The Transition to Oracle’s PeopleSoft Enterprise HCM 8.

9
An analysis of customers’ early experiences, challenges and
business benefits

By Keith Rodgers and David Longworth

Webster Buchanan Research
May 2006

www.websterb.com

Published in association with Oracle

www.oracle.com
 W E B S T E R • B U C H A N A N • R E S E A R C H

Contents

Executive summary ........................................................................................................................... 3

Introduction ....................................................................................................................................... 4

Part One: Building the business case............................................................................................... 4

1.1 The business impact of upgrading............................................................................................. 4
1.2 Choosing when to upgrade ........................................................................................................ 6

Part Two: Business implications of architectural changes ............................................................ 7

2.1 Person Model............................................................................................................................. 7
2.2 Service-enabled applications..................................................................................................... 8

Part Three: Business implications of functional enhancements.................................................... 9

3.1 Recruiting Solutions.................................................................................................................. 9
3.2 Time & Labor and Absence Management .............................................................................. 10
3.3 ePerformance........................................................................................................................... 11
3.4 Benefits, Union & Labor Management and other enhancements............................................ 12
3.5 PeopleTools............................................................................................................................. 12

Part Four: Overcoming the challenges of the upgrade process .................................................. 13

4.1 Managing the transition to a new architecture ........................................................................ 13
4.2 Upgrade Tools and Application Solution Centers................................................................... 13

Part Five: Case Studies ................................................................................................................... 14

5.1 British Red Cross Society ....................................................................................................... 14
5.2 Wells Fargo ............................................................................................................................. 15
5.3 California State Automobile Association................................................................................ 17
5.4 European Investment Bank ..................................................................................................... 18

End Notes ......................................................................................................................................... 19

Webster Buchanan Research © 2006 2

 W E B S T E R • B U C H A N A N • R E S E A R C H

Executive summary
This Special Report examines the business case for upgrading to Oracle’s PeopleSoft Enterprise
HCM 8.9, based on the experiences of customers in the United States and Europe. It looks at a wide
range of factors that influence the upgrade path, from maintenance issues affecting users of older
applications to the potential business impact of design changes and new functionality. It also
explores both the challenges and business benefits experienced by several early adopters, including
Wells Fargo bank, the California State Automobile Association (CSAA), the British Red Cross
Society and the European Investment Bank (EIB).

In particular, the Report concludes that:

• The new ‘Person Model’ architecture in Enterprise HCM 8.9 has significant implications in
terms of improved workforce management, reporting, security, compliance and contractor
cost control. It provides a central means to manage the entire workforce, including
employees, contractors and key individuals such as dependents and volunteers
• Another architectural change, the rebuilding of the Recruiting Solutions application, has led
to a number of product improvements, but may present challenges for organizations that
have heavily customized version 8.3. Wells Fargo advises users to redesign customizations
in Recruiting Solutions 8.9 rather than carry them forward from 8.3. Design changes to
Time & Labor 8.9 may also make the upgrade a little more complex than users of earlier
versions anticipate
• Enhancements to a number of 8.9 applications have delivered tangible business benefits for
early adopters, ranging from efficiency gains to lower IT expenditure. Key changes include:
o Recruiting Solutions The new, more flexible design and extended functionality
provided early adopters such as Wells Fargo with significant productivity gains and
increased competitive edge in managing the overall applicant experience
o Time & Labor and Absence Management Early adopters such as the CSAA and
EIB are adopting new time management functionality for better compliance,
absence management and activity-based costing. Time & Labor functionality is
increasingly being used in this way for salaried employees as well as more
traditional deployments for hourly workers
o ePerformance The performance management application in version 8.9 provides a
platform to better align corporate and individual goals and improve day-to-day
appraisal management. New functionality, such as the performance dashboard,
allows organizations to close the loop between performance review, development
initiatives, task execution and compensation
• Users of older versions of Enterprise HCM have an additional incentive to upgrade in order
to guarantee ongoing maintenance and product development. Version 8.9 will provide a
platform for an eventual migration to Fusion at any time over the next six years.
Conversely, full support for Enterprise HCM 8.3 expires in March 2007, and with upgrade
cycles running from three months to a year, the clock is ticking

Webster Buchanan Research © 2006 3

 W E B S T E R • B U C H A N A N • R E S E A R C H

Introduction
While it’s the functionality improvements and architectural changes that tend to grab the headlines
in any new product release, assessing whether or not to upgrade is fundamentally a business
decision. True, some of the impetus for change may come from the IT department, particularly
when older versions of business-critical software are no longer supported or when upgrades present
an opportunity to clean up customizations and cut maintenance overhead. But from a functionality
perspective, the issues are the same as in any selection process: it’s not what the new software does,
but the value of what it helps each business achieve.

Fundamentally, the upgrade to Oracle’s PeopleSoft Enterprise HCM 8.9 is no different in that
respect – what has differed is the timing of the release, coming so close to Oracle’s acquisition of
PeopleSoft. Many customers have understandably held back, waiting to learn more about the
combined companies’ product and development strategy under the Fusion banner.

Today, not only is that roadmap much clearer, but early upgraders to Enterprise HCM 8.9 are now
live and willing to share their experiences. This Special Report includes extensive input from four
customers – Wells Fargo bank, the California State Automobile Association, the British Red Cross
Society and the European Investment Bank – who have made the transition from versions 7.5, 8.0
and 8.3. It provides insight into the drivers for upgrading, as well as the tangible business benefits
they have enjoyed, which range from cost reductions and productivity increases to advanced
management reporting and analytical capabilities. And it explains some of the practical challenges
they faced in the process of upgrading, from recurrent data quality and testing issues to the specific
challenges associated with the move to Enterprise HCM 8.9.

Part One: Building the business case

1.1 The business impact of upgrading
Every major upgrade brings its own challenges and potential business benefits, and most
organizations take a pragmatic perspective when they weigh up a decision to move. No single
argument applies across the board – some IT departments have an informal policy of undertaking at
least every other upgrade, while others are prepared to stay on older, un-maintained applications
until changing business needs or ongoing support concerns provide sufficient impetus to move.
Whatever the policy, upgrades absorb sizeable amounts of IT and functional resource, and so the
business case for investment has to be compelling. In this respect, the shift to Enterprise HCM 8.9 is
no different from any other major upgrade.

