SaaS vendor Plateau Systems and advisory firm Saugatuck Technology released the results of an interesting survey earlier this year. The 200+ HR executives who participated in the study made it clear that they have compelling reasons to choose SaaS. Plus, they know what they want in an SaaS vendor. Online software access has become common enough that the novelty of the delivery system is no longer a prime selling point. Businesses can source core HR software from among a broad field of competitors. So, executives can afford to make comparisons.
Up front implementation is one area where businesses are looking to save money. By now, human resource execs know that it’s easy for an SaaS product to look great in the slick sales brochure - but that everything will fall apart without appropriate interfaces. HR is are catching on to the fact that they can’t just contract with an SaaS vendor and expect IT to do the heavy lifting in making the application work. Employers expect vendors to provide implementation assistance and troubleshooting. Ongoing support is also a negotiating point at the HR table. In other words, they want the service part of the Software as a Service package to mean something.
Effectiveness Draws HR to SaaS
As the focus in HR turns more and more toward strategic planning, executives are realizing that their business performance is lagging compared to other departments. They have the right priorities but simply don’t have the right tools to improve operations. While core HRIS is a central feature of SaaS for HR, niche products are also being sought to address strategic needs quickly and efficiently. Talent acquisition, management, and retention are all key areas where HR is trying to close the gap.
Onboarding is an obvious area of potential improvement for the mid to large size businesses involved in the Saugatuck survey. From the perspective of service, Emerald Software Group makes it a priority to help clients ensure a successful onboarding software implementation by collaborating with IT and HR. We also address another top HR executive concern (data security) through adhering to industry best practices. For more information, contact us at 770-569-5122.
Wednesday, December 22, 2010
Monday, December 13, 2010
Can HR Negotiate Better Software Deals?
The HR Capitalist has an amusing and insightful blog post up about why so many Human Resources professionals tend to be poor negotiators. Many people get into HR because they enjoy helping people – not because they enjoy driving a hard bargain. This generous attitude has its place in creating great employee relations, but it doesn’t serve HR well at the bargaining table when money is on the line. HR decision makers need to be ready and willing to negotiate with their software vendors to get the best product and the best deal.
Pricing Isn’t Always Set In Stone
For core HR software that can be purchased from many different vendors, pricing is usually a negotiable point. This is more likely to be the case with on-site licensed products than with SaaS. Vendors that use traditional licensing as their primary business model often have significant wiggle room if their pricing is inflated. Figuring out where the padding is can help HR determine where to ask for price breaks. Pricey ongoing maintenance/service packages allow many of these software vendors to generate a substantial portion of their revenue. This is an area where HR may be able to vigorously negotiate for better pricing.
In the SaaS market, the profit margins are not always as flexible. The vendor is already taking primary responsibility for all the software maintenance, upgrades, security, etc. Plus, these vendors are often pricing their products very aggressively to earn a larger market share in an industry still dominated by traditional licensing. However, with SaaS vendors who require a contract rather than a no-commitment monthly subscription, there is sometimes a potential to negotiate a longer contract term in exchange for a lower fee. It never hurts to ask.
It’s Not All about the Money
Niche and Best of Breed HR software vendors may be less likely to come down on their pricing because they are not in competition with as many other products. However, this doesn’t mean there is nothing on the table to negotiate. For example, your organization might need to interface the vendor’s software product with another application such as your HRIS, ERP, or a third party program.
A savvy SaaS vendor might have a vested interest in helping develop such an interface. Building a track record of successful interoperability with a broad category of applications gives the vendor a competitive advantage and widens their prospective client base. At Emerald Software Group, we are constantly adding to our portfolio of interfacing capabilities for Universal Onboarding. So, let us know your needs in this area – we are ready and willing to negotiate!
Pricing Isn’t Always Set In Stone
For core HR software that can be purchased from many different vendors, pricing is usually a negotiable point. This is more likely to be the case with on-site licensed products than with SaaS. Vendors that use traditional licensing as their primary business model often have significant wiggle room if their pricing is inflated. Figuring out where the padding is can help HR determine where to ask for price breaks. Pricey ongoing maintenance/service packages allow many of these software vendors to generate a substantial portion of their revenue. This is an area where HR may be able to vigorously negotiate for better pricing.
