Ready or Not, It’s Decision Time

A change in HRMS platform is not something to be undertaken lightly. Under normal circumstances, companies tend to hold onto their legacy platforms for a decade or so, and upgrading only when necessary. That’s because HRMS conversions and upgrades are expensive, disruptive and hard work. And let’s be realistic, Wall Street couldn’t care less about which HRMS platform you’re using. But in a recent HRSSI survey on HR technology practices, about half of the respondents said that they either recently switched or plan to switch HRMS platforms in the next couple of years. That’s a lot of expense, disruption and hard work. Clearly, the disruptive technology propelling this sea change is software-as-a-service (SaaS). But it’s not only that SaaS appeals to client organizations. Evidence suggests it appeals to HRMS software providers as well, maybe even more so. After all, if you’re in the software business what’s not to like (other than downward price pressure, of course)? If you were a software vendor wouldn’t you rather control the program code, rather than allow IT shops and consultants all over the world to mess with (customize) it? Wouldn’t you prefer to publish the latest release on your timeline, rather than wait for users to upgrade when they’re ready or forced to? Wouldn’t you rather update the program on your own server than send out new CDs to be uploaded to theirs? Finally, wouldn’t you rather have the ability to implement enhancements and fixes right away, rather than waiting for the next scheduled patch or release? It’s actually easy to see why software developers love SaaS, and why traditional software providers, like SAP, Oracle and others, have been buying up SaaS platforms like newly forged ocean front property. You might think of introducing cloud-based products as a defensive strategy, but I’m betting the vendors are glad to be making the switch, and the faster the better. What this means for user organizations is that their friendly neighborhood software salesperson is no longer going to be selling the next software upgrade. Instead she’s going to be hawking their new cloud offering. Even if you’d like to stick with your client-server platform, the second shoe will drop when she tells you not to expect much in the way of enhancements and that the company plans to mothball the product you just bought (or so it seems) much sooner than you’d like. The Austrian economist Joseph Schumpeter (1883 – 1950) called periods like these the "gales of creative destruction" – episodes when disruptive technology leap frogs the existing order. Graphically, the creative destruction pattern is depicted as a series of Sigmoid curves, also known as S-curves. A characteristic of creative destruction periods is that change accelerates, as though time is moving faster, illustrated above. During times of technological disruption, new market entrants make competitors scramble. Developers develop faster, marketers market more aggressively and salespeople sell more frantically. The result is that more happens in a shorter period of time. Time flies when you’re having fun, but it travels at light speed when you’re racing for survival. So if you’re accustomed to having a few (or several) years to chew on decisions, you might find yourself scrambling in a couple years. The old order isn’t going away tomorrow, so there’s no need for a Y2K-like panic. But if you’re not already thinking about what’s next, I recommend you start.

Ready or Not, It’s Decision Time

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