Essentially, the new application provides three core potential benefits:

• Introduction of a ‘Person Model’ architecture, which provides a central means for managing
employees, contractors and other individuals and has significant implications in terms of
workforce management, security and compliance (see Part Two)
• Significantly improved functionality and design changes, including a newly-architected
Recruiting Solutions application and major enhancements in core areas such as Time &
Labor and Performance Management (see Part Three).
• An opportunity for users of older versions of PeopleSoft Enterprise HCM to shift to the
latest platform, with an extended support commitment stretching to 2012.

Webster Buchanan Research © 2006 4

 W E B S T E R • B U C H A N A N • R E S E A R C H

Most early adopters of Enterprise HCM 8.9 cite a combination of these different opportunities in
their decisions to upgrade, weighted according to their specific business priorities. The business
factors they cite include:

• Expanded workforce management capability The British Red Cross Society (a not-for-
profit organization with 3500 employees, 35,000 volunteers and a million donors) is taking
advantage of the Person Model architecture to manage and cross-reference its different
constituents, part of a strategic initiative to dramatically increase its supporter base
• Increased productivity Wells Fargo, which handles 1.7 million job applications a year, has
upgraded to version 8.9 of the Recruiting Solutions application specifically to improve the
productivity of its specialist recruiters and make the process easier for applicants
• Streamlined business processes One of the drivers behind the California State Automobile
Association’s (CSAA) decision to upgrade to 8.9 was to take advantage of new
functionality to better manage its performance appraisal and time management processes
• Lower IT expenditure Functionality enhancements in areas such as recruitment have
helped the British Red Cross Society cut the number of customizations it requires by 78%,
lowering ongoing maintenance costs and reducing the complexity of future upgrades. As a
user of Enterprise HCM 7.5, the upgrade also took the Red Cross from a client/server to
Internet architecture, allowing it to eliminate multiple servers and generate additional
savings in terms of client machine management
• Product support and stability Along with functional enhancements, the European
Investment Bank’s decision to upgrade was based on the need to shift from an unsupported
product and build a stable platform for the next five years
• Security, auditing and compliance The Person Model architecture provides a platform for
improved access control for employees, contractors and others, along with associated audit
trails for compliance purposes
• Improved reporting for better cost control By managing employees, contractors and
other individuals in one central system, organizations are better able to analyze workforce-
related expenditure – for example, in assessing whether to hire a full-time employee or
freelance

Inevitably, these potential benefits come with an associated overhead in terms of in-house resource
and in some cases, external consulting capability. At the top end of the scale, Wells Fargo estimates
it will spend a total of 44,000 hours migrating in two phases – however, this includes managing a
high volume of customizations and building an interim customized link between Enterprise
Recruiting Solutions 8.9 and HCM 8.3 after phase one. By contrast, the CSAA handled the core
HCM upgrade in five months, while simultaneously implementing several 8.8 modules.

Similarly, every upgrade brings its own unique challenges, particularly when it involves a shift to a
new architecture. Wells Fargo found the upgrade to the new recruitment architecture challenging:
the CSAA, however, says the overall upgrade to 8.9 was relatively painless, and the European
Investment Bank says that overall it was less problematic than expected. These user experiences are
analyzed in more detail in Parts Four and Five.

Webster Buchanan Research © 2006 5

 W E B S T E R • B U C H A N A N • R E S E A R C H

1.2 Choosing when to upgrade

PeopleSoft’s combination with Oracle inevitably impacted customers’ decision-making processes
about the upgrade to Enterprise HCM 8.9, which was released shortly before the deal was agreed. It
brought a degree of uncertainty as customers waited for clarification about the future direction of
the PeopleSoft Enterprise product line and more details about the combined Oracle/PeopleSoft
product set, now being built under the ‘Fusion’ banner.

More than one year on, however, and the picture is much clearer. To begin with, upgrade and
support commitments to all products have been reconfirmed, and Oracle will support 8.9 through at
least 2012. It will also continue to develop the PeopleSoft applications beyond the next planned
version, 9.0, in parallel to its work on the next-generation Fusion applications. This gives
organizations that upgrade to 8.9 a stable platform going forward, providing a sufficiently long
shelf-life and upgrade path for them to make the move to Fusion at a time of their choosing. The
new PeopleSoft applications from 9.0 onwards will actually incorporate some Fusion technology,
making the eventual migration to the full Fusion platform easier for customers.

In addition, it’s also now clear that the next planned version of Enterprise HCM, version 9.0, will
not represent the generational change that its product numbering implies. While it will incorporate a
number of new technologies, including the first integration of Oracle application technologies, the
company stresses that the move from 8.3 and earlier to 8.9 is more significant from an architectural
perspective than the move from 8.9 to 9.0. That should go some way to allaying customer concerns
that they will be faced with two major upgrade projects in consecutive versions.

The upgrade decision will of course be heavily influenced by each customer’s current version
status. Those that have recently moved to version 8.8 will need some convincing of the merits of
another shift, although there is a precedent: the California State Automobile Association, for
example, upgraded to 8.9 even as it was completing the implementation of several 8.8 applications.
Most companies who make that transition will build a business case on the back of the major
functionality enhancements, the architectural shift or a desire to extend support to 2012.

The situation is different for customers on older applications, where maintenance concerns give
more urgency to the upgrade decision. For some this becomes a functionality issue, given that
application capability is effectively frozen once ongoing development ceases: for others, running a
business-critical application out of maintenance presents a risk that ultimately becomes
unacceptable.

With full support for 8.3 expiring in 2007 (tax support alone continues through March 2008), the
clock has started ticking on that decision-making process – especially given that upgrade cycles can
take from three to twelve months. Users of pre-8.3 versions, which are already out of maintenance,
may be tempted to follow the lead of the European Investment Bank, which made the transition
from 8.0SP1 to 8.9 to provide a modern, supported platform that will be upgradeable to Fusion
whenever the bank is ready to move forward.

