Human Capital Management Technology Failing to Capitalize on Promises

Finding the right technology solution for human capital management (HCM) is a daunting - and frustrating - task for most companies, according to a recent i4cp study.

The study found that over a third of responding companies are either very or somewhat dissatisfied with their current HCM technology solution. This is in contrast to a little over 6% who reported they were "very satisfied." Part of the issue could be how much customization occurs with HCM technology across the board. A whopping two-thirds of respondents reported they have customized the software - whether it was purchased or leased - versus a mere 13.7% who used the software "as is."

Customized or not, it's quite clear that all of this technology doesn't come cheap. Over 45% of respondents reported they've spent more than $500,000 on their HCM technology, with over 40% saying the integration of that technology was equally expensive. The time to deploy the technology is also quite lengthy, with more than 70% of respondents pegging the time frame at greater than six months. And it seems there's little relief once the technology is implemented; over 30% reported that annual maintenance exceeds $250,000.

"Overall, companies realize that technology solutions are important to their human capital management initiatives," said i4cp research analyst David Wentworth. "They are just generally not satisfied because reality often doesn't live up to the promises made during the sales process. It's important for new buyers to do their homework, which includes understanding the issues that current users are facing with their technology solution."

The "build it ourselves" vs. "buy it off-the-shelf" debate seemingly hasn't slowed at all within human capital technology, but certain applications are apt to be purchased vs. developed. Organizations are more likely to use vendors for functions such as recruitment and selection (67%), workforce planning (58%) and learning management (57%). Internally developed systems are favored for succession planning (64%), and 55% of those polled utilize internal systems for both the compensation and incentives and performance management functions.

When it comes to specific vendors, both Oracle and SAP led the pack as the vendors of choice, making an appearance in the top five of nearly all function categories. A number of other companies, such as SuccessFactors, ADP and Kronos, made the top five in their targeted areas.

Not surprisingly, the use of vendors for HCM technology solutions is more widespread in larger companies (those with 10,000 employees or more). The top-ranked function for a vendor-based program was recruitment and selection, pegged at 86% by large companies, followed by workforce planning (73%) and learning management (71%). And, while the numbers were lower for companies with fewer than 10,000 workers, the popularity rankings echoed the findings for large companies across the board.

The good news for vendors: Once a vendor is selected, companies are apt to stand behind them. More than two-thirds (69%) said they have recommended, would recommend or were likely to recommend their current vendor.

The 2008 Human Capital Management Technology survey was conducted by i4cp as part of i4cp's Technology Commons research. The full results of the survey are available exclusively for all i4cp corporate members. For more information about the Technology Commons group, visit the i4cp Web site at

About i4cp, inc.

i4cp is the world's largest vendor-free network of corporations focused on improving workforce productivity. Our vendor-free community facilitates innovation by giving our members - among the largest and most respected organizations in the world - access to:
  1. Peers to spark new ideas and prevent "reinventing the wheel,"
  2. Research to enable members to understand current practices and next practices,
  3. Tools to put ideas and research into action,
  4. Technology to enable members to easily access tailored information and execute workforce strategies.
With more than 40 years of experience and the industry's largest team of human capital analysts, i4cp is the definitive destination for organizations seeking innovative ways to improve workforce productivity. For more information, visit
Erik Samdahl
Erik is the head of marketing at i4cp, and has nearly 20 years in the market research and human capital research industry.