In our continuing series on human resources and technology, I thought it would be good to cover a term that gets thrown around a lot – SaaS. It’s an acronym for Software-as-a-Service.
Many times, when I hear the term SaaS, it’s used in the same sentence as “the cloud.” So much so that it’s easy to wonder about the relationship between the two. Are they the same? Different? And how do they work?
So I reached out to a friend who works with a SaaS product to see if she would share her expertise. And luckily, she said yes. Helene Kopel is a product development leader specializing in Web-based products for small businesses. She currently spearheads the SaaS (Software-as-a-Service) product development and customer success teams for the HRdirect Family of Brands, including TrackSmart employee time and attendance software and Hello Scheduling staff scheduling software.
What is Software-as-a-Service (SaaS)?
[Helene] Basically, SaaS, is any software, paid for through a subscription or license rental that you use or run but isn’t installed on your computer. This is opposed to traditional software, which requires you to purchase a license outright and install the software on your own computer or network, using your own data center and servers.
How does SaaS compare to “the cloud”?
[Helene] Although people use the term differently, “the cloud” really only refers to computing resources – like data storage, virtual servers or networks that aren’t tied to a specific location. SaaS vendors, developers and information technology departments handle the technical side and work within the cloud to make sure the SaaS application works for the users. So when you run a SaaS application, you typically log in to the website and the app itself is running in the cloud, but you are not in the cloud; the SaaS app is.
What are the advantages to SaaS?
[Helene] There are a lot of advantages. The biggest, by far, is how much faster SaaS is compared to traditional software. You don’t need to take a trip to the store or spend time downloading and installing programs. You can get up and running in minutes. There’s nothing to install or configure; it’s usually ready to go. Similarly, bug fixes or software updates happen more frequently than with traditional software, and, the user doesn’t have to do anything.
Another big advantage: SaaS products are typically more affordable. Instead of purchasing expensive software outright, you can pay a reasonable monthly or annual fee to access a program instead. Maintenance costs, updates and new releases are generally included in SaaS fees too, whereas traditional installed software usually requires you to buy an upgrade package and install it – or pay for others to help you do so.
Scalability is a huge advantage that SaaS has over traditional software, too. Many SaaS vendors offer a variety of plans, typically based upon sets of features or numbers of users, so you only pay for what you really need. At TrackSmart, for example, we know that employee attendance tracking software shouldn’t be a ‘one size fits all’ service, and we offer different plans to accommodate businesses of various sizes and needs.
You mentioned affordability as one of the big benefits to SaaS. If I’m not currently using SaaS, is it expensive and time-consuming to move to a SaaS environment?
[Helene] Not at all. SaaS applications are typically cheaper and easier to use than traditional software. So while making the transition may take some time upfront, you’ll save time in the end since you won’t have to download or install any more upgrades, bug fixes, or other updates to traditional software. And there’s no major investment to get started.
So, there a lots of advantages. Is there a downside to SaaS?
[Helene] Since SaaS applications aren’t installed on your computer and typically require an Internet connection to run, speed and service outages – either on your end or the vendor’s – can be issues that affect your workflow. But the biggest issue, of course, is data security and privacy.
Speaking of security and privacy, is SaaS secure?
[Helene] SaaS applications can be very secure – sometimes more secure than traditional software. But businesses should always take care when transmitting sensitive employee data over the Internet. While there are many, many reputable and secure SaaS vendors, it’s a field full of startups that may be less-than-thorough with their security protocols. To best protect your employees and your business, only use services that have detailed security and privacy policies listed on their sites.
Last question, what do you see as the future of SaaS?
[Helene] Data integration will become much easier and more readily available, moving forward. One of the biggest downsides of traditional software is that these applications are usually independent tools that can’t always ‘talk to each other,’ for lack of a better term. Sometimes, the same information lives in multiple places, simply because it can’t be easily shared between different software, which means double the effort and time to upload or enter data. With the current trend toward data integration between SaaS applications many of your systems will be able to share information and work together.
