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Erik Finch

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Software-as-a-service and talent management

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Erik Finch questions whether software-as-a-service is the right choice for learning and talent development and examines the factors that employers should consider before adopting it.

 
 
The software-as-a-service (SaaS) delivery model typically involves a vendor developing a web-native software application, and hosting and operating it on behalf of its customers (either independently or through a third party) over the internet. Customers pay for usage of the software and do not incur expensive ownership costs.
 
SaaS offers much faster time to value than most traditional deployment models. As a result, it is becoming increasingly popular with enterprises looking for an efficient and effective solution for everything from customer relationship management to business intelligence and web analytics.
 
There is now a growing interest in SaaS for learning and talent development. While it will never be the right option for all, the next few years are likely to witness a gradual migration of customers in this sector to a SaaS-based model.
 

Scoping the benefits

 
Opting for a SaaS approach to talent development enables organisations to focus more closely on their core business. They gain peace of mind from obtaining talent and learning management solutions that help them develop their employees better, manage their performance data more efficiently and free up their IT team to focus on the core business.
 
SaaS deployments invariably enable businesses to reduce software implementation costs. This is largely because the main alternative in this context – behind-the-firewall implementations – require companies to invest in costly IT infrastructure (servers, databases, load balancers, routers, switches, software licences) and to have expensive IT staff dedicated to their maintenance. SaaS deployment models can also take advantage of economies of scale by limiting on-site services work.
 
For companies with urgent training or talent development needs, SaaS solutions offer the added benefit of much shorter implementation cycles than are typical with behind-the firewall software. Instead of having to undergo a protracted installation process, businesses can usually get SaaS deployed in a matter of weeks.
 
There are several reasons for these rapid deployment speeds – there is no software to install, vendor services and training engagements are less involved and implementation services are delivered around a standard solution, within a fully-known hardware and software environment, leading to greater efficiency and reproducibility.
 
Procurement processes are also typically simpler with a SaaS-based approach. Many training organisations are unable to implement the learning management software they want simply because of the bureaucratic complexity of internal procurement processes and the inevitable struggle to obtain buy-in from all stakeholders within the enterprise, including most critically the IT department. After all, behind-the-firewall implementations can be expensive, and getting buy-in for such projects requires consensus building across the enterprise.
 
In contrast, SaaS offerings are subscription-based, require little, if any, capital investment, and can often be procured entirely through training or HR departments.
 
Another key benefit of deploying SaaS is the ability to achieve speed of innovation. Unlike on-premise deployments, SaaS technology allows companies to upgrade instantly and seamlessly to the most recent software versions. This enables them to take advantage of the latest innovations within the software while future proofing their investment.
 
The traditional enterprise software business model can be inflexible by comparison. Companies will often spend months deciding on a solution and a comparable period waiting for software to become operational. By this time too, their vendor has often released new versions of the software, incorporating the functionality they really wanted. To add further complications, behind-the-firewall implementations are frequently heavily customised and difficult to upgrade.
 

Issues to consider

 
SaaS deployments can offer a broad range of advantages to businesses wanting to adopt learning and talent development solutions. That said, while SaaS is often the more affordable option, there may be circumstances where a behind-the-firewall perpetual licence purchase makes more sense. Equally, there are several important issues that businesses should reflect on before migrating to SaaS. Outlined below are some of the most important.
 

Data security

 
Talent development data is often business-critical and highly confidential. Imagine the likely repercussions if a company lost all of its training compliance data. It is little wonder that data security is the most common roadblock to adopting a SaaS model.
 
Fortunately, the reality today is that security measures have evolved to meet the requirements of most organisations. Nonetheless, data security needs to be a key part of the purchase decision for any prospective buyer.
 
Business customers should ask their vendor to provide documentation of both their facility’s physical security and their network’s logical security (e.g. internal server and firewall setup).
 

Performance and network reliability

 
When a business rents an externally hosted or SaaS solution, it must depend on others outside the organisation to ensure its systems are up-and-running. In the same way that it might press a vendor on its security measures, it also needs to have an IT specialist from its organisation to help evaluate the vendor’s hosting environment, its service level agreements (SLAs) and disaster recovery plans.
 
Businesses should also carefully evaluate the vendor’s service level agreements and monitoring and evaluation processes and be prepared to ask for customer references. It may seem like a lot to remember but for most companies SaaS solutions will be more dependable than their own internal resources.
 

Mandatory customisations

 
It is important to note that the SaaS model is not conducive to changing the software’s code to modify functionality. Simply put, organisations should carry out an in-depth scoping of how the vendor’s out-of-the-box solution can meet their needs.
 

Integration and scalability

 
One of the reasons the talent and learning management industries have taken so long to move to the SaaS model is because these systems usually must seamlessly integrate with an organisation’s HR system. Evolved, interoperable web services now provide sound, secure data synchronisation for most HR and learning organisations. Businesses should ensure, however, that their vendor of choice has the tools to support such integrations.
 
Few clichés are used more in the software industry than ‘buy software that can grow with your business’. For some solutions, a SaaS offering can be a perfect try before-you-buy solution. This all depends on how scalable the vendor’s solution is and whether the solution has a reasonable upgrade path.
 

Coming of age

 
While there are clearly issues that businesses need to consider before implementing SaaS, and while the technology might not be the right option for all organisations, it is nevertheless clear that for many companies, choosing a SaaS-based learning and talent development solution is likely to deliver a broad range of benefits.
 
In particular, it will help them to complete solution implementations more quickly, reduce set-up times and deployment costs and free-up employee time to focus on their core business.   
 
Recent years have seen SaaS become an increasingly popular and successful deployment model for web analytics, business intelligence and CRM among a host of other software applications. We believe that the benefits of SaaS are so compelling for many customers that it will soon come of age as a software delivery model in the learning and talent development space.
 
 
 

Erik Finch is talent development specialist at SumTotal Systems.

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