The tough economy has hit IT budgets hard, but there’s one area where many companies continue to invest, and it might surprise people. According to a new Towers Watson survey, 83% of respondents said they are maintaining or increasing spending on HR software in 2010. That’s just one eye-opening result from Towers Watson’s recently completed survey of 456 companies, two-thirds of which have more than 5,000 employees. Although other areas of software often top the trendy list (think social networking), that survey finding and others show that the market for human resource management software is also quite dynamic. Tom Keebler, global practice leader for HR technology at research firm Towers Watson, presented the survey during a June 23 webinar hosted by Workday and moderated by Bill Kutik, co-chair of HR Technology Conference and joined by Leighanne Levensaler, Workday’s vice president of HCM strategy. Watch the webinar! http://bit.ly/hBqdL0

1. How HR Spends on Technology
Tom Keebler, Towers Watson
Leighanne Levensaler, Workday
Bill Kutik, HR Technology® Conference
WORKDAY CONFIDENTIAL
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2. Shaping the HR Function of Tomorrow…Today
The Towers Watson 2010 HR Service Delivery Survey
© 2010 Towers Watson. All rights reserved.

3. Industry and Employee Population
I.A. Industry I.F. Employee Population
Financial Services,
Including Insurance 17% Large — Greater
Healthcare, Including than 20,000
Pharmaceuticals
17% 24%
Small — Less
Manufacturing 15% than 5,000
36%
High Tech 7%
Retail 6%
Utilities and Energy 6%
Media and
Communications 5%
Food and Beverage 4%
Public Sector and Nonprofit 4%
Professional and
Business Services 3%
40%
Property and Construction 3%
Medium — 5,000 to
20,000
Transportation Services 3% n = 449
Chemical, Oil and Gas 3%
Other 7%
n = 456
2
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4. HR Technology Spending
III.A.11. HR Technology Spending
54%
18%
10% 11%
7%
Much lower Lower About the same Higher Much higher
(>20% reduction) (<20% reduction) (<20% increase) (>20% increase)
n = 453
3
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5. HR Systems Profile Overview
III.A.7. Planned New HRMS
(For Those Implementing a New HRMS)
Workday 15%
SAP 15%
Oracle (legacy PeopleSoft) 13%
Lawson 7%
Oracle (legacy Oracle HRMS) 6%
Ceridian 3%
ADP/EmployEase 2%
Other HRMS 6%
Currently evaluating the new HRMS options 2%
Will be provided by an HRO vendor 31%
n = 54
NuView, Oracle (legacy JDE), Ultimate Software/Ultipro and in-house developed system received no mentions.
4
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6. Software as a Service (SaaS)
III.E.1. Use of SaaS to Support HR Service Delivery
Yes, we use SaaS extensively
for HR 8%
Yes, we use SaaS
29%
somewhat for HR
Not yet, but we are implementing a
SaaS-based solution 4%
No, but we plan to use SaaS
11%
in the future
No, and we have no plans
48%
to use SaaS
n = 456
5
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7. Software as a Service (SaaS)
III.E.2. Primary Benefits of SaaS (Select Up to Three)
(Companies Currently Using or Planning to Use SaaS)
Quick implementation 47%
Better functionality 44%
Easier to manage on an
42%
ongoing basis
Lower ongoing costs 41%
No need to upgrade; we are 41%
always on current version
Lower upfront costs 28%
Predictable ongoing costs 23%
Other 2%
n = 231
6
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8. Software as a Service (SaaS)
III.E.3. Concerns or Apprehensions About Using SaaS
Cost 50%
Inability to customize your own solution 33%
Lack of data ownership/control 32%
Philosophical acceptance of SaaS by IT organization 21%
Greater reliance on an external vendor 19%
Being locked into an external vendor 16%
Data security 16%
Immaturity/stability of SaaS vendors and solutions 10%
Compliance with data privacy laws 4%
Doubts about the viability of SaaS business model 4%
Other 3%
n = 135
7
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9. HR Systems Profile Overview
III.A.6. Main HRMS Application Objectives for 2010
Streamline business processes 45%
Deploy additional manager self-service functionality 43%
