Making HR Simpler. A Guide to Software as a Service. Cezanne Software White Paper

Transcription

1 Making HR Simpler A Guide to Software as a Service Cezanne Software White Paper

2 Contents Introduction... 1 What is SaaS?... 2 What are the Benefits?... 3 Food for Thought... 4 Finding the Right Supplier... 5 About Cezanne Making HR Simpler

3 Introduction Businesses today rely heavily on information technology to increase efficiency and drive performance. For HR, an effective, up to date software system is essential if they are to keep pace with the demands of today s workforce and their own organisations. In the past, adopting new HR software was often a costly, slow and unwieldy process. Upgrading existing systems to meet new business requirements was equally painful. But thanks to the growing use of Software-as-a-Service (SaaS), organisations now have the ability to be much more agile when it comes to implementing new solutions to meet the latest business challenges. SaaS allows clients to subscribe to software and the system it is hosted on, rather than having to buy and maintain the HR software and everything that s required to run it. There are enormous benefits in terms of cost, flexibility, speed of implementation, simplicity and scaleability all of which are described later in this report. It s a model for delivering HR software that has become increasingly popular over the past five years and is now set to boom as organisations find themselves under increasing pressure to cut costs, cope with complexity and manage their people in new and more effective ways. For HR departments, SaaS offers an opportunity to acquire up-to- date HR software solutions that meet their specific requirements without having to negotiate with IT for the resources to implement and maintain the HR software, or the technical infrastructure that s required to run it. With SaaS, the HR function is less reliant on their IT department and more able to drive their own agenda within their own time-line. For the IT team, it s a chance to liberate IT resources as the overheads associated with ongoing software and hardware maintenance and upgrades go away. IT costs are more transparent, because nearly all of the services are provided by the SaaS supplier and invoiced on a subscription basis, while service level agreements ensure that those using the system receive timely support without internal IT staff needing to intervene Leading US analyst Forrester has predicted a nearly 6 fold growth in SaaS between 2011 and 2020 This report aims to give HR professionals and other managers a clearer picture of how SaaS works, what advantages it can bring and what questions they might need to ask a potential supplier. Key issues, such as data security, are also explored, and there are some examples of how leading global companies are benefiting from SaaS. We hope you find it a useful resource that will help you develop a better understanding of SaaS and help you make a clear business case for its use within your organisation. Companies of all sizes can benefit from SaaS solutions and indeed they are already being used in a wide variety of settings, not just for HR, but also in areas such as finance and customer relationship management. In fact, estimates suggest that spending on SaaS solutions could increase by as much as 500 per cent over the next four years. 3 Making HR Simpler

4 What is SaaS? Software as a Service (SaaS) is a flexible and low cost way for businesses to access the latest software, without having to pay the traditional hefty up-front licence fee or acquire the IT infrastructure required to run it. Businesses simply pay a monthly subscription to cover the specific aspects of the software they require and the vendor provides everything that is needed to run the service, including the hardware, software infrastructure, security features and support. Users simply log on and access the HR software solution via the internet or as it is now commonly described in the Cloud. Importantly, true SaaS vendors provide regular updates and enhancements to the system, which are automatically added at regular intervals. This ensures that customers always have the very latest functionality without the overheads associated with updating traditional in-house or hosted applications. What are the Benefits? Lower Up-Front Investment With SaaS, there is no need for companies to invest in building IT infrastructures with multiple servers and all the associated operating systems, databases, firewalls and back up facilities needed to keep systems up and running and sensitive HR information safe. Everything that is required to run the system is hosted and managed externally by the vendor from a central location and users simply pay a monthly fee to use the service. This subscription-based approach means that in accounting terms, costs are regarded as operating costs rather than capital expenditure. This can make it easier to get budgets signed off, as you are not asking for huge lumps of cash up front or tying up precious capital in assets, such as IT hardware, that may rapidly become obsolete. Instead, the investment is transformed into smoother operational expenditure. Good Return on Investment Research from Knowledge Infusion, a leading Human Resources consulting organization, suggests that SaaS solutions are often half the cost of an internally-hosted solution. Another report, by Forrester, puts return on investment at 26 per cent, with payback within months. On the surface, if a straight comparison is done between SaaS fees and an on-premise licence, SaaS may appear to be more expensive. But the picture can change significantly when all the factors - such as internal IT resource, maintenance costs and the cost of updates are taken into account. The financial benefits will, of course, vary from company to company and all organisations will need to conduct their own cost analysis and weigh up the pros and cons. 4 Making HR Simpler

