Five questions to ask potential SaaS HRMS vendors

Software as a Service is here to stay! In fact, in 2015 the industry hit the tipping point, with 50% of HRMS implementations being SaaS solutions (source: Sierra-Cedar HR Systems Survey 2015-16). No surprise, given the much-touted advantages: improved HR services, reduced costs, and easier updating.

So, what are the top five SaaS-specific issues you should be checking out if you’re thinking of shifting your HRMS to the cloud?

1. Speed of implementation

The lack of on-site hardware requirements means that faster implementation is often cited as an advantage of cloud HRMS systems. However, as in so many things in life, faster is not in and of itself better. If you feel a vendor is over-emphasising how quickly they can get you online, check how they intend to approach the broader implementation issues, such as stakeholder engagement, change management, and proper user training.

Recommended reading: find SaaS HRMS vendors with our completely independent HRMS vendor directory.

2. Security

The biggest concern with off-premises data storage is security. First of all, however much you’ve checked out your software vendor, don’t assume they are storing the data for you. They are more likely to be leasing space in a third party data center, and it’s the owner of that center that you need to know about. Consider how information security standards such as SSAE 16 and ISO 27001 are relevant to your needs.

3. Data storage

While we’re on the subject of the distant data center, explore issues around uptime and access. Increasingly, organizations and employees need 24/7 access to their HR data. Check the service level agreement for your vendor’s chosen data center and ask to see a copy of their business continuity plan. Furthermore, cloud computing isn’t as ‘borderless’ as it’s made out to be; the data center will be subject to the data protection and privacy laws of the country in which it’s situated – check that those don’t cut across your organizational requirements.

4. Configuration and integration

Traditional HRMS systems tended to be ‘off-the-shelf’ in that the configuration possibilities were limited, and often time-consuming and expensive, compared to SaaS HRMS solutions. However, that doesn’t mean you should take the flexibility of your new cloud HRMS for granted. Find out what is possible and what isn’t by way of configuring the system for your needs, and also how smoothly it will ‘talk to’ your other business intelligence systems and HR software.

5. Total Cost of Ownership (TCO)

The SaaS subscription payment model always appears cheaper on face value than the traditional license fee for on-premises solutions. Note that word: “appears”. Hardware-free cloud HRMS is often very cost-effective indeed, but that doesn’t mean it isn’t subject to beneath the surface costs, such as consultants, vendor fees, system maintenance, and staff time. Be sure to explore the full budgetary picture before your make your final choice.

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Dave Foxall

About the author…

Dave has worked as HR Manager for the Ministry of Justice for a number of years, he now writes on a broad range of topics including jazz music, and, of course, the HRMS software market.

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Dave Foxall