Enterprise HR systems in 2020 - steady as she goes

As we look ahead to 2020, companies are rushing to prepare for the year to come - always a hard ask in the fast-moving world of tech. To assist with this, Computing Delta has a series of predictions about how the business IT landscape will evolve over the next 12 months.

Here we are looking at enterprise HR systems, where in 2020 we will see a continuation of the trends of the last two or three years: namely cloud, consolidation and AI.

Cloud

While a number of cloud-native SaaS HR solutions have emerged in the past few years, perhaps the most significant action has been within the traditional enterprise giants like Oracle, SAP and Microsoft.

Oracle no longer actively markets its on-premises HCM software PeopleSoft, although it will continue to support it throughout the next decade. Instead, it will direct customers to the HCM cloud, and will likely concentrate new features in the areas of self-service, automation and AI on the cloud products.

SAP ERP HCM customers face a similar choice: stick with what they know and trust or move to a more modern cloud-based option in the shape of SuccessFactors.

As a relative newcomer to enterprise HR, Microsoft is fortunate not to have legacy on-premises systems to contend with. Given its size and reach, we expect Dynamics Talent to increase its user base significantly.

Workday, the first and largest of the cloud-only enterprise HR vendors, is expanding into other back-office functions such as procurement. Customers will hope its service levels keep up with its ambitions for expansion.

Consolidation

The recent trend away from monolithic on-premises HR systems has allowed a best-of-breed approach to flourish, leading to the emergence of a large number of small players producing standalone modules. This may be reversing now as the VCs that fund the startups look to cash out by selling on to the big firms keen to buy in cutting-edge capabilities.

2018 and 2019 were quieter on the consolidation front than the period that saw SAP buy SuccessFactors and Sage acquire Fairsail. An exception was the acquisition, by cloud-focused US HR services firm Aspire, of NGA HR, the venerable British company formerly known as Northgate. Meanwhile, Workday continued to expand outwards from its roots with the purchase of procurement platform Scout RFP.

We expect to see the big players make more acquisitions of cloud-based specialist vendors in the coming year, in areas such as talent management, AI, learning management and recruitment, as these become key differentiators.

Artificial intelligence (AI) and machine learning

Most vendors now boast some sort of AI-enhanced widget, but in truth most are fairly rudimentary. However, there will be many more over the coming year or two, particularly in areas such as recruitment, onboarding, and wellbeing & e-learning. Zoho is among many vendors to have acquired AI startups recently, while Workday is working with IBM Watson for automatically captioning videos and sifting through CVs.

There is currently high interest in HR, thanks to a more general shift to the as-a-service model, but HR systems are complex and tied up with multiple business processes, so changes in the market do not happen overnight.

The above predictions, and our recent blog on the market leaders, come via Delta's enterprise HR report. We conducted this report with more than 200 senior IT leaders in the UK and Europe. These IT leaders have purchased, implemented and have deep insight into the workings of these tools. To see the complete findings, please click here to get an online demo of the service.