Tech Sizzlers: Of People, For People, By…Companies

NEW DELHI, INDIA: Managing the employees and keeping them satisfied is a biggest challenge every organization face. HR being the key asset, it has to be meshed effectively with the core IT systems.

But in most organizations, HR automation systems functions as a standalone entity and there is disconnect between the larger IT and HR systems.

While ERP vendors offer HR as a module, but due to the cost and economies of scale only large organizations can opt for ERP driven human capital management solutions.

Moreover some of the ERP based HR are rigid. Just like every country has it unique laws like the tax structures and country specific regulations, it makes difficult for a rigid system to meet the unique HR requirements of the user companies. While ERP today comes in customized country specific formats, but certain modules can be optimized, like the HR module. Here is where the pure play HR solution providers come into play.

A dedicated HR solution brings in greater fitment with the HR as it takes into ambit just HR and not other processes like manufacturing. An ERP solution will have a great functionality for manufacturing, but will have some shortcomings on the HR service delivery part.

The key difference between an ERP and pure-play HR solution is that the former is database driven while the latter is workflow driven.

According to a Forrester Research, the HCM apps are evolving rapidly from mere transactional systems like payroll, and benefits management into more strategic talent management suites.

Forrester also says that recognition of the need to align business and individual performance goals, along with better tools to accomplish this, is the key driver for HCM deployments in many companies. For these reasons, organizations need pure play HR systems for effective management of their human capital.

The reason for HCMS becomes more vital if we look at aspects like talent crunch and the increasing attrition in the hot verticals like IT, BFSI, BPO, telecom and manufacturing. Given this employee engagement and employee retention have started figuring on CEOs wish list.  Naturally the business leaders are looking pure HR solutions to achieve this.

This awareness is heating up HCM space that is also getting over crowded. At one end of the spectrum are small time vendors’ and on the other end, it is the full time ERP vendors fighting for their share in the space.

Given this, it is the mid-tier HR product companies that take the piece of HR cake. For instance one mid-tier company is Adrenalin, which says that its product is not just robust, but highly engaging with complete functionality but also specialized in complete human capital management.

While ERP players do have their say in this space, the pure play HR solution providers are pitching in is the ‘fitment’ aspect of the solution. A dedicated HR solution, the vendors in the fray claim can significantly expand the HR functionality.

A look at the market landscape reveals that pure HCMS solutions have good traction in the SMB space and those companies running ERP can look at this as an add-on for better management for their HR.

While the exact market size is not clearly known, but a few leading players in the fray are doing big business indicate a burgeoning market for HCMS.