Why SaaS Is Working For HR – Part 1

HR is one industry that is on the leading edge of SaaS adoption. In this blog post series, we’ll dig into several questions:


• Why HR?

• Why Now?

• What’s Next?

To start things off, take a couple of minutes to read Tom Malone’s TLNT piece on “The Top 5 Myths about SaaS”. The author delivers an even-handed look at what SaaS currently does and doesn’t offer. For example, some people think that SaaS solutions aren’t an option for handling complex processes. In fact, any BPM software application (or set of applications) that could be hosted on a legacy server can be hosted in “the cloud” and have its functionality delivered via the web.

HR Can Integrate Processes

In addition, the best SaaS solutions are constructed using an SOA (Service Oriented Architecture) approach. This means they are modularly designed with integration capability built in rather than tacked on as an afterthought. This is one reason HR looks to SaaS to address evolving needs that involve interfacing with other applications. HR processes touch those of many other departments such as IT, Payroll, Production, etc. Data must be shared for purposes of scheduling, security, and much more.

An on-site ERP suite can often provide this type of inter-compatibility; but rolling out new solutions may sometimes take more than a year of work on the part of IT. Here’s a story about Chiquita (the banana company) that shows how one employer decided to ditch the snail pace of traditionally licensed ERP development for the faster, global ERP implementation provided by an SaaS vendor.

HR Can Address Critical Needs

Of course, niche HR products that address a specific process such as onboarding are also attractive options for companies that have already heavily invested in an on-premise ERP solution and simply want to add more functionality. When HR’s budget is tight (which is pretty much always), promoting the use of a single SaaS program delivered via the web can be a lot easier to negotiate than a full system overhaul. Depending on the application and the degree of customization required, the roll out time for an SaaS product can be weeks instead of months.