SaaS – It’s relevance for HR and Payroll
SaaS (Software as a Service) is a method of providing software as a service experience by avoiding non value add intermediary processes for the customers like buying software, extensive training of staff,
Inseparability of data and application, buying and integrating of related applications like say a separate database to store application data, maintenance of specific hardware configurations for the purposes of software applications, mundane backup procedures, living with the risk of crash etc.,
In SaaS model, software applications are developed ground up keeping users in mind for delivery of services over internet, with an Internet browser being the only absolute necessity without worrying about version upgrade, installation expertise, data security, locking up with a single vendor, non availability of trained personnel, in-house maintenance expertise etc.,
This model also allows software companies technical capabilities to develop new revenue models as usage of applications can be controlled. SaaS enables software enabled service companies to significantly reduce their time-to-market and time-to-profitability. It also reduces the cost to reach customers drastically compared to a regular software application.
There are many factors responsible for increasing popularity of SaaS. Some of them are
· Internet becoming a popular medium and relative availability of bandwidth
· Anytime anywhere availability of applications
· Evolvement of commercial transaction mechanisms
· Hardware costs are decreasing while manpower and other soft cost are increasing
· Enablement of collaboration of expertise allowing quick response to change needs across users.
· Maturity of software application market reaching next level of users.
· Recognition by users of value obtained from usage rather than perceived ownership value in the software application.
SaaS is making its dent in Indian HR & Payroll services arena resulting in significant cost savings over costlier specialized standalone applications. SaaS as a delivery model gains more and more currency as companies are looking at less expensive and but effective methods to their HR / Payroll functions. The legal scenario is changing fast and complex procedural needs can be effectively addressed using SaaS better than stand alone applications. This is basically because SaaS services can be configured to a specific customer better than a standard application.
The typical drivers for companies to opt for a SaaS model are:
· Better visibility of costs being commitment.
· No upfront huge cost commitment
· Conversion of overheads into variable costs
· Flexibility. Easy entry and exit options.
· Better value for money even in short run
· Focusing management and functional owners on business issues rather than on technology for non-core activities.
· Business users spread across multiple geographies
Small and medium enterprises (SME) who do not have any past software legacy systems find it easier to adapt SaaS and are ahead of their larger counterparts as it provides them cost advantage, integrated service experience, domain rich up-to-date applications and most importantly the applications act as a collaboration tool to integrate business objectives across functions & geographies.
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