The Predictions about Chinese Consumers Are Coming True

While looking for some files recently, I came across an old PowerPoint presentation that I had given five years ago that talked about what China would be like in 2010. One bullet said that the country had already emerged as the leading market for cell phones, steel, and coal. The second one said that by 2010, China would be the No. 1 market for cars and No. 2 for PCs. Well, it has already earned the top spot for both.

On this topic, there was an interesting piece on Chinese consumer spending last Thursday in The New York Times. In the third quarter, there were 7.2 million PCs sold in China compared to 6.6 million in the U.S. It looks like Chinese buyers will buy 2.5 million more cars and light trucks than Americans–12.8 million to 10.3 million. Car sales there rose 42% in the first 11 months of 2009; they were up 96% in November alone. Meanwhile, U.S. car sales were down 37% last month.

China is also the top market for appliances. By the end of this month, Chinese consumers will have purchased 185 million refrigerators, washing machines, and other appliances this year. By contrast, Americans will have bought 137 million over the same period.

The Chinese may yet overtake their U.S. counterparts in credit card spending, too. The Times notes that spending rose 40% for the first three quarters of this year compared to the same period in 2008. You may be surprised to know that one out of eight Chinese consumers has a credit card, while the U.S. averages two per person.

What’s most amazing, though, is that incomes are still very low relative to the North America and Western Europe. Annual income for China’s urban areas averages $2,775 per person. It drops to $840 in rural areas.

A Wall Apps Pioneer Weighs In On the Topic

Robb Bush, an innovator at i2 Technologies in the '90s, and now with SAP, offered his perspectives on Wall Apps:

Bruce,

I read with great interest "The Future of Work: Wall Apps." I have also enjoyed the thoughtful commentary. However, I do not think I am either a dissenter or a proponent in general—it depends on the definition.

From my perspective, I can see the definition of Wall Apps in at least two different ways (each of which may have its own proponents or dissenters):

1. Wall Apps as a "bigger dashboard" These represent a display that can be seen by many people in an environment and are generally read-only. That approach has some pros, and cons, as illustrated by other commentary.

Yes, this type of Wall App can be more of a “billboard” than anything else. However, with some real-time data, it can be a valuable "scoreboard" that can be used in practical areas such as call centers, and even industrial environments.

2. Wall Apps as a "High-Definition App" This type is highly interactive, but exploits the larger viewing area, higher resolution, and other methods to make the business interaction more game-like, participatory, and faster than a small 1:1 application trapped in desktop monitor.

“HD Apps” open up many more possibilities, and it is becoming more and more cost-effective to realize.

For example, when I was recruited by i2 in the mid '90s from the consumer and "info-tainment" software world, I could immediately see game-like design solutions to the challenges posed by very complex Sourcing, Manufacturing, and Supply Chain problems. As a result, we developed the first data-driven 3D value-chain designs and applications - showing logical, physical, and temporal flows in real-time. This just happened to work much better on large, or multiple screen displays. Sometimes we used up to 11 screens of varying sizes, working all on the same application data and working synchronously.

However, back in 96-98, to pull this off required some powerful machines, custom programming, multiple advanced graphics cards, projectors and/or very exotic flat screen displays. While it was ‘state of the art' then, the same power is now readily available in commodity machines and console hardware!

In addition, think about how most teens "see" applications and GUIs. They don't! They see, and more importantly... expect, something far different.

Anyone that has raised 'connected kids' in the 21st century quickly understands this. The "Future of Work generation" has never known a world without the Internet, always-on accessible information, and increasingly compelling and immediate ways of interacting in engaging multi-dimensional environments and real-time communications. This is more prevalent in highly-networked console Games, and not limited to what is called Web 2.0. Watching kids use "computers"—you quickly see that the Future of Work is not trapped on a monitor sitting on a desk, but it is on larger wall-sized HD displays, and on handheld devices (But, that’s another story. To get started, just think differently of the handheld-mobile as a new "controller," or an auxiliary "viewer" between virtual and physical, and we’re off!).

