The in-house, software licensing model will drop to 60% of Latin American revenues for human resources software developer Meta4 in 2014 from the current 85%, as companies move fast toward an outsourced, SaaS-hosted model, Meta4 Latin America operations director Pedro Vaquero told BNamericas.
According to Vaquero, that process is happening mainly for reasons of cost cutting and being able to enjoy constant upgrades without major repurchases of licenses.
The same trend is happening even faster in Europe, especially Spain, driven by the economic crisis.
For the same reason, Latin America will represent 30% of Meta4's global revenues this year, down from some 35-40% in 2010, due largely to a resurgence of the importance of Europe.
"The crisis in Spain has driven the majority of operations to move to an outsourcing model instead of in-house.... Spain has dropped in licenses but has grown a lot in outsourcing, so that has compensated," Vaquero said.
In Latin America, Meta4 has offices in Mexico, Brazil, Colombia, Peru, Chile and Argentina. While Chile continues to be more license focused, which is partly for cultural reasons, Mexico has been one of the faster adopters of the outsourced model, Vaquero said.
According to the executive, the demand for Meta4's solutions has seen a notable increase in the last decade of companies seeking greater efficiencies in their human resource departments.
For some time, many companies have had the process of paying salaries distanced from the HR department's daily responsibilities, but lacked software that provides other "self-service" options allowing employees to take care of many tasks themselves, such as printing and filling out vacation forms or obtaining sick leave certificates.
Operating on a concept similar to that of Microsoft's Sharepoint software, Meta4's platform allows employees to register requests, which can then be processed and approved by the company online without the need for the employee to go to the HR department.
Vaquero compared the interaction between an employee and the HR department using the Meta4 platform to that of clients who never go to their bank branch offices and only interact with the bank online.
"Why do people go to an HR department? To make requests, process certifications, to inform them of resignations. The idea is that all of these functions are available so the employee doesn't have to go physically to the HR department," Vaquero said.
According to the executive, freeing HR departments from the former routine tasks, besides saving money in efficiency, allows those departments to concentrate on duties that add more value for the company, such as creating career paths for employees.