Finally, for those customers that have still to make the transition from 7.x, the move to 8.9
represents a major leap, not least in switching from a client/server to Internet architecture. This
makes the upgrade process considerably more challenging – to all intents and purposes, it’s as much
a new implementation as it is an upgrade. At the same time, however, the shift to an Internet
architecture provides a number of additional benefits, not least in terms of reduced IT overhead (no
code needs to be installed on client machines) and more flexible user access. Having resisted the

Webster Buchanan Research © 2006 6

 W E B S T E R • B U C H A N A N • R E S E A R C H

move to date, there is logic in 7.x users reconsidering an upgrade that now incorporates the Person
Model design along with all the cumulative functional enhancements provided in successive 8.x
releases.

As we outlined in Part 1.1, these support and timing issues are one of several factors that come into
the decision-making mix, along with the architectural and functionality changes contained in
Enterprise HCM 8.9. These last two factors are assessed in more detail in Parts Two and Three.

Part Two: Business implications of architectural changes

2.1 Person Model
The introduction of the Person Model in Enterprise HCM 8.9 reflects the changing nature of the
workplace, where a significant proportion of the talent and knowledge that organizations rely on
now lies outside their full-time employee base. While contractors form the biggest single group,
many organizations are also starting to look for ways to better manage their interactions with a
variety of different constituents, from non-executive directors to volunteer workers.

Contingent workforce management has been steadily climbing the corporate agenda in recent years,
driven by a growing awareness of the huge gulf that exists between the management philosophies
applied to employees and the relatively unstructured approach taken towards temporary workers.
The boards of most large and mid-sized organizations now accept the general principles of Human
Capital Management (the discipline of acquiring, developing, retaining and leveraging key
employees). Yet in many organizations, management approaches to contingent workers are at best
haphazard. Hiring is often carried out on a departmental basis or through central procurement
departments; performance management and development necessarily tends to be limited to tackling
the immediate tasks in hand; and retention (through either contract renewal or permanent hiring) is
often left to line managers, rather than being addressed as part of a coherent corporate policy.

This approach has a number of serious pitfalls. At an operational level, organizations open
themselves up to abuse: without effective controls and tracking, line managers can use long-term
contractors to circumvent headcount freezes, for example, or contractors who are fired for poor
performance can resurface elsewhere in the organization. Conversely, organizations may lose the
opportunity to offer permanent employment to consistently strong performers.

More strategically, the contingent workforce is becoming increasingly influential across all market
segments. In the past, attention has tended to fall on contractor management during economic
downturns, when salaried headcount is slashed and organizations look to control the costs of the
temporary workers they rely on to fill gaps. But the reality is that in an increasingly fluid business
environment, contractors provide the flexibility organizations need to react to fast-changing
business conditions. It’s no longer purely an issue for industries that have traditionally relied on
high volumes of self-employed or seasonal workers: it’s a cross-sector challenge, and organizations
need to manage contractors as carefully as they do their regular employees.

The Person Model in Enterprise HCM 8.9 allows organizations to manage all parts of their
workforce in one repository, including full-time salaried and hourly workers: part-time, temporary
and seasonal workers; and contractors. In addition, any ‘Person of Interest’ can be included,
whether they’re a volunteer at a not-for-profit or an employee of a third party IT service provider
who has regular access to the premises to manage the IT infrastructure. This centralized approach
offers a number of advantages, including:

Webster Buchanan Research © 2006 7

 W E B S T E R • B U C H A N A N • R E S E A R C H

• Better tracking Organizations can build a complete history of all relevant individuals
regardless of their employment status. For example, it’s possible to record all the projects
an individual contractor has worked on, their skills and competencies, manager
performance assessments and what they were paid. In addition, because individuals are
tracked according to an identity number rather than by their status, the history will be
retained if they switch positions (for example, if a former employee is rehired at a later date
as a contractor, or vice versa)
• Improved cost management Information on contingent workforce costs is normally stored
in financial applications and can be hard to access from HR. With the Person Model, HR
can choose to store this data alongside employee information for its own cost analysis
purposes
• Access to advanced functionality for non-employees Because all approval ratings are
managed centrally, it’s possible to authorize system access for contractors in the same way
as employees. This means, for example, that a contractor who has direct reports can easily
be given access to manager self-service
• Improved security and compliance By handling all constituents centrally, it’s easier for
organizations to manage access to systems (and indeed premises) and build an audit trail for
compliance reporting. Applications can now be secured according to any logical field, not
just by department or business unit. For example, it’s possible to limit access to data on the
basis of geography or employee population, such as salary grade or employee type
• Better overall workforce analysis and planning With information on all constituents
stored centrally, it’s possible to get a comprehensive view of skills and competencies across
the enterprise
• Streamlined IT and data management By replacing multiple systems with centralized
management of the entire workforce, organizations reduce data duplication and remove the
need to build and maintain custom links between different systems

2.2 Service-enabled applications

In addition to the introduction of the Person Model, Enterprise HCM 8.9 also incorporates design
changes that reflect the industry-wide shift towards Service-Oriented Architecture (SOA). Designed
to improve the way organizations manage business processes, the move towards SOA will
ultimately have as significant an impact on IT as the shift from mainframes to ‘client/server’
architectures, or the subsequent shift to Internet-based computing.

While the Internet has transformed business computing, particularly in terms of information access
and connectedness, it has had a limited impact in overcoming the constraints of traditional,
departmental-based organizational structures. Today, most organizations continue to rely on a host
of different, often incompatible IT systems, and while the IT industry has made significant strides in
helping them connect these applications and transfer data from one to another, it’s still difficult to
automate cross-departmental (and intra-company) business processes. The problem is that while
links can be built between the different systems, they tend to be inflexible – when one component is
changed, it may trigger associated changes all the way down the line. As a result, it’s hard to adapt
business processes to meet changing business need.

‘Service-enabling’ applications makes it much easier for organizations to extract the functionality
they need from different systems to build and modify business processes. Using this technique, IT
functionality and resource is wrapped up as individual ‘web services’, built around common
standards: when you want to build a process, you simply select the combination of services you

Webster Buchanan Research © 2006 8

 W E B S T E R • B U C H A N A N • R E S E A R C H

require and link them together. These individual components are no longer tightly coupled together,
and as a result, making a change to one will not impact another. In addition, each of these ‘services’
can be re-used, which makes the approach very efficient from a programming perspective.

