HR Vision Podcast #19 – A walk through Microsoft HR products ft. Bert Stegeman

Ivo:
Hey everyone, and welcome to the HR Vision podcast. I'm your host, Ivo, and every week I'm going to have a conversation that matters about HR. This week I have with me again. Bert Stegeman!

Hey Bert, how are you?

Bert:
Hey Ivo, I'm good, very good. Thank you very much for asking.

Ivo:
No problem, if you know as well enough you probably know that Bert is co-owner of FourVision, he was already the podcast. I think it was the second edition of it, and he's here today to talk about the evolution of the Microsoft HR product, as he worked with them extensively. And why are they special? What kind of exciting developments we can expect?

So let's let's get to it. Bert, Are you ready?

Bert:
I'm ready.

Ivo:
Always ready! Yeah, I just want to start, to get your general thoughts on HR tech. Of course with a special focus on Dynamics 365. I just want to have an understanding from your side. You're working with customers every day. You're seeing the challenges they have.

So the question I have for you is what do you think is the impact that this type of tech can have on people's growth and business success?

Bert:
What we see is that when someone has decided to go through the Dynamics 365 platform and HR is part of the platform, there are so many advantages and if you look at first of all Microsoft itself is focusing more and more on the employee itself, the way how they can find tools to improve their work. For example, VIVA is a nice example. It's a nice a solution where you can get in as an employee and can see all kind of learning situations where you can get in. You go to different LMS systems you can have access to.

From our side, our mission is to improve the business life of HR professionals, employees and managers. Looking at the HR system itself, it should help you as a professional or an employee or manager, to make your life easier, to automate your work to support your processes, but also to create alignment of your internal departments. Or if you're an international organization to make alignment of your international departments to make sure everybody works in the same recognizable way that if you are simply move from one location to another, they all work in the same way. And that's what we try to achieve together with Microsoft, of course.

Ivo:
OK, just digging a bit on that. Do you think it's important, you mentioned HR professionals and managers, and any employees I guess as well. But do you think it's helpful or easy to integrate, or easy to understand for maybe IT people as well.

Bert:
Yeah, the easy part is always the technical part, we speak the same language, so you see that Microsoft and it manages... it's a match made in heaven, I always say. But we rather would also focus on the business side. From a technical point of view, what you see is that that Microsoft 365 or Office 365 tools and business applications are growing more and more together. What you see is that Teams, we're currently using Teams for example, is the platform that we can use for all kinds of other solutions. So you can use teams already for making a leave request. You can see your balance easily, or you can go via Teams to the solution of one of our partners LMS365. You can use teams for Performance Management, our app.

The underlying technology is actually connection. One single point of truth, but using the tools for your day to day work and not like you first have to go into a system and from there find the right place and from there making a leave request for example. And therefore we are following the idea of Microsoft that the day-to-day tools should also support your processes and your business applications.

Ivo:
Yeah, so I believe what you're saying and I've been seeing it myself as well, is that Microsoft is more and more invested into getting the tools in the place where you are already using them, or where you need them, like Teams like the things are the applications that you use on your day-to-day job. So those applications should be and are more and more integrated in the places where you work. In this example Teams. Right?

Bert:
Yes.

Ivo:
You've been working with Microsoft products for a long time. You've been selling them for a long time, so I'm really interested in getting your take on the evolution of these products. What you've seen from the beginning. Was it really rudimentary? How evolved is it now? So I'm really interested in your view on this constant evolution.

Bert:
Yes, it started with an application on itself, a business location itself, and even within the business application you had a lot of silos. So you can see that back on the development side. There was not much collaboration. Now I talk about 15 years ago. What you see per new version, more and more functionality is shared through all the different functional areas within the product side, so that's the first step for working together. Secondly, the moment when Microsoft decided to go to the cloud, and I have to make the first time I heard the word 'cloud' and that was in the time of Steve Ballmer. You would hardly forget that. He was there, he was not even yelling. But he was more every three words were 'cloud' and we looked up to each other: "Cloud?". And again, that's about 10-15 years ago. We thought: "Well, that will not happen or it will not work. Or how is it possible that a vendor can have such an influence on the technology?".

