Gartner research HRMS:
Large-Enterprise HRMS Market Begins to Feel the Impact of SaaS
The large-enterprise HR management system market is starting to feel the impact of software as a service. Core HRMS buyers now have viable SaaS alternatives to ERP-based HRMS.
Our research finds that more than 75% of customers use SaaS for e-recruitment, illustrating rapid growth in SaaS in the talent management part of the human capital management (HCM) market. In 2010, inquiries from large enterprises considering SaaS for core HRMS have more than doubled On-premises deployments still dominate large-enterprise HRMS, but valid SaaS alternatives now exist.
For the past five years, the HCM market for large enterprises has been split:
- Core HRMSs have been stable, with large enterprises deploying core HRMSs on-premises, often as part of a larger ERP deployment. The market has remained static, with little evidence of replacement or vendor churn.
- In contrast, the growth of niche SaaS vendors has spurred a dynamic market for talent management applications.
Today, this trend is changing. Many ERP-based HRMS users are debating whether to upgrade to the latest ERP versions, such as SAP ERP 6.0, Oracle E-Business Suite (EBS) 12.1 or PeopleSoft 9.1. Often, customization means that these are not simple upgrades, but need significant system integrator involvement or additional licenses. Some organizations are reassessing their options, rather than simply upgrading or remaining on older releases. New players, such as Workday, are actively targeting these organizations.
Some alternative solutions under consideration include:
- SaaS offerings from core HRMS vendors, at a global and/or local level, include Workday, Meta4, MidlandHR, HumanWave, NuView Systems, Lawson, Ultimate Software and, eventually, Oracle Fusion
- Talent management vendors with core systems of record such as SuccessFactors, SilkRoad technology or SumTotal Systems-Softscape
- Partner-delivered, adapted hosted versions of ERP HRMSs offered with some (user experience) user experience modernization, by subscription, including NorthgateArinso (SAP), ROC (SAP), Kbace Technologies (Oracle EBS), Caliber Point (Oracle EBS), and Exaserv (SAP)
- Business process outsourcing (BPO) offerings based on ERP, such as ADP GlobalView (SAP) and Logica (PeopleSoft)
The core HRMS market will undergo significant disruption over the next five years. Through 2015, while on-premises will still be the prevalent deployment mode, leading SaaS offerings will see high, double-digit growth.
What You Need to Know
New options for large-enterprise HRMSs have emerged. Consider newer alternatives, but assess maturity, global support, functional fit and integration with care.
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