Deploy additional employee
42%
self-service functionality
Utilize additional HR modules 39%
Deploy reporting analytics/KPIs, and/or
strategic reporting functionality 32%
Upgrade to a new version 31%
Consolidate multiple HR systems globally 13%
Implement a new HRMS 12%
Create a global data warehouse 10%
Keep HRMS, but outsource payroll 2%
Other 9%
n = 452
8
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10. Manager Self-Service: Still Gaining, But…
MSS Transactions Currently Deployed
No
42%
Yes
58%
9
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11. Impact of Manager Self-Service
IV.D.6. Effect of MSS on Timeliness of Processing IV.D.7. Effect of MSS on Accuracy of Data
44%
37% 39%
32%
23%
16%
5%
1% 2% 1%
Slower Slightly No Slightly Faster Less Slightly No Slightly More
slower change faster accurate less change more accurate
accurate accurate
n = 209 n = 209
10
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12. And it’s not just faster, more accurate…it’s better, too
Effectiveness of Process
49%
25%
23%
3%
0%
1 2 3 4 5
Less No change More effective
effective
(n = 162, 2009 results)
11
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13. Impact of Manager Self-Service
IV.D.8. Impact of Manager Self-Service
73%
HR generalist/specialist n = 199 21%
6%
69%
HR service center/administrator n = 194 16%
15%
39%
Manager n = 199 19%
42%
 Less work
 No change
 More work
12
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14. Top HR Service Delivery Issues
II.B.4. Top HR Service Delivery Issues (Top Three Frequency)
Talent/performance system 42%
35%
Streamline processes/systems 35%
35%
More involvement in strategic business-driven issues 27%
23%
22%
Define human capital metrics and dashboards 17%
21%
Recruiting/staffing services/systems 12%
19%
Upgrade HR system 18%
Cost 18%
24%
17%
Compensation/benefit services/systems 12%
16%
Manager self-service 16%
14%
New HR system 15%
12%
Employee self-service 10%
11%
Systems integration 13%
10%  2010 n = 456
Payroll/time management services/systems 11%
 2009 n = 332
10%
Training 9%
9%
Accuracy of data 14%
8%
HR Web site/usability 8%
6%
Reports 7%
13
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15. Talent Management Delivery
III.D.1. Primary Delivery System Currently Used for Talent Management
Compensation - Base Pay n = 445 46% 21% 15% 18%
Compensation - Variable Pay/Bonus n = 429 33% 27% 15% 25%
Workforce Analytics n = 360 30% 22% 15% 33%
Recruiting/Staffing - Internal n = 440 24% 13% 49% 14%
Recruiting/Staffing - External n = 432 23% 10% 53% 14%
Compensation - Sales/Incentive n = 331 22% 33% 14% 31%
Performance Management and Goal Setting n = 443 22% 24% 26% 28%
Learning Management and Training n = 420 20% 23% 42% 15%
Onboarding n = 377 16% 19% 19% 46%
Career Development/Planning n = 375 15% 19% 20% 46%
Succession Planning n = 378 11% 18% 23% 48%
 Current HRMS  Custom/In-house  Best of breed  Manual/Paper-based
system developed tool technology
14
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16. Talent Management Delivery
III.D.3. Status Regarding Changes Being Made to Primary System Used for Talent Management
Performance Management and Goal Setting n = 428 18% 9% 9% 20% 44%
Compensation — Variable Pay/Bonus n = 419 18% 4% 6% 13% 59%
Compensation — Base Pay n = 429 17% 6% 7% 11% 59%
Workforce Analytics n = 419 17% 5% 7% 18% 53%
Succession Planning n = 422 13% 8% 8% 23% 48%
Career Development/Planning n = 420 13% 7% 7% 22% 51%
Recruiting/Staffing — Internal n = 432 12% 13% 8% 14% 53%
Learning Management and Training n = 429 11% 11% 7% 21% 50%
Compensation — Sales/Incentive n = 404 11% 4% 5% 12% 68%
Recruiting/Staffing — External n = 436 10% 14% 9% 15% 52%
 Implementing additional  Implementing additional  Implementing new  Exploring new  No changes
functionality from functionality from current vendor vendor options planned
current HRMS best-of-breed technology
15
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17. For more information on Workday, please visit
www.workday.com
Follow Leighanne: @leighlevensaler
Follow Workday: xxxx
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