IHRIM Forecasts Vendor Consolidation

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<p><strong>Burlington, Mass.</strong> </p><p>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).<br /><br />&ldquo;This year will be one of financial challenges,&rdquo; said Kuhn. &ldquo;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.&rdquo;<br /><br />Here&rsquo;s a look at IHRIM&rsquo;s forecast in detail:<br /><br /><strong>1. Sales of talent management systems will begin to slow.</strong><br />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&rsquo; 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 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.<br /><strong><br />2. Sales of non-ERP systems will take off.</strong><br />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 &mdash; these companies&rsquo; products have full suites of functionality and established track records.<br /><br />&ldquo;This trend is occurring particularly in midsize to large companies that operate PeopleSoft HRMS applications,&rdquo; Kuhn said. &ldquo;With SAP&rsquo;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.&rdquo; <br /><br /><strong>3. Workforce planning and management applications will have a breakout year.</strong><br />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.<br /><br />&ldquo;Today&rsquo;s HRMS products were designed to maintain employee records,&rdquo; Kuhn said. &ldquo;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.&rdquo;<br /><br /><strong>4. Vendor consolidation will continue.</strong><br />Expect to see vendors growing their market share and expanding their product offerings by buying small, innovative players. ADP, in particular, likely will acquire companies that round out its talent management offerings.<br /><br />&ldquo;This can change the landscape in a few ways,&rdquo; said Kuhn. &ldquo;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.&rdquo; <br /><br /><strong>5. Watch out Facebook: Corporate social networks are on the rise.</strong><br />Nudged by employees &mdash; from digital-savvy Generation Yers to 30-somethings &mdash; 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&rsquo;s history.<br /><br />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.<br /><br /><strong>6. oDesk shakes up IT outsourcing.</strong><br />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 they contracted. <br /><br />Through oDesk, providers set their 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.<br /><br />&ldquo;With the rising cost of maintaining systems and the shortage of trained resources growing, outsourcing portions of IT support is no longer the exception,&rdquo; Kuhn said. &ldquo;The challenge to the HR information management professional is to become a better business analyst.&rdquo;<br /></p>

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