The HR Software Impact from Cloud, Social, Mobile & Big Data Disruptive Technologies
In this podcast discussion with analyst Martin Schneider, Research Manager of Enterprise Software for 451 Research, we examine how next-generation and disruptive technologies such as the cloud, social, mobile, and analytics are providing new opportunities for HR and business leaders, and impacting HCM, HR and payroll software applications and HR services delivery.
Click the Start button to begin podcast 31 minutes, 50 seconds (31:50)
Key take away points in the HCM technology discussion with Thought Leader Martin Schneider:
The Human Capital Management (HCM) software industry continues to accelerate Software as a Service (SaaS), cloud and remotely delivered HCM, HR and payroll software services. HR software publishers are now delivering much simpler cloud HR applications that may be procured and deployed without IT dependence. Cloud HCM is no longer a new and novel concept and now more mature business software applications have stabilized while implementation and operation risks have declined.
Small and midsize businesses (SMBs) are leading the charge for cloud HR and payroll software adoption, in large part because these companies are not sitting on large sunk cost legacy systems. SaaS HR also delivers benefits important to SMBs such as HR software that is faster to deploy, simpler to operate, scalable on demand, less costly (particularly as IT resources are not required) and permits predictable investments.
A number of large enterprise software publishers have procured their way into cloud HCM applications. For example, SAP acquired SuccessFactors, Oracle acquired Taleo and Salesforce.com acquired Rypple. These cloud HCM technology acquisitions suggest that the HR software technology market is maturing and will become more competitive.
There are many HR services ripe for web delivery, such as employee self-service, manager self-service and learning & development. For many organizations, new cloud HR apps are acting as the stepping stones toward broader HCM cloud adoption. Many Human Resources departments are adopting SaaS HR solutions for discrete components, and then expanding their use of cloud HR over time.
Payroll processing applications are following a slightly different path in terms of transitioning to the cloud. While the advantages of SaaS and cloud payroll delivery are largely the same as they are for HR – and include benefits such as accelerated deployments, faster time to value, improved application ease of use, more frequent software innovation releases, more business agility, a returned focus to core competencies, on demand scalability, lower acquisition costs and oftentimes lower total cost of ownership (TCO) – even with those benefits, many companies find themselves with a significant sunk investment in on-premise legacy payroll applications and no overwhelming need to make a change. Cloud payroll software adoption is in large part being influenced by company size, with SMB's adopting cloud payroll at an increased pace, while larger enterprise companies attempt to maximize their prior legacy systems investments before making a change to a new technology. To aid these larger companies which see the benefits of cloud HCM but are in no hurry to displace their existing on-premise payroll software investments, many HCM software publishers are offering cloud software add-ons and extensions which effectively creates a hybrid delivery model and permits companies to incrementally step into cloud payroll and HCM solutions.
HR and business leaders are increasingly harnessing aspects of social media for social HR and social business initiatives. For example, managers are reviewing social networks in order to see which of their staff are responsible for growing customer advocates or earning favorable customer reviews, comments and even Likes, thereby gaining a new and highly relevant performance review channel that can identify a company's unsung heros. Customer response included in these social channels can also be effectively included into more dynamic and meaningful performance reviews, and offer an additional medium to recognize and reward talent and performance.
In a similar way whereby social consumers and customers accelerated the need for businesses to adopt social CRM tools and technologies, we're now seeing employees acting as the drivers for companies to adopt social HR technologies (rather than the companies themselves being the source of innovation). The rise of millennials and the next generation of workers clearly understand the communication, collaboration and productivity capabilities of social media in their personal lives, and expect similar capabilities in their professional lives. Forward thinking companies are using social HR for recruitment in order to reach candidates where they live, but more so, include social HR capabilities in the company culture and operations (Recruitment, Workforce Management, Employee and Manager Self-Service, Learning & Development, etc.) for staff satisfaction and business benefits.
Mobile HR apps are becoming the gateway for the knowledge worker of the future. With any time, any where, any device access and flexibility, mobile apps are increasingly achieving both higher employee satisfaction and productivity.
Mobile HCM solutions are going through a transition from first generation to second generation apps, where these newer mobile applications are purpose built to take advantage of specific mobile devices and operating systems. The improvements enable them to deliver better utility and a better user experience. But now the next generation of mobile HR apps is underway with HR software publishers creating and delivering mobile apps using HTML5. This newer presentation layer technology seeks to better achieve cross-device and cross-browser compatibility, as well as enable the software publishers to create a single mobile HR app that runs on all or most devices (i.e. write once, run everywhere). Whether HTML5 HR mobile apps will achieve the ubiquity desired without lessening utility and user experience remains unclear.
Big data and more accessible analytical solutions are also seeing increased adoption by business and HR leaders. From an information analysis perspective, traditional business intelligence tools have been historically used for internal and structured data, in a largely arbitrary manner, to deliver rigid, structured and often generic performance metrics. While HCM, HR and payroll systems generate significant data, and largely structured data, there are massive volumes of unstructured data online, such as in social channels. Big data tools are now offered through the cloud, more quickly deployed, more affordable and easier to use, thereby permitting HR and other managers to leverage more data to make more informed HR and business decisions. In fact, many HR managers testify that the unstructured data doesn't just increase the size of the data pool, but also delivers more insightful data that leads to a more qualitative analysis.
While we’ve talked about these emerging trends and disruptive technologies one at a time, in reality, there’s a synergistic effect available when understanding that all four major technology shifts—of cloud, social, mobile and big data—are converging in near parallel paths. Viewing these disruptive technologies holistically offers a more significant business opportunity for forward looking HR and business leaders to leverage these technologies in a broad and integrated fashion, rather than viewing or adopting them individually.