Integration of Big Data Involves Challenges

Big data has great promise for many organizations today, but they also need technology to facilitate integration of various data stores, as I recently pointed out. Our big data integration benchmark research makes it clear that organizations are aware of the need to integrate big data, but most have vr_BDI14_performance_01_overallyet to address it: In this area our Performance Index analysis, which assesses competency and maturity of organizations, concludes that only 13 percent reach the highest of four levels, Innovative. Furthermore, while many organizations are sophisticated in dealing with the information, they are less able to handle the people-related areas, lacking the right level of training in the skills required to integrate big data. Most said that the training they provide is only somewhat adequate or inadequate.

Big data is still new to many organizations, and they face challenges in integrating big data that prevent them from gaining full value from their existing and potential investments. Our research finds that many lack confidence in processing large volumes of data. More than half (55%) of organizations characterized themselves as only somewhat confident or not confident in their ability to accomplish that task. They have even less confidence in their ability to process data that arrives at high velocity: Only 29 percent said they are somewhat confident or not confident in that. In dealing with the variety of big data, confidence is somewhat stronger, as more than half (56%) declared themselves confident or very confident. Assurance in one aspect is often found in others: 86 percent of organizations that said they are very confident in their ability to integrate the variety of big data are satisfied with how they manage the storage of big data. Similarly 91 percent of those that are confident or very confident with their data quality are satisfied with the way they manage the storage of big data.

Turning to the technology being used, we find only one-third (32%) of organizations satisfied with their current data integration technology, but twice as many (66%) are satisfied with their data integration pro­cesses for loading and creating big data. A substantial majority (86%) of those very confident in their ability to integrate the needed variety of big data are vr_BDI_03_plans_for_big_data_technologysatisfied with their existing data integration processes. Those that are not satisfied said the process is too slow (61%), analytics are hard to build and maintain (50%) and data is not readily available (39%). These findings indicate that making a commitment to data integration, for big data and other­wise, can pay off in confidence and satisfaction with the processes for doing it. Additionally, organizations that use dedicated data integration technology (86%) are satisfied much more often than those that don’t use dedicated technology (52%).

New types of big data technologies are being introduced to meet expanding demand for storage and use of information across the enterprise. One of those fast-growing technologies is the open source Apache Hadoop and commercial enterprise versions of it that provide a distributed file system to manage large volumes of data. The research finds that currently 28 percent of organizations use Hadoop and about as many more (25%) plan to use it in the next two years. Nearly half (47%) have Hadoop-specific skills to support big data integration. For those that have limited resources, open source Hadoop can be affordable, and to automate and interface with it, adopters can use SQL in addition to its native interfaces; about three in five organizations now use each of these options. Hadoop can be a capable tool to implement big data but must be integrated with other information and operational systems.

Big data is not found only in conventional in-house information environments. Our research finds that data integration processes are most often applied between systems deployed vr_BDI_07_types_of_data_integration_processeson-premises (58%), but more than one-third  (35%) are integrating cloud-based systems, which reflects the progress cloud computing has made. Nonetheless, cloud-to-cloud integration remains least common (18%). In the next year or two 20 to 25 percent of organizations plan additional support for all types of integration; those being considered most often are cloud-to-cloud (25%) and on-premises-to-cloud (23%), further reflecting movement into the cloud. In addition, nearly all (95%) organizations using cloud-to-cloud integration said they have improved their activities and proces­ses. This finding confirms the value of inte­gration of big data regardless of what types of systems hold it. With a growing number of organi­za­tions using cloud computing, data inte­gra­tion is a critical requirement for big data projects; more than one-quarter (28%) of organizations are deploying big data integration into cloud computing environments.

Because of the intense need of business units and process for big data, integration requires IT and business people to work together to build efficient processes. The largest percentage of organizations in the research (44%) have business analysts work with IT to design and deploy big data integration. Another one-third assign IT to build the integration, and half that many (16%) have IT use a dedicated data integration tool. The research finds some distrust in involving the business side. Almost one in four (23%) said they are resistant or very resistant to allowing business users to integrate big data that IT has not prepared first, and the majority (51%) resist somewhat. For more than half (58%) the IT group responsible for BI and data warehouse systems also is the key stakeholder for designing and deploying big data integration; no other option is used by more than 11 percent.

