Full-service cloud options for finance and human capital management are lacking
Only 3% of the higher-education finance and human capital management market has selected modern cloud solutions since 2015, according to a report released this week by the Tambellini Group research firm.
Even as cloud service adoption accelerates, there’s still just a small number of vendors offering full-service options that fit the definition of “modern cloud,” the firm’s chief executive, Vicki Tambellini, told EdScoop. Fully featured modern solutions are built on infrastructure designed specifically to run in the cloud, she said.
With that definition, only three companies — Oracle, Workday and Unit4 — offer full-service solutions for finance and human resources systems, even as more schools prepare to migrate those functions to the cloud.
“As more solutions become available at lower price points, we expect to see more institutions making that move,” she said. “As more institutions are live on the solutions that are available, it will give other institutions that confidence that they too can successfully make the transition.”
Tambellini said more companies are planning to release fully cloud-based finance and HCM systems: One software company, Jenzabar, is planning a release this fall. There are also companies that offer either finance or HCM solutions.
The rate of cloud adoption for finance and human capital management in higher education grew by 60% last year, according to Tambellini. That’s compared to about 40% in 2020, according to the firm’s research, which gathers information from more than 20,000 colleges and universities.
Tambellini said her firm saw more activity from public four-year institutions buying as part of consortiums in 2021. Schools also began buying software that could address their remote-work and self-service needs, she said.
“They didn’t have the ability to support all of the things that you have to have for a workforce that’s working at least some of the time remotely and have the ability to do the reporting that they need, and also to improve security and access remotely,” she said.
When Tambellini removed the “modern cloud” definition from her data, she found that closer to 30% of the higher-ed market has transitioned to cloud-hosted or managed systems. That can mean using a system that translates the structure of a on-premise system to the cloud.
Transitioning legacy systems to cloud options often takes years of planning, requiring many different university departments to assess how data will be translated into the new software, and reviewing finance and human resources processes.
Using a system that mimics the structure of the on-premise system can save implementation costs, Tambellini said, which is why some schools opt for it. Some institutions are also satisfied with their current systems, she said, and see no need to move to a cloud solution yet.
“If all things stay relatively the same, our forecast is that the acceleration [to modern cloud solutions] will continue because especially with the demands that are placed on the existing workforce in higher ed and the concerns that institutions have are not getting any less,” Tambellini said.