While on-premise human capital management (HCM) solutions remain in use, eventually all solutions will be cloud-based.
- While 70% of organizations have already deployed at least one cloud-based HR application, 40% continue to use at least one on-premise solution, according to research conducted by Sierra-Cedar.
- Many software vendors have “retired” their on-premise solutions, with all development, sales and support efforts focused on their cloud-based solutions.
- An increasing number of “major players”, including Google and Microsoft, have new entrants into the cloud marketplace, further accelerating adoption.
An analysis conducted by Mercer Consulting highlight the primary reasons for this shift:
- Economics. On-premise solutions require a large upfront sum to purchase and implement the system, smaller annual maintenance costs, and separate upgrade fees. Conversely, cloud-based systems are typically priced per user or per transaction per month.
- Analytics. Cloud-based applications include enhancements such as artificial intelligence and chatbots, pulling data from multiple sources to provide a 360-degree view of performance. In addition, these applications offer sophisticated reporting capabilities.