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Bersin finds users willing to switch vendors to unify HRIS systems

At Impact 2013, Katherine Jones presented data on HCM technology trends, and gave tips on what 'good, better and best' HR IT systems look like.

The sheer number of products and vendors in human resources technology can make it nearly impossible for HR leaders to get a handle on market trends. But that's not stopping them from entering the market for new HRIS systems, funds in hand and prepared to switch vendors to get what they want, according to Bersin by Deloitte human capital management (HCM) lead analyst Katherine Jones.

Jones led the session "The HCM Technology Rodeo: What They Sell, What We Buy" at Impact 2013, held this week in Fort Lauderdale, Fla. She gave an overview of the talent management and HR information systems landscapes and shared insights about organizations' HRIS buying patterns from Bersin research. She also identified differentiating features that can help buyers evaluate products.

User interface, integration differentiating features for HRIS systems

More than half of the respondents who participated in a recent Bersin survey said their HRIS system was more than seven years old, so it's not surprising that the No. 1 reason HR managers are seeking a new HRIS system was "better, faster technology in the market." However, the No. 2 response was to improve the user experience, a consideration that Jones said has grown in importance over the last few years.

One surprising statistic had to do with vendor loyalty, as 76% of respondents said they were not planning on sticking with their current vendor when they replace their HRIS system. "That was much higher than I had anticipated," Jones said. "That means it's an open market out there, and people are looking."

So, if buyers are boldly venturing into the market, how should they evaluate products? Not on functionality, Jones said. "The basic functionality of most of these programs is accessible all across the board." Instead, she identified four key differentiators: user interface, integration, depth and breadth of analytics, and the degree of social integration. The quality of the user interface isn't just about the look of the software, she said, but also the ease of navigation for users.

Jones cautioned that just because a product looks integrated doesn't mean that the data is synced up underneath. "It's the degree and the kind of integration. There are a lot of ways [products] can be integrated, and sometimes it's just on the surface," she said. "That's not so good because you can't really get analytics if only the top layers are integrated."

Responding to an audience question about whether mobile capabilities were a distinctive feature, Jones replied, "Mobile wasn't a differentiator; it's a universal."

Talent management demand shifting from standalone apps to integrated suites

"Talent management [systems] have gone from 'nice to have' to 'have to have,'" Jones said. One major trend she identified in the talent management (TM) market is the move from standalone applications to integrated suites. This is a key reason why organizations are interesting in replacing current TM systems -- a fair portion of which are homegrown, according to a survey.

A highly segmented TM market pie chart demonstrated just how many vendors are competing in the space, and Jones explained that it's one of the most rapidly expanding software segments overall. "This is a huge market, [so] 1% of the market could actually be a fairly sizable customer base," she said.

Mobile and social capabilities are often heavily hyped in TM, and Jones offered a reality check from survey data. Talent acquisition, learning and onboarding were the top three areas where survey respondents wanted social capabilities. Jones commented on the low response for the area of performance management. "You hear about social performance, [but] it was only 10% who thought it was an interesting area." The top three answers for mobile were recruiting, performance management and onboarding.

Talent management vendors in particular often attach social features to places that don't always make sense for users, Jones said. "[Social] has to be relevant, not stuck on every piece of software," she said. "You need one [social] platform for your company, not a little bit here and a little bit there."

User and vendor push for employee single system of record

Jones also said HR leaders are increasingly interested in a "single point of truth" for each employee. At many organizations, employees have two separate profiles -- a system of record housed within an HRIS system containing factual information like gender and marital status, and a talent management system profile that holds performance and learning data. This record split can be further complicated by having multiple HRIS systems. Citing Bersin research, Jones said 18% of companies with more than 25,000 employees have 10 or more systems, and 68% of all companies have two to five. "People have many more pieces of technology to manage than probably makes sense," she said.

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Jones said both talent management and HRIS systems vendors are taking note of the interest in a single system of record, and while HRIS providers are striving to add talent management and payroll capabilities, talent management vendors are ensuring their products offer seamless integration to HRIS systems, or are building out HRIS capabilities. But no matter how vendors choose to provide new pieces -- either by acquiring or merging with other vendors, or building them in-house, Jones quelled the fears of audience members uneasy at the thought of more market consolidation by explaining that "a vendor has no interest in losing you as a customer."

Responding to an attendee running on-premises SAP HR applications who was concerned about no longer being supported in the wake of SAP's cloud-based SuccessFactors strategy, Jones extended the same reassurance, while also encouraging organizations that are on-premises customers to plan for a hybrid Software as a Service (SaaS) future. "Ask yourself at what point is some part of this more efficient in a SaaS solution, and there are some places where SaaS will never make sense," she said. "But look at your on-premises and cloud integration strategy, because somewhere down the line, [that] will be more economically efficient."

'Good, better and best' HCM products

Overall, Jones ranked HCM product features in terms of "good, better and best." The "good" category included such features as built-in metrics, mobile capabilities and cloud delivery; the "better" category, global market and hourly labor functions, and some cross-application analytics; and the "best" category, contingent employee management, merged talent profiles, advanced analytics, career pathing and vertical concentrations.

But no matter what vendors an organization ultimately chooses, the HR technology landscape will likely continue to be a fast-paced "rodeo" for the foreseeable future, Jones said. "The pace of our technology is not going to slow down, the horse is not going to get any slower [and] the ground is not going to get any softer," she said. "There are a lot of swerves, and we don't want to fall off."

Emma Snider is the associate site editor for SearchFinancialApplications.com. Follow her on Twitter: @emmajs24.

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