Trends of development and forecasts of the market of HRM systems

Different reference points

In the conditions of the Russian market of HRM systems demand in many respects defines the offer of solutions of the corresponding class. For the foreign suppliers offering the localized products, reaction to requirements of domestic enterprises is expressed in the offer only of a certain subset of functions of the created complete solutions with a possibility of its expansion. As for the Russian suppliers, they implement the principle of necessary sufficiency in the products, increasing functionality according to the existing demand for automation of separate procedures of human resource management.

In the described situation the processes happening in the world market have the prevailing impact on technology and functional development of the HRM systems of foreign development (requirements of domestic market concern only compliance to statutory requirements of the automated procedures of personnel records, payroll and assignments and also generation of the reporting). For the Russian developers the world market of HRM systems is only the general reference point and the indicator of the perspective directions of development of products and the technologies used in them. And specific steps by expansion of the functionality offered by them software products are determined by domestic market through requirements of the Russian enterprises.

Similar to the world market

At the same time, the general situation in the Russian market of HRM systems is similar to a situation in the world market. In particular, we have rather large number of the specialized solutions which are beyond opportunities of less numerous integrated products. Though the considerable share in these solutions is made by systems providing, separately, automation of personnel records and the reporting, personnel document flow, payroll, time keeping and access control in the market also automation systems of candidate screen and hiring of personnel (including HR portals), the systems of psychological testing of employees, the system of personel assessment, means of planning of training and career, management of remote education (eLearning), managements of motivation, etc. are offered So as well as in the world market, producers of the products best-of-breed behave in "specialization niches" more actively, than suppliers of integrated solutions which lag behind in the plan of satisfaction of the existing demand a little.

But not absolutely

However, unlike many players of the world market, the Russian developers firmly adhere to the principle "all from some hands" and, as a rule, leave issues of integration of the products into solutions of best-of-breed on conscience of their developers and customers. Vendors of the domestic complex HRM systems implement missing functionality by own forces. In this plan analogy to the world market is absent  — no integration and joint distribution of end-to-end systems with specialized solutions (very rare exceptions), especially, merger of best-of-breed developers by the companies offering the large HRM systems is watched.

Most likely, the aspiration to implement all functionality independently is a consequence of a certain conservatism of the Russian developers, and absence reasons of practice of merger of smaller companies larger are in rather small (in comparison with players of the world market) financial resources at their order. At the same time, practice of cooperation with developers of specialized products and (or) absorption of a part of the similar companies could accelerate market development and strengthen the solutions proposed by the Russian suppliers to domestic customers.

In this time the Russian enterprises to which the solution on control automation is required by labor resources which functionality is broader, than implemented in the domestic complex HRM systems are forced or to use services of foreign developers, or to independently implement the project of integration of the Russian HRM system with the specialized solutions "closing" its functional "gaps" or to find the best-of-breed systems conforming to requirements for functionality, developers whom provided a possibility of joint work from one of the domestic HRM systems.

Catch up and distillate

As for the general trends of development of the Russian market of HRM solutions, they consist in gain of domestic complete solutions, both in respect of scalability and performance, and in respect of expansion of opportunities for human resource management. Today the HRM systems of the leading Russian suppliers do not turn on only e-learning blocks, "information self-service" and means of the organization and (for a part of systems) supports of the HR portal. The most probable scheme of their development will include creation of the web expansions, in particular, ensuring functioning of HR portals with transition to e-learning support, and in an effect  — and to support of information self-service.

Suppliers of HRM systems with less broad functionality before developing the products in the directions stated above, will have to implement in them control functions by personnel based on competences, planning of human resources, personel assessment, planning and training management, personnel recruitment and management of a talent pool and also management of compensations.

Orientation to SMB, but without SaaS

Thus, the domestic HRM systems will "be tightened" by the given opportunities to solutions of foreign vendors and "be aligned" on functionality on the relation to each other. At the same time they will remain significantly more well on costs, than the foreign systems that will allow domestic vendors to work successfully in the segment of SMB especially sensitive to price characteristics of the offered products.

