TechnologyOne capitalises on demise of Best of Breed Payroll/HR

The Australian mid-market is moving towards fully integrated, enterprise wide software solutions rather than best of breed solutions for functions such as financial management, HR/payroll and supply chain. This trend has already occurred in the top end of the market.

In the past 2005 financial year, Technology One has sold its fully integrated financial management and HR/payroll solution to more than 50% of new clients, up significantly from the previous year. 

Technology One Executive Chairman Adrian Di Marco said the trend in the mid market towards fully integrated solutions is clearly gaining momentum. 

“Organisations in the mid market continue to look for ways to reduce risk and minimise expenditure.,” Mr Di Marco said. 

“Organisations of this size can not afford to have multiple solutions from multiple vendors, with multiple interfaces. The cost associated with initially writing, and rewriting interfaces each time one of their solutions is upgraded is hitting the bottom line, increasing both the initial implementation costs and the long term cost of ownership.  ,” he said. 

This trend towards fully integrated solutions is beginning to hurt best of breed suppliers, particularly in the HR/payroll market. 

“Best of breed suppliers are struggling to win new business in this consolidating market,” Mr Di Marco continued.  

This represents a significant risk to mid sized organizations that rely on the stability of their suppliers to support the growth of their own business.  Mid sized organisations are turning to larger suppliers that are, by nature of their business, more profitable, have higher R&D budgets and multiple revenue sources.  This in turn allows them to spread their risk against downturns in particular market segments,  Opting for a fully integrated solution from a larger, more stable supplier offers a greater level of security and certainty for their customers.

“One of their big issues is keeping up with the latest technology. Some of the best of breed HR/payroll solutions in the Australian market are as much as 20 years old – vendors are spending R&D applying face lifts to their solutions rather than upgrading the underlying technology.” 

Technology One invests approximately 20% of its total Revenue each year into R&D for its software solutions. This has allowed the company to bring to the market a fully integrated HR/payroll solution built on its future proofed Connected Intelligence architecture. 

“We are able to provide our clients with a fully integrated financial management, accounting, HR/payroll and supply chain solution.  The result is a significant improvement in the quality financial data since the payroll system, and timesheet entry in particular, is a critical source of costing information that is passed into your Financials.   

“Organisations, such as recruitment firms, need to be able to invoice on a daily basis – and this means they need their payroll information available automatically in their general ledger for project costing. 

”Technology One delivers on this market need.”