Reposted from ASUG NEWS
Human resources—and how members are planning their technology strategy accordingly—was a no-brainer topic to include when we set forth our ASUG 2015 research agenda.
Why? While estimates do vary, HR—or HCM (human capital management)— is one of the hottest segments in enterprise software these days, as customers look to augment or replace aging on-premises systems with cloud-based options, as well as invest in specialized modules for analytics, learning, workforce planning and more.
To this end, we’re pleased to announce the results of ASUG’s new and exclusive member survey on HR technology and strategy.
What We Found
Many customers have active and ambitious plans to reshape their HR software landscapes, with the cloud playing a key role. For sure, on-premise HR systems are alive and well—but big changes are on the horizon. Our respondents also say that they want to get much more value out of their systems by adopting new features and functionality.
“As we’re recovering from the recession, the motivation for most companies is to invest where a clear financial return exists,” says Sherryanne Meyer, HR Community Advocate at ASUG, in the survey report. “If you take a look at companies that are on a high-growth pattern, HR processes and technology are much more important to the business itself. Every company will ultimately need to invest in HR to become more effective in their engagement with their most expensive and most valuable asset: humans.”
The Current Environment
Sixty-seven percent of respondents said they’re running core SAP HR on-premises, while another 21 percent have implemented SAP’s cloud-based SuccessFactors Employee Central.
Among specialty modules, recruitment came in on top, at 33 percent, followed by followed by performance management/compensation at 30 percent, onboarding and training with 24 percent and workforce analytics at 15 percent.
Where Customers Are Investing
In short, the cloud wins this one. Forty-eight percent of respondents plan to invest in Employee Central within the next two years, while only 25 percent intend to expand their on-premises HR footprint during that time.
And here’s an interesting finding, in light of all the competitive noise you hear in the market. Forty-five percent of respondents said their company has no plans to invest in third-party products such as Workday for HR, and another 27 percent said they weren’t sure. Only 27 percent said they are.
Still, there are some caveats to consider, Meyer notes.
“I don’t think this means that Workday or Oracle don’t remain as threats” to SAP,” she says in the survey report. “Today, I think we’re hearing from more IT professionals than HR professionals. And as we’re recovering from the recession, the motivation for most companies is to invest where a clear financial return exists. If you take a look at companies that are on a high-growth pattern, HR processes and technology are much more important to the business itself.”
HR Going Hybrid
We also asked respondents to describe their current deployment model for HR, with 51 percent choosing “on-premise or nearly all on-premise.” Another 35 percent said they are running core HR on-premises with some specialized functionality in the cloud
Our next question: What will your HR deployment look like in two years? Only 27 percent said they’d remain purely or mostly purely on-premise, while 45 percent expected to be using core HR on-premise with specialty cloud modules, and 28 percent predicted a move to cloud or nearly all cloud.
“We were not surprised by ASUG Research’s findings,” says David Ludlow, SAP group vice president, line of business solutions, in the survey report. “In fact, we have identified similar trends. Many companies are finding the path forward to invest in new HR solutions to support their people strategies. The journey is personal and needs to be charted and navigated with care. We are confident the outcomes will justify the investment.”
Our survey targeted ASUG members through paper and online surveys between May 3 and June 26, 2015.
We obtained a total sample size of 373. Eighty-one percent of respondents identified themselves as ASUG members, followed by 16 percent as SAP partners. Answers from the 2.5 percent of respondents identifying themselves as SAP employees were discarded and not used in the survey.
The full report is available to ASUG members through this link on ASUG.com.