DEBUG: PAGE=domain, TITLE=NelsonHall Blog,ID=1469,TEMPLATE=blog
toggle expanded view
  • NelsonHall Blog

    We publish lots of information and analyst insights on our blogs. Here you can find the aggregated posts across all NelsonHall program blogs and much more.

    explore
  • Events & Webinars

    Keep up to date regarding some of the many upcoming events that NelsonHall participates in and also runs.

    Take the opportunity to join/attend in order to meet and discover live what makes NelsonHall a leading analyst firm in the industry.

    explore

Subscribe to blogs & alerts:

manage email alerts using the form below, in order to be notified via email whenever we publish new content:

Search research content:

action=something else...array(7) { ["program"]=> int(-1) ["analyst"]=> int(-1) ["industry"]=> int(-1) ["serviceline"]=> int(-1) ["vendor"]=> int(-1) ["country"]=> int(-1) ["application"]=> int(-1) } array(0) { }
from:
until:

Access our analyst expertise:

Only NelsonHall clients who are logged in have access to our analysts and advisors for their expert advice and opinion.

To find out more about how NelsonHall's analysts and sourcing advisors can assist you with your strategy and engagements, please contact our sales department here.

Application Management Services a Key Gateway to HR BPaaS

go to blog home

Search posts by keywords:

Filter posts by author:

With many organizations turning to cloud-based ERP and HR systems to replace legacy, on premise systems, and more importantly as a means to enable organizational transformation, the demand for cloud-based HR services continues to grow. NelsonHall’s Targeting Cloud Based HR Services market analysis estimates the market to be ~$15bn in 2016, growing to ~21bn in the next five years.

Thus, as cloud-based HR platform adoption has grown, the shift from traditional on-premise systems to cloud-based HR platforms has created demand for post-deployment application services and a growth opportunity for HR BPaaS providers. Our market analysis found that vendor support for cloud systems or Application Management Services (AMS) currently makes up ~14% of the cloud-based HR market, is growing at a rate of nearly 12%, and is estimated to reach ~3.6b by 2021. The study found that nearly all vendors are currently offering AMS services of varying scope in conjunction with their other HR BPaaS offerings (e.g. workforce administration, payroll, etc.). ~80% of vendors offer AMS on at least one of the major HCM platforms, with 40% offering multiple systems.

Because cloud technology has become far more dynamic and “intelligent” than its legacy predecessors, a key driver with many organizations seeking AMS is the realization that they lack the skill and resources internally to maintain cloud systems properly. Furthermore, buyers need to optimize the configuration of cloud systems to achieve the full value of their investment, as well as maintaining the system for peak performance.

This has many organizations recognizing that supporting a cloud system (likely) isn’t core to their business and is best left to providers with proven experience in implementing, optimizing and maintaining them. As a result, cloud-based HR service providers are seeing AMS as a gateway service offering, leading to broader HR outsourcing service adoption, with a quarter of vendors indicating AMS is the leading source for new clients. With demand for post-deployment AMS a leading gateway to new clients for vendors, many now offer AMS services on multiple systems, and most (~70%) now offer AMS as a standalone service or plan to in the coming year.

Looking forward, with an estimated ~40% of legacy HRO deals operating on cloud systems, there is strong growth potential for vendors to retain and transition existing customers to the cloud. Additionally, those organizations who were early adopters of cloud solutions will remain strong candidates for AMS support services. Vendors whose offering includes a comprehensive cloud HR offering, including consulting, implementation, AMS and broader HR BPaaS services, will benefit from offering a complete solution that showcases their experience with leading cloud HCM platforms. 

No comments yet.

Post a comment to this article:

close