Price Value Trade Off: James Thomas
Using HR Technology for people automation and optimization is the last scene of automation the world over – once organizations have invested in technology for other process automation. Markets like India are not very different. With HR Technology the logical movement post automation is optimization. We are more into the space of automation than optimization at this point. Automation would include areas like performance management, training management, payroll, recruitment and half a dozen specific functions. You first automate the process and then you move into optimizing it. The Indian market is in the peak of automation. CEOs are increasingly concerned about integrating various functional areas.
Kronos is the best in the Workforce Management space that provides deep and unparalleled functionality when it comes to managing the workforce in real-time. When I started 5 years back, things were different. Today organizations are starting to budget for Workforce Management which was not happening earlier. That is a directional trend on how the space is maturing in terms of functional requirements. The second trend is the contemporary trend of convergence between a broader platform view with cloud and Human Capital Management. Instead of companies looking at only one of the various functions, they are looking at a broad spectrum. HCM as an area may adopt things much faster because employee engagement and aspects related to social convergence are happening today and employees are more active on social platforms. The third trend is the changing dynamics of employee engagement. Today it is no longer the physical interactions that happen in the office space. The business to social convergence in employee engagement and how the multiple generations in workforce need to be engaged is critical for HR to understand. In order to guide this engagement automation needs to shift to intuitive and guided interactions.
It is still a fragmented market world over. There are cloud players who are trying to get functionally rich. There are niche players moving to cloud. I could be a small SaaS HR company trying to expand my portfolio and go on cloud or I could be a recruitment company or workforce management company moving to cloud. Both these are happening and there is a consolidation. Kronos has done 60 acquisitions in the last few years. Even in the fragmented space, there are players are consolidating in specific areas. In the next 2-3 years the space will get consolidated.
The first consideration that companies have is the price value trade off. Indian market is very price sensitive and they have started to see the price value trade off. Second consideration is looking for more functionally rich vendors. Third would be what is the long term road map and dependability of a particular department. There is a heightened sense of de-risking looking at the long term goals of the platform that the company is providing. How robust is the platform to sustain in time. Though the market is maturing, having burned their fingers in the past in the HR area, there is a lot of cautiousness.
Companies are asking a lot more questions on what return on investment they get. They are asking for outcome based pricing but definitely business case justifications on the price value trade off and intangible terms are there.