[Tweet “Here’s everything #HR needs to know about SaaS”]
Many thanks to Helene for sharing her knowledge with us. If you want to learn more, you can check out the TrackSmart blog or the Hello Scheduling blog.
As technology and the functions of human resources become more integrated, it’s important for us to understand the terminology. We have to make good decisions for our organizations on the right technology to accomplish our strategy, the most effective technology to buy, and the reasons why one technology solution is better than another. Knowing key technology terms is essential.
Image courtesy of Sharlyn Lauby3
Bill Kutik (@billkutik) says
In an otherwise well-informed discussion about SaaS, Helene makes a statement that is true only for the smallest companies:
“You can get up and running in minutes. There’s nothing to install or configure; it’s usually ready to go.”
SaaS software is not like buying a book from Amazon. In larger organizations with more complicated HR processes, SaaS software requires an implementation with hundreds or even thousands of configuration decisions.
I know everyone thinks of Oracle as big company software, but recently they have been selling to companies with 500 ee’s. At the recent HCM World conference, they estimated a SaaS implementation as taking 8.4 months.
Helene Kopel says
Thanks, Bill. You’re right…the larger and more complex the HRIS system, the more likely the implementation will take some time.
Steve Risner says
Our company, HR Associates, has been using Automated Business Designs’ (ABD.net) Ultra Staff software for 6 years. We have always paid for the Maintenance Program which includes yearly software updates.
Last year, ABD began offering Ultra Staff through the “Cloud” for virtually the same cost as the Maintenance Program. So happens, HR’s aging 2008 Dell server uses Microsoft Sequel Server 2003 which will no longer be supported as of July 2015. One of the main reasons we have not upgraded the SQL Server 2003 is that Microsoft has since gone to an ala carte system with Sequel Server 2008 & 2012, making the program much more expensive. The SQL Server program can be more that 1/2 the cost of a new company server.
We have decided to replace the server but with just a basic server program to run internal documents and file sharing and take our software and data to the cloud through ABD’s Ultra Staff.
Being a small company, going to the cloud seems to be a no-brainer.
Thanks for the article, we were making these decisions with our IT company last week.
FYI: Our IT company suggested using the Wi-Fi personal hotspot on our iPhones as an internet service backup, in the situation where our internet service goes down. ie. connecting through a laptop or a Wi-Fi enabled desktop.
Lauren Mathers says
What an informative post. People are constantly throwing around the term “the cloud,” and half the time, I’m not quite sure they even know what they’re saying! But the facts you point out about SaaS rang true for me. SaaS solutions are definitely a cheaper, and often times, much better solution to some of the problems that run rampant in the HR industry.
We have been using HR software by Ultimate Software that has really streamlined our processes. It can truly make a world of difference in the hires you make, profitability and payroll. These solutions definitely make my life much easier!
Thanks for your post; it was really informative!
Sharlyn Lauby says
Thanks for the comments. I totally agree that questions are a part of implementations. Many of them are part of the planning phase and actually set the foundation of the project.
Ronen Schwartz says
I work for a company focused on Data Integration that dcided 7 years ago that Cloud integration and specifically cloud data integration will be the next thing. Obviously, I loved your your future view that Data Integration is going to be key part in the future of SaaS. I wanted to add from my experience that it is about Data Integration for All! Cloud Data Integration done by any user is the SaaS direction. SaaS has gave the power for more users, to do bigger things. Integration is a key enabler. Unless these new users are able to integrate data on their own, SaaS will not live to its full potential.
The premise of SaaS is excellent. I think with many businesses outsourcing functions to freelancers these days, this is a great way to safely provide software access. And, of course, data integration is a huge plus. This is definitely something that more businesses should look in to, especially if they use remote workers.
Halina Pupin says
Thanks for your clarification about SaaS. I’d like to add a few comments; agree with Bill, sometimes those implementations do take a number of months AND more often than not, one of the key issues becomes integrating/interfacing the SaaS solution with existing on premise / traditional software tools. Given that data models are different (SaaS vs. on premise) this can pose some interesting challenges.
In terms of cost, the ‘saving’ I would suggest is on the cash flow end.