SaaS-Enabled HR Transformation for High Tech – Part I
Tech Sheets - The High Tech Blog
Posted by John Malikowski on May 29, 2012
Who hasn’t considered the impact that Software-as-a- Service (SaaS) solutions can have on their businesses? In some form or another, many High Tech businesses are taking advantage of the scalability and flexibility of SaaS solutions, using either an on-demand or subscription-based pay-as-you-go model. In this two-part series we’re going to look at how key trends in the market are shaping HR Transformation initiatives for High Tech companies and how SaaS solutions can accelerate the value of HR Transformations.
You are probably aware that SaaS is an approach that’s already transforming traditional IT organizations and structures into more nimble, flexible and affordable architectures. While SaaS technology is evolutionary, its business implications could potentially be revolutionary. That’s why the real demand for SaaS is being driven by the business, where there are heightened expectations — requirements, in some cases — for agility and flexibility in business operations. SaaS can create the possibility of rapid business model innovation, improved service levels and new ways of controlling costs — powerful stuff for High Tech companies responding to the after-effects of the economic downturn, a renewed war for talent and pent-up business demand of Human Resources (HR).
But there’s even more at stake than potentially being able to do current things faster, better and cheaper. SaaS solutions, like cloud computing, can enable small/mid-size High Tech companies to do entirely new things like helping those with smaller HR organizations compete and operate on a global scale. Similarly, for large High Tech enterprises, SaaS offers increased operational agility in terms of accessibility, scalability and deployment of the solutions – which are all desired benefits for the HR organization.
New business environment, new trends
There are a number of trends shaping the course of HR Transformation initiatives underway today. Here are a few to look out for…
Intensified focus on results
Many High Tech companies are at different places in their HR Transformation journeys and have different needs depending on their maturity and what they have already accomplished. However, many Tech companies have made massive investments — often with mixed results. For this reason, companies have limited tolerance for continuing to spend money related to HR Transformation without tangible results for efficiency and effectiveness of the HR organization. Often times they are truly doing more with less, so any process improvement, cost reduction and efficiency they can incorporate is critical to the success of the HR organization and the company. In fact, a 2011 study conducted by Deloitte found that nearly two-thirds of the surveyed executives still identify cost reduction as one of their top-two business challenges, closely behind talent retention at number one. Cumbersome systems constrain HR effectiveness and HCM technology solutions are moving up the priority list. Efficiency and effectiveness are still critical for driving the case for HR Transformation and as a result, expanding or implementing HR/Talent management technologies is expected to be a growing priority for many High Tech companies over the coming years.
While some High Tech companies have taken great efforts to streamline and improve processes and technology, those efforts often have not bled over into the other areas of the HR Service Delivery organization. While business and HR leaders appreciate the long-term value of HR Transformation, the planning can be daunting and the journey to value seems long. Is there a more efficient way to accelerate the transformation of HR to capture value faster? An approach to HR Transformation that is built on SaaS can help. The evolution of HR, business needs and technology maturity are converging to create a unique moment in the history of HR Transformation. Business leaders need improved HR delivery models to enable business decisions and growth, while HR departments need improved talent management and retention solutions. The timing couldn’t be better, as SaaS HR technology capabilities are continuing to mature. All of which can result in new opportunities to implement a different technology-enabled HR Transformation.
More off-the-shelf options
While software sales in general trailed off over the past couple years due to the economic conditions, according to several analyst reports, HCM software as a service (SaaS) continues to grow at over double the pace of on-premises solutions. This is good news for Tech companies as it means there are now a variety of options for those looking for a more tailored approach to their HR Transformation challenge.
As HR Transformation continues to evolve, an increasing number of High Tech companies are leveraging SaaS as a key enabler. Not surprisingly, a number of these solutions are focused on getting talent and analytics capabilities into the hands of business leaders as simply and quickly as possible. The entrance of SaaS-enabled Human Capital Management technologies to the market also enables companies to get the full depth of functionality, reducing the need for point-solutions that put pressure on traditional core HR solutions.
In part two, we’ll discuss how SaaS can accelerate the value of HR Transformation for High Tech companies and highlight some of the benefits. In the meantime, if your company or HR organization has journeyed down the SaaS path, please let us know if you have any guidance, lessons learned, or leading practices to share.
|John Malikowski is a principal in Deloitte Consulting’s Human Capital practice with over 25 years of experience in Human Resources (HR) and large scale project management. He is currently the National leader for Deloitte’s Workday practice.|
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