Oracle already has many of the building blocks that enable organizations to take advantage of these
more advanced process management capabilities. They include a BPEL engine, which uses the
Business Process Execution Language for Web Services to bring together services from different
applications to create business processes. While the workflows built into most of today’s HR
applications help move data from one human interaction to another, the BPEL engine allows
organizations to manage more advanced processes that combine automated and human steps across
multiple systems.

The new Recruiting Solutions application in Enterprise HCM 8.9 also takes advantage of this new
services-oriented approach. Some components have been service-enabled, allowing easier
integration with third party applications such as background checks and resume processing.

Part Three: Business implications of functional enhancements

Version 8.9 of PeopleSoft Enterprise HCM incorporates significant functionality improvements in
half a dozen applications. Early adopters have tended to focus on four main areas – Recruitment,
Time & Labor, Absence Management and Performance Management – although enhancements
have also been made in areas such as Benefits and Union & Labor Management. This section
explores the business implications of some of the primary changes.

3.1 Recruiting Solutions

Recruitment software is a fast-growing sector in the Human Capital Management field, and is a
highly-competitive market with a number of specialist providers. It’s not hard to see why. In
industries with high employee turnover – and in most large organizations – the volume of applicants
can overwhelm all but the most efficient business processes.

In most organizations, recruitment activity tends to be fragmented. While departmental headcount

will usually be closely managed, the process of filling individual jobs tends to be split between a
variety of different functions, from HR and specialist recruiters to individual line managers. As a
result, it’s hard to apply a consistent approach: just as important, information about individual
candidates tends to be managed in silos, meaning that talented individuals who fail to make the
grade for one specific role are rarely captured for a more suitable job in a different part of the
organization. From an administrative perspective, meanwhile, many organizations still rely on
manual processes to handle parts of the recruitment process, and unconnected processes require data
to be rekeyed.

Recruitment applications are designed to overcome these process and information management
problems, while bringing a more strategic approach to talent acquisition. After capturing initial
candidate data (from the corporate or third party website), the various steps in the recruitment
process through screening, interviewing, offering, accepting and hiring can be managed through
pre-configured workflows. At the same time, candidate data can be stored centrally regardless of the
specific vacancy, allowing recruiters to assess individuals from an enterprise-wide rather than job-
specific perspective. Managing these processes efficiently can bring tangible savings: for
organizations such as Wells Fargo, which handles 600,000 candidates a year, saving five minutes of
a recruiter’s time on each application translates into significant savings.

Webster Buchanan Research © 2006 9

 W E B S T E R • B U C H A N A N • R E S E A R C H

Ultimately, all of the data can be flowed into other Human Capital Management activities once a
candidate is hired, feeding into competency databases, for example, as the basis for individual
performance reviews, development needs analysis and strategic workforce planning.

PeopleSoft released its first fully-fledged recruitment application with Enterprise HCM 8.3, and it
has been re-architected in Enterprise HCM 8.9 to bring greater flexibility. Process management, for
example, was relatively proscriptive in the original version, designed to take customers through a
series of pre-defined steps from initial candidate data capture to offer acceptance. Feedback from
customers reflected the fact that organizations will not necessarily follow each step – some don’t
carry out screening, for example, while others might not route candidate data to managers prior to
setting up interviews. The new release, Enterprise Recruiting Solutions 8.9, allows organizations to
choose the steps they need and add extra process stages as necessary (the only hard-coded process
step is a requirement to receive a job acceptance prior to hiring).

While the shift in architecture may impact the upgrade process, particularly for organizations that
have heavily customized the recruitment capability in version 8.3, (see Part Four), the new version
incorporates a number of enhancements. They include Enterprise Candidate Gateway, a web-based
front-end designed to improve the candidate’s experience by providing useful web-based tools to
help them search and apply for jobs. The Gateway operates like a store, allowing candidates to
place interesting jobs in a basket, make multiple applications, submit their resume, check the status
of applications and configure alerts for future suitable openings. This kind of approach can play a
significant role in building positive initial impressions, and is a core part of Candidate Relationship
Management.

The recruitment process itself is handled by Talent Acquisition Manager (TAM), which allows both
recruiters and managers to post jobs and handles each subsequent step through to hire. TAM
provides 360-degree views of candidates – which are accessible by everyone involved in the
process – and provides for a more coordinated corporate approach to hiring by including
information on all applications that the candidate has made to different parts of the organization. It
also contains a contact manager, enhanced in version 8.9, to keep track of interactions with the
candidate. If organizations take advantage of the Person Model architecture in Enterprise HCM 8.9
to store contractor information, they will also have easy access to information about contingent
workers who may be suitable to fill permanent positions.

3.2 Time & Labor and Absence Management

Having long ago shed their image as a mechanism primarily designed to ‘clock in’ hourly workers,
today’s Time & Labor applications are used in a variety of business environments, from financial
services to traditional manufacturing environments. The California State Automobile Association,
for example, has a three-phase plan for adoption of Enterprise Time & Labor 8.9, beginning with
tracking of hourly workers for compliance purposes and culminating in an activity-based costing
exercise to track return on both employee and contractor time. Similarly, the European Investment
Bank has upgraded from Time & Labor 8.0SP1 to 8.9, which is used by approximately half of its
1500 employees to report worked hours against projects and activities for cost accounting purposes.

Time & Labor 8.9 incorporates improved reporting and scheduling functionality to handle this kind
of integration. The employee and manager self-service capability has been made more user-friendly,
both in terms of navigation and in new graphical representation of data, making it easier for
employees and managers to personalize their view of the application. The scheduling features –

Webster Buchanan Research © 2006 10

 W E B S T E R • B U C H A N A N • R E S E A R C H

which now include dynamic scheduling and ad hoc schedule creation – also allow managers to drill
down into individual employee schedules, while pre-configured alerts highlight deviations.