In the SaaS market, the profit margins are not always as flexible. The vendor is already taking primary responsibility for all the software maintenance, upgrades, security, etc. Plus, these vendors are often pricing their products very aggressively to earn a larger market share in an industry still dominated by traditional licensing. However, with SaaS vendors who require a contract rather than a no-commitment monthly subscription, there is sometimes a potential to negotiate a longer contract term in exchange for a lower fee. It never hurts to ask.
It’s Not All about the Money
Niche and Best of Breed HR software vendors may be less likely to come down on their pricing because they are not in competition with as many other products. However, this doesn’t mean there is nothing on the table to negotiate. For example, your organization might need to interface the vendor’s software product with another application such as your HRIS, ERP, or a third party program.
A savvy SaaS vendor might have a vested interest in helping develop such an interface. Building a track record of successful interoperability with a broad category of applications gives the vendor a competitive advantage and widens their prospective client base. At Emerald Software Group, we are constantly adding to our portfolio of interfacing capabilities for Universal Onboarding. So, let us know your needs in this area – we are ready and willing to negotiate!
Tuesday, December 7, 2010
Newest HR Software Terminology – PaaS
Software as a Service (SaaS) has become practically a household name in the HR industry. However, there is always a new development just around the corner and it’s hard to keep up with the technical lingo. The latest concept making its way into HR software vendor’s vocabularies is PaaS. Platform as a Service refers to more than the practice of offering a specific application over the web. With PaaS, Web 3.0 is in the mix. Software companies develop and run instances of their applications on the cloud computing platform. These resources are made available as a service by companies such as Amazon. Client data is hosted, stored, and transferred using virtual servers (this part of the picture is sometimes referred to as IaaS or Infrastructure as a Service).
What’s Different for HR?
The actual applications are still accessible via the internet just like traditional SaaS. The end user’s experience of the software doesn’t really change with a PaaS approach. However, there are other issues that can impact HR software choices from a strategic perspective. With virtualized servers and highly flexible platforms, it is possible to run an entire HRIS suite in the cloud environment. What was once the province of niche applications is becoming a standard offering from even the largest HR software vendors. IT and HR will need to collaborate closely to determine if and when moving the management of HR data and processes to the cloud is beneficial from a cost, maintenance, and security perspective.
The ability of smaller, niche HR software providers to serve clients is also enhanced with the advent of PaaS. Now, it is possible for them to run as many instances of an application as needed without increasing their costs for maintaining a permanent infrastructure. This server space and the computing capability being used can be scaled up and down practically instantaneously (which is why Amazon’s service offering is called the Elastic Compute Cloud). The ability to provide a separate instance of an application for each client also means SaaS vendors can offer greater customization without significantly adding to costs. Vendors can also serve a larger client base with rapidly changing capacity requirements.
Coming Soon?
There is speculation that Web 3.0 will make using multiple SaaS products together much simpler as interfacing between various programs becomes more commonplace. The popularity of Service Oriented Architecture (SOA) in software development has already moved web-based programs in this direction. SOA makes applications more likely to be interoperable as a basic design feature instead of an afterthought. This advance will create more flexibility for HR departments that want to use many Best of Breed niche products for the highest level of functionality in all areas of human capital management. HR might eventually have the option of ditching outdated suite software that contains applications that aren’t needed or used and simply cherry picking the best tool for each job. Of course, at Emerald Software Group, we’re already offering Universal Onboarding as a PaaS option for our clients. It’s a great place to start!
What’s Different for HR?
The actual applications are still accessible via the internet just like traditional SaaS. The end user’s experience of the software doesn’t really change with a PaaS approach. However, there are other issues that can impact HR software choices from a strategic perspective. With virtualized servers and highly flexible platforms, it is possible to run an entire HRIS suite in the cloud environment. What was once the province of niche applications is becoming a standard offering from even the largest HR software vendors. IT and HR will need to collaborate closely to determine if and when moving the management of HR data and processes to the cloud is beneficial from a cost, maintenance, and security perspective.
The ability of smaller, niche HR software providers to serve clients is also enhanced with the advent of PaaS. Now, it is possible for them to run as many instances of an application as needed without increasing their costs for maintaining a permanent infrastructure. This server space and the computing capability being used can be scaled up and down practically instantaneously (which is why Amazon’s service offering is called the Elastic Compute Cloud). The ability to provide a separate instance of an application for each client also means SaaS vendors can offer greater customization without significantly adding to costs. Vendors can also serve a larger client base with rapidly changing capacity requirements.
