2016年3月24日 星期四

Top HCM Applications Vendors In The Cloud and Market Forecast 2015-2019

Market outlook is bullish, but mixed results confound vendors, customers

 
The market for Human Capital Management(HCM) applications in the Cloud, engineered by some of the world’s best minds in Cloud computing, grew faster in 2014 than our estimate as customers big and small embraced their software as the emblem for HR innovation.
Last year the HCM applications market in the Cloud jumped 21% to $6.1 billion in Cloud subscription revenues, a full four percentage points above our earlier estimate of $5.8 billion. Among the top 10 HCM applications vendors, eight shot past 21% last year. Of the remaining 71 Cloud HCM applications vendors listed in this year’s Cloud Top 500 market report, 38 scored above-average growth rates in 2014 with at least two Zenefits for HR benefits administration and Castlight Health for management of employee healthcare benefits experiencing triple-digit revenue increases.
SAP as No. 1 in Cloud HCM Market. Subscribe Now and read profiles of the Top HCM Applications Vendors In The Cloud and Market Forecast 2015-2019
SAP as No. 1 in Cloud HCM Market. Subscribe Now and read profiles of the Top HCM Applications Vendors In The Cloud and Market Forecast 2015-2019
Like many HCM Applications Vendors In The Cloud, Zenefits and Castlight Health have done exceedingly well raising capital with the former securing a total of $580 million to date and the latter bagging $178 million in its IPO in 2014.
Over the past year, major vendors such as LinkedIn, SAP and Skillsoft all strengthened their offerings through acquisitions of Lynda.com for elearning, Fieldglass for contingent labor management and SumTotal for talent management, respectively. Workday, the poster child for Cloud HR innovation, boosted more than 100 enhancements including the incorporation of the latest machine learning and professional services automation technologies into its latest release Workday 24 for customers to create a more engaging workforce.
In the future, the Cloud HCM applications looks promising because of a number of factors, despite a  general wariness of how new technologies are increasingly being used by managers and Line of Business executives to implement HR strategies or sift through metrics that may not be conducive to the health of the organization, or the individuals involved(more on that in a minute).

HCM Market Drivers

The upshot is that cross-industry alliances such as the one between Ultimate Software and NetSuite to joint-market each other’s offerings will help drive new revenue opportunities. Since March 2015, Ultimate has been offering HCM products to larger NetSuite customers with complex HR system requirements. In the second quarter of 2015, Ultimate Software reported it was able to close six deals with NetSuite in the three-month period with the possibility of closing many of the 100+ deals in the pipeline.
On the other hand, Lumesse and Salesforce.com are working together to help build new Cloud HCM apps by taking advantage of the increasingly popular Salesforce1 platform. Additionally, SAP has signed OEM agreements with Benefitfocus and Workforce Software to resell their benefits administration and workforce management applications into SAP SuccessFactors’ installed base.
The verticalization of Cloud HCM applications, exemplified by the successes of API in healthcare, HotSchedules in retail and hospitality and NeoGov in government, will become increasingly commonplace as companies in different verticals are drawn to vendors that can meet their domain-specific requirements for workforce management and overall personnel administration automation as they start to upgrade or replace their existing legacy systems in hopes of keeping up with the latest advances in analytics, Cloud and mobility support.

Rise of Contingent Workforce

The third reason that Cloud HCM applications vendors can expect to exploit is the rising tide of contingent workers, a movement that has become more evident than ever with the advent of sharing economy riding on the popularity of Uber as well as similar outfits that soak up excess capacity of drivers, programmers and consultants, then retooling and redirecting them to meet new consumption demand.
SAP’s 2014 purchase of Fieldglass, coupled with the continuing growth of Upwork(a result of the 2013 merger of Odesk and eLance), Beeline(now a part of big staffing firm Adecco), IQ Navigator and PeopleFluent, illustrates that a flexible workforce is capable of transforming the global economy in ways that have never been made possible.
Over the past year, Fieldglass, now a part of SAP Business Networks, has added 2.7 million users on top of the two million contractors who have registered with the site for creating Statements of Work, turning in timesheets and billing some 400 million hours worked for their job assignments.
At Upwork, its 9.3 million registered freelancers from over 100 countries earned more than $900 million in 2014 by performing a variety of part-time or full-time projects from programming in WordPress to writing press releases on behalf of 3.7 million clients.
Hundreds of millions of working hours and the corresponding dollars in any given year would not have been easily aggregated and distributed around the world were it not for the powers of these contingent labor management systems.