In the near term, the most productive Wall Apps may not appear just in management suites, but in busy industrial environments that any employee can walk up to with a familiar hand-held wireless controller, 3D navigation conventions, and real-time communications via wireless headset. They will be able to quickly understand plans, scheduling, inventory, and be able to collaborate across the value chain in a way that makes sense to them, immediately and intuitively.

So to wrap up, bigger dashboards or scoreboards on-a-wall can be very useful, depending on the execution and situational context. And yes, they could easily be call "billboards" if existing only for show.

However, if we think about making "HD-apps" and inform our design-thinking on the tools and the expectations that are already in practice daily by the future workforce, then we really will be heading toward the future of work. And, it may not be too different than the future of play.

Best regards,
Robb

Reader Comments on Wall Apps: The Dissenters’ Edition

In my recent post on “The Future of Work: Wall Apps,” I  advocated placing large screens in the executive suite and around the building to display real-time performance information. Not surprisingly, I received several emails from opponents and proponents.

The Dissenters’ Edition features emails from three readers who did not agree with me.

The first came from a reader who asked that his name and company be withheld:

“Bruce,
I continually fight "front end" visualization hysteria, lately the world of Business Objects due to our strong relationship with SAP. I find it dangerous! The reason being is that 90% of the work is in the business process, gaining common definitions, having sustainable governance and accountability for data integrity, and going through data and system validation processes all has to occur first. The "front end" stuff is the fun part, but in a large global operation such as ours the business process is the work that has to be accomplished first, ... and it's not easy.”

The second dissent piece came from Jeff Tognoni, CEO, Consona:

“Bruce:
While I have great admiration for your concept from an aesthetic viewpoint I am not sure that all of this visually appealing stuff makes that much difference to actual business results. The bigger point is this, if I had real time sales pipeline data always in front of my face I am not sure that would make me a better CEO or quite frankly a better Sales VP. The question you have to ask yourself is what are the actions you would take based upon having that information and what business impact those actions would result in. So lets say I notice that sales in the SE region are not looking as good one day, am I going to call the SE regional sales vp and ask him what’s up? Quite frankly CEOs that do that usually just create a lot of CYA activity that adds no value to results. From day to day this stuff bounces all over the map and it is only by analyzing this stuff over longer periods that you get real actionable data. I know there are many real time actionable things in some industries but not sure if they are the majority or even the most important to actual results, even in the short term. But like you I am all for the aesthetics of the whole concept and if it sells more software bring it on.”

The third e-mail came from Ed Hancock, a partner at Business Navigation Systems LLC:

“Bruce,
I remember visiting the network operations center of a large computer services company in the 1980s. Standing in the viewing gallery, looking at all of the large screen displays of the real time network status was pretty impressed until one of the tour guides told be that they were just for show. No real work went on in the center. The people on the floor were just working at their desks doing their normal tasks. The room was just setup to impress customers. Ever since that visit, whenever I see visual data displays in factories, call centers, data centers, telecom operations centers, etc. I always wonder if they are there to help manage the business or to impress customers and close business.

I think the same thing applies to wall apps. Will they help managers manage better and improve real business results or are they sales aids?”

Please read the Proponents Edition, too, and add your comments.

Reader Comments on “The Future of Work: When Will Desktops Catch Up to Consumer Electronics”

The current edition of First Thing Monday continues the theme of
“The Future of Work.” This time we asked, “when will desktops catch up to consumer electronics?" If you look at the advances in price/performance for processors, memory, storage, printers, and mobility, we had to ask why we haven’t seen similar advances in the screens that sit on my desktops.

Based on the responses, there are many readers in violent agreement with us. Most have allowed us to use their name and company name, though asked us to point out that these views are their own and not necessarily those of their organization. 

From Charles Milligan, IBM:

“Bruce -
You tickled my techno-weenie side this morning....

