More than three quarters of the companies responding to a recent ISG study say they plan to adopt a Software-as-a-Service (SaaS) HR platform in the next two years. Why? Among other things, they want to reduce dependency on IT. But just how much does the adoption of HR SaaS reduce IT’s role? And how much work should HR expect to take on when it commits to integrating and maintaining the new platform?
As organizations stabilize their work on these new SaaS platforms and begin to manage them without the help of their external implementation partners, many are realizing the need for technical support is far greater than they anticipated, leading them to consider looking outside of their own organization for application management support (AMS).
The gap between expectations and reality when it comes to ongoing support for SaaS begins to grow from the outset of the software selection process. As organizations are evaluating platforms, they often factor in – indeed hope for – reduced IT support. And SaaS vendors emphasize the ease and usability of the systems, reinforcing the belief that minimal technical support will be needed once the new platform is up and running.
It’s true that SaaS systems are user-friendly and configurable; HR teams can make system updates without relying on IT to develop new functionality or make coding changes, and IT no longer bears the burden of hosting software or managing infrastructure. However, despite the desire to implement an integrated SaaS platform, integrations with numerous other systems remain to be done after the new system is live, and someone has to be on the hook to maintain them. Consider also the effort involved in ongoing release management as new functionality is pushed from the vendor, not to mention configuration changes, updates to integrations and testing of the system.
Today, in the absence of adequate technical support, many HR teams must take on these responsibilities without the required skillset. Additionally, many organizations contract with a systems implementation partner to implement the software, and then face a steep learning curve when the reins on the system are handed over.
The demand for people with expertise in SaaS HCM platforms exceeds the supply, making it difficult and costly for enterprises to attract and retain talent in this area. However, many HRO providers have been on the forefront of the SaaS market trend and have made strategic acquisitions to help meet the demand for talent. Examples include Aon Hewitt’s acquisitions of Omnipoint and Kloud, Accenture’s acquisition of Day Nine, IBM’s acquisition of Meteorix, and Wipro’s acquisition of Appirio.
As these and other HR providers strengthen their SaaS capabilities, they are becoming a go-to option for HR organizations seeking help with their new technology. Transitioning support to these external resources is particularly appealing to organizations that have an existing relationship with an HR service provider or systems implementation partner. Sourcing AMS lessens the risk of losing a critical resource to turnover and often includes training and certification of resources in the cost of the contract.
As with other services, companies must consider what kind of support – and what cost model – will work best for their HR organization. AMS providers offer a range of options, from expensive, dedicated support to the more cost-effective “pool of hours” approach. Keep in mind that it may take a few months for support to stabilize as the partnership gets off the ground. And, though it may be appealing from a cost perspective, a more budget-friendly model may mean longer turnaround times due to a lack of dedicated resources and difficulty estimating the need for hourly support from month to month.
ISG helps HR organizations select SaaS platforms and design the support model to helps them achieve their goals. Contact us to discuss further.