According to the results of a recent survey of more than 200 human resource (HR) executives, HR is quickly moving to SaaS and “cloud-based” solutions to meet their key business challenges and as a means of closing the effectiveness gaps that currently exist between HR priorities and HR systems. Survey results also revealed that executives view support and implementation costs as the most important business considerations when selecting a SaaS or Cloud-based solution provider, underscoring their desire to see a larger focus on ‘services’ with SaaS solutions.
(For those less techy: Some define cloud computing narrowly as an updated version of utility computing: basically virtual servers available over the internet. Others define it more broadly, arguing anything you consume outside the firewall is "in the cloud," including conventional outsourcing. SaaS means “software as a service.”)
“It is clear from this research that HR is broadly adopting SaaS solutions to help them meet their business objectives,” says Jeff Kristick, senior vice president of marketing at Plateau, a provider of enterprise-class SaaS talent management suites. “It is equally clear that not all SaaS solutions and vendors are created equal. We partnered with Saugatuck Technology to explore these issues, and found that not only is HR headed to the cloud, but also that, importantly, HR executives identify ‘Service’ – a component they find to be lacking in many SaaS HR solutions – as the most important consideration when evaluating SaaS solutions.”
The survey was conducted between January and February 2010, and included 226 HR and IT executives and professionals. Seventy per cent of survey respondents were employed by companies with more than 5,000 employees, with 35 per cent of respondents reporting that they worked for companies with more than 10,000 employees. More than 65 per cent of survey respondents were based in the United States, 17 per cent were from continental Europe, and the remainder were from Asia.
According to survey data, respondents believe the following business challenges will have the greatest impact on their organization’s human resources organization over the next two years: organizational change and transformation; addressing the skills gap; reducing overall labour costs; and leveraging technology to improve business performance. Unfortunately, survey data revealed that HR executives believe their current HR systems are falling short of helping them meet those goals, resulting in a significant “effectiveness gap” between HR priorities and the abilities of existing HR systems. The survey showed that the largest effectiveness gaps exist among the most important HR priorities, including those related to acquiring and retaining key talent (effectiveness gap of 26 per cent), managing talent (effectiveness gap of 28 per cent), and performance (effectiveness gap of 29 per cent).
Survey results clearly indicated that Cloud-based solutions – including SaaS – are seen as a means of helping to bridge the effectiveness gaps and improve HR professionals’ ability to manage their key responsibilities. According to the survey, nearly 40 per cent of executives surveyed indicate plans to implement SaaS for one or more core HR systems between now and the end of 2011, with nearly 50 percent planning to have SaaS-based, core HR administration applications in place by the end of 2012.
Other key findings from the survey included:
- ‘Service’ needs to be put back into SaaS: Support (39 per cent) and implementation costs (33 per cent) are the most important business considerations in selecting a SaaS/Cloud-based solution provider.
- Top Business Benefits of SaaS: Reducing costs (40 per cent) and simplifying software management (32 per cent) are the top business benefits expected by users of SaaS and Cloud-based solutions.
- Top Concerns: Data security and privacy concerns (48 per cent) are the core concern of users regarding SaaS and Cloud-based solutions.
As part of the findings from this survey, Saugatuck researchers have prepared a report titled, “HR SaaS Solutions for Better Business: A Selection Guide.” The guide includes key criteria for selecting SaaS solutions, including the basic abilities a provider must be able to demonstrate to guarantee SaaS success, such as the ability to simplify software management, adapt to organizational change, and integrate with existing systems. The guide also highlights the importance of carefully evaluating the “Service” component of Software-as-a-Service in terms of implementation support, commitment to customer success, solution provider experience, and track record with customers. The guide is available for download at
For more information about the survey results, visit SaaS survey results (
). For more information about Plateau, visit
Saugatuck Technology Inc. provides subscription research and management consulting services focused on the key market trends and disruptive technologies driving change in enterprise IT, including SaaS, cloud infrastructure, open source, outsourcing and enterprise social computing. For more information, please visit