Let's see.... Moore's law projects a doubling of density of semiconductors roughly every two years; it's been applied to storage, extended backwards to tubes and relays, camera pixels.... So in our careers - mine is 32 years - that means 15 or 16 doublings since I was in college.   So what did you get in '77 or so?  Graphics-barely - there were stored-image CRTs that could draw lines pretty well (Tektronix made the ones I came in contact with - maybe 11" diagonal?).   Color on a 'standard' CRT display was still a couple of years out - and only characters to start.  The usual screen size was measured in characters, like 24 lines of 80 characters - which mimicked a punch card well (and key punches were still around, and could be called to have a 1-line display, perhaps). Weighed 50± pounds, so rate this as 24x80x2 levels of text (normal, bold) = 3840 (round to 4k).

Skip forward 10 years, I'm in grad school. We have a few pretty much state-of-the-art IBM 5080 graphics terminals connected to a small mainframe (4341) in the lab I worked in. It can do 2-D CAD with no problem most of the time, but it's an eighty pound (but roughly 20") display with a pile of electronics in a separate cabinet. If I had pretty much exclusive use of that mainframe, CADAM would paint my relatively simple wireframe at maybe 4-5 frames per second; enough to use but hardly smooth. On the traditional-business, character front, I had a plasma of a similar size (a very distant precursor to today's color ones) display that would show about 80x160 characters or maybe 800x800 binary pixels when in graphics. Rate this as 800x800x1 = 640k in graphics or 13k in character mode. Or you could buy a Macintosh with it's laughable (today, at least) little B&W display.

Today, my 1 year old laptop probably exceeds that mainframe in compute capacity - it certainly has more memory and disk space.- and has 1400x1050 color pixels, each of which can display 24-bit color; but for business use 256 colors are plenty. It isn’t optimized for real-time graphics rendering but can certainly keep up with Powerpoint, play DVDs, show my vacation pictures, etc. It can display text reasonably well that is too small for me to read at a comfortable typing distance. Increasing the pixel density or color depth isn't going to show me more information. A standalone display of this size might weigh 3 pounds. Rate this as 1400x1050x256 = 376M for graphics and about 85x160x256= 3.5M for text, although if you include fonts, bold, italic, etc. you can push this up significantly.

So, for text, we've grown from 4,000 arbitrary units to 3.5 million, a growth of 870x over 30 years, well short of Moore's law, but we reached the physiologic limits of what's useful about a decade ago. For graphics, we've only really had useful devices for about 20 years or 10 doublings. In my arbitrary units, this is a growth of just shy 600x, not far off the 1000x that Moore's law would project, but again we're running out of  ‘useful.’ So, do I want more? Sure; two screens (in today's metrics) is nice and I can see there are professions where four to 6 would be an advantage, but not a lot. Portability has something to say for it, but if you need 30x40" of display space, you're not going to portable or mobile, ever. At some point in the bigger-is-better debate the data presented ceases to be information because there's too much of it to absorb; we should be spending time/energy figuring out how to present it more intelligently/usefully - thus everybody's desire for ‘dashboards’ - not in displaying every possible facet for the user to wade through.  

3D is around the corner for the business user and is likely to pay off in some disciplines, but until we either have 'cool' 3D glasses or it works without wearing something geeky, it won't make it into middle management or higher.” 

Two Comments From Dave Anderson, Supply Chain Ventures

Here’s the first:

“Bruce
 
Right on as usual…
 
And while you are at it, why not whine about our cars???
 
They are so far behind in enabling mobile work (not while moving, I might add), it is crazy
 
My boat is more technology enabled than my Lexus—weather, depth, position, fish finder, radar and internet on the same Raymarine navigation screen.
 
Go figure…

Dave
 
PS—sitting in the office with two active PC screens, a third screen on CNBC, WGBH playing through Bose, and the BB synching with the machines…sounds cool, but I would like one of your dream “work rooms.” “
 
Here’s his follow up:
“While I am on a roll, here’s how I would like to get my WSJ, FT, Technorati, Economist, NYT in the am:

I get up, go to the media room, sit in comfortable chair while Starbucks brews, spool up the news website (all-in-one news/Blog/? subscription options; no web site reloads!), project on my media wall (10x12 feet), bring up print-like versions of today’s papers (allowing for some format improvements) and scroll through them with a biometric device on my finger, with immediate full article read capabilities, among other apps.

