Traditionally, companies had to purchase, install, configure and maintain the IT environments required to run business critical systems (like CIPHR). The costs involved in purchasing servers, software licenses and upgrades etc, although exponential, were accepted as a necessary evil……….until SaaS (Software as a Service) arrived on the scene.
What is SaaS?
SaaS or ‘The Cloud’ offers the same systems that were previously installed on your premises (on your expensive servers) in an online environment, maintained by the provider. There are a number of significant advantages to this approach;
Availability and adoption
As the application is delivered online, employees have access to it from anywhere and on many devices with an internet connection.
Also, because the vast majority of employees regularly use online applications and websites for daily tasks, such as checking their bank account or ordering shopping, accessing the HR system online should be quite straightforward for them. Being able to log into a self service module, such as CIPHR Net, from home is a major benefit when an employee needs to book leave/absence or is planning a holiday and needs to check other employees’ annual leave.
But that is not all. SaaS is an enabler for other key activities, like ‘Onboarding‘. This has the potential to improve employee engagement by allowing new employees to access specific company information and files and enables them to update their own details prior to their start date. The knock-on effect is a reduction in administration for the HR department.
Lower up-front costs and defined ongoing spend
SaaS offers users a simple implementation process. The expensive project planning is unnecessary as the environment, licenses and software are already in place and optimised for the specific application being delivered. This means that the initial project costs are vastly reduced.
Also, SaaS is delivered to organisations as a subscription model, usually billed on a ‘per user per month basis’, making the costs granular in nature. This does away with the large up-front payments and massive annual license fees. All investments in hardware, licenses, databases, ongoing overheads of employing and training IT staff, software and hardware maintenance and upgrades are managed by the SaaS provider.
Service based software operates on agreed pre-defined fixed charges. This enables you to predict the costs and helps you budget for annual expenses.
Integration, scaling and security
SaaS is completely scalable. As your system grows, so too can the online environment where it is stored,. As more and more systems are served online, many key connectivity tools become simpler to implement (such as Web Services). As a result, there is no requirement for your IT staff to create links (and potential security risks) from your internal network to an online system – both systems are already online.
Many organisations cannot match the infrastructure and security investments made by SaaS providers so SaaS offers a more powerful and secure environment. After all, SaaS providers are in the business of providing uninterrupted, reliable services and they understand the importance of data back-up because information security is their top priority. To provide an enterprise-class service, skilled resources, network redundancies, stand-by power, up-to-date security and intrusion detection are mandatory infrastructure requirements. Such high level infrastructure investment is usually overkill for a single organisation or IT team.
Reduction (or eradication) of ongoing costs
Many of the costs that will be saved are not directly related to HR and are realised by the IT function within an organization. Below are a number of examples of the costs associated with maintaining a business application which would be reduced or eradicated by adopting SaaS (place your current costs in the ‘Premise Cost’ column);
|Hardware: Servers||The server hardware required to run the system.||Fixed||Included|
|Hardware: Network||The network hardware (switches, routers, etc) required to support the servers.||Fixed||Included|
|Hardware: Backup||Backup libraries and/or vaults.||Fixed||Included|
|Hardware: Security||Firewalls, intrusion detection sensors and all associated centralized monitoring consoles.||Fixed||Included|
|Datacenter Setup||Physical setup of datacenter environment. Includes things such as: power provisioning, space provisioning, physical access control, etc.||Fixed||Included|
|Hardware installation||Physical installation and maintenance of required hardware.||Labor||Included|
|Administration: HVAC||Proper HVAC engineering and routine maintenance.||Labor||Included|
|Administration: Systems||Day to day administration of the underlying systems that run the software and all supporting applications.||Labor||Included|
|Administration: Database||Day to day administration of the DBMS backend supporting the system.||Labor||Included|
|Administration: Security||Day to day administration of security devices and regular technical security audits.||Labor||Included|
|Administration: Capacity Planner||Measuring infrastructure capacity and load to plan for future expansion.||Labor||Included|
|Administration: Backup Administrator||Conducting daily backups and rotating tapes (or other backup media) to secure off-site storage.||Labor||Included|
|Administration: App Administrator||Administering the application itself and conducting upgrades.||Labor||Included|
|Information Assurance||Auditing operations and infrastructure to maintain certifications and/or compliance standards.||Labor||Included|
|Disaster Recover Planning||Design, implementation and maintenance of hot disaster recovery facility and systems.||Labor||Included|
|Hardware: Supplies||New tapes (or other media) for regular backups and break replacements for other hardware.||Reoccuring||Included|
|Datacenter: Power (primary)||The amount of power required to run the infrastructure.||Reoccuring||Included|
|Datacenter: Bandwidth (primary)||Bandwidth required to host the system and transport real-time data to disaster recovery facility.||Reoccuring||Included|
|Datacenter: Power (DR)||Power required to keep disaster recovery facility running.||Reoccuring||Included|
|Datacenter: Bandwidth (DR)||Bandwidth required to maintain real-time backups of production with the ability to burst should the site be brought online.||Reoccuring||Included|
|Datacenter: Space (primary)||Payment for the physical space being occupied.||Reoccuring||Included|
|Datacenter: Space (DR)||Payment for the physical space being occupied.||Reoccuring||Included|
|Hardware: Maintenance and Vendor Support||Vendor support agreements. 18% of hardware list price is a good rule of thumb for maintenance contracts.||Reoccuring||Included|
|Backups: Off-site storage||Off-site storage of backup media.||Reoccuring||Included|
As you can see from the above, there are many associated costs with running an application ‘in house’ that you may not immediately consider!
Lower cost (or free) upgrades
Many SaaS application providers include upgrades as part of the standard service and subscription. This not only gives you peace of mind, but also means that you are the first to receive new features, functionality and improvements. However, it is not only the application that benefits from these upgrades. The environment is also maintained as part of the subscription.
SaaS delivered systems are much easier than on-premise systems to support. Pinpointing the problem and ruling out environmental issues is a large part of this. With SaaS, every client system is installed in a consistent way and in the same environment so solutions are easier to find. In this way, cutting out the “trial and error” involved in traditional system problem solving will significantly reduce the time required to resolve issues.
The service desk has immediate access to the system (with your permission) and is able to replicate the issue. This means time is not wasted having to request a backup, wait for it to arrive, restore the backup and finally look for the cause of the problem.
Also, the headache of IT staff trying to keep track of software updates, software compatibility, license renewals and potential viruses or malware is relieved with a SaaS environment. All of these are maintained and monitored for you as part of the service.
Below is an infographic illustrating just how much activity already exists on line;