If a plethora of new business to business research is to be believed, human capital management (HCM) is set to be the latest genre of business apps to do battle for supremacy in the cloud. Analyst group IDC valued the global market for HCM applications at around $7.5 billion in 2011. This is still less than half the size of its CRM cousin, which indicates huge potential for growth. IDC predicts that the market is likely to experience a compound annual growth rate of 8.1% until 2016, helped largely by the growing adoption of so called ‘on demand’ cloud-based systems. Further research by HR software company SilkRoad also highlighted that the cloud’s role in HCM isn’t just a fad, but then they would say that. An active M&A market that has seen some of the biggest technology names (SAP, IBM, Oracle) buy up smaller cloud based HCM companies (SuccessFactors, Taleo) does indicate that HCM in the cloud is certainly a market to watch.
The increasing interest in cloud-based HCM applications has a lot to do with timing. Many companies are currently faced with legacy HR systems that need upgrading and some will have already dabbled with other business apps in the cloud. This experience means that IT managers’ view of cloud has changed and matured and see it as a secure and viable alternative to wholesale upgrade of hardware and software. With restricted budgets, HCM in the cloud begins to look very attractive.
So with start-ups pitched against technology monoliths and everything in between, just how do HCM cloud service providers differentiate themselves? And with all of the providers fighting for a share of a potentially very lucrative market, how does HCM see off challenges from big enterprises and jumped up start ups? From a business-to-business PR perspective, there are several simple strategies that are worth investing in.
Having worked with and for a number of different cloud providers and vendors since its inception, I have seen the market for cloud services mature somewhat in the way it’s sold and marketed. But one thing that remains is that people still buy from people and nowhere is this truer than in HR. With the cloud there is a tendency to focus on the automation – the ease of buying and provisioning cloud services goes a long to explaining why. Yet, even as it matures, companies still need to be assured of a human touch when things go wrong (or right for that matter). By personalising their communications cloud services vendors are able to provide assurances and security that are missing from some public cloud offerings.
HR is considered to be risk averse and while IT is comfortable moving its infrastructure services to the cloud, it’s a few years ahead of HR. Personalisation provides security of service, security of data and security that cloud is the best way to deliver HCM. Take a look at this example, SAP recently utilised an HR exec appointment to drive home it’s business growth messages and reinforce it’s understanding of the HR/talent management market. By using a ‘face’ rather than a technology it was able to create brand awareness within its core HR market.
A second viable B2B PR strategy to help gain standout in the HCM market is one that really is tried and tested – to highlight their own HCM strategy as a way to demonstrate their expertise and approach. Customers want to know that their vendors/providers are fully immersed in their own technology and, more importantly, have learnt from previous implementation mistakes. Vendors like PeopleSoft took this approach back in the 1990s to build brand awareness. It focused on publicising its own internal strategies – specifically its role as an ethical employer – as demonstrable experience. And while not an HCM-specific example, I also had the pleasure of working with EMC just after its acquisition of VMware, and it spent a lot of marketing effort to support communication efforts on its journey to virtualise its own servers, using EMC’s own CIO to front the campaign.
The final strategy I wanted to touch on was social media’s role within HCM. It’s obvious really. As employees become more mobile and tied less to an office or even a desk, the challenge to keep them abreast of company developments and engaged while not working in physical proximity has been somewhat resolved by the use of enterprise social media solutions. As employees become more and more comfortable expressing themselves and communicating via social media – both at work and at home – these tools can and should be built in to PR campaigns. Use them to personalise HCM cloud services with employees becoming the human face of the technologies you sell.
It’s clear that HCM distributed via the cloud offers those working in HR clear benefits. The ability to increase the speed while decreasing the cost of service delivery to the organisation is a powerful sell. As a result, it’s likely that we’ll see an increasingly ‘busy’ HCM software market as cloud vendors realise the market potential. However, the key to increasing adoption of these cloud services lies in the way that they’re marketed. Vendors need to consider carefully their business to business strategy or run the risk of becoming ‘me too’ in the same way many other software/infrastructure as a service providers have already become in these popular cloud markets.