5 Speedier Set-up Procurement processes are usually much simpler and faster for a subscription-based product. There s no software or hardware to install, so you are not reliant on other vendors or your IT department to scope and purchase the supporting software and IT infrastructure. True SaaS solutions are usually easier to implement too, as the vendor will have a standardised process in place to get you up and running quickly. They should be able to offer you advice on how to best set up your system, and perhaps help you with data migration too. Reduced Pressure on IT Teams IT departments, in common with HR, are often hard-pressed to keep up with the constant changes going on in the organisation. They are, of course, not just supporting HR but providing a service to the whole business with the conflicting demands that brings. With SaaS, there is a limited requirement for the internal IT team to be involved on a day-to-day basis as virtually all of the activities associated with managing and maintaining the system are the responsibility of the SaaS vendor. That also means that new SaaS-based HR systems can usually be implemented more quickly because projects are not reliant on changes being made to the internal IT infrastructure, and don t get pushed to the bottom of the pile by other priorities. With true SaaS, clients also benefit from much more frequent product enhancements than with the older-style applications. That s because these solutions have been built from the ground up around new product architecture, sometimes known as multitenant. In this environment, clients have their own instance of the software, but share a single code base. This means that, rather than juggle the conflicting demands of maintaining different releases, as traditional software suppliers have to do, SaaS vendors can concentrate on adding new features to just a single code base. Innovation is easier and everyone benefits from always being the latest release of the software. It s a much more productive approach for everyone. Scaleability Companies are not static. Needs change as organisations grow, restructure, merge, acquire new businesses or simply change focus. Updating an internally-hosted IT system to reflect these changes can be an unwieldy process. Increasing the scope of an in-house HR system may, for example, involve having to invest in extra computer hardware. With SaaS, the vendor will be operating in a large-scale environment where there is plenty of spare capacity and these kinds of changes can usually be accommodated very quickly. For smaller companies with limited IT resources, or businesses with high IT staff turnover, SaaS provides another advantage too. You don t need to worry about how to manage your HR system if key people leave, as the knowledge and responsibility is with the SaaS vendor. Continuous Improvements One of the biggest frustrations with traditional in-house or externally hosted HR software systems is the amount of time it can take to upgrade them as needs change or new features become available. It s often a costly exercise, both in terms of money and resources, and sometimes calls for a complete re-install. The beauty of true SaaS is that systems are updated seamlessly. Vendors simply add enhancements to the system on a regular basis, ensuring clients always have the latest features and the best functionality. Updates are usually made during scheduled maintenance windows, so there is minimum disruption to clients and the new features are simply there waiting for them the next time they log on. 5 Making HR Simpler

6 Food For Thought A proposed move to SaaS can lead to healthy debate within organisations. As well as having to make a strong business case, HR teams often find themselves having to respond to concerns about how aspects of the service will work in practice. These are the issues that are most commonly raised: Security Data security is, quite understandably, a big concern for organisations. HR information is highly sensitive. Companies don t want details about their employees getting out into the public domain and of course they have a legal responsibility to keep it safe. The reality is that good SaaS vendors offer an extremely high level of security often better than can be achieved by an internal system because their business depends on keeping everyone s data safe. Their systems are tried and tested and of course there are plenty of other precedents for the safe out-sourcing of organisational data. Payroll systems, for example, have been handled successfully by third parties for many years. The key is to ensure that any potential vendor s system can provide the following: Secure Product Architecture: In other words, a system that is built in several layers, so that each users permission to access or change information is carefully controlled. Roles-based Access: A secure system will give you control over exactly who can access what information while at the same time ensuring people can see the information they need to see. Where systems are deployed globally, this security also needs to take into account the legislative requirements of individual countries. Embedded Reporting: The procedure for pulling reports off the system needs to be at the same security level as the procedure for inputting and managing the information in the first place. Reporting tools need to be fully integrated in the security of the system, so users cannot pull reports directly off the database and bypass system security. Secure Data Centre: A good SaaS vendor will use a recognised, established data centre that has proved itself to be best in class. Cezanne OnDemand for example, is hosted by BT, which has a state-of-the-art-data centre providing both stringent security controls as well as exceptional connectivity to BT s global network. Our reputation as a supplier rests in part on being able to provide our customers, many of whom are major multi-nationals, with a level of service and data security that s as good as if not better than the service available from their internal IT facilities. Andrew Paul, Director of Customer Services, Cezanne Software independently audited and certified by LRQA a member of Lloyd s Register Group for ISO27001:2005 the international standard for information security management systems. Creating the Right Internal Culture HR departments may find themselves having to negotiate their way carefully through some internal politics when a move to SaaS is first mooted. In most cases, IT and HR departments both see the benefits to this alternative method of delivery and are able to work happily together towards successful implementation. In some cases, however, the IT team can see the introduction of SaaS as a threat. If the IT department is particularly strong or influential within the business, they may perceive that they are losing some of their power base. In an organisation that is under pressure to cut costs, they may be concerned it could lead job losses. In reality, outsourcing the HR system can often free up funds and resources for other strategic IT projects. It is important, however, to be aware of these possible sensitivities and be prepared to work closely with the IT team to demonstrate a strong business case for the change if this is required. It makes sense to get others who can act as champions on board at an early stage too. Senior managers, company directors and even the finance department can help you win over key gate keepers especially if you can combine a strong business imperative with the SaaS financial proposition. Strong Internal Processes: Organisations need to ensure their vendor s own internal security procedures are watertight. The delivery of Cezanne s SaaS solutions, for example, is 6 Making HR Simpler

