Employee Xperience Labs

𝘖𝘳 𝘢𝘳𝘦 𝘵𝘩𝘦𝘺? I am reading and hearing these days a lot about the end of HR platforms like SAP, Workday or also ServiceNow. And if you believe the stock markets where the share-prices of these companies seem to know only one direction, their end is approaching fast. Wouldn’t that be great? We could save all of these millions of license costs and could also stop making all these constant updates and upgrades of these systems. And let’s face it: No one really likes these systems anyway – enterprise software was never good at UX/ UI and probably will never be. So is there anyone that would cry a tear if they would be gone?
Well, not so fast. I am holding it more with Jensen Huang who said that the end of SaaS/ enterprise software is “illogical“. Why?

𝗔𝗜 𝗶𝘀 𝗮𝗿𝘁𝗶𝗳𝗶𝗰𝗶𝗮𝗹, 𝗯𝘂𝘁 𝗻𝗼𝘁 𝗶𝗻𝘁𝗲𝗹𝗹𝗶𝗴𝗲𝗻𝘁

It is rather simple: 𝘈𝘐 𝘪𝘴 𝘢𝘳𝘵𝘪𝘧𝘪𝘤𝘪𝘢𝘭, 𝘣𝘶𝘵 𝘯𝘰𝘵 𝘪𝘯𝘵𝘦𝘭𝘭𝘪𝘨𝘦𝘯𝘵. AI out-of-the-box doesn’t know any of the rules that you have in your company, AI doesn’t know any of the workflows and approval cascades you have in your company. And AI doesn’t know your interpretation of the legal environment for all the countries that you are operating in or your CBAs. And without all of this knowledge, AI will for sure be effective in doing your HR work for you – it will create an effective chaos where most of your HR work ends up being non-compliant – and (and you could argue what is more disastrous) unequal.

Sure, you could decide to (vibe-) code your own HR system and “teaching” it all the rules and workflows and approvals, and legal/ regulatory landscape. But why would you do that? In fact, how could you even think of running a company on such shaky grounds like a vibe-coded platform or an AI ChatBot or an LLM for that matter?
No, you must have a knowledge base with all your policies, processes, and institutional knowledge. And you have to make sure that this knowledge is clear with a single version of truth. Most of HR Organizations have something like this already today – in ServiceNow or Workday. This is the foundation of any 𝘪𝘯𝘵𝘦𝘭𝘭𝘪𝘨𝘦𝘯𝘤𝘦 𝘧𝘰𝘳 𝘈𝘐. And not to forget all of the coded rules of how a specific process is to be handled for a specific employee in a specific country under a specific CBA…you have configured something like that today already in your system – may it be Workday or may it be something else. This is the second source of intelligence that you already have. Why would you do away with those? and what would you do without them?

𝗧𝗵𝗲 𝗺𝗮𝗿𝗸𝗲𝘁𝘀 𝗵𝗮𝘃𝗲 𝗶𝘁 𝘄𝗿𝗼𝗻𝗴

No, the markets and many experts have it wrong. We are far away from HR SaaS platforms ending. I actually believe that instead they will have a once in a lifetime opportunity to reinvigorate themselves. The potential is amazing – and this is because of AI. Undoubtedly, AI will be at the center of it (which is why I neither believe that Jensen Huang made the case to burst the AI bubble with his above words what some experts allude to) and the leading force in it. Yes, the platforms have to reimagine themselves – but knowing some of the very good product and strategy people at Workday, ServiceNow and others, I am not at all concerned. They understand what is happening and not only have an answer, but are ready to take the advantages they have to the next level.
Why am I so confident?

𝗧𝗵𝗲 𝘁𝘄𝗼 𝗶𝗺𝗽𝗮𝗰𝘁𝘀 𝗼𝗳 𝗔𝗜

I believe that when it comes to HR platforms, there are two massive positive impacts of AI. The first one is behind the scenes.
Today, we all still have big insourced or outsourced teams that operate your Workday or SAP. They perform all the transactions, get any paperwork ready, inform any stakeholders that need to be informed and make sure that your HR admin organization keeps going and keeping the company running – yes, let’s not forget that your HR platform is not a dead backend system. It is the backbone of most of your other systems you have in your enterprise. Just check how many other applications want information from your HR system? I bet you have north of 100 integrations from your system. So, this has to continue to happen – but this is where opportunity number one lies for the current providers. And this opportunity is so much bigger than any market these SaaS providers had in the past.
Instead of Software as a Service, these providers can shift to Services as a Software and suddenly can address the whole HR outsourcing market. And that is big: The HR outsourcing market is going from record year to record year. Its market size 2021 was recorded $35325 Million whereas by the end of 2025 it has reached $42158 Million, and will grow further.
With transforming the business model with the help of AI from 𝘚𝘰𝘧𝘵𝘸𝘢𝘳𝘦 𝘢𝘴 𝘢 𝘚𝘦𝘳𝘷𝘪𝘤𝘦 𝘵𝘰 𝘚𝘦𝘳𝘷𝘪𝘤𝘦𝘴 𝘢𝘴 𝘢 𝘚𝘰𝘧𝘵𝘸𝘢𝘳𝘦 suddenly the Workday’s of today will become the Accenture’s of tomorrow and take the whole HR outsourcing market with one single change or better addition to their portfolio: AI Agents that perform all the transactions that today are performed by your HR outsourcing provider or Shared Services center. That is the new case for HR SaaS providers.

But this is not where AI will stop. The second impact is finally a UX/ UI solution and smart support. Instead of being forced to use these ridiculous UXs/ UIs from your SaaS provider, everyone can have an AI powered, virtual HR Business Partner that provides the white glove service that you had in the past. No longer do you as an employee or manager need to navigate a complex system and process landscape, but you can talk in plain text to your personal AI and get all HR admin work done in an instant. No longer do you need to figure out what to do, when, where and how – but you just tell your virtual HR Business Partner to get the work done for you (which then instructs the back-end AI Agents). How does this sound?

In essence, bet on your HR SaaS provider, but watch the outsourcing market very careful. And of course, all of this has massive impacts on how your HR organization will work and be structured as well as on your HR Tech Stack Architecture… But that is for another day…