Of people, for people

Managing the emplo-yees and keeping them satisfied is the biggest challenge
every organization faces. HR being the key asset, it has to be meshed
effectively with the core IT systems. But, in most organizations, the HR
automation system functions as a stand-alone entity and there is disconnect
between the larger IT and HR systems. While ERP vendors offer HR as a module,
due to the cost and economies of scale, only large organizations can opt for ERP
driven human capital management solutions.

Moreover, some of the ERP based HR solutions are rigid. Just like every
country has its unique laws like tax structures and country specific
regulations, and it makes it difficult for a rigid system to meet the unique HR
requirements of the user companies. While ERP today comes in customized country
specific formats, certain modules can be optimized, like the HR module. Here is
where the pure play HR solution providers come into play.

A dedicated HR solution brings in greater fitment with the HR as it takes
into ambit just HR and not other processes like manufacturing. An ERP solution
will have a great functionality for manufacturing, but will have some
shortcomings on the HR service delivery part. The key difference between an ERP
and pure-play HR solution is that the former is database driven while the latter
is work-flow driven.

According to Forrester Research, the HCM applications are evolving rapidly
from mere transactional systems like payroll, and benefits management into more
strategic talent management suites. Forrester also says that recognition of the
need to align business and individual performance goals, along with better tools
to accomplish this, is the key driver for HCM deployments in many companies. For
these reasons, organizations need pure play HR systems for effective management
of their human capital.

Key Players

HCMS becomes more vital if we look at it in the context of issues like talent
crunch and increasing attrition in verticals like IT, BFSI, BPO, telecom, and
manufacturing. Given this, employee engagement and employee retention have
started figuring big time on the CEO's wish-list. Naturally, business leaders
are looking at pure HR solutions to achieve this. This awareness is heating up
the HCM space which is also getting over crowded. Given this, it is the mid-tier
HR product companies that take a piece of the HR cake. For instance, one
mid-tier company is Adrenalin, which says that its product is not just robust,
but highly engaging, with complete functionality and also specialized in
complete human capital management. While ERP players do have their say in this
space, the pure play HR solution providers are pitching in the 'fitment' aspect
of the solution.

A look at the market landscape reveals that pure HCMS solutions have a good
hold in the SMB space and companies running on ERP can look at this as an add-on
for better management for their HR. While, the exact market size is not clearly
known, a few leading players in the fray are doing big business, which indicates
a burgeoning market for HCMS.

Shrikanth G

shrikanthg@cybermedia.co.in