JULY 2015HR TECH OUTLOOK8Making the Transition to Software as a Service (SaaS) R technology has changed dramatically over the past decade, typified by movement away from licensing and managing HR technology in-house or even traditional externally hosted-systems. Companies are spending more on HR technology and replacing their core systems more frequently than ever before­every three to five years on average vs. every five to seven years. On-premises systems are being abandoned in favor of Software-as-a-Service (SaaS). SaaS service delivery is considerably less expensive, easier to implement, and requires little IT support. Internal technical talent is freed up to work on core business initiatives that contribute to generating revenue (although a good HRMS contributes to profits by controlling costs). However, there are major differences in purchasing and managing SaaS systems that are not obvious to HR technology professionals new to Software as a Service. If you're moving away from traditional models and towards SaaS, here are some considerations: Defining RequirementsSaaS applications are highly configurable, so a single instance of the system can be used across many customers. Resist the temptation to define your requirements and then seek out vendors whose products can meet them. Instead, consider altering your key processes to align with best practices as defined by the vendors. Embrace the possibilities offered through configuration, but avoid customizations-while common and acceptable in on-premises systems, they are difficult to support in a SaaS application. The desire to minimize change comes naturally, but customizing SaaS systems to avoid changing existing practices will complicate your upgrades. Invest time in building a data governance model that aligns across your organization, and then let the workflow defined in your SaaS application drive your processes. Contract NegotiationsIn the SaaS world, support is supplied by your vendor instead of your internal IT resources, so clear expectations are essential. You're building a partnership with your vendor­vs. simply licensing software. Be clear about what the vendor will do and what your internal staff will do. Vendor management is still critical to the success of your service delivery model­and, done right, it continues to be time consuming. Build specific metrics into the service level agreement, and be specific about metrics reporting. Understand vendor response times for each level of issue severity and negotiate meaningful financial penalties for failure to meet service levels. Ask your vendor to report monthly on service levels so penalties can be worked into invoicing. Address business continuity in your contract­what is the plan if your vendor's data center is affected by earthquakes, floods, or other natural disasters? ImplementationSome SaaS vendors don't implement their own applications. Instead, they will certify consultants to staff and manage implementation projects. While you certainly need implementation expertise specific to the application, consider using consultants to backfill internal staff functions, so you can assign internal resources to the implementation. Then, when your implementation partners depart, you still have knowledgeable support HBy Pam Puetz, VP-HR Services, First American Financial CorporationIn MY OPINION
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