Enterprises Are Set to Implement Cloud into HR Systems, says ISG
More than half of enterprises are expected to move away from legacy HR applications for cloud benefits by 2020, reported Information Services Group, a leading global technology research and advisory firm. The ISG report outlined the growing interest of companies in hybridized, on-premises-plus-SaaS systems.
Leading vendors like Oracle have already made it clear that the future of their business is in cloud. Oracle CEO Mark Hurd believes a "majority" of its customers will be on the cloud platform within five years. For companies that still favor on-premise solutions to cloud, the message from Oracle is loud and clear. Move to cloud on priority or risk losing out on many new features.
The early adopters of SaaS-based HR solutions are small companies who are free from the burden of maintaining legacy systems. According to the survey, 32 percent of all enterprises will rely solely on SaaS subscription-based HR technologies by 2020.
"We see the move to SaaS as likely the single biggest opportunity to transform HR service delivery, from improved talent targeting and employee engagement to increased HR administrative efficiency, compliance and data insight," said Debora Card, partner of HR Technology and Delivery Strategies at ISG. "Companies that lag in deploying and integrating SaaS-based capabilities risk falling significantly behind in their ability to attract, engage and retain the talent necessary to compete in a rapidly evolving market."
The ISG Research survey finds 46 percent of enterprises are expected to devote more than half of their HR technology spending on cloud-based systems over the next two years, up from only 28 percent in the 2015-2016 period. Those expecting to spend less than 25 percent of their budgets on cloud-based systems shrank from 47 percent over the last two years to only 30 percent in the next two years.
"The strategic shift to cloud-based HR systems requires strategic planning and an enterprise-wide willingness and ability to execute," said Card. "Organizations need to develop and staff three- to five-year transition strategies as soon as possible. And they need to keep in mind that migration to SaaS/cloud is not a one-and-done activity; rather, it is a series of ongoing transformations. Enterprises need to plan for continuous change in providers, solutions and how those solutions are used in house. Alignment with enterprise business requirements will demand ongoing, dedicated resources."