They've got to have it integrated. They want that one clean picture that they understand. And the second part of that really ties in, I think, it's like you said, the user experience is a huge part of it. One of the growing kind of disciplines that I'm seeing more research on and actually planning to do some research on in the fall is around the employee experience. So we think about when someone's making a buying decision for HR technology, it's usually the person on the admin side, the HR person that's identifying the technology, making the selection, and ultimately picking it, even if it is something that includes time and attendance or applicant tracking where people are, tons more people are seeing it outside the system interacting with it than the person on the admin side. And for a long time, they were picking it based on whatever made their job easier. And now they're realizing, hey, if we're picking an applicant tracking system that has an awful interface, we're getting this drop off, candidate experiences going in the toilet, and people are reviewing us on Glassdoor saying how crappy we are as a company. So people are really trying to improve that by picking technology that's going to work there. That's simple, easy to use, intuitive, that is clean. People want that consumer grade technology experience. They want to go over from Facebook right over into applying for your jobs and to be as simple and seamless of an experience. And HR is one of those areas that's been around for a while. We've been automating HR for decades. Absolutely. And so as a result, with mobile coming in and the desire to have new user experiences, what a lot of firms will do is they'll just sort of layer on maybe a new UX UI and they'll say, okay, switch between, right? And the new function isn't all there on the new interface. And it creates a lot of frustration for users. So they go back to the old one, but the old one stinks on mobile. How are organizations dealing with that? I mean, is that a, from a buyer standpoint, do they just sit in their hands and say I'll wait? Or they really can't wait, right? Because they have to continue to advance. So it gets down to the company and how important it is for them. So I talked with a talent acquisition leader at a technology company, enterprise technology company, 12,000 employees, about two months ago, about their decision to move away from Workday to another technology provider for their talent acquisition system. And she said they're using Workday for everything else in the company. All their other functions are flowing through that. But she said, we're a technology firm. And when I see people go into that website to apply for the jobs, it embarrasses me because it's not a clean, easy, everything we just talked about as far as interface and how much, how important UX is. She said it's none of that. It doesn't fit in those requirements. And it embarrasses me as the recruiting director for this company to have people coming there. So we went with this other provider that does provide those kind of things. So, yeah, there's definitely a lot of, there's more of a focus on that than ever before because, again, people expect it. People just, they're not going to put up with it. They're willing to move and make changes. And the question that I asked her was, how did you sell that? How did you get that done internally? Because most companies would say, hey, Workday has a module for handling recruiting and we're going to use that and you're not going to break this away. Yeah, get leverage on that asset. The CFO's going to say, we're going to let you go buy some other system. So how'd she sell it? She said the same way I just told you. She said, this is embarrassing. This is making us look bad. This is, and again, I don't mean to bad my poor day, but she said compared to the other systems that are going to be point solutions, best of breed, they are building from the ground up. They don't have to take a product that's already in place and completely revamp it to make it look good or try to layer something over the top. They're starting from the ground up and they can build something that's very simple, very intuitive for people to use and people like it. People like going in there to use it because it's built into their workflow. There might be slack integrations, all these different things that tie it in. So they're not having to go over here outside of the normal work to get something done. It's just embedded straight into the workflow. They can handle everything within the system and people really are looking for that. It's just something to make the job easier. This notion that you were talking about, about like swapping out the talent management from workday, but leaving it in for the core stuff, the core HCM processes. If we have cloud apps now, as opposed to in the old era, on all on premises where every customer instance was configured and customized. So it was unique, not only unique in the customizations, but on different release levels, on different platforms. So now workday has an instance out in the cloud or a multi-tenant up-to-date set of instances. And let's say success factors has something similar. Isn't it much easier to do an integration, essentially one-to-one between the vendors so the customers don't have to do those ugly integrations? And the implication, I would imagine, is it's easier to have choice in a cloud. Yeah, I would definitely say, I definitely agree with that statement. It is much easier to have choice in the cloud. And the integration part we didn't even get to earlier is around this concept of the marketplaces where all of the larger providers now are having marketplaces where their APIs are open, people can connect to them. And what's neat about that is a lot of the times when it's something complementary and it's not completely replacing the system, you can sell that without saying, hey, we're replacing this completely. Maybe there's a recruitment marketing platform that plugs in, you're still using your suite's applicant tracking system, but it doesn't have that functionality that another solution would, but you