HRO Today July/August 2017 - 62

The NelsonHall Report
Seeking Transformation
New research outlines the top drivers of cloud-based HR
service adoption.
By Pete A. Tiliakos
As the journey toward HR transformation continues for
many organizations, cloud-based HR services remain
in high demand. These services are increasingly seen
as a viable path toward achieving business goals and
optimizing the HR delivery model.
NelsonHall's 2017 Cloud-Based HR Services Market
Analysis fi nds the industry is estimated to reach more
than $20 billion by 2021. With many organizations
still using legacy, on-premise systems-these account
for roughly half of the current HRO contracts-it's no
surprise that HR cloud implementations make up the
largest portion of the market (44 percent). The need
to move to a future-proof, SaaS-based HR platform
is pressing, and for many, it's the key to achieving
transformation.
According to NelsonHall's research, the top reasons
why organizations continue to seek out cloud-based HR
services are:
* To streamline and standardize existing HR processes to
a more manageable model, allowing HR to return focus
to strategic business initiatives.
* To improve the user experience throughout the HR
delivery model, including mobile capability to support a
global workforce.
* To ensure compliance and risk management.
* For access to analytics and robust reporting capability
for real time data-driven decision-making.
* To shift to a SaaS-based subscription cost model for
predictable HR operating costs.
The middle market (organizations with between 500 and
15,000 employees) remains the largest segment of buyers
of cloud-based HR services, with organizations in the
manufacturing, fi nancial services, retail, and professional
services sectors showing the highest adoption of cloudbased
HR services. However, demand for cloud-based
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HRO TODAY MAGAZINE
| JULY/AUGUST 2017
systems and services is gradually moving down market.
Small businesses with less than 500 employees are
seeking the same level of HR technology as their larger
peers. As a result, vendor offerings are being scaled to fi t
or specifi cally designed for small market businesses.
In terms of deal scope, core HR administration and payroll
continue to be the services most commonly purchased
in cloud-based HR deals. Demand for post-deployment
application management services (AMS) is also up. Early
and newly converted adopters of cloud systems need to
optimize and manage their investment but realize that
they do not have the expertise to adequately do so in
house. This is where AMS come in: Many cloud-based
solution providers now offer them on more than one
system or as a standalone.
The research also fi nds that some organizations remain
reluctant to make the leap to cloud-based systems
because HR teams are unsure of the real impact these
solutions will have on operations. Building a business
case and showing return on investment as quickly as
possible are key to showing value realization to hesitant
organizations. A preconfi gured, standardized tool is
one solution that reduces deployment time and makes
implementation of cloud systems easier.
Looking forward, organizations should expect more value
from cloud-based HR services including:
* An enhanced user experience that offers intuitive, easyto-use,
consumer-grade, mobile-enabled applications
that make day-to-day HR transactions simple.
* Access to on-demand HR data through descriptive and
predictive analytics that are easy to access and provide
an accurate, real-time view of the workforce.
* Development of advanced automation capabilities
throughout the delivery model to reduce operating
costs, increase effi ciency and accuracy, and improve the
user experience.
HRO Today July/August 2017

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