Sierra-Cedar-HR Systems Survey 2019-20- Highlights

This article briefly reviews the 22^nd Sierra-Cedar HR system survey 2019-20. The objective of this article is to highlight key points from the survey and interpret the same for both buyers and sellers of HR Technology solutions.

The Story of the Buyer

We looked at the report from a buyer’s perspective and for the purpose of this short review, we are focusing only on the strategic aspects of the buying process that this report highlights and suggests. The report also has a ton of information for buyers on various operational aspects such as mode of delivery of their shared service center, cloud vs. on-premise, cost of HR systems and application-specific insights. We are not focusing on this part of the report here.

The importance of HR Systems Strategy

HCM Blueprint is a key tool this report introduces to its readers. Those of you who thought implementing HR technology is complex, should give this framework a look. You would soon realize you are missing a few aspects in your current approach and this framework will help break the elephant into manageable pieces.

The interaction of various HR applications and the importance of the HR systems to co-exist with other enterprise applications is highlighted in this model. The blueprint clearly identifies various layers and aspects of an integrated HR systems strategy. It puts the culture, strategy and data governance at the heart and then expands into 6 primary categories of enterprise HR system application. Holding these 6 categories together is the larger enterprise systems ecosystem combined with enterprise standards of data privacy, social media, platform, mobile, content, integration, workflows, and others.

The survey report has been consistently pointing to the higher business outcomes achieved via a regularly updated HR Systems strategy. So, if you asked what is included in the HR systems strategy? Then your answer is here. This is another great tool offered by the report for its readers, especially the buyers.

The above two elements constitute a great framework defined in this report for developing an enterprise HR systems strategy. Any business and HR leader looking to develop and execute a comprehensive HR systems strategy cannot afford to overlook these models presented in this report.

The Good News

Previous year surveys have clearly indicated that organizations with a regularly updated HR systems strategy are twice as likely to be viewed by all levels of management as contributing strategic value. This year’s survey indicates 70% of organizations have some form of an enterprise-level HR systems strategy. The survey argues that strategies allow organizations to align software purchases with business outcomes during the buying processes, while also providing a clear blueprint for system configuration, data integration, and change management efforts.

41% of organizations reported they plan to increase HR systems spending this year, which is a slight decrease from last year. However, a closer look at the data tells us that it’s the smaller organizations that are causing this overall drop. Medium and large organizations are continuing to invest in HR technology.

What Buyer Needs to Know

This survey report will provide most HR leaders with specific questions they need to ask themselves and drive their HR technology agenda in the organization. Some of these are:

• How do I need to re-look at the HR service delivery model and HR roles within my organization?
  • HR Data Analytics, Recruiting, and talent management are the top 3 roles being added in larger organizations. This composition changes by organization size and HR service delivery model.
  • 13% of large organizations and 54% of small organizations do not have a shared service delivery model. The centralized shared service and multiple shared service centers with central management are the top 2 models currently used by large and medium organizations.
  • Although chatbots seem to be popular only 7% of large organizations are likely to use these tools.
• What is the value of change management in my HR tech implementation efforts?
  • Organizations that have a culture of change management are 17 times more likely to be seen by all levels of the organization as contributing strategic value vs organizations that never use change management
• How are companies managing their contingent workforce?
  • 36% of the organizational workforce is contingent today but only 56% of organizations track these in their HRMS. So it appears that HR needs to co-create an HR systems approach for the contingent workforce throughout their employee life cycle.
• What are the best practices of implementation and average timeline and cost of implementation?
  • On Average HRMS implementation takes 9.19 months
  • 65% of organizations choose to rollout all applications at once
  • 50% of resources in implementation are internal while the other 50% is a mix of vendor and third-party resources. These resources perform different roles in the implementation process and their utilization within a phase of implementation will vary.
  • For an average of 8.04 applications organizations are spending USD 274 per employee per year on HR Technology.
  • Typical metrics used for measuring implementation outcomes are budget, timeline, resourcing, and adoption.

The Story of the Vendors

Here we look at key insights from the report and decipher what it means for the vendors. We have primarily focused on sales and marketing-related implications of the report findings, while we have also highlighted the need for HR systems vendors to invest in service. In this highly competitive market, it is not just important for you to do a great job at the entry but you need to keep the promises else the cloud is not as forgiving as its on-premise cousin.

Everything in the cloud

The report indicates a steady rise in cloud deployment in all major HR systems over the last 14 years. The survey data clearly indicates that data-driven and consumer-grade applications have become standard in the HR community. HR cloud adoption has increased by 3% from last year along with higher average user experience (UX) scores for cloud applications. Based on data presented in the report, it is clear that moving from an existing on-premise core HR system to a cloud solution is not easy. While many organizations indicated the intent to move to the cloud, not many executed on the same. This means that fewer leads converting into sales and longer sales cycles for HR tech vendors.

What Vendors Need to Know

• What about the cloud?
  • While more enterprise organizations are adopting and will continue to adopt cloud applications, the key question they will ask is – where is my data today, where will it be tomorrow, how will I get it out and what are my options for data storage?
• What will move to the cloud faster?
  • Talent management applications which include recruitment, onboarding, performance, and learning are more likely to move to cloud faster than HRMS, Payroll and Workforce management.
  • 40% of organizations still have one or more HR applications deployed on-premise and the survey expects a slower-than-expected decrease in on-premise deployments.
• What HR is looking for?
  • HR is moving from process-focused to outcome-focused. Your message to your prospect, however, needs to address how HR technology is helping efficiency/cost, impacts employee experience and is agile.
  • Close to 60% of organizations have deployed some level of mobile HR applications and hence these are table stakes now. The conversation is likely to change to include other mobile devices other than phones like tablets and wearables. Along with these more applications beyond time and attendance would be requested to be deployed on mobile. The survey predicts a higher deployment of onboarding, performance management and learning via mobile.

What can I build next?

The survey this year offers a very clear and specific direction for what HR tech vendors can build next by application type; we present a few samples here. You can find more details in the report.

• Payroll
  • Pay equity and transparency tools
  • On-demand paycheck options
  • Machine learning
  • Blockchain payroll
• Core HRMS
  • Voice initiation/chatbots
  • Contingent/remote worker management
  • Robotic process automation (RPA)
  • HR Standards Benchmarking
• Workforce Management (WFM)
  • Activity and Project tracking
  • Work/Productivity burn-out monitors
  • 24/7 employee communications
  • Contingent workforce management
• Talent Management
  • Contingent workforce management
  • Activity and Performance tracking
  • Feedback
  • Engagement

Conclusion

22 years of survey history gives Sierra-cedar long term insights into the trends with staying power in today’s HR technology marketplace.

HR technologies are facing a rapidly changing world that requires the management of an overwhelming amount of information and constant skill development. The need for HR technology today is not a matter of debate anymore. This survey helps HR and business leaders choose, use, maintain, connect and harness the power of various systems to achieve desired outcomes.

Download your own copy of the report here:  https://www.sierra-cedar.com/hr-systems-survey/