At the same time, to predict emergence and serious distribution of the HRM systems "on demand" implementing a business model "software as service" (SaaS), most likely, it is premature. Similar the solution so far only begin to extend even in the western markets where lease of the software is quite usual. As for the Russian market, first, practice of provision of services on remote use of software products is a rarity here, secondly, network infrastructure is obviously insufficient for wide circulation of similar services, and, in the third, the similar organization of data processing is estimated by domestic enterprises as very risky and fraught with loss and (or) leak of important information.

Post-crisis trends

Alexey Lapirov, FORS development center, notes the following trends of development of the Russian market of IT services:

• Movement of focus when implementing projects on the business interests of the customer. The customer focus becomes the main condition of successful work of integrators in crisis.
• Course towards integration: waiting for recession of sales on new products of the IT company address integration of the solutions which are already implemented at the customer.
• Conditional division of players in terms of demand. Some integrators are ready to offer different discounts and actions, others selected the added value more accurately and began to explain in detail to the customer what he pays for and why it would be wrong to discount.
• Increase in the importance of work with the SMB-market for integrators.

Market prospects for 2010

The volume of the Russian market of IT services in 2010 will be $4.3-4.5 billion, consider in the Asteros group. Growth of revenue of players of the market in comparison with previous year will be insignificant - within 10%. "A basic reason of it that IT budgets of many companies are still seriously limited to anti-recessionary policy", – the president of the Asteros group Mikhail Ehrenburg considers. In 2009, according to Asteros, this sector was reduced by 30-33%.

Experts of group selected four segments of IT services and told about their perspectives separately. They gave the first place to IT outsourcing. Revenue from such services as consider in Asterosa, in 2010 will grow by 10-15% in comparison with previous year. Further the direction of system integration with growth of 5-10% follows. To implementation of business applications researchers promise 5% growth, and to IT consulting – stay at the level of previous year. Complete recovery of the market of IT services in Asteros is expected in 2012.

Besides, Asteros published survey results of 104 customers. Questions concerned a cost structure on IT. Respondents said what up to 55% of IT budgets of their companies in 2010 will fall on support of the existing IT infrastructure. About another 35% will make costs for upgrade. The amount of financing of innovations will not exceed 10%. Apparently from the chart showing percent selected this or that option (it was possible to note several positions), among priorities of customers also creation of IT infrastructure and the telecom solution. Services of management consulting and implementation of ERP systems will be in the smallest demand from the offered options.

However, at assessment of market prospects of HRM solutions it is necessary to consider trends in labor market. Based on the monitoring of 184 large companies from 12 Russian regions which is carried out by consulting company “Ernst&Young” in 2010 of 15% of the Russian companies are going to continue to reduce personnel. A quarter of the companies – survey participants intend to raise number of employees up to 20%. Today the companies aim more and more at increase in efficiency and performance therefore many are ready to review completely structure of remuneration of employees taking into account special performance indicators. Among trends in labor market as note in “Ernst&Young”, – optimization of organization structures, transition to the balanced labor market and the development strategy, review corporate the politician of remuneration in terms of the systems of variable remuneration, preserving and expansion of privileges, localization of the training programs, the growing importance of effective internal communications. Effective implementation of such priorities is impossible without use of functionality of HRM systems that allows to predict demand of HR solutions at the level of 15-20%.

Conclusion

Respectively, the perenimaniye of foreign experience of human resource management together with development of domestic practice of the organization of accounting and settlement personnel transactions and preparation of the reporting will remain a top trend of the market of HRM systems. Revolutionary changes in the basic technologies used by developers, most likely, will not be, but, perhaps, processes of integration of end-to-end systems and solutions of best-of-breed will be shown. Price availability of domestic solutions will remain.

See Also

• HRM system

Links

• CNews