In addition, the Time & Labor application is integrated with PeopleSoft’s Absence Management
application, which was previously bundled with the company’s Global Payroll application but is
now also integrated with North American Payroll. The application is designed not only to record
and track absences, but also to highlight potential issues (such as when an employee tries to register
a sick day but has already exceeded their entitlement) and in some cases suggest fixes (for example,
by suggesting that the same employee instead records their absence as a holiday). Pre-configured
workflows streamline the approval process for vacation and training requests, while the pre-built
integration with Time & Labor allows managers to sanction or deny requests based on a
comprehensive assessment of schedules and workloads. Overall, it gives managers instant ways of
monitoring overtime, schedule deviations, sickness, holidays and training.

All of these capabilities are designed to meet two key business needs:

• Better management information By retaining tighter control over overtime, unplanned

absences and scheduling conflicts, organizations can cap costs and deploy their workforces
more effectively
• Compliance Because rules are configurable to suit local need, they can be set up to meet
specific country or regional requirements governing minimum holiday entitlement,
maximum working hour limits and sick pay benefits

3.3 ePerformance
Along with Time & Labor, the new functionality in the Enterprise ePerformance application was
one of the key drivers to upgrade for California State Automobile Association, which is looking to
replace spreadsheet-based management of appraisals with a central system. As with most
performance management implementations, its aim is two-fold: to improve the day-to-day appraisal
management process, and in doing so to better align organizational goals with departmental and
individual objectives.

Goal alignment has long been one of the more troublesome areas of Human Capital Management, a
discipline that’s easy to conceptualize but hard to execute. Successful alignment tends to rely on
three factors:

1. Easy-to-use technology that automates as much of the performance management process as

possible with minimal hassle for either the employee or the manager. This typically requires
employee and manager self-service capability and easy-to-configure workflows
2. Collaborative tools that allow multiple parties to get more closely involved in the
performance management process and help overcome resistance from employees or
managers
3. An information management mechanism that helps close the loop between performance
review, development initiatives, execution of tasks, appraisal of employee progress and
compensation. Closing the loop ensures that individual goals identified in an appraisal
process are acted upon and rewards are linked to performance

Oracle’s new Enterprise ePerformance functionality was released across two versions, and now
largely addresses these three criteria. Version 8.8 focused on the employee and manager
performance review process, while 8.9 incorporates additional capability in three areas:

Webster Buchanan Research © 2006 11

 W E B S T E R • B U C H A N A N • R E S E A R C H

• Multi-rater functionality, which allows different managers to input to the review process
for compensation and promotion decisions. Incorporating multiple management
perspectives should give a more accurate aggregate view of performance, which in turn
helps create a tighter link to reward. Alongside multi-rater functionality, 360 degree peer
review capability provides feedback for individual developmental need
• Improved collaboration, by easing the flow of information between employees and
managers and streamlining the goal-setting process
• New performance dashboard, which provides a view of outstanding performance tasks
for improved operational performance management. Role-based security features allow
organizations to limit document visibility to authorized individuals

The combination of more effective process management and improved reporting is critical for
closing the loop in performance management initiatives, ensuring that employee measurement and
execution management is an ongoing, evolving process.

3.4 Benefits, Union & Labor Management and other enhancements

In addition to the changes outlined above, Enterprise HCM 8.9 incorporates a number of
functionality enhancements that may influence the business case for those considering upgrading.
Many of these enhancements are designed to improve management of complex processes and
ensure compliance with statutory requirements, particularly in Benefits and Union & Labor
Management.

Improvements to the three Benefits applications – Benefits Administration, eBenefits and Base
Benefits – include effective-dating of dependent and beneficiary records, designed to better manage
eligibility and provide an audit trail for changes to benefit plans. These records are stored as
‘Persons of Interest’ in the new Person Model architecture, allowing organizations to combine
information about employees and related individuals in the same database. In addition, a number of
enhancements have also been made to enforce ERISA compliance in flexible benefit changes. And
for the first time, multiple Annual Benefits Base rates are supported, reflecting the need for
flexibility in managing different types of benefits,

Enhancements for Union & Labor Management in Enterprise HCM 8.9 include integrated job
codes, labor agreements and wage plans; automated wage progression; multiple seniority dates; new
layoff and recall management functionality and flexibility in defining facilities.

3.5 PeopleTools
Users of Enterprise HCM 8.3 and earlier 8.x releases will see a number of changes to PeopleTools
once they move to version 8.9. The current version of PeopleTools, 8.4, incorporates Integration
Broker, which manages the routing and translation of messages from different types of applications.
The Broker is supplied with a number of pre-built connectors to other enterprise applications,
including Oracle’s Siebel solutions and SAP, and connectors can be adapted to other legacy
applications.

There have also been a number of communications enhancements that will impact some HR
functions. They include the introduction of internal instant messaging; PDA support for mobile
employees; and support for multiple communications “channels”, which allow organizations to
centrally manage email, web chat, telephone and face-to-face interactions.

Webster Buchanan Research © 2006 12

 W E B S T E R • B U C H A N A N • R E S E A R C H

Part Four: Overcoming the challenges of the upgrade process

4.1 Managing the transition to a new architecture
As with any architectural change, the transition to Enterprise HCM 8.9 brings a number of
challenges. While upgrading to many of the core components is no more onerous than any other
version upgrade, two applications that have undergone design changes – Recruiting Solutions and to
a lesser extent, Time & Labor – may prove more complex if users have heavily customized earlier
releases.

Wells Fargo and the European Investment Bank (EIB) both found the Recruiting Solutions upgrade
challenging because of the extensive changes that have been made to the core syntax, table and
component names, field names and types, and relationships between data. Wells Fargo ultimately
opted to redesign its customizations from the vanilla code in version 8.9, rather than attempting to
reapply them from 8.3, and advises other customers to treat the Recruiting Solutions upgrade as
something more akin to a re-implementation. Likewise, the EIB has gone through a technical
upgrade to version 8.9, and because of the complexity of carrying forward customizations, plans to
drop the majority of them in favor of vanilla functionality.

The EIB was also surprised by the complexity of upgrading to Time & Labor 8.9, given that it had
implemented the application less than a year previously. Compared to Recruiting Solutions,
however, the design changes in that module have been less extensive, consisting primarily of
streamlining the administration process and rewriting the scheduling component.

