There’s little question that Software as a Service (SaaS) Internet-based solutions hosted by an external vendor offer a wide range of benefits to buyers including: 1) Access to a single database from any location; 2) No need for additional hardware other than existing laptops or desktop PCs; 3) No need to pay for maintenance and upgrades, as compared to in-house systems or ERP solutions; 4) No IT staff required for support or other needs; 5) The system can be accessed by users anytime 24x7x365; 6) When used across multiple locations and geographies, one system allows for standardization and efficiency, increasing compliance and lowering costs; and 7) Bottom-line reduced costs in service delivery.
But is SaaS a panacea for HR’s service delivery needs? In a word, no. SaaS by itself is not a remedy for completely eliminating a buyer’s internal HR staff or an organization’s propensity to outsource, particularly in the mid to large market. That’s why we will continue to see an increasing array of SaaS and HRO services-bundled offerings from vendors supporting a wide range of HR processes including benefits administration, health and welfare administration, HRO analytics, RPO, outsourced training and payroll.
That said, examples of the SaaS components of these solutions include:
• MidlandHR’s iTrent software is a web-based, integrated HR and payroll system which helps its clients tackle HR issues such as payroll, talent management, succession planning, recruitment and absence management
• NorthgateArinso’s euHReka OnDemand supports HR administration and payroll processes, preconfigured for more than 50 countries, and talent management processes in 24 languages, on a single integrated platform
• Patersons, a global payroll provider, uses SaaS developed in-house to deliver payroll to companies in 160 countries via a global network of providers
• Cornerstone OnDemand is a SaaS offering that supports talent management, performance management, succession planning, learning management, compensation management, social networking and reporting and analytics (note: ADP and Cornerstone entered into a partnership in mid 2009 to enhance its talent management capability)
It’s important to note here that service providers are muddying the waters a bit by referring to their offerings as SaaS, on-demand or managed services. And while there are differences among the three – a topic we’ll cover in a future blog – suffice it to say that NelsonHall expects the volume of “SaaS-esque” contracts to significantly increase over the next several years. For data points and statistics, we’ll soon be reporting the results of our Q409 Outsourcing Confidence Index which includes a focus on “Proportion of contracts signed which were platform-based.” Stay tuned!
Gary Bragar, Lead HRO Analyst, NelsonHall
HRO Insights 
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