PERHAPS IN A FEW YEARS…

Dave

From Asvin Ramesh, HCL America

“Hi Bruce,
 
Great article, very insightful on how things have not progressed on some aspects of computing and display to keep pace. Another part that is really lagging is the area of Power Management.
 
“One of my professors in engineering school had joked in 1996 that you will have all your computing functions in the size of the watch (13 years hence, he is close with the iPhone) but you will still have to carry a bag for the power that will be needed. I believe had power management been developed at the same pace as the rest of the High Tech world, we would have been living in a completely different world. I found a recent article on how Andy Grove teaches leveraging advances in one field for another in the Economist interesting on a related subject.”
 

From Brian Carter, SAP Labs

“Just what we need, Bruce. 250 people getting on a plane with their yoga mat style graphical displays and trying to find room in the overhead for them. Don't you think that projection technology and the ability to either project a large screen on a wall with a good resolution from a cell-phone sized device (or even from within your cell) or the ability to connect your laptop wirelessly or via a universal docking station (with wireless mouse and keyboard on the desk, which hopefully faces the big screen TV) would usurp OLEDs for travelers - unless maybe you can fold them instead of rolling them up, then maybe we would be have something. And of course, there will be the 80+% of hotel rooms that don't contain the right setup (or it doesn't work) where you will still need the old standby laptop display. I don't think the laptop form factor is going away any time soon, for anything more than a day trip to a customer where you are going to make a one hour presentation and you can fit it on your smartphone. But I guess we can dream, can't we......
 
I enjoy your newsletter. Keep up the great work!”

From Gregory Anderson:

“Having been in a cubical all my professional life, I’ve long wished for all the walls to be displays. Some panels would be set for work, manipulated via a keyboard and touch (like iPhone and/or Minority Report). Others would be communicating panels… video & voice to other cubes, conference rooms and home. Is Janice at her desk, or has anyone shown up for the 1:00 meeting (yes, privacy concerns abound but I cube video should be no more invasive than walking by someone’s desk).”

From Kapil Mishra, Infosys Technologies Ltd

“Very insightful write-up on desktop. As a full time IT worker, I share your views that bottleneck for IT productivity no longer lies with processors and memory but largely with User interaction layer and desktops play a key role there.
 
As a side thought, why have a physical screen at all. No one size will ever fit all needs. There are some advanced researches in holographic projection screen that offer interesting possibilities. 
 
Another related aspect to desktop innovation is matching abilities at OS level. You alluded gently to MacOS in your write-up though I can be a little blunt with how primitive Microsoft UI concepts appear today though they may have been path breaking in early 90s.
 
At the wish list level, I would look for a ‘Stretchable’ screen that can be adjusted to differing needs (a laptop size when I am commuting in train and a 30 inch one in my study). Till then, I will live with my laptop and CRT displays.”
 

From Kevin Wolf, spokesperson for NextWindow:

“You should check out www.nextwindow.com. These guys are making optical touch screens for desktop PCs from Dell, HP and others. Desktop touch is heating up. Win 7 will launch 10/22 and all the largest PC makers are preparing new touch PC products.  Let me know if you have questions about NextWindow and what’s happening in this market.”
 

I welcome your comments, too.

The Future of Work: A Vote for Google Wave

The flurry of posts drew this comment from Jeff, who asked to be identified only as a director of product management at a supply chain software company. Here are his comments:

Bruce,

Great articles the past few weeks. I believe current multi-media and social networking tools out in the market today have a large negative impact to multi-tasking and productivity. At the end of the day, there’s just too much information and too many ways to communicate it. Additionally, too many people lean on one type of tool or another, which may or may not make sense for others.

