Cloud-based software services driving latest workforce management solutions

Cloud enables customers to centralise management of workforce solutions over several sites, to outsource the IT infrastructure required to host the software, and to pay for the solution as an operational expense rather than as a capital investment

Cloud-based software services driving latest workforce management solutions

Cloud-based software solutions, biometric terminals and mobile apps are among the key trends in the years to come for managing the workforce in business settings, according to new analysis from IHS Technology.

In a white paper entitled Five Global Trends Shaping the Future of Workforce-Management Solutions, such trends increasingly point to a pattern where automated or remote systems are taking over individual and locally situated responses. These dynamics, in turn, can either generate significant growth opportunities for those that take advantage and innovate accordingly, or herald widespread displacement for the ones that fail to act.

Prospects are especially rosy for cloud-based software solutions—also known in industry circles as software as a service (SaaS). Revenue for the global SaaS market will rise to $983.9 million—nearly $1 billion—in 2018, up from $539.0 million last year.

“The adoption of SaaS will be driven by the strategic advantages offered to using cloud-based software,” said Samuel Grinter, analyst for enterprise resource planning at IHS. “The cloud enables customers to centralise management of workforce solutions over several sites, to outsource the information technology infrastructure required to host the software, and to pay for the solution as an operational expense rather than as a capital investment.”

But the shift in technology from SaaS could be potentially disruptive. As customers become long-term subscribers instead of just occasional purchasers, variables like customer care, software features and competitive pricing will become increasingly important for vendors seeking to limit customer churn.

As a result, the prevailing landscape could alter dramatically, and market share among the current players could also enlarge or shrink in unexpected ways.
Nonetheless, the increasing adoption of SaaS also means the market for such solutions will ultimately stabilise.

And because the lifetime cost of SaaS is higher than that of perpetually licensed software, the SaaS market for workforce solutions will be headed for clear growth, Grinter noted.

Biometric terminals and mobile apps face off against older technology
Another key trend that will shape the workforce is the growing use of biometric terminals, replacing card- or PIN-based terminals. Last year, biometric hardware terminals represented over one-third of all hardware terminals sold globally in terms of revenue, with most of the sales taking the form of fingerprint terminals.

Driving the adoption of biometric terminals are the falling prices of the terminals, a need for a higher level of authenticating credentials and the wider adoption of biometrics. Confidence in biometric technology is growing as consumers see how it is being implemented in new smartphones from Apple and Samsung, reducing fears related to privacy concerns.

Mobile self-service apps also represent a new way of workforce management. A workforce mobile application in a smartphone, for instance, could give employees direct access to their human-resources data, or let them clock in or out remotely.

While the potential for abuse could increase with such technologies, companies could also save money by not needing to purchase as many hardware terminals for employee workforce management.

Rough times ahead for vendors of older technology
Hard lessons will be in store for vendors of older, non-biometric or non-mobile technology. With growth forecast to be slower in the overall market for hardware terminals, factors such as the rise of touch screens, biometrics and open operating systems makes it even more pressing for vendors of workforce-management hardware to incorporate the new appealing features in order to ensure continued sales to customers.

In this fragmented and slower-growing market for hardware, vendors also must have the flexibility to price their products competitively, especially as price is a deciding factor for many workforce-solution customers.

Meanwhile, the rising cost of labour in many areas of the world is prompting significant investment in workforce-management solutions—in places like the Middle East, Africa, Mexico, Brazil, India and China. The rise in labour costs is being driven by increases in minimum wages, which IHS forecasts to continue steadily.

Any workforce-management vendor looking to take advantage of the trend above would do well to invest efforts in countries with high increases to the minimum wage, Grinter remarked. Here the potential benefits of a workforce-management solution could be communicated to customers, allowing companies to take better control of labour costs and maximise operational efficiency.

The findings in the white paper can also be found in the report entitled, Workforce-Management Solutions – 2014, from the Information Technology service of IHS Technology.

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