Is SaaS dead in HR Technology?

Asking AI this question gives back a surprisingly balanced view on the future of Saas in the world of HR.

I've written about the compression of the HR tech stack previously through the rise of HRS platforms, removing the need for a foundational platform layer and focusing on the application layer however this was without the full consideration of AI.

Most will have used the new AI Assistants like ChatGPT or even have Copilot on their laptop now (some of the best productivity improvements I have found to date are coming through co-pilot, I completed a manual task that would have taken 1.5 working days in 60 seconds with co-pilot last week...). The experience is a simple 'search bar' where we ask a question and get a rapid response.

If this is the possible, why do we need long user journeys or user interfaces?

HR is a good example of this transition. Traditionally we have managed HR on excel spreadsheets, from the detail of every single employee to what they earn etc. Some great tools arrived (HRS), but we had to learn how to use that software and have continued to do so through SaaS. Increasingly so through AI you will just prompt the application since you can communicate with it like a human and therefore adoption curve will also increase as there is nothing to learn for the HR employee.

There is still going to need to be a single source of truth that might be Workday, ServiceNow, ADP or Salesforce however I don't believe there will be an application ecosystem and instead just a simple 'Copilot' interface that will move from Assistant to Agents (use a trigger and work the rest out with prompts).

Marc Benioff for famously continued the phrase 'Software is Dead' has said this week that their AI agents will analyse customer chat and set about solving the customers’ problems without direction. I've spoken to the senior leaders at several well known UK Banks that are already using the ServiceNow AI Agents through the Now Platform.

One caveat to this in HR is that a lot of this, particularly employee benefits, health data and payroll are regulated spaces. Whoever is managing the AI needs to really factor this into account with FCA Consumer Duty penalties being the alternative.

The AI tech companies are essentially going to be selling 'HR employees' in the format of an AI Assistant or Agent. This is going to give actual HR employees the ability to be more strategic and provide the context to HR from the responses.

One final thought that might accelerate this is the ease at which this adoption can happen. It has taken years for enterprise to move to Cloud given data typically needs to be sent to the SaaS providers cloud environment however with AI, this is no longer required.

It will be interesting to see how this evolves and which technology companies are able to provide a single source of truth and compliant AI Assistant or Agent as the interface.