It looks like Google is attempting to pull all these tools together so that whatever the method(s) are to your communication madness (e-mail, Instant Messenger, blogs, wikis, social media, etc.) you’ll be able to get the information you need in the form you prefer. I recall in the video (link below), that the Google developers mentioned something along the lines that if e-mail/social networking/collaborative tools were created today, Google Wave is what it would look like. Not individual apps, or even interfaced apps but one tool (professional and personal) that can be used in many different ways based on device/access point and preferred method of communication. I’m sure you’ve already seen this, but if not enjoy!

http://wave.google.com/help/wave/about.html

http://www.youtube.com/watch?v=v_UyVmITiYQ

Regards,

Jeff

Crowdsourcing and Prediction Markets: Right-Timing Revisited

After talking with the Crowdcast team, I went and retrieved my right-timing file. Some of the features I was interested in would be nearly impossible to implement. Others are already baked in Crowdcast’s prediction market. Here’s a closer look.

If you review the example involving Shai Agassi’s Better Place, my thought was to have at least two separate prediction markets that would be linked together. These include bets on the level of funding that Better Place would need to raise and the date for the opening of the first battery replacement service station

Why stop there? As I sat next to the bed that night I considered some of the other related issues: How much would the batteries cost? How much would consumers be willing to pay? How long would they be willing to wait as the batteries got swapped out? What would happen if oil dropped to $20 a barrel? Should Better Place target commuters or government vehicles? 

At the same time, it seemed fair to ask whether other technologies such as hydrogen might be ready before Better Place was able to build out the infrastructure or whether Toyota or another car manufacturer could design/deploy better battery technology. All of them seemed to merit wagers, too.

As I saw it, bettors could segue between these markets. They would be aided by RSS links to relevant news stories. This is a feature offered by Crowdcast. Participants could also offer comments on a discussion board with expert postings differentiated from others. This is also offered by Crowdcast. 

As the related markets changed in importance (e.g., hydrogen was viewed as not being viable for another decade), the effected markets would change colors. Cold discussions would turn deep blue, while the hotter markets would turn red.

After unsuccessfully testing the right-timing idea internally, I did approach at least three software companies to see if they had an interest in talking more about the concept. I was hoping to end up having something that we could use for our research and post on our website. Nothing happened.

As I reviewed my notes today, I still like the concept. After talking to the Crowdcast team, though, I realize that these bets need to be more bounded to be effective. The linkage of related markets may have proven to be too much of a stretch.

What do you think of the idea?

The Future of Work: 3-D Learning

A couple of weeks ago I was flying back from Europe. As we were settling in after boarding, my seatmate pulled the new Kindle 2 from Amazon and asked, “Got one of these?” As I pointed to my dog-eared copy of “Three Cups of Tea,” he bragged about the four books he had downloaded for his travel. 

A few days later, I was reading the Sunday edition of The New York Times (“Is This the Future of the Digital Book") and saw the article on Vook. There was a big color picture of founder Bradley Inman. The caption described how he is building a “platform for e-books that will combine text, video, and social networking.”

I was immediately drawn back to my book. In the future, I will be able to see the grandeur of K2 and the mountains of Pakistan and Afghanistan, the bridge built to help build the first school, the villagers and the climbers, and the relative closeness or distance between the village and the current battles between the U.S. military and the Taliban.

In the not-so-distant future, you can imagine textbooks will be delivered via Kindles and similar devices. Eighth graders struggling with abstract math concepts can see how algebra and geometry fit into the real world. Likewise, history, science, and foreign language studies will come alive. New games will be created to make learning fun.

And how long will it be before you can read our research on a Kindle? It may not be long before you can read our case study on a company’s supply chain transformation, and be able to click on the video interviews with supply chain executive and the CIO. We can take you from the manufacturing plans to the distribution centers to the retailer’s shelves, allowing you a much better view of the overall process and the challenges involved. If you can imagine it, we can deliver it. Think about how this changes the learning process.

What do you think?

The Future of Work

If you looked inside our company, you would see that we currently serve two broad categories of technology buyers: IT executives at large companies who need insight on managing their global enterprise application/ERP architectures, and operations executives looking for our assistance in helping to improve the effectiveness and efficiency of their ever-expanding supply chains.

For about a year or so, I’ve been fixated on a third audience: executives looking at how their organizations will need to evolve over the next five to 10 years.

There’s no shortage of questions: 

• Where will we find the people?
• How will we train them?
• Where will they be based?
• What productivity tools will they need?
• How will we structure their responsibilities?
• What will compensation look like?
• How will we manage the transition from baby boomers to younger employees?
• Who are our future competitors?  

