Integrated Workforce Management (WFM) Platforms: Fact or Fiction? - Part 1

In her recent blog post 12 Things Retailers Did Last Year To Improve Supply Chain... IDC’s analyst Leslie Hand said that many retailers, as one of the top three priorities of the last year, implemented new “pay and bonus for performance” structures based on current labor standards/time management or simply applied new labor standards to their distribution centers (DCs) and warehouse work. Some also implemented comprehensive workforce management (WFM) products to better schedule and assign work in their distribution facilities and stores.

Sought-after partners most often included Kronos and RedPrairie Corporation, which is not surprising to me given these two vendors’ recent impressive moves in the WFM field. 

For its part, the Kronos Workforce Central suite features various systems that collect time and attendance (T&A) data and automatically post it to payroll systems. In addition, Kronos’ data collection systems keep track of factory production and labor hours as well as warehouses, hospitals, and retail stores’ labor hours.

Kronos also develops labor scheduling, absence management, hiring/recruiting, human resources (HR) administration, labor analysis, and payroll processing applications. The vendor sells its products through its own direct sales force and through an alliance with the renowned payroll service company ADP. Kronos focuses on the healthcare, manufacturing, public sector, services, distribution, retail, and hospitality markets. Kronos' YouTube video entitled “How Will You Manage” is worth seeing.

As for RedPrairie’s corporate information, see my recent blog post RedPrairie Makes a Smart Turn into SaaS WMS. In the mid-1990s, RedPrairie (at the time called McHugh Software) acquired Gagnon and Associates’ Labor Management Solution (LMS) for warehouses and distribution centers. 2006 was the year of RedPrairie’s acquisition spree, starting with BlueCube for retail workforce scheduling and store operations and StorePerform for workforce task management for retail stores.

This store- and shelf-level connection with the supply chain has been getting a lot of traction in the retail supply chain and is starting to get noticed by retail suppliers as well. In fact, the best quote from my attendance of the recent JDA Focus 2010 user conference came from JDA’s CEO Hamish Brewer, "Today end-to-end supply chain decisions are disconnected and far removed from the retail shelf."

Why Comprehensive WFM Offerings?

The $64,000 question is why a comprehensive WFM platform might be beneficial. The answer would start with the ability to control labor costs due to reduced overpayments, eliminated manual processes, reduced over- and under-scheduling, and ensured visibility and control, among other major reasons.

Furthermore, compliance risks can be minimized via centralized policy administration, local policy enforcement, and detailed audit tracking. Last but not least, WFM can improve workforce productivity by automating productivity-killing manual processes, matching labor to sales volume, and understanding the impact people have on the business (via savvy labor analytics).

Simply said, having the right staff at the right time and place typically results in increased sales (in retail stores) and productivity (everywhere in the supply chain), lower costs, and improved compliance. In addition, by putting real-time information in the hands of decision makers, managers can be virtually put back on the floor, which can reduce the cost of communications by up to 40 percent and enable two-way communication between the labor-intensive facility and the central corporate office (HQ).

More than ever, the current difficult economy highlights the need for organizations to more effectively manage their workforce assets (or human capital). Despite record unemployment figures around the world, labor costs remain the largest controllable expense for most organizations. For several years, organizations seeking to manage their workforce effectively have increasingly been turning to automated and integrated WFM solutions.

IDC’s white paper entitled Maximizing Workforce Management with Best-of-Breed Solutions, sponsored by Kronos, claims that unified WFM systems can enable organizations to achieve visibility into workforce management trends, practices, and policies that in turn can reduce costs related to staffing, compliance, and payroll. Last but not least, comprehensive WFM solutions can help enable organizations to improve employee satisfaction and align employee performance with organizational objectives.

Major Elements of WFM Suites

Data Collection tools, as their name suggests, automatically collect accurate labor data. Many timekeeping errors occur during data entry at the unsophisticated collection device itself. Real-time connectivity with data collection enables automatic validation of all time entries, which can prevent problems before they occur, such as early/late punches, ineligible workers clocking in erroneously, and so on and so forth.

Avoiding these problems before they arise can dramatically reduce the need to make corrections later and help ensure more accurate payroll processing. Industry best practices call for the devices to be fully integrated into the workforce management process to enable employee self-service.

To that end, Kronos 4500 badge terminals are high speed, network-centric data collection devices that provide access to key self-service functionality, and their centralized configuration makes them easy to deploy and maintain. The Kronos 4500 terminals are designed with “swipe and go” badges (magnetic swipe cards) functionality and keypads for fast interaction.

The Kronos 4500 Touch ID terminal, similar to the abovementioned Kronos 4500 badge terminal, is a high speed, network-centric data collection device. But it incorporates finger scan verification technology, rather than badges, which is deemed ideal for eliminating so-called “buddy punching.”

