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Why choose on-demand HR solutions?

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Web-based software
Information technology solutions for HR have changed rapidly in recent years as technology has evolved. On-demand solutions are the way forward, where users pay for what they want, when they want them, says David Woodward.


Software-as-a-service (SaaS) is where software is hosted and delivered to users via the web. Yet what has made web-based SaaS or ‘on-demand’ software possible? Besides the wide availability of PCs, broadband has grown dramatically. Bandwidth has increased by more than 100 per cent, every two years. Web systems, available 24/7, 365 days of the year, are now reliable and the security surrounding them is trusted and proven. A good example of how far such systems have grown in popularity is internet banking.

Modern day computing is now a commodity. In the past, big mainframe computers were regarded as the engine room for large corporations, providing them with strategic advantages. IBM was at the forefront. More recently, it is applications, not big mainframes, that are viewed as strategic. Today, it is business processes and the data itself, e.g. employee records, that are king.

Applications are now standardising. The Microsoft Office suite, and its individual applications such as Word, Excel, PowerPoint and Outlook, is probably the prime example. How many employees don’t use Microsoft Word? Very few.

“The beauty of true SaaS or on-demand software is that it has a low initial cost. Forward-thinking providers are now moving away from charging for the software itself, and expensive upgrades, by offering a subscription pricing model.”

The beauty of true SaaS or on-demand software is that it has a low initial cost. Forward-thinking providers are now moving away from charging for the software itself, and expensive upgrades, by offering a subscription pricing model.

This leads to rapid implementation, easy configuration, ‘utility’ style ‘switch-on’ (much like electricity or gas), lower upgrade costs and minimal to zero disruption during upgrades. Some providers have done away with any concept of user licensing, which is ideal for HR systems deployment, encouraging collaboration and complete self-service roll-outs without the constraints of licensing.

So what type of SaaS or on-demand software to go for? Well, let’s simplify the current state-of-play. It’s worth viewing the maturity levels of the various technologies available. Essentially, there are four levels of maturity, and I would strongly advocate that would-be purchasers concentrate on providers of solutions at level three or four.

1. Level one

The traditional application service provider (ASP) model dates back to the last decade. Each customer has his own customised version of the hosted application, which is an expensive bespoke solution to meet or partially meet the client’s needs. The customer runs their own version of the application on the host’s servers and pays for the often expensive hosting arrangements and costly upgrades as and when they are introduced. Besides the cost factor, customers have to hope that their ASP provider has the expertise to keep at least abreast of the latest technologies. The last thing customers want is to be held back by an ageing system.

2. Level two

With level two providers, the vendor hosts separate versions of an application for each client. Common to all customers is the same code implementation, which means that the solutions are not quite as bespoke as they may first appear. Vendors try and get round this by providing configuration options to meet individual customer needs. This allows customers to change how the application looks and behaves within defined constraints. So customisation is in the hands of the customer to a large degree, which means they have to have a good IT department.

3. Level three

Providers of level three solutions run what is known as a single instance, which serves all customers. Security policies ensure that each customer’s data is kept separate from the other. Customers are unaware that the application instance is being shared among a multi-customer base as configurable metadata allows each customer to enjoy a unique user experience and feature sets.

“For the first time, customers can enjoy true configurability, so the solution is precisely tailored to their needs. Gone are the days of frustration associated with traditional software solutions.”

4. Level four

The latest stage of modern IT sees the provider hosting multiple customers on a load-balanced farm, with each customer’s data kept separate. Again, configurable metadata ensures a unique user experience and feature set for each customer.

The choice between level three and four will often depend on confidence in the technology provider, especially in respect to data isolation. Smaller companies may well be satisfied with level three, where the provider should be able to pass on some cost advantages of the shared database platform, whereas larger enterprises would be advised to seek level four providers.

Level four SaaS or on-demand software offers would be HR purchasers with numerous advantages. For the first time, customers can enjoy true configurability, so the solution is precisely tailored to their needs. Gone are the days of frustration associated with traditional software solutions. Implementation timescales are rapidly brought forward. The solution has much greater capability, so it can do all the basics better, and yet is much easier to integrate with other solutions.

Alternatively, it can operate as a standalone system. Reliance on the company IT department is significantly reduced, freeing them to concentrate their limited resources on other pressing projects and enabling HR to gain a platform to deliver its services more effectively.

The flexibility of such solutions means that they can be responsive to ever-changing business needs, more necessary than ever in this fast-paced modern business world.

SaaS or on-demand software acts as the platform for service-led offerings so HR departments can start adding real value to their organisations.


David Woodward is chief information officer at Ceridian UK. For more information, please visit the Ceridian HR software page.

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