So nowadays if you step out of the plane, you open your radio, you have an ad: "Do you have your data into the cloud?". It's like something very common nowadays.

It's thanks to Apple, thanks to Google. You know everything is in the cloud so Microsoft was one of the first and they focused partly also under on the business side. And that's an extra hurdle. So in the beginning it was difficult to convince everyone that you can use a public cloud. We worked with the police force, even they had their data in the public cloud. They had that much trust in Microsoft.

Now think that compared to, if you look at the world of where we are dealing with the SAP's, Oracles, the Workdays and Microsoft: Microsoft the only one who can provide the complete vertical integration. And they manage.

I really like the fact that Microsoft is also responsible for production environments. So in the beginning it was like you said a CD, you get to a partner, the partner goes to the customer, then make the software working and Microsoft was more on the backside. If there is an issue, you can mail them or give them a call. And then let's see how it works nowadays: Suppose someone finds a fix, it's 24/7, and how it's solved, and how easy that works and the procedures to work that. So that gives a very good confidence for every end-user that if there is a '10183' that's what I call a bug. How it's fixed by by Microsoft. And they are managing really, truly managing the production environment shows us the commitment from their side. There's another commercial for Microsoft, but it shows the way how they manage the data centers they manage the middleware. They manage the application, the front-end, the business application and the office applications. And how these are merging together.

That's a trend. We're glad that we that we are on Microsoft support, they are never pretending that they can support the 110% for every vertical of a certain business. So therefore they work together with partners. That's the reason why we have the ecosystem. That's also the reason why we're there. We're not focused on a vertical but a horizontal system, and make sure that we are delivering the last miles, and that together is something we bring to the market for the IT, but also for the HR, but also on the employee and manager's side.

OK, so from your answer I'm taking that it was a gradual growth, or effort on the HR part. So in the beginning I think it was a functional thing, and you just have an application. You install it and that's it.

Now, because you have support 24/7 and because the developments are constant and coming up every every month or something like that, apparently companies are focusing, and Microsoft understood that that, companies are focusing more on HR. And those processes are really important to the business as well as the Finance and Operations and Supply Chain, CRM and those kind of things. Is that correct, this assessment?

Ivo:
Pretty well. For HR, HR is always special, and everybody knows that and also from a technical point of view, it was kind of special. So what happened is that when the overall business application moved to the cloud, only HR was picked out. Or as they told us, "We carved it out" and I called it "copy paste it", and renamed the product from HCM to Dynamics 365 for Talent. And it was a positioned as this, although part of the Dynamics 365 platform, as a special product on its own. Related to other parts, but still as an HR solution on its own.

That was not a best idea and I think they fixed it now. Now the product is as they called it. It's coming back inside the integrated ERP solution because HR has a central role as the source for all the other parts. And now you need to make you needed to maintain data on two places or at least you need to get better alignment to make sure that it's all connected very well.

So, Microsoft announced that the 'copied' HR system will be the main system and anything that was added on a separate site will also go back to the HR module, inside Dynamics 365 for Finance/Operations. So that HR module will be then the source for all the other areas. The single point of truth as I call it. And because of that. Please go ahead.

Ivo:
No, I was just saying don't spoil the question for me, because I'm gonna go there right after. I just want to take a little piece of it just to talk about the evolution, when did this community and the ecosystem come up? That's my first question, when did it start? Of course we build our business through that partner ecosystem, but how important do you think it is, not only for companies, but for the customer, because that's the most important part. Because I think it shows a lot of strength and humility at the same time from Microsoft, such a giant to allow partners to come in and improve their products. What is your view on that?

Bert:
Yeah, since day one Microsoft is embracing the partner model. I think they are pretty unique compared to other vendors, because they know that the partners can deliver much more knowledge about the product, and building up the expertise for certain verticals. Or in our case, the horizontal HR part. They never pretend they can do the same, the only thing they can do is creating the right circumstances that the product has a certain level. And that partners can finalize it, or building up the knowledge to implement it properly. They speak the so called language of the customer, or the department, to make sure that the software is implemented pretty well, and it can do what it should do, namely supporting the customer in their day-to-day work.