7 Finding the Right Supplier A good vendor will be willing to help you gain a thorough understanding of how SaaS works and whether it is right for your organisation. Here are some key questions you might want to ask a potential supplier and some issues you might want to think through yourself: Questions to ask your vendor... Questions to ask yourself... What security processes are in place to protect your organisation s data? How do they match up against your own internal processes? Have these been independently audited and certified to a recognised standard? The two to look out for are ISO27001 and SAS 70 Type 11. The latter is a US standard, and is based around financial auditing processes. The former is European-wide standard focused specifically on security. How often are security processes reviewed and reaudited? Are they using an established, reputable data centre? If not, you may want to spend some time benchmarking their data centre against those with an established track record. Where is their data centre based? If it is not in Europe, you ll need to consider European data protection legislation. How often do they update the system with new features? You may want to ask them to provide you with recent release notes. What evidence will you need to establish a strong business case for investing in a new HR system? What are the objections you are likely to encounter if you decide to go with SaaS? Who internally can help you gather the information you need and put together a convincing case? Is SaaS right for you? Are there specific regulatory issues or unique processes in your business that means SaaS would not be an appropriate solution? Is a proposal to move to an externally-hosted system likely to be welcomed by the IT team? If not, what will you need to do to get them on board? Who else do you need to involve in the selection process? How will you implement the solution? Who internally is available to help you implement the solution? What level of support and training will they need? How are updates managed and what input is needed from you? For example, is the process seamless, or might you have to re-implement configurations that you have made? What kind of support is available on an on-going basis? Is training provided to get you up and running? What service level agreements are in place? You may want to look at the guaranteed availability of the system and check this against actual performance over the last 3, 6, 12 months. Vendors should have these reports as standard. How are subscription fees managed? Can you decrease as well as increase your commitment during the subscription period? What is the notice period if you decide to cancel? How do you get your data back? 7 Making HR Simpler

8 Will SaaS save you money? As with most business investments, the answer is, it depends. When evaluating the total cost for any software system, there are a number of factors you might want to take into consideration, especially when choosing between an in-house solution and one that is pure SaaS. It s very easy when comparing a licence cost with a subscription fee to overlook the other costs and risks associated with implementing and maintaining in-house HR systems. The table below shows some of the key differences between the two approaches and what that means for you. Licensed in house Subscription based SaaS About Cezanne Cezanne Software provides leading-edge Human Capital Management solutions that help companies better manage, develop, reward and retain their most important asset - their people. With many years experience of delivering solutions for HR and talent management and hundreds of customers worldwide, Cezanne Software is committed to service excellence. Cezanne OnDemand is the latest generation of our HR software solutions. Developed specifically for smaller businesses, Cezanne OnDemand harnesses the most up to date web technologies to allow companies to cost effectively improve the way their people are managed. Large up-front licence fees and start up cost Need to purchase, install and manage software and hardware Infrequent releases that may have an additional cost Updates applied separately to each customer s system, usually with associated professional services costs and requirement for internal resources Physical and system security are mainly the responsibility of the client Data back ups, fail-over support, etc. are the responsibility of the client Recurring subscription fee and minimal start up costs No hardware or software to install or manage (apart from web browsers) Frequent updates provided as part of the subscription fee Updates applied to all customers at the same time by the vendor at no cost Security provided by the vendor, typically at a much higher standard Vendor is responsible Contact UK (Headquarters) Cezanne Software Limited Tel + 44 (0) info.uk@cezannesw.com France - Cezanne Software S.a.r.l. Tel +33 (0) info.france@cezannesw.com Greece - Cezanne Software Hellas SA Tel info.hellas@cezannesw.com Italy - Cezanne Software S.p.A. Tel info.italia@cezannesw.com Portugal - Cezanne Software Ibérica S.A. Tel info.portugal@cezannesw.com Spain - Cezanne Software Ibérica S.A.U. Tel info.espana@cezannesw.com And remember, not all SaaS subscription models are the same. A vendor that provides you the flexibility to reduce as well as increase your usage during your subscription term, could save you money, especially if you have a seasonal workforce, or may need to reduce your headcount. USA - Cezanne Software, Inc. Tel (from USA CEZANNE) info.usa@cezannesw.com For other locations please info@cezannesw.com or visit ABCDEF Cezanne is a registered trademark in the EU and elsewhere. All other trademarks are the property of their respective owners and are hereby acknowledged.