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SaaS will disrupt and stabilise Workforce Management Solutions

The prevalence of cloud-based IT solutions is becoming more widespread, with non-critical IT systems in many organisations now hosted on the cloud. Workforce management solutions are no exception to this trend. According to a new report titled ‘Workforce Management Solutions – 2014’ by IHS, the growing adoption of SaaS based workforce management solutions will have a dual affect on the market, acting both as a disruptive technology shift, and a long-term stabiliser for positive market growth.

IHS estimated that in 2013 SaaS based workforce management solutions accounted for more than $500 million in revenue, and forecasts this to grow to almost $1 billion by 2018.

“Adoption of SaaS in the market for workforce management solutions will be driven by the strategic advantages offered by using cloud-based software. Cloud enables customers to centralise the management of workforce management solutions over multiple geographic sites, to outsource the IT infrastructure required to host the software, and to pay for the solution as an operational expense rather than a capital investment. These benefits are forecast to aid the market for SaaS based workforce management solutions to grow by more than 80% over the next four years”, said Sam Grinter, market analyst at IHS.

As with any technology shift in an established market, increasing adoption of SaaS will disrupt the status quo. As customers become potentially long-term subscribers rather than occasional purchasers, customer care, software features, and competitive pricing will increasingly become a focus of vendors as they look to limit customer churn. This presents an opportunity for dramatic shifts in market share as customers become empowered to shop around for the best deal.

However, as adoption of SaaS-based workforce management solutions increases, this is expected to ultimately stabilise growth of the market. Stabilisation will come from the regular monthly and annual revenues generated by SaaS, relative to the more fluctuating revenue stream of perpetual licence software. Furthermore, as the life-time cost of SaaS is more expensive than perpetual licence software, the increasing adoption of SaaS will ultimately accelerate growth in the workforce management solution software market.

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