Whether either of these upgrades become an issue for other users will depend on the volume of
customizations they plan to reapply from earlier versions, and the extent to which new functionality
and design changes make earlier customizations redundant.

Elsewhere, users can expect to encounter traditional upgrade challenges. Data conversion and
testing remain major components of the upgrade process – conversion was the most significant
piece of the British Red Cross Society’s nine month upgrade project, for example, although that is
partly explained by the fact that the data model had changed significantly between versions 7.5 and
8.9. While organizations such as the California State Automobile Association rank the upgrade as
straightforward, it’s important to be realistic about the amount of time the upgrade will require and
take that into account when reviewing ongoing maintenance commitments – particularly for users of
Enterprise HCM 8.3, which will be unsupported from the end of 2007 (see Part 1.2 above).

4.2 Upgrade Tools and Application Solution Centers

As part of the Fusion initiative, PeopleSoft Enterprise HCM is expected to take advantage of some
of the upgrade initiatives currently underway at Oracle, particularly in terms of automating more of
the upgrade process. For now, a number of enhancements have been made to the upgrade tools for
the shift to Enterprise HCM 8.9. They include visual representation of changes and more drill-down
for compare reports, designed to make it easier to understand where changes conflict. In addition,
the same tool, Change Assistant, is now used for both updates and upgrades, providing a common
environment for users to manage the installation process.

Oracle also points to the fact that a growing number of customers are now using its Application
Solution Centers (informally known as the Upgrade Labs). Organizations such as the European
Investment Bank, which used a Center for its first test run and conversion, recommends this
approach and plans to use the Center again when it upgrades PeopleSoft Financials.

Webster Buchanan Research © 2006 13

 W E B S T E R • B U C H A N A N • R E S E A R C H

Part Five: Case Studies

5.1 British Red Cross Society
With 3500 employees, 35,000 volunteers and one million donors on its books, the British Red Cross
Society has a huge people management challenge ahead of it. Having set itself an ambitious goal of
securing two million supporters by 2010, it needs to track a growing volume of people involved in a
wide range of not-for-profit activities, from emergency response to first aid training. At the same
time, it’s looking to improve productivity among staff and volunteers, increase revenues and cut
costs – similar challenges, in fact, to those faced by most organizations in the commercial sector.

Part of the worldwide International Red Cross and Red Crescent movement, the Society plays a key
role in crisis response in the UK, supporting the statutory emergency services in dealing with
anything from flooding to the terrorist attacks on the London transport network in July 2005. It also
provides short-term individual care, and carries out extensive training for individuals and
corporations (it has a target to put 2.5 million people through its first aid courses by 2010). As a
result of its different activities, it has a complex people structure, working through a branch network
and managing relationships with employees, volunteers, and donors in the UK, as well as delegates
from the international organization.

Tackling that organizational complexity was one of the main reasons why it became one of the first
customers worldwide to embark on an upgrade to Enterprise HCM 8.9, beginning the process in
November 2004. At the time, it was running PeopleSoft Enterprise HCM 7.5 and Financials 7.5,
and was looking for an HCM platform that would support a series of corporate initiatives in the
coming years, from operational management to revenue generation. As Jo Randles, Specialist
Advisor, HRIS, points out, moving from a client/server-based application to PeopleSoft’s 8.x
Internet-based architecture would in itself make it easier to communicate with the Society’s widely-
dispersed constituents. But with release 8.9 in particular, the Society was also able to take
advantage of the Person Model architecture, allowing it to house information from different kinds of
supporters in a consistent manner.

The Society went through a standard series of upgrade steps, from functional review and fit gap
analysis to data migration, culminating in user acceptance testing and training in late July and
August 2005. Data migration proved the biggest challenge and made for the largest workload,
running from March to mid-August 2005 – hardly surprising, perhaps, given that it had to contend
with 100,000 person records, 600,000 job records, and very different data models in 7.5 and 8.9.
Less onerous was the user acceptance testing, where Randles was surprised at how few issues arose.
The only other significant issue she ran into was the release of a major service pack in the course of
the upgrade.

One eye-opening outcome was that the Society has been able to eliminate 78 per cent of the
customizations it had maintained in Release 7.5 – some because subsequent organizational changes
had made them redundant, others because they were superseded by functionality in the vanilla 8.9.

The upgrade now provides the British Red Cross with a platform for a wide range of operational,
marketing and management improvements, including:
Supporter management and reporting The Person Model architecture allows the Society to
manage different kinds of supporters in the same database, providing better access to information
and improving reporting capability. It also provides a central version of the ‘truth’ for people-

Webster Buchanan Research © 2006 14

 W E B S T E R • B U C H A N A N • R E S E A R C H

related management – the Society’s policy is that if data is in PeopleSoft, that’s sufficient authority
for other functions to act on it
Cost control and budgeting
The central system provides greater visibility into people costs and forms the basis for workforce
planning for staff and volunteers. In the future, it will also allow the Society to apportion costs over
multiple departmental codes. In addition, it brings tangible operational savings: because supporter
email addresses are now stored centrally, the Society will be able to scale down physical mailings to
its volunteer base, which currently cost around £10,000 ($17,500) each
‘Cross-selling’ and ‘upselling’ Better information management will allow the Society to take a
more holistic approach to its supporters. For example, it believes it trains around half a million
people a year but does not leverage those supporters – there will now be an opportunity to invite
trainees back for refresher courses when their three-year First Aid certificates expire, generating
additional revenue. This information may feed into a future implementation of a Customer
Relationship Management module
Business processes management and administration The Society will begin rolling out some
elements of workflow in 2006 to automate manual processes and reduce the paper trail in activities
such as onboarding. This also helps with the Society’s goal to free managers from spending too
much time on administration
Communications The combination of a central system with Internet access improves
communications between the Society and its staff and supporters, both from an HR and operational
perspective. For example, the Society is considering how to use SMS messaging to engage with
staff and volunteers, and also as a tool for emergency response
IT Resource The move from a client/server environment to an Internet-based architecture allowed
the Society to eliminate a number of intermediary servers that coordinated client data, and has also
reduced the cost of ongoing maintenance, since applications do not need to be maintained on client
machines. In addition, the removal of 78% of customizations will reduce ongoing maintenance
overhead. Overall, the shift from an unsupported application, 7.5, to the most up-to-date version of
Enterprise HCM provides a secure platform for the Society going forward

5.2 Wells Fargo

Don’t be surprised if Ted Brand, HCM Application Architect at Wells Fargo, has mixed feelings
about the company’s partial upgrade to Enterprise HCM 8.9. The project, which centers on the
Recruiting Solutions application, has resulted in significant time savings for the company’s
recruiters and led to a number of improvements in a recruiting process that tackles 1.7 million job
applications each year. By the same token, however, it was a major exercise, accounting for around
20,000 hours of work – almost half what the company expects to spend on migrating all of its other
applications to the new release.