The best-run organizations are already looking ahead. Fortune recently profiled Procter & Gamble’s A.G. Lafley as part of its ongoing “Top Performers” series. P&G has a comprehensive leadership and performance management program that is has branded “Build From Within.” 

A couple of points in the article jumped out:

• P&G plans to hire 2,700 people this year out of 600,000 applicants.
• Nearly all will be new graduates. Less than 5% of the hires will come from other firms.
• The company maintains a database on all 138,000 employees that closely tracks their monthly and annual performance reviews.
• P&G maintains a stable of three viable candidates for each of the top 50 positions.
• All P&G executives teach at the company training center and host weeklong “colleges” for employees moving up in the organization.
• Mr. Lafley closely tracks the development of the top 150 managers.

Clearly, this is a company focused on the Future of Work.

What do you think of “The Future of Work”?

I see the Future of Work as the theme for a lot of our existing coverage on human capital management, customer relationship management, knowledge and content management, SaaS/clouds, office automation tools, business intelligence and performance management, business process outsourcing, and social networking and other Web 2.0 tools. We would need to add some additional coverage around the organizational issues that don’t fit neatly in the software and services coverage areas.

I need your help, though.

What do you think of the theme? We have debated calling it “The Future of Work” or some combination of “People, Performance, and Productivity.” I believe this will be a critical discussion topic, especially as we emerge from the recession. What do you think?

Rearden Commerce to Buy Global Ground Transportation

Rearden Commerce, the provider of travel services software for Road Warriors, is acquiring Global Ground Automation. GGA helps travelers reserve limos/town cars while allowing their employers to manage travel spending. Terms of the deal were not disclosed

Ground transportation is a deceptive expense that can be easily managed. Rearden executives told me of one large services firm that was spending $12M annually spread across 5,000 different providers. Using Rearden and GGA, the company was able to determine spend by city (80% was concentrated in nine cities) and negotiate with preferred vendors.

GGA works with all of the major travel platforms and agencies, including Amadeus, Apollo, Expedia, Galileo, Orbitz, Sabre, and Travelport. It also works with more than 33,500 ground transportation providers including Boston Coach, Carey, and DavEl.

Today, GGA supports “transient travel” or getting you from point to point. As part of Rearden, the company intends to target the meeting market and consumers. In terms of meetings, perhaps one day when you register to attend one of our conferences, we will provide you with the opportunity to reserve a limo to the event, powered by Rearden.

Live from OpenWorld: Oracle Unveils Beehive, PowerPoint Better than Demo

In PowerPoint, Oracle’s new Beehive looks like the realization of the promise of Web 2.0/Enterprise 2.0. The slides promised a collaboration server for email, voicemail, discussions, search, conferencing, chat, tags, calendaring, wikis, “presence,” and the like. All that was missing were integration with Facebook and support for prediction networks.

Unfortunately, PowerPoint was more effective than the demo, which showed how co-workers could share documents. This looked like a poor imitation of IBM’s Lotus capabilities. While it did provide strong security (the originator can “delete” the document once you no longer have permission to view it even if it appears to remain on your hard drive), I was disappointed that it didn’t take better advantage of the newer technology.

If you visit IBM’s Lotus operations in Cambridge, you see a lot of clever innovation that you would love to have. Take presence. If I am working on a client inquiry, it would be helpful to know if Shep or Derek Prior are available and how best to contact them: email, IM, VoIP, or video. Imagine what we will be able to do when we have GPS functionality built in. I could see if Shep was in the building or at OpenWorld.

Beehive has been incubating at Oracle for three years. Maybe the next demo will be more interesting.

Shouldn't You Be Working?

If you're reading this on company time, you're part of the $650B productivity drain on corporate America (but keep reading, we won't tell). That number comes from Maggie Jackson, author of “Distracted,” a new book that looks at the issues caused by living in a “split-focus world.” She’s also the author of a recent Boston Globe article and BusinessWeek article that examines the issue of e-mail and other distractions and their effect on the worker.