Almost since day one, Microsoft did a number of acquisitions on the business application side, but all these vendors were supporting the partner model, so it was always in the same line in spirit of how Microsoft is looking to the world. And they always work with partners. I'm on the day-to-day. I worked together with Microsoft for the HR part to show and share the capabilities to the end-customers. And they do that for purpose, because we speak the language and we know, where the painpoints are and what are the solutions for these painpoints.

Ivo:
Of course, so there was a commitment from almost the beginning of the partner community, and that's good to hear.

You already mentioned it, but let's go a bit a bit on that subject. Part of this evolution, Microsoft a few years ago created a separate module called a Dynamics 365 Human Resources. "For Talent" first I believe, and then for Human Resources. And then they because they developed it so much and there's so much functionality in there, they want to move it back. And they announced this merge a couple months or some months ago. They announced this merge, where they're bringing that module back into Finance and Operations. Just to be part of their Finance & Operations product.

So we already talked about this, but it doesn't harm to mention it again, what does that mean? And how will customers benefit from it?

Bert:
In 2017, Microsoft started with what we call Dynamics 365 for Talent. It's a long name. We call it Talent and later on they changed the name to Dynamics 365 HR, Human Resources. We call at HR to make it easier.

I think the the intention was focusing on. "Do you need an HR system? We have a separate HR system and if you got something else we can still can use our HR system." I think that didn't work pretty well. The power of the platform is much more available or existing then a separate HR solution. That's one part.

Secondly from a technology point of view, the developers within Microsoft were doing twice; the same work for HR and F&O, so they were wondering why they were doing that. But sometimes you make a decision and then you are more or less stuck. So then it takes guts to say, alright, we need to change that, although it will be painful... and not by spinning it and say "Well it's good for you that we have to go back first and then set the functionality back." because it has some impact in certain situations, but at the end it will absolutely have many more benefits for the customers. They need to do things once.

If you look at the financial dimensions, how easy now you can use them and maintain them. Or the old finance and HR still need to talk to each other and how to use, for example, the financial mentions. But if you set up your workflows, if you if your Power BI report. They are much more integrated. Think about the authorization. Think about the underlying report who's doing who did what made any change. It's now very more consistent, so it will really help everyone.

But for the existing customers of HR, there we have to make a plan on how to move back to the HR module inside FnO.

Ivo:
OK and do you think those customers will have a hard time to adjust? Did you hear anything from Microsoft that they, you know, they will help with that transition with securing the data and all those kind of things?

Bert:
Yeah, we have the situation of 'what if you start nowadays with the HR module'? We advise to use the HR module already within Finance and Operations. That's an easy and seamless choice. It will work very easy and what Microsoft will will do is during, and it starts around this December, and I think general availability is a March. Certain functionality that will move already to the HR module inside F&O or FinOps as we call it. So that' an easy choice. From there we can move forward. And it's an ongoing process. If you already use the HR module, then you need to find a window in time that will be after summer this year. Sorry, next year 2022. And that means that the solution will move to the HR module inside Finance & Operations.

And then you have two options: you never used finance operations, that's an easy move. But if you already use Finance/Operations and if you already used some parts of that HR module inside F&O, then we need to sit together and finding out how we can create an easy transfer, because we have positions on one hand positions on the other hand. Are they similar or not? And if they're not similar then we have to sit together? And how do we get that data in an easy way in the new way environment.

Ivo:
Just one more thing on that just to just to clarify, because this move makes sense. They are not doing it because they just woke up one morning and decided that yeah we're gonna move back to FnO, it's because there are some processes that actually are part of HR but also Finance right? So I would like just to go over that a little bit more, because even if you think you only need HR, HR always has some stuff related to finance, right?

Like payroll for example. I'm saying from the top of my head you can. You can clearly clarify that better than I do, but I think it's important for people to understand that you're going back to a system that is broader, sure. But if you don't use everything, at least you will use some of the processes that will help you combine HR with finance, is that correct?

Bert:
Yes, and almost

Ivo:
You can say no, it's fine! I'm here to learn.