It is not surprising that IT is the department that most often facilitates big data and needs integration the most (55%). The most frequent issue arising between business units and IT is entrenchment of budgets and priorities (in 42% of organizations). Funding of big data initiatives most often comes from the general IT budget (50%); line-of-business IT budgets (38%) are the second-most commonly used. It is understandable that IT dominates this heavily technical function, but big data is beneficial only when it advances the organization’s goals for information that is needed by business. Management should ensure that IT works with the lines of business to enable them to get the information they need to improve business processes and decision-making and not settle for creating a more cost-effective and efficient method to store it.

Overcoming these challenges is a critical step in the planning process for big data. My analysis that big data won’t work well without integration is confirmed by the research. We urge organizations to take a comprehensive approach to big data and evaluate dedicated tools that can mitigate risks that others have already encountered.

Regards,

Mark Smith

CEO and Chief Research Officer

Payroll Management Software Rated in 2015 Ventana Research Value Index

To help companies improve the efficiency and effectiveness of their payroll management processes, we have assembled our 2015 Value Index for Payroll Management. It evaluates vendors of payroll management software to provide a guide for selecting the right application to suit specific needs. The executive summary is available for download, and this analysis provides a snapshot of the findings. Ventana Research defines payroll management as all activities associated with paying employees correctly and efficiently. This set of processes crosses the human resources and finance functions; deployed properly it provides employees with access to their payroll information as well as improving payroll management effectiveness.

Our benchmark research on payroll management optimization finds that the majority (54%) of organiza­tions have a priority to improve the efficiency of their payroll management processes. VR_PAYROLL_VI_2015Almost as many (44%) cited a more strategic aim for payroll management: increasing the productivity of the workforce. Indeed, more generally almost three in four organizations (71%) said it is very important to improve the productivity of their workforce. Further evidence of this lies in the finding that the most-often cited driver (48%) motivating organiza­tions to consider investments in payroll management is a demand for higher employee productivity.

For many years payroll was a separate process inside organizations, and payroll management often has been a stand-alone application or service. However, with the growth of integrated systems for human capital management, vendors of payroll management software have started to develop systems that integrate payroll applications with talent management and workforce management systems. Such integration can enable organizations to create a single employee record that managers can use to reach important goals such as satisfying compliance requirements, tracking all aspects of compensation and better aligning pay to performance. This, the research finds, most have not done. For example, currently fewer than one in 12 (8%) have integrated payroll management with their talent management system, and although 22 percent said they plan to do that in the next 12 to 18 months, fully half of organizations have no such plan. Similarly, 29 percent reported having a dedicated workforce management system, but only one in five have integrated their payroll management system with it.

The 2015 Value Index for Payroll Management uses the Ventana Research methodology, a framework that evaluates application vendors and their products in seven categories of requirements. Five are product-related, assessing usability, manageability, reliability, capability and adaptability, while two quantify the customer assurance issues of vendor validation and total cost of ownership and return on investment (TCO/ROI). To assess function­ality, one of the compo­nents of capability, we applied the Ventana Research payroll manage­ment methodology and blueprint, which links the business process of payroll management to an organization’s information technology. We also applied best practices from our payroll management benchmark research that statistically look at the market of using payroll management applications in organizations. We weighted the seven categories and their importance in assessing vendors and their applications. This Value Index report evaluates the following vendors that offer products that address key elements of payroll management as we define it: ADP, Ceridian, Kronos, Oracle, SAP, Ultimate Software and Workday.

The Value Index for Payroll Management in 2015 shows that currently the top supplier is SAP, followed closely by ADP; both are rated Hot vendors. SAP was the only vendor to submit its on-premises product and ranks first in Reliability, Capa­bility and TCO/ROI. In third place is Ceridian, slightly more Payroll_Mgt_2014_Weighted_Overallthan one percent­age point behind ADP, which ranked first in Manageability and Validation. Ranked fourth is Workday, also rated Hot, which ranks first in Usability. In fifth place, only 0.3 percent lower, is Ultimate Software, which is rated Hot in all seven evaluation criteria.

Oracle also is a Hot vendor and came in sixth, separated by one percentage point from Ultimate Software. Oracle ranks first in Adaptability with strong integration capa­bilities and recent advancements in its cloud computing application platform as a ser­vice technology. Oracle did not provide a submission for this Value Index, but docu­men­tation of its product is publicly avail­able and used along with knowledge of the product through briefings, customers and conferences. Rounding out this Value Index is Kronos, which is rated Warm; its product is suited to provide payroll management for small and midsize companies located in the U.S. Kronos did rank highest in Validation, being well established in the related workforce management software segment.