Moreover, Kronos Workforce TeleTime leverages the convenience and accessibility of the telephone to collect time and labor information from employees on the move. This product provides a solution for these employees and managers, whether they telecommute, work in multiple facilities, travel frequently, or otherwise don’t have access to a data collection terminal or the Internet. Employees can use this interactive touchtone application for a range of time and labor transactions, all completed over the telephone.

The Kronos Workforce Central suite is designed to work with existing enterprise systems (static data repositories) by integrating with HR, payroll, financial, and production planning applications. Data collection can be carried out through the abovementioned terminals, HyperText Markup Language (HTML)- and Java-based timestamps, or through a timesheet.

For its part, RedPrairie supports and resells five different timeclock systems as well a biometric devices. The time clocks choice can be seen at this page.

Time and Attendance (T&A) applications enable the elimination of tedious timecard/timesheet reviews, automatically apply policies regarding organizational rules, and facilitate correct payments by supporting electronic timecard edits and automatic recalculations. T&A systems are aimed at reducing errors and minimizing overpayment.

The use of traditional disparate point solutions results in WFM processes that are often delayed and prone to errors. This disconnect can result in costly validation efforts, unmanaged employee absences, inaccurate or late payroll, and a general lack of management oversight, visibility, and control.

To that end, Kronos Workforce Timekeeper automates and streamlines the management, collection, and distribution of employee hours, eliminating the need for capturing data from manual timesheets. The system has a flexible pay rules engine that applies complex work and pay rules accurately and consistently throughout an organization.

The Web-based time clock software has the ability to block early, late, or unscheduled punches. Employees can view punch and schedule information, whereas administrators have the ability to reconcile punch exceptions (missing in/out, etc.)

For its part, RedPrairie’s T&A solution, one that is primarily aimed at retailers, is able to categorize worked and non-worked hours according to governmental and statutory/local regulations, company policies, and labor unions agreements. The system also supports punch rules to control when employees punch in or out as well as alerts and thresholds (including punch-to-schedule).

Pay rules and pay rates are also supported for various employee types, e.g., full-time, part-time (20, 30, or more hours per week) as well as daily and weekly premium calculations. The product also calculates accruals or the hours available for non-worked time, which can be either imported or calculated and managed within the application. RedPrairie also has a supply chain-based WFM that has had similar T&A capabilities for many years and that serves a wide spectrum of verticals.

Activities solutions link the company’s personnel to the actual work that they do, and thus help organizations understand how labor is being used. These solutions provide visibility into how the workforce performs against productivity goals and benchmarks, and provide activity-level data in real time for better decision-making.

The Kronos Workforce Activities module enables real-time tracking of activity data for individual employees and teams (crews). It reconciles direct and indirect labor to time paid and enables an organization to compare productivity against standards. The offering also eliminates the process of manually entering job-costing data into enterprise resource planning (ERP) systems. Going beyond weekly or daily reporting, Workforce Activities provides up-to-the-minute information so that managers can adjust to the shifting demands of a production environment.

RedPrairie’s WFM modules offer similar capabilities, but in much more depth with preferred methods and engineered labor standards, as well as extensive performance reporting coupled with quality and safety monitoring.

The RedPrairie Enterprise WFM suite is a work in process (no pun intended). T&A is the first product integrated across Retail and supply chain. The company still has WFM for Retail and WFM for Supply Chain as separate products, each of which have several modules under them. The intent over time is to merge the strengths from both product sets into one Enterprise WFM suite.

Absence Management applications automate and enforce absence-related policies, automate eligibility requirements for paid and unpaid leave, and alert managers to exceptions and potential violations. Simply said, and as their name suggests, absence applications manage the people who aren’t there.

To that end, Kronos Workforce Absence Manager focuses on controlling employee absence and the impacts it has on the organization. The product addresses the most fundamental aspects of an absence management program - to track and enforce all types of absences, and administer and comply with federal, state, and organizational policies.
RedPrairie’s Enterprise WFM suite features absence and leave accruals, and extensive labor reporting and analytics capabilities.

As a recap, Kronos is a much bigger player in WFM, especially in the retail space and basic T&A in other areas. Kronos has a presence in more than 60 countries, and more than 30 million people use a Kronos solution every day. But Kronos has no sizeable market share in the supply chain performance management side, where RedPrairie and Manhattan Associates have dominated.

Part 2 of this blog series will continue with remaining components of WFM, particularly those related to talent management. In the meantime, please send us your comments, opinions, etc. We would certainly be interested in your experiences with this software category (if you are an existing user) or in your general interest to evaluate these solutions as prospective customers.
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