Bert:
That's OK. If you do not use anything from finance/operations, and then we have we have an underlying tool to maintain the system. It's a tool where you can record your activities and it automatically, it creates a Word document, for example. That tool is also available in the other HR, but it is well maintained for the complete F&O solution versus a smaller one only for HR. So if you get rid of that too, but you can use the only one, the one which is the best equipped, then we can. Then you already have a technical benefit out of it. I'm not saying something functional.

But the fact that it's you have already that kind of you have more tools available from a technical point of view again, and that is already a benefit. But other parts within a F&O side, you already mentioned the connection with finance/operations. We also have the budget functionality. So you can use budgets in the data is coming from an HR system and you can feed the budgets for for the finance module. So setting up for example, your budget and for the whole organization including the cost of labor. In some organizations that 80-90% in our organization 30-40% depends on the type of industry working for. But that's not our example where it all comes together.

Ivo:
That's the insight I was looking for. Thank you. That's why you're an expert on it and I'm just asking the questions here. No, I think just to send the sum it up even if you only use HR, at least you have the power of a tool that you can that you can combine and you will use some functionality, because you will see that will be valuable to you. I think we even discussed this in the previous episode of the podcast. Even if you don't know everything on finance and operations, you will use some of it because it's a pretty powerful tool, right?

Bert:
Absolutely. You also got for example 'purchase to pay'. If you set up workflow, suppose. You are allowed to buy till 25,000 euros. You were setting up and hierarchy of. How does it work internally? Who's allowed to buy something till 25.000, till a million, and that information is all coming from HR. So your hierarchy, but also your conditions for workflows. The basics of the data is coming from HR.

Ivo:
Alright, that's pretty clear. Just a couple of things here before we finish, and I'll let you go. Besides this merge, besides this news from from Microsoft, is there anything in the future that you envision will be very important for for HR processes? For these HR systems? Is there anything trending that you see? It's going to be, crucial and important for people using these systems. Is there anything?

Bert:
Yeah in two ways. I want to emphasize two nice features, one within the Microsoft side and one within our side.

From the Microsoft site I know that pretty well because there is something, some IP what was owned by FourVision, but the power of that IP is that it's all focusing on time. Collecting the time: I'm working from-till for example. But also determine what is overtime. So how you can set up profile so you can determine 'OK that person worked at that moment in the time during the day' and has an entitlement for certain overtime and overtime is that will be paid out? Or will it be time for time and when it will be paid out, it will have an impact on the payroll for example. And also if you are in the field and you're making time for certain work order, what kind of allowances are you entitled to? If you need to travel or you're out for a number of days, or you have certain number of night shifts and two or three, or four in a row. These entitlements differ per organization, based most of the time on trade union rules and official rules in a country, or a certain a line of businesses or healthcare. I live in the Netherlands and you're not allowed to have more than four night shifts in a row. That's a rule, and the hospitals organized together with trade unions. So all this kind of functionality will be available. I expect by the end of 2022, within the HR module.

And here it comes. It is also a direct connection with Leave and Absence. So if you got your timesheets, you automatically see your leave and absence inside your timesheet. If you are sick, you cannot change or something on your timesheet, but if you are already asked for a vacation which is approved, you can override it because you know you needed to work for a couple of hours for a certain project or for certain customer. So there's also a very tight integration between these different elements. It's a really powerful tool and there's a high need for that. We will start on a short term to get the functionality available.

On the other hand, is what we see on the performance side. There are actually four steps: So you got your performance management, I set my goals, I got my reviews, I got my periodic reviews or 1-on-1 reviews. An easy way to set up the goals, approve them, or make sure that your goals are allocated to the different persons. From there you can set up your merit increase. If you are based in several countries. You see always people struggling with excel sheets, different currencies, different locations with the number of salary raises, you want to calibrate them.

That's now available and its relation to the succession planning. We already support the 9-box but also a 16-box which is pretty new in the world of HR. Because everybody's talking about the 9-box. But then you get someone you put most of the time in the middle. But with the 16-box there's a bar, so someone is underperforming, so that's much, much easier and you need to force a manager to make decisions about their own staff.

