Los Angeles, CA (PRWEB) June 18, 2014
The human resources (HR) software market has a buyer power score of 2.6 out of 5. The technological boom has allowed suppliers to develop a favorable position in the market given the effects of the recent recession, when firms began looking for ways to reduce internal costs while improving process efficiencies. "Software solutions also started to grow in popularity, with HR software vendors embracing emerging cloud technology as a more flexible and efficient way to install and maintain HR programs," says IBISWorld procurement analyst Hayden Shipp. As demand for online services has grown, buyers are increasingly replacing older on-premise HR software with services they can purchase and access on the spot. Prices for HR software have grown moderately during the past three years, and they are forecast to rise through 2017 as demand continues to increase.
Major suppliers of HR software include Automatic Data Processing Inc., International Business Machines Corporation, Intuit Inc. and Microsoft Corporation. "Suppliers typically have very high profit margins," says Shipp. After having programmed their software products, suppliers can distribute the same code in large quantities with minimal costs, allowing for higher profitability. With a select group of established vendors dominating the HR software market, market share concentration has also contributed to profit margin growth. A recent wave of consolidation has allowed large multiline vendors to acquire smaller niche players to help bolster product and service portfolios. As the number of potential vendors has been decreasing, buyers' negotiation power has been contracting.
Negotiation power may appear weak for buyers, but the growing trend toward online HR software deployment brings many potential benefits. Traditional on-premise systems require installation onto a buyer's server. While these solutions allow for more robust systems, they are also very costly to install and increase lead time and total cost of ownership. Newer online delivery systems allow more flexible payment structures, instant on-demand access and less switching risk. Buyers will need to evaluate their operations before determining which type of HR software system will suit their needs.
For more information, visit IBISWorld’s Human Resources Software procurement category market research report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Like IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of human resources (HR) software. This type of software is designed, developed and published to help improve and oversee a company’s talent management and performance by automating daily administrative processes relating to its workforce. Software applications include personnel sourcing and tracking, payroll, benefits administration, performance development and regulation compliance. These products may be provided online or through on-premise systems. While physical software may be purchased from downstream suppliers, such as retailers, many publishers license their products and services directly to buyers online.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.