With all of its HCM applications running on Enterprise HCM 8.3, Wells Fargo began work on a
standalone project to upgrade Recruiting Solutions in November 2004, focusing on Talent
Acquisition Manager for its managers and specialist recruiters, and the Candidate Gateway for
applicants. Its motivation was straightforward. Nearly half the bank’s managers – some 8000
employees – choose to manage the recruitment process themselves, but the other half of the work is
carried out by 200 high-volume recruiters, managing some 78,000 requisitions annually between
them. Volumes are high – in one extreme case, a recruiter had 700 open requisitions – so the bank
needed a flexible, scalable application that could meet the requirements of these specialists and
handle a large number of simultaneous searches. By splitting the upgrade process in two and
focusing exclusively on Recruiting Solutions in the first phase, it was able to take advantage of new

Webster Buchanan Research © 2006 15

 W E B S T E R • B U C H A N A N • R E S E A R C H

recruitment functionality earlier and spread the workload for its IT team, even if this meant
spending additional time creating links between the new application and the core 8.3 system.

Wells Fargo had already implemented and heavily customized eRecruit 8.3, and handling that large
volume of customizations proved to be a challenge in the upgrade because of the new Recruiting
Solutions architecture. The design changes have been extensive: Brand points out that the core code
syntax has been rewritten for 8.9; recruiting table names and component names have been changed,
along with many field names and types; and the relationships between data have shifted. In addition,
the bank was moving to a new database and new tools, which added further complexity.

As a result, reapplying the customizations from 8.3 proved too onerous, and the bank decided
instead to document them from a functional perspective and redesign the most important ones in the
new release. Customizations were selected on the basis of whether they either improved recruiter
productivity or the applicant experience, as well as on their impact on the underlying IT
architecture. During the selection process, the IT team came under pressure from the business to
replicate a higher volume of customizations than it had planned for, and in all, handling them
accounted for almost half of the total project workload. In effect, says Brand, this was a re-
implementation rather than an upgrade.

While the upgrade process was challenging, however, the business impact of shifting to the new
version has been tangible, particularly in terms of improving recruiter productivity, reducing
ongoing maintenance and enhancing the applicant experience. Brand points to a number of new
functionality areas in 8.9 that have made a significant difference, from the usability of the templates
to the Verity Job Index feature, which eases the search load on the database and makes the
application more scalable in high-volume environments. Similarly, the ability to store resume
attachments in the database makes for more efficient data management.

These enhancements have led to significant time savings. In the most extreme case, the highest-
volume recruiters can now pull up pages at one twentieth of the time it took on 8.3 – that may seem
a small change, but as Brand points out, if you save five minutes on every one of 80,000
requisitions per year, that’s a significant aggregate saving. These savings are particularly significant
during the spring and fall recruiting seasons, where temporary recruiting contractors are brought on
board and every hour spent carries a direct cost. Another positive outcome is that 17 of the 25
busiest days (in terms of volume of new applicants) have come since the upgrade, suggesting that
applicants are finding it easier to locate openings on the site and apply for them.

In addition to productivity gains, the upgrade has also led to tangible improvements in both the in-
house and external user experience. Because 8.9 can be easily configured to manage the applicant
interface, the bank has been able to cut the number of steps that external users go through and so
reduce the amount of information they have to supply. Feedback from in-house users has also been
positive. The only thing Brand would do differently in hindsight would be to carry out user
experience testing earlier in the cycle, before the bank completed the project plan. One issue that
emerged was that while the 360-degree views offered in 8.9 have helped increase recruiter
productivity, some managers found them confusing, so the bank went back to simplify the
navigation after development work had begun.

Overall, those benefits convince Brand that carrying out the upgrade was the right choice. Although
the high volume of customizations at Wells Fargo meant the upgrade workload was higher than
expected for the recruitment application, he stresses that the bank achieved all three of its goals:

Webster Buchanan Research © 2006 16

 W E B S T E R • B U C H A N A N • R E S E A R C H

increasing recruiter productivity; positioning the product to reduce ongoing maintenance; and
providing a competitive edge for attracting applicants.

5.3 California State Automobile Association

In an unusual approach to upgrading, California State Automobile Association (CSAA) made the
shift to Enterprise HCM 8.9 even as it was implementing several 8.8 modules – and even in
hindsight still argues that the process was relatively easy.

The insurance, travel and auto organization – which is the third largest AAA club with 4 million
members – was keen on making the shift to 8.9 to take advantage of new ePerformance and Time &
Labor functionality, as part of a broader strategic push towards implementing extensive self-service
capability.

The association started the upgrade to 8.9 in May 2005, using the Application Solution Centers. It
had already implemented a number of applications on 8.8, including eProfile and the Employee
Portal, but was still in the process of rolling out version 8.8 of Payroll and Benefits Administration
when the 8.9 upgrade began. These two applications were retrofitted to 8.9 between August and
October, along with eBenefits for open enrollment. In the course of the seven month project, the
association also established an employee service center using HR Helpdesk 8.9, and concluded with
the rollout of ePerformance 8.9 in December 2005. As Scott McVittie, Senior Manager of Human
Resources at CSAA, points out, the simultaneous activity on 8.8 and 8.9 definitely made for a more
challenging implementation, but the total project was delivered on time.