SAP as No. 1 in Cloud HCM

SAP became the No. 1 Cloud HCM applications for the second year in a row in our survey, largely on the strengths of its talent management applications as well as explosive growth of its Employee Central Core HR product in the Cloud. In addition, the acquisition of Fieldglass gave it the new impetus to establish a strong presence in the contingent labor management space.
SAP Employee Central for Core HR doubled the number of customers in 2014 to about 600 with many of them going live and taking their global system of human resource and payroll records to the Cloud. By July 2015, the number of Employee Central had exceeded 730.
The explosive growth of SAP’s Cloud HCM revenues has not been without its challenges. During its recent SuccessConnect conference, executives such as Mike Ettling, who heads the vendor’s Cloud and on-premise HR operations, were unequivocal about their resolve in addressing customer complaints ranging from outdated documentation from its partners to lapses in tech support responses. The launch of a certified SuccessFactors administrator program will help ensure the quality and consistency of support customers can expect.
In addition, SuccessFactors is going to be dialing up its innovation quotient by announcing an array of Intelligent Services for enhanced manager and employee self-service, while revamping the concept of performance management to better meet the evolving needs of today’s teamwork environment, which places a premium on continuous job and performance review and feedback.
You can read the entire profile of SAP as the No. 1 Cloud HCM applications vendor here.
The following table highlights major developments that the top 10 Cloud HCM applications vendors are undertaking in order to sustain their growth, along with their 2013-2014 Cloud HCM subscription revenues and their customer count. Subscribe Now and read the profiles of the Top 84 HCM Applications Vendors In The Cloud in our database.
Top 10 Cloud HCM Applications Vendors With 2013-2014 Revenues, Cloud HCM Shares, No. of Cloud HCM Customers and Major Developments
RankVendor2014 Cloud HCM Apps Revenues, $M2013 Cloud HCM Apps Revenues, $M2014 Cloud HCM Apps Market Share, %No. of Cloud HCM CustomersMajor Developments
1SAP66153511%4350SAP has benefited from rapid expansion of its Cloud-based Employee Central Core HR apps as well as a slew of talent management offerings that complement its ERP, Payroll and other back-end systems.
2Workday5333379%1000After a steep ramp to reach 1,000 clients, Workday has set its sight on new HCM products like erecruiting and predictive analytics.
3Ultimate Software4193347%2800In 2015, Ultimate partnered with NetSuite to cross-sell each other’s products. Early indications suggested that Ultimate is making inroads into many of NetSuite customers.
4Oracle3842786%7000The latest version of Oracle HCM Cloud, as part of the July 2015 launch of Oracle Applications Cloud Release 10, hones in on the user experience designed to boost employee engagement.
5LinkedIn3742586%30000In 2015 LinkedIn acquired Lynda.com for $1.5 billion as it expanded into online learning picking up a large video library of courseware and skills content.
6IBM2862655%9000IBM unveiled Open HR initiative, which enables all third-party HCM applications vendors to run open APIs and toolkits to become interoperable with the IBM Kenexa platform.
7ADP2391994%50000Since 2011 ADP has invested more than a billion dollars in acquisitions as well as internal development efforts to bulk up its HCM offerings. Next step is to go global by selling best-in-class Cloud HCM, payroll offerings to its multinational customers.
8Cornerstone OnDemand2101484%2300Major expansion in global sales with customers in EMEA and Asia representing nearly 30% of its installed base.
9Skillsoft1861693%6000After buying SumTotal for its talent management apps in 2014, Skillsoft expanded further to pick up Vodeclic SAS for its library of more than 25,000 video tutorials in 2015.
10Benefitfocus125982%714Benefitfocus gains nearly 100 new employer customer additions each quarter and benefits from Obamacare as large firms aim to get a better handle and cost control over the benefits administration process, which previously has been done by outsourcers.
Subtotal3417264356%
Other2634236544%
Total60515008100%
Source: Apps Run The World, September 2015

