Here are the 3 megatrends in HR Tech that promise to bloom this year.
HR Tech has finally arrived in India and 2018 was proof. The second half of the year – typically not a decision-making time saw a lot more activity happening around HR Tech than usual. The industry witnessed some isolated activities from the beginning of the year morph into definite trends with a promise to continue into 2019. Here are the 3 megatrends in HR Tech that promise to bloom this year:”
Traditional ERPs will face stronger headwind:
Controversial statement – yes. Incorrect statement – No. Over the past one year, companies – small (sub 1000), mid (1000 – 5000), large (5000 +) & dragon (15000+) – have actively engaged in HR tech evaluations. The ensuing results were the following trends:
The Small companies want quick, easy and inexpensive: Smaller companies are typically moving to the cloud for the first time and as such have limited requirements. There are rarely very complicated policies etc that need to be tackled here. They usually aren’t considering the traditional ERPs for obvious reasons. Having said that – there are efforts being made by the traditional ERPs to come into this space. Let’s see how that pans out.
The Mid-sized companies are most prone to making mistakes: Given the fact that they are experiencing the traditional ERPs for the first time – they want to experiment with a big name or still go the small business route (take something inexpensive for now). The output garnered was dismal. These companies realised that their implementation had failed within 3 – 4 months and they instead wanted to get a robust and configurable system.
The Large enterprises want to move out of the ‘customization’ game: CIOs and CHROs are both getting tired of the dependency on the implementation partner for every small change that needs to be done vis a vis their processes, system and data. This was one of the biggest revelations given the fact a lot many odd large deals in 2018 replaced the traditional ERPs and did so successfully.
The Dragons are till now selective: The Dragon accounts are still selective. Extremely large companies are still the bastion of the traditional ERPs not because of the merit of their product – more because of the economics of bundling that comes with their other software products. Every stakeholder in a dragon deal expressed their desire to get out of the relationship – and largely wherever the CXOs realised that the only thing that was increasing was the actual TCO of traditional ERPs vis a vis productivity or newer ways of collaboration – there was proactive transition. Case in point, the Future Group (70k employees), Chola Investment & Finance (21K employees), VMart (18K employees), Max life (15K employees) & others opting against traditional ERPs.
Effectively – in all the segments, there are headwinds for the traditional ERPs. It will be interesting to see how the year 2019 pans out.
Companies will want specialized software. Not Generic software:
Every line function wants in-depth products. Not shallow products that can’t be configured, don’t keep up with the times and don’t get invested into. Vertical slivers are appearing for ancillary services. Products that are focusing on one specific problem and doing it well. Having said that – they still need to be housed together. Be it employee engagement, or travel management or anything else. Companies want a solid core HR tech platform and the ancillary services to be equally deep – but housed together. ‘Complete’ and in one single place. They don’t want to deal with multiple vendors. Companies ideally want: Specialized software to solve ancillary vertical problems (travel, compensation planning etc) from Multiple specialized vendors on One frontend with One primary relationship
Data will put HR at the centre of (almost) everything
In the current era of big data and analytics, companies are turning their data into insights. HR is no exception. Data is emerging to be one of HR’s most important asset & necessity. Be it purely HR related data relating to recruitment, onboarding, career progression, training, engagement, performance, or more cross-functional data including sales productivity, exit predictions, successful onboarding vs activity trends or more. Data will no longer only be simple ‘data’. Every data will be tracked and monitored and potentially recorded. HR data will become ‘People data’. Data that talks about everything related to their work, and that can talk back to teams about what is really needed in the company.
More specific types of integrations will be required to get this cross-functional data – which is going to be a problem. A lot of effort is being done on the visualisation side of this data by Microsoft, Tableau and others and they provide the ability to slice and dice in the hands of the end user. What we still don’t have is a plug and play approach to integrating all types of data into the backend. This requires an open architecture and an ability to ingest both structured and unstructured data. Something that doesn’t exist today in most products.
The ask from the clients is coming to be able slice and dice all data, but the systems don’t support it yet. It will be interesting to see how companies will manage this piece because the ask is coming!
This article is part of PeopleStrong & PeopleMatters Learning Initiative