According to the Globe article, the First Thing Monday newsletter will be one of 156 e-mails that you will receive today (if you don’t subscribe, you can here). Due to the volume of e-mails, you will likely change tasks every three minutes. The constant interruptions lead to stress. According to the article, “nearly a third of workers are chronically overworked and are more likely to be stressed, depressed, and in poor health.”

My cure this week has been vacation on Cape Cod where Blackberry reception is sporadic at best, mobile reception is spotty, and wifi is practically non-existent. Ahhhhhh, bliss. We have some more ideas in this week’s column. What’s your cure for e-mail overload? Let us know here.

Q & A with Kronos CEO Aron Ain: The Future of Work

Our interview with Kronos CEO Aron Ain ventured into numerous areas. This week’s column in the First Thing Monday newsletter (subscribe here) explores how Mr. Ain took his company private and the benefits from doing so. We now continue that conversation, moving to a broader reflection on the workforce management and enterprise software markets.

 

Here’s the second part of my interview:

 

My first memory of Kronos is a time and attendance system I saw in a Boston hospital around 1979 or 1980. How should Kronos be thought of today?

 

Mr. Ain: Think of us as providing software and services that allow organizations to effectively manage their workforce. Everything we do is related to managing the workforce.

 

Time and attendance remains a major focus for Kronos—our “bread and butter”, so to speak. Now, we also offer applications for selecting and hiring the best people, scheduling them, tracking absenteeism, paying them, and analyzing workforce data. We help customers reduce costs, increase productivity, improve employee satisfaction, and ultimately enhance the level of service they provide.  

 

Our solutions are used by organizations large and small. We offer Kronos Essentials for SMBs, which is a bundled solution to fit their budget and IT resources. And we offer bundled solutions to meet unique requirements in most major industries. These bundled offerings combine select applications, dedicated service teams, and industry best practices.

 

Kronos entered the talent management market two years ago by acquiring a recruiting vendor for hourly employees. How is Kronos’ move into recruiting playing out?

 

Mr. Ain: We acquired Unicru in 2006 and Deploy Solutions in 2007. These moves complemented our existing offerings and made us the undisputed leader in hourly recruiting. We target organizations with a high concentration of field-based employees, such as retail, healthcare, dining, and entertainment. Think of us as the “eHarmony of field-based recruiting;” we connect the best people with the most appropriate employers and jobs. It’s instant love when a match happens between the employee and the hiring company.

 

We’re very pleased with our progress. We have a strong platform, and our behavioral science and analytics capabilities remain differentiators for Kronos.

 

As Christa Degnan Manning wrote in an AMR Research Report a few months ago (editor note: read it here for free until July 18), Kronos has all but locked up the market for hourly recruiting. She highlighted our greatest asset as our assessment capabilities to help predict which employees will perform well and be more likely to stay longer.

 

How is business progressing in the HRMS space?

 

Mr. Ain: We’ve established a customer base of close to 500 organizations since we entered the business a few years ago. As expected, we’re seeing the most traction in the mid-market from customers who desire an integrated suite from a single vendor.

 

So far, you’ve completed 58 acquisitions. When do you think we’ll see your 59^th and 60^th acquisitions?

 

Mr. Ain: Acquisitions remain a part of our strategy to fuel our company’s growth. We are currently working on several opportunities in the U.S. and in Europe.

 

Last time we spoke, we talked about Kronos’ operations in China and India. Any surprises in having recently moved into these geographies?

 

Mr. Ain: Lots of early surprises, the biggest of which is the newness of the concept of workforce management. We’re essentially creating a market in these regions. In addition, we are surprised by how many companies manage their workforce with manual, legacy systems. This all translates into a wonderful opportunity for us. I’m visiting China and India next week, so I will likely have an additional perspective later in July.

 

What percent of companies have automated their time and attendance function? Is there more runway?

 

Mr. Ain: While I’m not sure of an exact percentage, I can tell you there is plenty of runway left. We just finished a fantastic quarter with product sales accelerating yet again. We see no end in sight.

 

In your opinion, how has the workforce management market evolved the past 10 years?

