30 November 2016

What is a good HR Cloud Provider?

In today’s blog article we deal with the topic what defines a good HR Cloud Provider. In the last ten years one can witness a strong increase of Cloud or as it is also called Software as a Service (SaaS) solutions. The common and so called inhouse solutions like the classical SAP HCM or Oracle HCM are facing the pressure and the tendency is that they will be replaced in the near future. That’s why these Software giants made the decision to purchase Cloud providers. In 2012 SAP bought SuccessFactors and Oracle did the same with Taleo. That’s how SAP SuccesFactors and Oracle Taleo got established. SAP paid approx. 3.4 billion and Oracle 1.9 billion US Dollar. However more interesting is the acquisition of SAP in the year 2014. They bought with Concur a Cloud software provider for travel and expense management for approx. 8.3 billion US Dollar, so almost triple what they paid for SuccessFactors. What one can observe is that both big software companies purchased massively on the HR Cloud market to be prepared for the future.

During the last years a lot was happening on the German speaking market too. The Cloud Providers are also significantly growing. Within Switzerland the development is a little bit slower than in Germany. But the biggest and most famous provider next to SAP comes from Switzerland, only a few years ago the company was called umantis, now it belongs for a couple of years to the Haufe Group from Freiburg, South Germany. It is the only software from the German speaking area next to SAP that got listed by the Gartner Report and you can find them among the group of the Visionaries. This is indeed a pretty good achievement as most of the providers have Anglo-Saxon heritage. Mainly providers come from the US, a few from UK and Canada, the rest of the world is obviously lacking behind.

For a couple of years the provider Workday brings a new fresh breeze to this market. In this years published Gartner’s Magic Quadrant for Cloud HCM Suites for Midmarket and Large Enterprises Workday is narrowly ahead of SAP and Oracle. Reasons for that can be that the software architecture is very modern, the performance is fast and many HR processes are optimized for mobile devices. The famous founder David Duttfield and his team thought well about what they want to achieve with this software. But being seen in the leading role after less than 10 years of operation is a strong indicator that they did a lot of things right. The next years will show whether Workday will increase this new leadership role or if the competition will regain the first place in this ranking.

But now back to the question in this blog article. What is a good HR Cloud Provider? Is it software that is able to have a proven solution for all HR processes? Or is it software that doesn’t offer solutions for all HR processes but the service is outstanding? Particularly the topic of data security is more and more important. In Switzerland and Germany the sensitive personnel data has to be held in the legally valid territory and most of the providers from overseas are facing here a problem. That makes it more difficult to choose a provider with overall good solutions for all HR processes, as it is mentioned in the Gartner Reports. It seems like that Europe in terms of technological development is always lacking behind the USA a couple of years. For most of the state organizations and regionally operating companies the Anglo-Saxon Cloud Providers won’t be interesting unless they build up data centers in Europe or within the intended country. That’s where the local providers come back into the game, even if the software is still not providing a full life cycle of all HR processes to compete with the Anglo-Saxon competition. So it is up to everyone’s own interpretation what you consider as a good HR Cloud Provider. The future will show whether we will have other European providers that can compete with the Anglo-Saxon Cloud Providers in terms of offering fully integrated HR Could solutions for all HR processes. Or will we see more local data centers solutions to offer modern HR Cloud solutions to organisations and companies that operate locally. The future will show in which direction we are heading to and we will keep you informed on our blog.