What we are working on later on is what we call workforce planning. So the outcome of your succession planning, so what could be your potential new job? Are you ready for a new job? Are you now occupying and a key position, for example, that information will move to workforce planning. And that's on our road map and where you have a few and two sides from an HR and financial part, but from an HR perspective. How does the organization looks like for next year? If I look at which contracts are not continued if people are moving, people are retiring. What's the impact on my department? Which skills do I not have anymore? So how quickly can I start hiring new staff and not getting surprised by "Oh, now we have a problem because the person is already gone.".

Ivo:
And we miss skills, yeah.

Bert:
Exactly. It's just like the chips industry. So be quickly upfront and on top of it and then you are always having your smooth operation in the availability of your staff.

From a financial point of view: Do I have my financial space to hire new staff for example. And as a manager you want to know that.

Ivo:
Alright, exciting things coming out.

Bert:
Absolutely. I can't wait.

Ivo:
Alright, I cannot wait too.

One last thing, just a small challenge. Imagine that you are in a plateau. You have people in front of you that actually, they don't know yet if they want to change towards HR tech, they still like those spreadsheets very much. They think they can manage all the data there so. They listen to these podcasts or they they read information about HR tech, but they are not convinced yet. So you have the plateau. What would you say to those people?

Bert:
In general, I'm not making remark of someone that is working with Excel. I see that so often large organizations worldwide, it has all to do with history. You do something, it's not hurting, you're moving forwards yet plus more time. But I know exactly how it works. So why change? The change will be there. Someone is moving to another job, another position, and there's more need for information. And that's most of the time the trigger to look to your current situation. And the more triggers, but also the the need depends on the type of organization or international or working locally. But we see in general there's more need for new staff; if you want to have new staff getting in, you need to give them a modern tools. To get them in, but also to maintain; to keep them inside your organization.

It's not about the tools itself, but it helps. It's the perception of a new employee. If they how they see the organization, is it modernizes it open for a modern organization? Do you want to work for an organization which do everything via Excel? Or is an organization could say here? Here's our app and this is our on boarding procedure and this is our welcome mail. I'm glad you're here. Oh, I see you have not responded quickly, let me help you any other question so you feel yourself welcome. The moment you sign your contract. Hopefully via docusign or something like that.

So it's all in an automatic process and it's you know you're getting older and but the newbies. They all have the same age. They're all early 20s mid 20s and they expect more and more from you as an organization. And I had a feeling myself. Like come on, how is it that important? But it is. And as we see, suddenly we had a COVID and suddenly there aren't truck drivers. I don't know why this is 2021 and we talk about our early November and not truck drivers in the UK. How is that possible for example?

We see the train hardly riding in the Netherlands because some guy had a day off. So certainly there is a lack in people, in staff, and everybody is feeling it. And everyone is asking: Where are they? So the people you already have any organization, you need to nurture them. But if you want to be a good employer for any new one will make sure that that you have good tools. Not only the newbies but also for your existing staff. And, on the other hand, it will make your life easier. Some of these processes are necessary. You need to fill in your timesheets, someone has the idea, but it gives you much more extra information of, when you're filling your timesheet. We can see where do you spend your time and do we see trends for example? And does it mean that there's much more work pressure for you? So can we change that? So in a very early stage you can get much more information out of the systems, then what you see on first sight. Or only what you can see from your department point of view. And I think that's the importance for moving to a new, well in our case HR system, there's only one element I would emphasize.

We perform the best in a Microsoft environment. So if you make that decision for moving to adopt Microsoft technology. Then it's so easy to also use the HR module of Microsoft itself and a few of our web apps to make your life much easier. So that's the no brainer.

Ivo:
Alright, there you go. It automates your processes, gives you data and information to make better decisions. That's all about it.

Bert:
Absolutely, I cannot say it better.

Ivo:
Alright Bert. Thank you so much for taking the time. I really appreciate the conversation. I hope you enjoyed it too. And for everybody listening out there. Have a great week and we'll see you soon. Thanks Bert.

Bert:
Thank you very much. Talk to you later. Bye bye.