The implementation of ePerformance 8.9 has allowed CSSA to replace a spreadsheet-based

performance management approach with a centralized system. The short-term aim was to improve
the association’s mid-year and annual appraisal process by introducing self-service capability,
building a central repository to capture profiles and standardizing procedures. In turn, that gives it
more strategic capability, allowing it to align individual objectives to its enterprise and divisional
goals. The upgrade has also given the association access to a number of functional enhancements,
such as 360-degree reviews.

CSAA is rolling out Time & Labor 8.9 functionality in three phases, replacing its paper-based time
records and providing a central repository for time data. It has already completed the first phase,
which took four to five months and was focused on improving time management of sales and
service employees for regulatory purposes. The next phase will see it extending the system to all
7000 employees, bringing significant management benefits for an organization operating shifts 24
hours a day and with employees in multiple states. Finally it will introduce Activity-based Costing
for both employees and contractors, to help it better analyze how time is being spent, giving
management insight into where it gets the best returns and allowing it to focus on ways to improve
its cost structure.

In addition to these functional changes, says McVittie, the Person Model architecture in HCM 8.9
made the decision to upgrade more compelling. With a significant number of contractors on its
books, the ability to track non-employees will be critical for project time tracking.

Overall, McVittie argues that the upgrade wasn’t hard to handle, particularly as the association had
the right skills on board. “It’s pretty straightforward if you get the right team, as long as the
business case can support it,” he says.

Webster Buchanan Research © 2006 17

 W E B S T E R • B U C H A N A N • R E S E A R C H

5.4 European Investment Bank

For the European Investment Bank (EIB), the decision to join Oracle’s Early Success Program for
the upgrade to 8.9 hinged on a combination of practical need and the lure of new functionality.

Based in Luxembourg, EIB is the financial development arm for the European Union and an
extensive PeopleSoft user. Prior to the upgrade it had been running older, unsupported versions of
applications for HCM (Enterprise 8.0SP1), Financials and Enterprise Performance Management.
From a practical perspective, Robert Johanns, head of the PeopleSoft applications unit at the bank,
was keen to establish an up-to-date platform across all three applications to secure ongoing support,
standardize toolsets and position the company to move to Fusion at a time of its choosing. In
addition, the bank planned a range of projects to leverage the new functionality in the application
from 2006.

The upgrade was not without its challenges. Conscious that it had missed several upgrade steps
between 8.0 and 8.8, EIB’s plan was to go through a technical upgrade first, then review all non-
conflicting customizations in a second phase once the application had gone live. That approach
worked for the core workforce administration module, but proved more difficult for Recruiting
Solutions because of the extent of the design changes. “The structure of the tables has changed –
one applicant table has become ten, twenty tables. So to reapply customizations has been very
difficult,” says Johanns. The bank now plans to remove most of the customizations and as far as
possible shift back to the vanilla application.

Similarly, Johanns was surprised by the extent of the design changes to the Time and Labor
application, which predominantly impact time administration and scheduling. Having originally
implemented the application in 2004/5, and with memories of the customizations fresh in his team’s
minds, he expected a straightforward upgrade. But because of the way the module is programmed,
he found it harder than expected to locate even simple customizations. By contrast, Johanns says the
bank had no problem upgrading the payroll rules and data in Global Payroll. The payroll process
proved to be accurate from the beginning of the testing phase, running successfully just one day
after the initial test migration was completed.

The issues it encountered don’t take away from the security of being on a supported, modern
release, however – and nor do they detract from the additional functionality now at EIB’s disposal.
Around 750 of the bank’s employees now use Time & Labor to report worked hours against
projects and activities for cost accounting purposes. EIB is also considering plans to build a link
between Enterprise Learning Management and its PeopleSoft Financials application so that external
training costs can be viewed in the HR application. Longer term, Johanns is also interested in the
enhancements that have been made to eRecruit 8.9.

Overall, he says, “the version looks very good – it’s much more user-friendly that 8.0SP1. It’s also
more stable – there are very few bugs. So from that point of view, I’m very satisfied.” He also
recommends the Application Solution Centers, which carried out the first test run in the summer of
2005 with the new upgrade scripts. “They’re very good people, very helpful and professional. It’s
the best experience we’ve had.”

Webster Buchanan Research © 2006 18

 W E B S T E R • B U C H A N A N • R E S E A R C H

End Notes

About the Authors

Webster Buchanan Research is a media and market intelligence company specializing in the
practical implementation of business strategy. It focuses on the deployment of information
technology as a tool to deliver business benefit, primarily in the fields of Human Capital
Management, Financial Management, Customer Relationship Management, Facilities/Property
Management and Business Integration. The organization is based in London, San Francisco, and
Hong Kong. Visit www.websterb.com.

About Oracle
Oracle (NASDAQ: ORCL) is the world’s largest enterprise software company. For more
information about Oracle, visit our website at http://www.oracle.com.

Disclaimer, Copyright and Trademark Notice

The information contained in this paper is intended to provide an overview of a particular topic.
Facts presented and information provided by users referred to in this paper have been verified to the
best of Webster Buchanan Research’s knowledge. Webster Buchanan Research is not responsible
for any errors or omissions, or for the results obtained from the use of this information.
The information contained in this paper is provided on the strict understanding that Webster
Buchanan Research is not engaged in rendering professional advice and services of any description.
As such, the paper should not be used as a substitute for consultation with professional advisers.
All information in this paper is provided “as is,” with no guarantee of completeness, accuracy,
timeliness, or of the results obtained from the use of this information and without warranty of any
kind express or implied including but not limited to warranties of performance merchantability
and/or fitness for a particular purpose. In no event will Webster Buchanan Research or its related
partnerships or corporations, or the partners’ agents or employees, be liable to anyone for any
decision made or action taken in reliance on the information in this paper or for any consequential
special or similar damages.

This paper is copyright. Except as permitted by the Copyright Act, no part of it may in any form or
by any electronic mechanical photocopying recording or any other means be reproduced stored in a
retrieval system or be broadcast or transmitted without the prior permission of Webster Buchanan
Research.

Oracle, JD Edwards, PeopleSoft and Siebel are registered trademarks of Oracle Corporation and/or
its affiliates. Other names may be trademarks of their respective owners

Webster Buchanan Research © 2006 19