What to Consider When Considering HR SaaS

Linda Merritt, HRO Research Analyst, NelsonHall

Linda Merritt, HRO Research Analyst, NelsonHall

Based on the HR Outsourcing Association’s (HROA) SaaS webinars and my discussion with Ceridian’s senior vice president Howard Tarnoff, who has been instrumental in the successful launch of Ceridian’s Dayforce HCM, here are a few key elements to consider when considering SaaS.

Determine Business Needs

Determine what business, operational, and organizational needs are driving change and if each decision-factor is equal or if there is a rank order as needs often conflict. For example, the need for control and customization will come at a higher cost and takes more time and effort than the configuration and standardization that comes with SaaS.

Sometimes that process is not completed before bringing in potential vendors. Howard has sat in discovery process meetings where the buyer team is having this discussion amongst themselves as much as with the vendor. Maybe that’s a bit late, but better late than never.

Consider Trade-Offs

Consider what trade-offs will be needed to deliver the best solution. HR SaaS can meet many needs and deliver many benefits, but it is a fundamentally different choice than a traditional ERP or other licensed or subscription software products.

Configuration and standardization:  acceptance and understanding of configuration and standardization is growing, as is awareness of the on-going cost of customizing into a corner, according to Howard. Still, it is vital to determine the limits of what can be accommodated as configuration is not infinite.

If compliance is a key factor, then the pain of standardizing policies and processes to fit within a system where the vendor keeps up with the constant changes to complex governmental regulations may be a risk management plus.

IT collaboration: the role of IT changes and becomes more collaborative with SaaS.  The HROA SaaS series reminds us there will still be a role for IT to play, so bring them in early in the process to address:

  • The impact on enterprise technology roadmap
  • Changes to IT workload and budget
  • Integration into the larger architecture (e.g., maintenance of interfaces, implication to other vendors connected to the system)
  • Vendor-driven upgrades on the IT team (e.g., understand the role, workload, and timing).

Customer collaboration: with real SaaS you will be one of multiple clients using a web-based system riding a single code base and that changes the nature of the client-vendor relationship and opens the need and opportunity to collaborate with other customers. You may have more input into the development of system enhancements, but you will be one among others.

Worried about future-proofing your services? Howard says change is coming fast and furiously. SaaS, with a great vendor partner and an active team of client users, can support affordable innovation.

Quickly, the question is becoming not if, but when and where to use HR SaaS.

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