plug in through the marketplace, and you without having to have that replacement conversation like they did it. Who owns that marketplace? Or what vendors, is it the vendor who is missing functionality, or is it like something neutral, like an Amazon marketplace? No, so in four and a lot of the other vendors now have their own dedicated marketplaces where other companies come to them and plug in to their system, and they can get that full functionality from other things without having to replace that. Maybe it's a recruitment applicant tracking firm and they have background checks coming in one side and on the other side they have an onboarding platform and all these different pieces that plug into it without having to completely overturn it and get rid of that technology. You're right on, it's definitely a hot trend, everybody wants to have their marketplace, give me an API that I can connect into that. Yes, absolutely. It's a platform play. Yes, yes. What about this notion of bringing analytics to HRs, particularly from a standpoint of talent acquisition? I know there's a lot of talk at this event about that capability, you know, the data science lab up in Cambridge, Massachusetts and applying that to actually predict the right fit for employees, lower turnover rates, especially in high turnover rate environments, I think like restaurants for example. How effective is that? Where are we at in that life cycle? So I'll tell you a great story about N4 actually. So a couple years ago I published a case study about N4 in a healthcare organization. The healthcare firm had ridiculous turnover in its nursing population because it would hire someone and slot them into a job as soon as there was one available they put them in the job and they realized they were having all this turnover. So they went back and said, okay, we've got to figure out a better way. There's gotta be a smarter way. So they started using this talent science to as an assessment on the front end. Okay, let's figure out what these people are about. Let's get deeper than just that interview which doesn't give us much of a picture of their actual beliefs and motivations and things like that. And they did this and they ended up breaking them into two groups. So the nurses that have more of that personal demeanor, much more just friendly in general, that's their approach. They put them in client-facing roles, patient-facing roles. And those nurses that had more of a, you know, by the book rules the road kind of very regimented approach, they put them in the operating rooms where they're not interacting with anybody except their own peers and colleagues and their turnover dropped dramatically. Great results, great story. And just one example of how you can do that. I just got to say, it sounds like in one flu over the cuckoo's nest, cuckoo's nest nurse ratchet should have been in the OR. Yeah. Yeah. Yeah. But I just want to ask, how do you see data science being applied more effectively within the traditional HR sort of functional stream as well as some of the newer ones? So one of the neat things that I've seen from a couple different vendors now is a, it's a retention predictor. So it will tell you based on different signals, if someone is likely to stay or not. And it also will label them with a value. So this person is, you know, Dave not that important. You know, he's a low bat. Sorry. Dave, very important. Hey, high value person and look, he's doing these things that in the past, based on the data, have signaled someone getting ready to depart. So we're going to, we might need to intervene, have their manager schedule a more regular one-on-ones or try to do something to dig into that and really see what's going on. So employee churn, like subscriber churn. Yeah. Whatever those signals are, again, using that aggregate data, that's what's kind of fun is about having a company that has, you know, thousands, tens of thousands, millions of data points that they can start really looking across their customers, maybe industry specific even, and seeing, okay, when someone does these things, we can predict with reasonable certainty what they're going to do next. Are you using data within a company or are you aggregating data across many companies? Across customers, across customers. Yeah. Okay. Absolutely. The first one that I heard, the first company that I really taught you that was doing that is Ultimate Software. They're based down in Florida. They have the suite. And that's one of the things they started doing is let's look at who's going to leave because they have all this data. Why not start using it and leveraging it to figure out what those insights are? Retention predictors. The other one that I've heard is high potential. So, hey, this person started. Here's the things that they're doing in their work. Maybe it's their recording scores from their learning management system or the weight, the source they came in from recruiting, whatever those signals are, again. And they say, okay, we predict this person is going to be a high potential employee. They're going to have a lot of value. So, let's get them into succession plan. Let's get them slotted for a higher spot of the leadership chain. And that's all based on just the data that's there. So, Ben, any upcoming research that you want to highlight before we close? New stuff you're working on? The new stuff that I'm working on is called the Modern Measures of Success and Talent Acquisition. And it's looking at the analytics that companies are using, getting beyond those old time to fill measures and really getting deeper into the employer branding side and candidate experience and how companies are measuring their performance there and then ultimately to help them to improve those things. You have them going away to benchmark against their peers and everything else. Great. Hey, well, Ben, thanks for coming to theCUBE. Absolutely. Thank you. Sharing your knowledge and it was great, haven't you? Yes, sir. All right, keep it right there, everybody. We'll be back with our next guest right after. This is theCUBE, we're live from New York City in Forum 2016. Right back.