Cloud based solutions have taken the world by storm, and workforce management (WFM) systems are no exception.
The cloud can offer exceptional value to customers: It frees them from the hassle of maintaining their IT systems, and reduces up-front costs compared to on-premise systems. Lower costs, simpler, modern… sounds perfect, right?
Not so fast.
If you’re a small or midsize business (SMB), the cloud is a huge step in the right direction. As your business grows, it learns to operate in ways that are compatible with the WFM solution you have chosen. The lower up-front investment frees up valuable cash flow to allow you to grow your business more quickly. ROI heaven!
If, on the other hand, you’re in the enterprise market, things aren’t quite so simple. As businesses grow, so too does the complexity of their workforces. Acquisitions introduce multiple ways of doing business, unions dictate strict requirements surrounding pay, scheduling and benefits, and operating in multiple states and countries requires compliance with significant labor legislation. On top of that, significant human capital management infrastructure is already in place that cannot be easily changed to fit a particular WFM system.
Option 1: Of these options, No. 1 is the clear favorite. It’s simple, it’s cheap, it’s effective, and it can be implemented with relative ease. For some industry verticals, this utopia can be a reality. Enterprise retail is particularly well-served by well-known cloud WFM solutions, including Dayforce and Kronos Workforce Central.
Option 2: Customizing or configuring a WFM system has been the standard approach to the enterprise WFM problem. It has the drawbacks of being complex and costly, but it does give businesses almost unlimited flexibility to adapt the WFM software to meet their needs. Back in the days of on-premise WFM deployments, it was possible to create customized software modules and leverage the expertise of third parties to bridge gaps in the solution. But, within a pure cloud context, only limited flexibility exists to configure the system as necessary. The reality is that without writing custom code, cloud WFM without customization is probably going to be a square peg in a round hole for most enterprise customers.
Option 3: The vendor pledge to adapt their product to meet a customer’s needs. This blurs the line between a cloud-based solution and the traditional Application Service Provider (ASP) model in which a vendor would host, configure and customize a customer’s solution for them. Introducing customer-specific features into the product creates multiple and different versions of the solution, which will tend to diverge over time. Enterprise customers requiring customization can expect significantly higher fees and increased complexity, both up-front and on an ongoing basis.
Although vendors will still pitch this as a “cloud” solution, be aware that this solution eliminates many of the benefits customers expect from the cloud.
Option 4: building a WFM system internally. Don’t underestimate the magnitude of this undertaking. Even a lean, purpose-built WFM system is a very significant IT project.
You’ll likely need help from industry experts to build a successful solution that will stand the test of time. The long-term support of the software will be your company’s responsibility, and it can be a real challenge to find the necessary IT resources. And more than any of the other options, there is no guarantee that a useful WFM system will actually be created.
WFM vendors are well aware of this. For years, their strategy has been to align their R&D priorities with the pursuit of Option 1 For Everyone: creating the perfect WFM solution for all verticals. This hasn’t worked out so far. Most verticals are still underserved by the available WFM solutions, and vendors are looking for novel ways to accommodate their needs within a cloud context.
It would not be surprising to see a major WFM vendor introduce an enterprise cloud-based version of their solution that included integrated scripting features in the next year or two. The solution would have to be priced in a way that made the vendor’s added support headaches a worthwhile tradeoff. But if the value is there, enterprise companies would likely pay a higher price for an offering that meets their long-term needs.
