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IHRIM Forecasts Vendor Consolidation, Social Network Growth in 2008
BURLINGTON, Mass. January 31 - In 2008, information management vendors will
continue to consolidate, corporate social networks will grow, talent
management sales will cool down and the company to keep an eye on will be
oDesk, according to Jacqueline Kuhn, chair of the International Association
for Human Resource Information Management (IHRIM).
"This year will be one of financial challenges," said Kuhn. "Human
resources organizations will need to build the financial business case for
purchasing applications, which has not been their strong suit in the
past. If they do, we do see much opportunity for software sales,
specifically in core HR management system (HRMS) products."
Here's a look at IHRIM's forecast in detail:
- Sales of talent management systems will begin to slow
As corporations fret about a looming labor shortage, talent management
and related technical solutions have been a hot area. These Web-based
software packages track employees' progress from the time they join a
company until they leave, promising insight into timing promotions and
ongoing recruiting needs. Despite their promise, corporate human resource
(HR) managers are realizing these solutions require a steep learning
curve and much organizational effort. Unless HR can make a solid
business case for it, sales of such applications will likely slow in 2008.
- Sales of non-ERP systems will take off
With the growth of service-oriented architecture, HR managers are
finding they can get a better product at a better total cost of ownership
with a separate human resources management system (HRMS). Watch for
strong growth in products from HRSmart, Spectrum and Ultimate - these
companies' products have full suites of functionality and established track
records.
"This trend is occurring particularly in mid-to-large companies that
operate PeopleSoft HRMS applications," Kuhn said. "With SAP's bundled
pricing, it is pretty hard to justify not using SAP for HR. However,
Oracle products are not bundled and there is a real business case in moving
to a separate HRMS system when you factor in maintenance costs and
upgrades to the PeopleSoft environment, as well as the uncertainty with the
product direction that still exists."
- Workforce planning and management applications will have a break-out
year
With the need for more efficient and productive employees, workforce
planning and management applications will gain lots of attention this
year. This is new territory for HRMS, and vendors such as Vemo and
SynchSource are leading the industry with tools that link strategic planning
to operations to workflow.
"Today's HRMS products were designed to maintain employee records,"
Kuhn said. "Vemo and SynchSource have created products specifically with
workforce planning in mind. By doing this, they have completely changed
the model upon which the data is based, making it easier and more
flexible to perform workforce planning, management and budgeting."
- Vendor consolidation will continue
Expect to see vendors growing their market share and expanding their
product offerings by buying small, innovative players. ADP, in
particular, will likely acquire companies that round out its talent management
offerings.
"This can change the landscape in a few ways," said Kuhn. "It could
homogenize vendor offerings so that no one vendor has a product more
unique than another. If this occurs, decisions would be made solely on the
price and services of the software, thereby benefiting HR software
buyers. It also could open the doors to smaller players offering products on
newer technologies."
- Watch out Facebook: Corporate social networks are on the rise
Nudged by employees - from digital-savvy Generation Yers to
30-somethings - corporations are creating internal social networking sites where
workers can post profiles, trade information and share documents. This
translates into a big sales opportunity for companies that sell
networking products, and, indeed, Microsoft SharePoint is one of the
fastest-growing server products in the company's history.
This year, we expect SelectMinds, Adaptive Path and IBM
LotusConnections to come on strong. At the same time, while companies rush to adopt
this technology, expect a turf battle between human resources managers
and corporate communications staff over who owns this space.
- oDesk shakes up IT outsourcing
We picked Menlo Park, Calif.-based oDesk, a relatively unknown provider
of outsourced IT resources, as a company to watch in 2008 because it
offers experienced, high-quality IT talent for reasonable prices. oDesk
uses a technology-based approach to track and monitor workflow so that
buyers can be confident that they pay only for work in which they
contracted.
Through oDesk, providers set their own rates for fixed-price and hourly
jobs, and employers search for talent based on skills, history and
pay. Indeed, thousands of companies throughout the U.S., U.K., and Canada
look to oDesk to provide technology professionals primarily from India,
Russia, Ukraine, Philippines and, yes, the U.S.
"With the rising cost of maintaining systems and the shortage of
trained resources growing, outsourcing portions of IT support is no longer
the exception," Kuhn said. "The challenge to the HR information
management professional is to become a better business analyst."
About IHRIM
Formed in 1980 from informal gatherings when HR and IT professionals
found themselves needing mediators, IHRIM has become the world's leading
clearinghouse for the Human Resource Management Systems industry.
Today, IHRIM is a community of experts - a dynamic group of practitioners,
vendors, consultants, students, and faculty that continues to grow, not
just in numbers, but in its scope of knowledge and information. For
more information about IHRIM and its many services, visit www.ihrim.org.
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