 

Mr. Ain: Oh, how far we’ve come! It’s been an amazing ride as the market-maker in the space. From our perspective, the market has evolved in four ways:

 

·                                             Globalization has driven the need for more scalable, centralized, localized products

·                                             More people work remotely, which has driven the need for more mobile solutions

·                                             The proliferation of the web has fueled a desire for more employee self-service capabilities, allowing employees to access and interact with personalized data

·                                             The desire to analyze data across locations, regions, and company-wide has driven the need for more sophisticated analytics tools to assess performance, monitor outcomes, and make better decisions

 

According to AMR Research’s own quantitative studies, the human capital management market leads enterprise application growth, which speaks volumes to how far the market has come.

 

Globalization continues to be a hot topic among AMR Research clients. What advice would you offer these companies regarding how to manage a global workforce?  

 

Mr. Ain: Do it! The tools exist today to manage your global workforce in a central or decentralized way. Technology makes it possible to effectively manage your employees anywhere in the world.

 

What are the technical implications of managing a more complex and geographically dispersed workforce?

 

Mr. Ain: Globalization and technology will change the meaning of “the right person, in the right place, at the right time.” The physical location of an employee will be less relevant in the workplace of the future as technology enables greater virtualization, and as organizations develop the means to bring the work to the worker, not the worker to the work. This shift is imminent. I recently read that 80% of Fortune 1000 companies are likely to introduce a telecommuting policy in the next two to three years.  

 

As for the technical implications, vendors must deliver solutions that are increasingly scalable, flexible, and cost effective. They should leverage existing infrastructures and be easily integrated with other products. And vendors must offer a vast network of support because customers will require and should expect a consistent level of support on a global basis.

 

Are there particular types of buyers who are interested in workforce management? How has the typical buyer changed over the years with the proliferation of products beyond time and attendance, and as the products have become more sophisticated?

 

Mr. Ain: We generally see two types of buyers, the differences of which have become more distinct as add-on products (such as scheduling) have become available.

 

There’s the functional buyer, who seeks deep functionality and a full suite of applications, and typically taps into our vertical and global expertise. And then there’s the ease and value buyer seeking preconfigured, bundled solutions with an option to have someone else host the application, ease of integration with other applications, and flexible payment options.

 

A common concern among best-of-breed vendors is encroachment by the large ERP vendors. What’s your perspective on the best-of-breed vs. ERP debate?

 

Mr. Ain: In our world, buyers sometimes have the perception that it’s cheaper to extend their ERP solution to include time and attendance. On the surface, that may appear true. The facts, however, do not support this perception. The reality is that our (best-of-breed) products are less expensive on multiple dimensions. Unlike ERP, whose primary focus is not managing the workforce; we can quickly configure software because we’ve done it tens of thousands of times. That makes it less costly. In addition, we have invested a lot in integration to ensure that the process is smooth for our customers.

 

We built a $700 million company by being the best. Our business is accelerating. If you do it better than anyone else, you will win!

 

Last question: What should we expect to see in workforce management in the next 5-10 years?

 

Mr. Ain: In terms of the vendor landscape, I agree with you that we should expect to see more consolidation. My theory is that if you’re not among the top 2 or 3 vendors, it’s virtually impossible to survive in the long term. That said, many of the small, niche vendors have good customers and products, so they may make ideal acquisition targets.

 

Regarding the changing nature of the workforce, several things come to mind. First, the need to bring the work to the worker will become even more prevalent, which will create demand for more innovative approaches to support a virtual workforce. Second, attracting and retaining workers will continue to be a competitive concern, so we should expect to see even more demand for applications that help find and hire the best people. Third, globalization will continue to drive the need for more scalable, centralized, localized products.

 

And finally, I believe that providing superior service will prevail as a major competitive differentiator. Here’s my theory … every organization provides a service – whether to shoppers in a retail store, patients in a hospital, customers using a software application, patrons in a restaurant, subscriber to a service, etc. You get the idea. My point is that providing superior service starts with the people providing the service. I believe the best way for a business to thrive is to hire the best people and provide them with tools to maximize their performance. Service is king.