Outlook for Cloud and Non-Cloud HCM Applications Market

The Cloud-based HCM applications market is expected to grow from $6.1 billion in 2014 to $10 billion by 2019 at a compound annual growth rate of 10%, while the conventional on-premise implementations of HCM applications are projected to show considerable contraction through the forecast period, as shown in the following table.
Worldwide HCM Applications Market 2015-2019 Forecast By Revenue Type, $M
Revenue Type201420192015-2019 CAGR, %
License1369452-20%
Maintenance345035640.70%
Cloud Subscription6051992610.40%
Total10870139425.10%
Source: Apps Run The World, September 2015
While on-premise license revenues are projected to fall precipitously to as low as $452 million through the forecast period, a number of recent developments could help soften the blow to the resiliency of these legacy systems – thereby extending the rate of depreciation of the underlying maintenance revenues. Some companies may choose to reevaluate the near-term benefits of Cloud HCM applications, or for that matter the merits of embarking on a new HR technology strategy. In fact, some HR and LOB executives may opt to do nothing in order to preserve the sanctity of their company culture.
It’s worth noting that the past 12 months were also a time for self-assessment in Cloud HCM, reminding HR innovators that their robust results might not be a good reflection of how their software is being received or used by the general public.

Mixed Results Confound Vendors, Customers

In March 2014, Globoforce, which specializes in employee reward and recognition apps, withdrew its IPO citing adverse market conditions. Then in February 2015, Saba, which sells Core HR and talent management apps, was acquired by Vector Capital for $9 a share. Few months before that, its shares were traded at $14. Castlight Health, whose shares soared 149% to nearly $40 in their first day of trading in March 2014, has seen its stock plummet to a recent low of under $5 after failing to meet investor expectations.
The about-face reaction coincided with recent announcements from a growing list of companies including Accenture and Deloitte dropping their annual performance reviews and the associated HR processes including the stack ranking system for rating employees on a curve. Keep in mind that some of these companies such as General Electric have been among the most vocal proponents of leveraging advanced HCM applications to rate and evaluate their employees. In many cases, they have invested tens of millions of dollars implementing the software and hiring expensive consultants to develop such highly-automated systems. Now it seemed these applications were not producing the desirable outcome they had hoped.
Then in August 2015, an article appeared in the New York Times putting the culture and HR practices of online giant Amazon under the microscope, calling it a bruising workplace for workers who claimed their personal and family needs were brushed aside for the sake of a metrics-based system including the use of apps like Anytime Feedback Tool, which allows employees to send praise or criticism about colleagues to management. However, the system is “a river of intrigue and scheming’’ with some at Amazon manipulating it to make them look good, according to the article.
A footnote to the raging debate following the publication of the article was the pay to quit program from Amazon affiliate Zappos. In its 2013 annual report, Amazon said it would run the program. When Zappos finally implemented it in 2015, 14% of its staff accepted the severance offer in May.
The dichotomy of companies wanting to ditch a rating system and those like Amazon relying on different tools in order to weed out poor performers raises questions about to what extent should these HCM applications be used to drive process improvement, boost employee morale and ultimately reduce attrition.
Based on our continuous research on adoptions of Cloud applications among the more than 100,000 organizations in our database, the best practices remain those that run these products for single-purpose projects in order to automate and streamline processes like hiring and onboarding, while leaving much of the big-picture objectives like formulating a global talent management strategy in the hands of a steering committee.
At a time when there are no shortages of applications to manage a wide range of business processes from costing to invoicing, the art of managing people is as elusive as ever. The next breakthrough may come if HCM innovators are capable of quantifying and comparing trust – the single most important covenant that governs human relationship – and perhaps devising ways to automate and replicate it in the workplace.

2016年3月21日 星期一

HR Technology For 2016: Ten Disruptions On The Horizon HR技術10大顛覆性的創新

First, there is a massive replacement of licensed, traditional HRMS systems taking place.
企業將大量更新人力資源管理系統

Second, the talent management market is being redefined.
新型態的人才管理系統將改變市場

Third, the market for feedback, culture, and engagement apps is here.
員工關係管理將有突破性的應用發展

Fourth, we have a maturing market for employee well-being, wellness, and productivity systems.
員工福利與照顧邁向正向發展

Fifth, the era of People Analytics is here.
新世代的人才分析工具與做法已經來臨!

Apps as the Platform of the Future
APPS的已成為主流應用與APP平台化是未來趨勢!

全文: Bersin by Deloitte