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TECH CHOI CES
Includes a Forrester Wave
EXECUTI VE SUMMARY
Kronos oers a good human resource management systems (HRMS) product that is aligned with its
market-leading time and labor solution. Te product is well-suited for medium-size US companies
via a licensed, on-premise deployment model, and Kronos has recently begun to oer a SaaS version
as well. Te Workforce Central HR/Payroll product has good depth in personnel record management,
compensation administration, and payroll but has less depth in recruiting, performance, and talent
management.
TARGET AUDIENCE
Application development professional, business process professional, chief information ocer
KRONOS IS BEST SUITED FOR MEDIUM-SIZE COMPANIES USING TIME AND LABOR
Kronos acquired its HR/Payroll product a few years ago to complement its market-leading Workforce
Central Time and Labor solution. Architectural dierences have limited its ability to seamlessly
integrate the two products at the UI and code level, but Kronos has achieved signicant integration at
the database level, enabling a single instance deployment. Kronos has approximately 400 customers
managing a total of 500,000 employees in its HR/Payroll system versus about 30 million managed in the
Workforce Central time and labor products. Te company has strong nancial viability, with revenues in
excess of $600 million.
Forrester evaluated Kronos current oering and strategy for HR management systems against
approximately 92 criteria (see Figure 1). Te product has good overall breadth of functionality, as well as
depth in core transactional areas, including personnel, payroll and compensation administration, and, of
course, market-leading time and labor. Like most products positioned for the midmarket, performance
and talent management functionality, as well as recruitment, are limited to the basics. Usability and self-
service functionality are adequate but not compelling. Te product is an especially good t for buyers that:
Are current Kronos Workforce Central time and labor customers. Kronos has carefully aligned
the HRMS oering with its agship Workforce Central Suite. Tis means that Kronos customers
can leverage process and data integration to a signicant degree, including feeding time or gross pay
data to payroll and avoiding duplication of employee records. Companies with signicant numbers
of hourly workers will get the most benet from this product integration.
September 28, 2006
Kronos Is A Strong Performer In HR Management
Systems For The US Midmarket
The Forrester Wave Vendor Summary, Q3 2006
by Paul Hamerman
with Elisse Gaynor
Tech Choices | Kronos Is A Strong Performer In HR Management Systems For The US Midmarket 2
2006, Forrester Research, Inc. Reproduction Prohibited September 28, 2006
Are medium-size US-based companies. Te inherent scalability and functional sophistication
of the solution is not sucient to appeal to Kronos large enterprise customers. Large customers
tend to run Workforce Central Suite on the Oracle database versus the Microsof-centric
architecture for the HR/Payroll product. Te solution is best for US companies in the 500 to
5,000 employee range and has been primarily deployed as an on-premise licensed solution.
Kronos very recently introduced a hosted subscription model for the solution, which may
help increase traction among small to medium-size businesses (companies with six to 999
employees).
To see how Kronos stacks up against 10 other competitors, see the Forrester Wave evaluation of the
human resource management systems market.
1
Tech Choices | Kronos Is A Strong Performer In HR Management Systems For The US Midmarket 3
2006, Forrester Research, Inc. Reproduction Prohibited September 28, 2006
Figure 1 Kronos Workforce Central HR/Payroll Evaluation Overview
Source: Forrester Research, Inc.
Kronos oers good functionality in workforce planning, requisitions, sourcing,
applicant tracking, and onboarding. This functionality is contained within the core
HRMS functionality as a fully integrated module.
Workforce Central enables maintenance of detailed applicant and employee records
and is fully position-based. Minimal support is provided for international assignments.
Kronos Workforce Central HR/Payroll oers a good compensation management
capability, including planning, analysis, market value comparisons, and distributed
administration of salary and bonuses.
Kronos supports multiple benets plans and programs, automated enrollment, and
eligibility screening based on user-dened criteria.
The payroll capability supports automation of the entire payroll process, including
garnishments and retroactive pay adjustments. Localization is currently only available
for the US.
Kronos Workforce Central provides best-in-class time and attendance and labor
management functionality, including source to gross calculation involving complex
work rules and a labor scheduling solution based on constraint-driven optimization.
Kronos has done a very good job integrating the HRMS product with the Workforce
Central Time and Labor solution.
Kronos has a reasonably good capability for performance management using
cascading goals. The solution supports training management but has gaps with
respect to learning, talent management, and succession planning.
Employee and manager self-service functions are relatively complete, but the portal
front end is limited in exibility and content capabilities.
Risk management capabilities are adequate but not robust. The application tracks and
reports accidents, injuries, and incidents but does not support the administration of
workers compensation claims and payments.
Workforce HR, which is Microsoft-based, is less scalable than the enterprise-oriented
time and labor solution. Usability is rated average in the HRMS product and is not fully
consistent across products. The application is very exible from a conguration
standpoint, incorporates some open standards (e.g., XML), and has improving
reporting and analysis capabilities.
HR/Payroll is delivered in English and is currently localized for the US market only.
Kronos partners with SAVVIS to deliver customized hosting services. The SaaS
subscription model is a new oering for the vendor. Some payroll-related outsourcing
services are available through partnership with Ceridian.
