Key technologies in the world market of HRM systems

Functions of the modern HRM systems

According to materials of Forrester Research, the modern integrated HRM systems contain six main functional units distributed on three technology levels unevenly. This structure can be provided as follows.

"User" level

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Блок «информационного самообслуживания» Self-service interaction layer
The interface for personnel Employee self-service	The interface for managers Manager self-service	Means of exchanging messages Employee communications	Means of the managerial analysis and generation of the reporting Management reporting and analysis

"Strategic" level

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Блок управления процессом обучения Learning management processes
Управление треннингами Training administration	Управление содержанием курсов Learning content management	Проведение треннингов Learning delivery

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Блок управления процессом найма Recruitment processes
Поиск и привлечение кандидатов Candidate sourcing	«Ведение» претендентов Applicant tracking	Адаптация вновь нанятого персонала New-hire onboarding	Управление назначениями Contingent staffing

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Блок управления эффективностью и «талантами» Performance and talent management processes
Управление эффективностью персонала Employee performance	Управление кадровым резервом Succession planning	Управление компетенциями Competency management	Управление компенсациями и премиями Compensation and rewards	Планирование и анализ Planning and analysis

"Operational" level

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Блок учета труда Workforce management processes
Учет рабочего времени и прогулов Time and attendance	Планирование и прогнозирование Forecasting and scheduling	Управление командировками, отгулами и отпусками Absence management

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Блок учета кадровых операций Transactional HRMS processes
Кадровый учет и делопроизводство Employee records and personnel actions	Управление поощрениями Benefits administration	Расчетный контур Payroll	Управление должностями/ штатное расписание Position management	Правовое обеспечение HR compliance

As noted, now "operational" and "user" levels are worked well out practically in all solutions presented at the world market. The main technology development is observed at the "strategic" level which is implemented both suppliers of complete solutions of HCM/HRM, and developers of specialized solutions. At the same time technology leaders are not always financial market leaders at all.

Technology leaders

During preparation of the report "The Forrester Wave™: Human Resource Management Systems, Q3 2006" analysts of the company selected 10 vendors operating in the world and American market of HRM systems (Automatic Data Processing (ADP), Ceridian, Employease, Infor, Kronos, Lawson, Oracle, Sage, SAP and Ultimate Software). At the same time to guarantee a maturity of the selected companies and their serious positions in the market, the following three criteria were used:

1. The vendors included in the report should have not less than 400 companies clients, and the operated products should process in total accounts, at least, of 500.000 employees.
2. Products of all companies included in the report should support the minimum set of functional units, including personnel records, management of compensations and encouragement, a settlement circuit and "information self-service".
3. Products of the companies included in the report should support requirements of the legislation of the USA to HRM systems.

Thus, the research included 11 HRM solutions (Oracle has their two). All listed above components therefore products were ranged on the level of the technologies put in them and also product development strategy and level of presence in the market were revealed and estimated at them (on a five-point system).

As for solutions for multinational companies which can ensure global functioning of a uniform HRM system, only four companies which entered the report can provide them: SAP, Oracle, Infor Global Solutions and Lawson. According to estimates of Forrester Research, technology leaders are SAP (mySAP ERP HCM) and Oracle (Oracle PeolpeSoft Enterprise, Oracle E-Business Suite) here that is not something surprising, and Infor Global Solutions and Lawson are carried to "strong players". At the same time, the cumulative "technology" point of mySAP ERP HCM made 4.28, Oracle PeolpeSoft Enterprise – 4.19, Oracle E-Business Suite – 3.90, Lawson Human Capital Management Suite – 3.29, and Infor Human Capital Management – 3.27.

Technology level of HRM solutions for multinational companies

Source: Forrester Research, 2006

A bit different situation developed at assessment of the domestic American market (with the removed requirement of support of multinational companies). Here leaders are Lawson and Ultimate Software. Nevertheless other vendors were included into group of "strong players". Estimates of technology level of their products were located as follows: ADP Enterprise HR – 4.01, Ultimate UltiPro Workforce Management – 3.99, Oracle PeopleSoft Enterprise – 3.92, Ceridian HR/Payroll Web – 3.89, mySAP ERP HCM – 3.88, Oracle E-Business Suite – 3.63, Kronos Workforce Central HR/Payroll – 3.62, Lawson Human Capital Management Suite – 3.60, Infor Human Capital Management – 3.38, Employease Network – 3.15 and Sage Abra HRMS – 3.12.

Technology level of HRM solutions for the American companies ^*

Source: Forrester Research, 2006

• The diagram considers not only the level of technologies, but also two other factors

American realities

Estimating today's American market of HRM solutions, analysts note three of its key features:

• dominance of SaaS solutions over the traditional "installed" products: the market leader, Ultimate Software changed the business model to SaaS several years ago, ADP and Ceridian build on it a considerable part of the business, and Employease initially worked in the SaaS model;
• simpler and available products are on sale more successfully: Sage Abra, a product with a high ratio "price/quality", is very popular with the American companies with number of staff to 1.000 people, also SaaS solutions are popular, and implementations at medium-sized enterprises of "heavy" ERP systems are rare because of high cost and complexity;
• lack of "weak" products: in the market, except leaders, only "strong players" are provided; the main difference between solutions consists in the level of sale of blocks of automation of hiring, accounting of work and working time, performance management of personnel and its training.

As a situation in the American IT market as on the most technology developed, in many respects defines a situation on world, it is necessary to consider the SaaS model potential for creation of HRM solutions and also prospects of "minimalist" solutions in a segment of SMB.

Sereda S.A.//TAdviser

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By the beginning of the overview

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