HCM Digital World Class Matrix™ Identifies Software Innovations and Leading Providers
HR Gen AI Adoption of 15% Significantly Lagging
Optimizing HR processes and predictively analyzing workforce trends are critical to the successful operation of businesses of all sizes. While the “great resignation” is over, employee engagement remains a high strategic priority for the C-suite. A core pillar of HR excellence is effective deployment of HCM technology.
The HCM Digital World Class Matrix™ provides a comprehensive guide for understanding the critical aspects of the HCM market, the evolving landscape, challenges, opportunities, and key considerations for both solution providers and buyers. Drawing on extensive interviews and 29 different criteria, the report evaluated 11 global providers and divided them into five categories:
- Digital World Class ® offers an expanded mix of solution capabilities with high customer satisfaction ratings in value realized.
- Innovators deliver superior value realization to clients but with limited scope and service features.
- Enterprise leaders focus on building strong, broad, function-level capability but have the opportunity to improve against key performance metrics.
- Challengers deliver greater value realization and capability breadth, but capabilities and value realization are not yet fully established.
- Emerging has limited market share but displays a vision for growth and is still developing and defining their strengths and capabilities.
Both established and emerging HCM solution providers continue to distinguish themselves through a wide variety of capabilities and offerings. Reward-to-exit processes form the core of HR operations for critical functions such as data management, compliance and benefits administration. Time-to-pay (TTP) processes are continuing to be delivered in a highly fragmented delivery environment, and organizations are challenged to find a single vendor delivering native TTP solutions to all of their countries. Talent management processes are frequently the most fragmented of tech stacks for organizations overrun with point solutions for niche processes.
The report highlights the diversity and fragmentation of the HCM technology market. As organizations grapple with the multitude of HR technologies – ranging from end-to-end to point solutions – they continue to multiply. Striking the right balance of HCM technologies in a tech stack remains a challenge for HR professionals seeking advanced functionality without the potential complications of managing numerous vendors.
HCM vendors continue to innovate their products by incorporating artificial intelligence (AI) solutions within the flow of work. These include job description generation, analytic report recommendations, and chatbot assistants for basic HR tasks, among others. Organizations are cautiously implementing AI into their HR technology toolkit but seek greater confidence in those solutions before deploying.
Research indicates that it is still early days for generative AI (Gen AI) implementation in business services functions, and most organizations are taking a measured approach. Just 24% are in the initial stages of Gen AI exploration, while 15% are still investigating how to apply it. Only 15% are in the process of piloting Gen AI technology, and merely 2% have a Gen AI project in production. The Hackett Group’s analysis projects a 51% increase in HR staff productivity and 44% reduction in HR process costs by fully embracing Gen AI.
To remain competitive,
“As the HR function elevates as a strategic priority, organizations are demanding more expansive and advanced technologies to support their strategic HR initiatives,” said
By leveraging this comprehensive analysis, HR professionals can make informed decisions to optimize their operations and drive strategic value, ensuring they harness the full potential of advanced HCM technologies.
HCM Digital World Class Matrices are part of The Hackett Group’s full 66-page report. The HCM Digital World Class Matrices should be read in the context of the entire report. A 23-page summary is also available on a complimentary basis, with registration: https://go.poweredbyhackett.com/hcmsm2406nr. Inquiries regarding purchase of the full research report can be made by visiting our
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