This Value Index evaluation finds that all the products assessed can handle the core payroll capabilities for domestic North American companies. These capabilities include calculating gross to net pay, executing multiple payrolls, managing tax calculations for most scenarios, and allowing configuration of business logic to accommodate most payroll scenarios. All the products provide some type of reporting and analytics to handle compliance reviews for zero net pay and other standard policy violations.

The products differed in their standings in our seven categories. In our Usability assessment, we segment according to role, specifically payroll professionals or managers, employees and senior managers. In our benchmark research Usability is the evaluation criteria most often rated very important. All the products provide a functional user interface for payroll professionals, though some, such as Workday, provide a more intuitive experience. ADP and SAP followed closely. For employees, the largest group of users, the leading products have evolved robust mobile and Web-based employee self-service applications. For senior managers, the vendors of the leading products have combined new, more powerful analytics capabilities with mobile functionality to differentiate their offerings from others.

The Reliability category determines whether the products can deliver the performance and scalability required. The eval­u­ation criteria include the nature of the product’s support for an organization’s IT archi­tecture at the level of the enterprise, the net­work, the ser­ver and the data, and the sophisti­cation of its development and customization capa­bilities. SAP ranks the highest in Reliability with ADP following closely and Ceridian and Ultimate Software also rated Hot.

In the Capability category, which in our benchmark research is the evaluation criterion third-most often rated very important, we found differences among products in advanced functionality, notably the degree to which they can handle international payrolls. Ultimate Software and Workday do not process international payroll within their products but through partnerships with payroll aggregators; they receive some amount of the information back into their product from the aggregators to be reported on or managed there. Conversely, SAP and ADP handle much of the international payroll processing directly while relying on partnerships for some cases. Nearly every vendor offers a broader product suite beyond payroll management. Most offer a human resources management system, most have workforce management, and some have a talent management product. The ERP vendors Oracle, SAP and Workday also offer a financial management product for posting payroll directly to the general ledger. SAP ranks highest in Capability; ADP and Ceridian are tied for second place. Ultimate Software, Workday and Oracle also are rated Hot.

Manageability assesses whether products meet business and IT needs for installation, deploy­ment and ad­min­is­tration. Here Ceridian ranks highest, with ADP and SAP following closely, though all vendors are rated Hot in this category. For Adaptability, there is value in providing an integrated approach to payroll and other human capital management products, but it also is useful for products to integrate well with third-party products for customers that prefer to use them. ADP, Oracle and SAP provide more established integration frameworks, which is reflected in our ratings. Workday provides integration tools but requires customers to use its HR management product as a condition of purchasing payroll. Oracle ranks first in Adaptability, followed by Workday and ADP.

Our Value Index also provides for customer assurance in two categories. Validation assesses the vendor’s commitment to the market segment and its products along with the breadth of its commu­nication of relevant information. Here Ceridian, vr_Payroll_Management_04_why_change_payroll_management_vendorUltimate Software and SAP rank highest though all are rated Hot. The TCO/ROI category applies evaluation criteria designed to assess the value the vendor delivers with its products. Here SAP and Workday lead the field, and Ceridian, ADP and Ultimate Software follow closely.

Organizations can use the Value Index realize other benefits from upgrading their software and match important priorities. For example, half of organization in our research that made such investments have gained efficiency and accuracy in the payroll management pro­cess, two-fifths are better able to comply with regula­tions, and three in 10 have better an­a­lytics and visibility into payroll metrics. Among considerations for establishing a business case for payroll management software, the most-often cited, audit and regulatory compliance (very important to 52%), addresses payroll effectiveness while the item ranked fifth is reducing the time for payroll tasks (very important to 33%). The research finds a variety of reasons organizations change their payroll management vendor, from operating faster (cited by 59%) to reducing resources (41%) required to operate the processes.

Our benchmark research and Value Index analysis are carefully crafted tools that can help any organization assess and improve payroll management. Please download the executive summaries of each as you begin to frame the challenge and opportunity for yours and reach out to us if you want to use the complete research for a methodical assessment of your organization and vendors.

Regards,

Mark Smith

CEO and Chief Research Officer