HRO Today December 2019 - 20

2020 Forecast
Cloud-Based, Multi-Process HR Services (MPHRS)
2020 HR OUTLOOK:
MPHRS contracts were the only HR service line to see a
slight decline in growth in 2019 due to the consolidation
of outsourced services and the rise of technology-led
contracts. About half of MPHRS contracts were delivered
on a cloud platform in 2019, up from about 40 percent
in 2018, leaving a signifi cant growth opportunity for
HR partners to support buyers seeking a shift to the
cloud. Currently, the top cloud-based human capital
management (HCM) platforms hosting MPHRS include
Workday with 27 percent of the market, SuccessFactors
with 25 percent, and Oracle Cloud HCM with 19 percent.
2020 HR OUTLOOK:
MPHRS
* 2020 is predicted to see low, single-digit growth
in the MPHRS market. This is due to the high
number of cloud-based HR services contracts,
including both new buyers and those converting
from legacy enterprise resource planning (ERP)
systems.
* MPHRS partners will continue to develop their
specialized capabilities through mergers and
acquisitions (M&As) and partnerships, making
buyers more willing to outsource multiple
HR services to one partner and reduce their
administrative burden.
* Although there will continue to be some
new multi-service line contracts (for example,
benefi ts and payroll), most contracts will consist
of a narrower set of services (typically HR
administration and payroll) for a shorter duration
(three to fi ve years), on a cloud-based HCM
platform.
HCM PLATFORM TECHNOLOGY
* NelsonHall estimates that in the next fi ve
to seven years, more than 90 percent of large
enterprise organizations operating on legacy HR
platforms will transition to the cloud for core HR.
* Within the next fi ve years, talent module
maturity and adoption will catch up to core
modules, driven by the growing need to enable
and support a talent-driven organization.
* In the next fi ve years, all cloud-based HCM
platforms will offer an " open platform " approach
with extensive marketplaces for adopting
integrated third-party solutions, allowing buyers
to derive a best-fi t solution for their unique
needs.
with their larger peers. NelsonHall estimates that
between 55 and 60 percent of organizations have
transitioned to the cloud for core HR processes, with
with their larger peers. NelsonHall estimates that
between 55 and 60 percent of organizations have
transitioned to the cloud for core HR processes, with
many large enterprise buyers operating with legacy on
premise platforms that will lose support in the next six
to seven years.
many large enterprise buyers operating with legacy on
premise platforms that will lose support in the next six
to seven years.
While core HR, payroll, and time management modules
remain the highest adopted, adoption for talent
modules is steadily increasing as organizations focus on
acquiring and developing top talent.
HCM Platform Technology
Companies of all sizes continue to adopt cloudbased
platform technologies to enable digital HR
transformation. North America remains the largest
adopter of cloud-based HCM platforms, with demand
steadily increasing in EMEA and APAC.
The middle market remains the highest adopter of cloudbased
HCM platforms, with smaller buyers on the rise
who seek to leverage modern HR technologies in line
[20]
HRO TODAY MAGAZINE
| DECEMBER 2019
Access to on-demand, analytic reporting that enables
HR to make informed decisions through predictive
insights into the total global workforce has become a
critical tool for HR. Artifi cial intelligence (AI), machine
learning (ML), and natural language processing
(NLP) capabilities are becoming increasingly common
in both consumer and workplace technologies and
are augmenting HCM users to deliver personalized
experiences and enhanced outcomes.
Payroll Services
Considering the maturity of the market, payroll remains
quite strong, growing at over 4 percent annually.
While middle market buyers remain the largest users
of managed payroll services, adoption is increasing in
both the small and large market segments, driven by
the demand for modern cloud platforms and globally
consolidated solutions. Payroll transformation has
HRO Today December 2019

Table of Contents for the Digital Edition of HRO Today December 2019
