Quincy Valencia's Analyst Perspectives

Since its inception, HCM software has upended how people interact with their workplace. Paper resumes have given way to online applications. Physical time clocks have largely disappeared in favor of apps or clocks housed within a point-of-sale system. Even benefits enrollment has entered the digital age, adding tools like decision-support modeling to help enrollees determine which of the myriad offerings will better fit their specific circumstances. This digital transformation does more than just improve productivity and drive compliance. It helps to create an experience for workers that can build trust and engagement. In our research, 64% of organizations indicated that delivering a superior employee experience is a top priority. We assert that by 2025, two-thirds of organizations will require artificial intelligence (AI) in all HCM and adjacent systems to curate personalized experiences for all workers to drive engagement, productivity and retention. UKG, a company founded in 2021 by the merger of two HCM technology giants, Ultimate Software and Kronos, excels in this arena. Much of UKG’s initial success is the result of bringing together two of the most respected and successful-in-their-own-right organizations in all of HCM technology. Ultimate Software came to market with one of the earliest cloud-based HR management systems in UltiPro, combining core HR, payroll and talent management into a single system of record. Kronos, a giant in the workforce management space, was the perfect complement to Ultimate’s capabilities, creating a powerful product suite. This type of merger can bring complications, trying to blend disparate underlying architecture, sunset competing products, and manage through different operating structures, each with its own fans and detractors from the legacy organizations. What UKG has done right is to maintain its focus on the people it’s designing for. “Our purpose is people,” comes straight from the UKG website and repeatedly from the mouth of CEO Chris Todd. This commitment to making people the center of everything is a true differentiator from others in the space, who boast about their technological roots and capabilities first. While sound architecture is critical to the success of any software platform, by centering the end user in everything they do, UKG empowers its product managers, developers and support resources to make decisions that will enable the best possible experience for anyone interacting with the software. In 2023 and beyond, UKG will continue to address one of the issues mentioned previously, that of sunsetting redundant or outdated products, in order to focus its development dollars and resources on those products that will carry the company into the future. This is bolstered by UKG’s commitment to drastically increase its innovation budget, combined with the company’s focus on simplification of its product suite. When complexity is removed from a system, the impact of the concentration of human and financial capital is accelerated. With the goal, per CEO Chris Todd, “to be the leading company in the world focused on people,” it stands to reason that the outcome of the increased investments and simplification of the business will result in improved user experience (UX), as the products and structure support the mission. UKG’s people-first mission was on full display with the 2021 acquisition of Great Place to Work Institute (GPTW). The data collected by GPTW provides valuable insights into what actually matters to people at work, across all demographics. By placing these insights at the forefront of the product design process, UKG is able to capitalize on a dataset that literally no other provider in the HCM technology industry has direct access to. Success in software design and development is not just working software. That software must meet the needs and enhance the experiences of those who are using it. For HCM technology, specifically, there is no better way to know how to design personalized and meaningful experiences for workers than by analyzing the information provided directly by those very workers. With GPTW, UKG holds a significant advantage in this arena over its competitors in the space. The primary factor for UKG’s success in providing world-class UX is its decision to make people the focal point of the business and then create the technology to support that mission. From the simplification of the business to the increased investment in innovation, to smart acquisitions like GPTW, UKG has placed itself in a position to be a leader in the tight and competitive HCM platform-provider field. Organizations considering new HCM platform providers would do well to include UKG in the mix. Regards, Quincy Valencia

Quincy Valencia's Analyst Perspectives

UKG Excels in User Experience

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