Why SaaS Is Working For HR – Part 2

In this second blog post about how HR is utilizing SaaS solutions, let’s take a look at another article that talks about our current topic. This is a piece from 2008 which may seem like eons ago in the fast paced world of technological evolution. However, it still makes some points that are relevant in 2010. Author Cindy Waxer at HR World contrasts the previous dearth of niche solutions with today’s array of choices for every application. There is really something for everyone, from performance management to new hire onboarding – any process HR wants to focus on improving can be addressed by a specialty program.


ERP vendors are struggling to keep up since rolling out upgrades for fast implementation by end users is not exactly their forte. However, some major players are offering more “off the shelf” functionality than before that permits HR to add on features as needed when their current suite falls short. Unfortunately, for clients using older versions, implementing these newer solutions can still be a very lengthy process.

That’s one reason newer businesses sometimes choose to build their HRIS from the ground up using SaaS solutions rather than investing in a system that will be outdated almost as soon as it is up and running. Companies with existing ERP systems are also choosing to add new features using products provided by SaaS vendors rather than launching extensive projects to revise their legacy software.

Will On-Site Licensing Persist?

In the future, a non-SaaS performance management solution outside those sold by the really big name vendors in HR software may be hard to come by at all. According to Waxer (quoting an IDC study) over 80% of vendors in that niche are already using the SaaS model to deliver software services to their HR clients. This doesn’t mean SaaS is always the best way to go. But as it becomes more prevalent, the momentum of the movement is likely to convince more and more employers that this type of solution has merit.

SaaS for HR Is Expanding in Scope

While SaaS has long been viewed as the province of niche software suppliers (including Best of Breed providers like Emerald Software), some vendors are beginning to expand their offerings to become more like traditional suite providers. It will be interesting to see to what extent these companies maintain their agility as their portfolio of product offerings grow. These vendors will need to remember that ease of integration with other solutions is still critical.

The more collaboration and cross compatibility we SaaS solution architects can generate, the better our chances of survival in a world where HR clients have an ever growing array of options. The days of crowding out everyone else are over – even for the giants in the HR software industry. This is why we focus strongly on building strategic partnerships. In the end, it is likely that those who cooperate the most effectively will be the most successful.