Coming Soon?
There is speculation that Web 3.0 will make using multiple SaaS products together much simpler as interfacing between various programs becomes more commonplace. The popularity of Service Oriented Architecture (SOA) in software development has already moved web-based programs in this direction. SOA makes applications more likely to be interoperable as a basic design feature instead of an afterthought. This advance will create more flexibility for HR departments that want to use many Best of Breed niche products for the highest level of functionality in all areas of human capital management. HR might eventually have the option of ditching outdated suite software that contains applications that aren’t needed or used and simply cherry picking the best tool for each job. Of course, at Emerald Software Group, we’re already offering Universal Onboarding as a PaaS option for our clients. It’s a great place to start!
Monday, December 6, 2010
Should HR Interface or Integrate Applications?
Spectrum HR has an excellent whitepaper available online discussing the benefits of interfacing vs. integrating various aspects of HRIS. What happens when an HR department is rigidly determined to have as few software vendor relationships as possible? The organization may actually be shooting itself in the foot by choosing a partner that offers an integrated HR system as part of its product offering.
Payroll is obviously a highly specialized field and requires software that makes it possible to effectively manage all aspects of employee compensation from overtime calculations to leave accrual to tax withholding. The state and federal rules for payroll management are constantly changing, so outsourcing this function or hiring a specialist to run an in-house program makes sense. However, payroll software vendors aren’t really the best choice for HRIS. Their products are too narrowly focused and HR simply doesn’t get all the tools needed to manage non-payroll aspects of workforce management. Inevitably, HR must add other third party applications to pick up the slack.
An ERP suite software provider may have a more complex HR offering and the pricing is likely to be attractive as part of a package deal. However, key areas of functionality are still likely to be missing. This leaves HR struggling to develop workarounds that are inefficient and not agile enough to remain compliant with labor laws.
What’s the Answer
The conclusion reached by the authors of the Spectrum paper is that Payroll and ERP vendors simply don’t provide the solutions HR needs for human capital management. The obvious answer is to implement a Best of Breed HRIS product rather than trying to integrate critical HR’s processes with the limited functionality of software that is not designed with HR’s needs in mind. The HRIS can then be interfaced with the Payroll partner and the ERP application as needed to share data.
HRIS Still Doesn’t Have It All
The relationship between HRIS applications and onboarding software is identical (albeit on a smaller scale) to the difference between ERP and HRIS solutions. Onboarding is too often thrown in as an afterthought rather than being designed for compliance, efficiency, and practicality. That’s why Emerald Software continues to offer Best of Breed Universal Onboarding software for our clients to interface seamlessly with their existing HRIS program.
Payroll is obviously a highly specialized field and requires software that makes it possible to effectively manage all aspects of employee compensation from overtime calculations to leave accrual to tax withholding. The state and federal rules for payroll management are constantly changing, so outsourcing this function or hiring a specialist to run an in-house program makes sense. However, payroll software vendors aren’t really the best choice for HRIS. Their products are too narrowly focused and HR simply doesn’t get all the tools needed to manage non-payroll aspects of workforce management. Inevitably, HR must add other third party applications to pick up the slack.
An ERP suite software provider may have a more complex HR offering and the pricing is likely to be attractive as part of a package deal. However, key areas of functionality are still likely to be missing. This leaves HR struggling to develop workarounds that are inefficient and not agile enough to remain compliant with labor laws.
What’s the Answer
The conclusion reached by the authors of the Spectrum paper is that Payroll and ERP vendors simply don’t provide the solutions HR needs for human capital management. The obvious answer is to implement a Best of Breed HRIS product rather than trying to integrate critical HR’s processes with the limited functionality of software that is not designed with HR’s needs in mind. The HRIS can then be interfaced with the Payroll partner and the ERP application as needed to share data.
HRIS Still Doesn’t Have It All
The relationship between HRIS applications and onboarding software is identical (albeit on a smaller scale) to the difference between ERP and HRIS solutions. Onboarding is too often thrown in as an afterthought rather than being designed for compliance, efficiency, and practicality. That’s why Emerald Software continues to offer Best of Breed Universal Onboarding software for our clients to interface seamlessly with their existing HRIS program.
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