Kronos Workforce HR/Payroll is relatively easy to upgrade. A complete portfolio of
maintenance services is provided, and the vendor is clearly focused on customer
service and retention. References were good.
Stang and
recruiting
Personnel
management
Compensation
Benets
Payroll
Time and
attendance and
labor management
Performance and
learning
Employee and
manager self-service
Risk management
Technology
International
Hosting and
outsourcing
Customer
experience
CURRENT OFFERING
Tech Choices | Kronos Is A Strong Performer In HR Management Systems For The US Midmarket 4
2006, Forrester Research, Inc. Reproduction Prohibited September 28, 2006
Figure 1 Kronos Workforce Central HR/Payroll Evaluation Overview (Cont.)
Go online to download additional in-depth data and scores for this vendor and other vendors
included in this Forrester Wave evaluation.
Source: Forrester Research, Inc.
The Kronos vision leverages its market-leading position in Workforce Management. It
has recently begun to develop a strategy for strategic HCM. The product development
strategy road map is not as specic or as aggressive as some competitors.
Kronos has a strategy to promote an open, scalable, and congurable Web-based
architecture that allows customers to implement, extend, maintain, and upgrade. It
also promotes the use of a variety of user interface devices to access the applications.
The strategy is primarily oriented to the agship time and labor management solution,
however.
Kronos invests over $60 million annually on research and development. This is
approximately 10% of revenue.
Kronos has several strategic alliances it leverages to diering degrees. Most notably, it
partners with Citrix, Hewlett-Packard, IBM, Microsoft, Oracle, SAP, and Sun
Microsystems for technology and platform support.
Product strategy and
vision
Technology strategy
and vision
R&D
Strategic alliances
STRATEGY
With steadily increasing prots and revenues, and a balance sheet with $140 million,
the company is extremely viable nancially.
Kronos has among the fewest live HRMS customers (400+) compared to key
competitors in this evaluation, but has shown steady growth since acquiring the
solution.
Kronos currently has 68 oces worldwide and more than 600 employees who do
implementations and consulting.
Financial viability
Installed base
Delivery footprint
MARKET PRESENCE
Tech Choices | Kronos Is A Strong Performer In HR Management Systems For The US Midmarket 5
2006, Forrester Research, Inc. Reproduction Prohibited September 28, 2006
SUPPLEMENTAL MATERIAL
Online Resource
Te underlying spreadsheet for Figure 1 is available online. Te spreadsheet includes more detailed
data and scores for this vendor.
Tis detailed data and scores for this vendor are also available online through an Excel-based vendor
comparison tool that provides detailed product evaluations and customizable rankings.
The Forrester Wave Methodology
We conduct primary research to develop a list of vendors that meet our criteria to be evaluated
in this market. From that initial pool of vendors, we then narrow our nal list. We choose these
vendors based on: 1) product t; 2) customer success; and 3) Forrester client demand. We eliminate
vendors that have limited customer references and products that dont t the scope of our evaluation.
Afer examining past research, user need assessments, and vendor and expert interviews, we develop
the initial evaluation criteria. To evaluate the vendors and their products against our set of criteria,
we gather details of product qualications through a combination of lab evaluations, questionnaires,
demos, and/or discussions with client references. We send evaluations to the vendors for their
review, and we adjust the evaluations to provide the most accurate view of vendor oerings and
strategies.
We set default weightings to reect our analysis of the needs of large user companies and/or other
scenarios as outlined in the Forrester Wave document and then score the vendors based on a
clearly dened scale. Tese default weightings are intended only as a starting point, and readers are
encouraged to adapt the weightings to t their individual needs through the Excel-based tool. Te
nal scores generate the graphical depiction of the market based on current oering, strategy, and
market presence. Forrester intends to update vendor evaluations regularly as product capabilities
and vendor strategies evolve.
ENDNOTES
1
Forrester evaluated human resource management systems (HRMS) vendors across 92 criteria for both the
multinational enterprise market and the US midmarket. We found that SAP and Oracle (with its E-Business
Suite and PeopleSof products) were clear Leaders for multinational enterprises. For US-based companies
with minimal international workforce requirements, Ultimate Sofware and Lawson were Leaders. A
notable trend, particularly in the midmarket, is the increasing acceptance of sofware-as-a-service (SaaS),
which is the primary delivery model for Ultimate Sofware, as well as for Strong Performers Automatic Data
Processing (ADP), Ceridian, and Employease. Infor Global Solutions (Infor), Kronos, and Sage Sofware
(Sage) are also Strong Performers in the US midmarket but oer primarily on-premise sofware solutions.
Sage, with its Abra product, oers the most cost-eective sofware solution among the products evaluated
Tech Choices | Kronos Is A Strong Performer In HR Management Systems For The US Midmarket 6
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for companies with fewer than 1,000 employees. In this relatively mature sofware category, customers
should look for a solution that is compatible with their overall ERP strategy or opt for a SaaS mode of
delivery for transactional needs, potentially supplemented by best-of-breed solutions for strategic HR
processes. See the September 28, 2006, Tech Choices Te Forrester Wave: Human Resource Management
Systems, Q3 2006.