How the HR industry has seen cost optimisation with SaaS: Exploring next steps


It is always interesting to see how different industries are seizing the opportunity of cloud adoption as well as coping with its challenges. As far as the HR industry is concerned, a new report has asserted that enterprises have realised the cost savings of software as a service (SaaS) and are now focused on building the next steps.

The study, from Information Services Group (ISG), polled more than 250 companies, ranging in size from 1,000 to more than 20,000 employees, and found a “distinct picture of the typical journey towards maturity in HR technology.”

Approximately half of those polled who had leveraged a SaaS model said they had achieved between 10% and 30% savings in both IT and technology operations and HR administration. 15% said they had achieved savings of 30% or more in both areas. When it came to a specific technology platform – perhaps not surprisingly given the sensitive data departments work with – data security was the key feature, cited by almost three quarters (72%) as a ‘must-have.’ Ease of maintenance (69%), ease of use (66%) and depth of functionality (66%) were also highly cited.

Despite all this however, only two in five (41%) respondents agreed that they had seen measurable business improvements by adopting SaaS. The report argued this was down to a discrepancy between investment and results.

The key finding here was that HCM solutions do not address all of an organisation’s needs. SaaS providers were coming around this realisation too, the report added, investing in case management software or partnering with suitable providers to plug the gap. The report also advocated extensions through open APIs – Oracle, SAP and Workday are among the vendors who have explored this – as well as revaluating their metrics.

Part of the solution for enterprises could be to combine HR with other systems, such as ERP. More than two thirds (68%) of organisations polled said they were exploring this, with approximately half actively seeking out a platform or deployment partner.

Ultimately however, the move to what ISG describes as the fourth generation of HR technologies is a way off yet. HR Tech 4.0, as the report put it, would necessitate central governance established by a centre of excellence, full SaaS capabilities and fully automated and optimised processes.

“While organisations are accelerating HR technology capability, they have not yet made similar advances in process, service delivery and self-service technology,” said Stacey Cadigan, partner at ISG HR Technology and report co-author. “To add true business value and solve HR challenges, organisations must combine the use of SaaS with a clear HR technology strategy, optimised processes, an end-to-end experience and change management designed to ensure technology adoption and drive business outcomes.”

You can read the full report here (email required).

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