SaaS HCM and Traditional HCM

Today we look at traditional or On Premise HCM Applications like PeopleSoft HCM and also at SaaS or On Demand HCM like Workday.

Are you wondering why I choose to name PS and Workday here from a plethora of On Premise and On Demand HCM applications available ? Well there is a reason and the reason happens to be these two inspiring and gritty gentlemen who found Workday in 2005-2006. The duo David Duffeild and Aneel Bhusri were part of the PeopleSoft leadership team who witnessed the takeover of PeopleSoft in 2004 (David was a founder of the erstwhile PeopleSoft).

And what would I do if I had to face a similar situation, maybe lick my wounds in private and turn bitter but no sir, that was not what the duo did, they created a top notch ERP again and this time it has an additional dimension to it, it was cloud enabled, in other words it was an On Demand or a SaaS application.

I salute the never say die spirit of Workday.

So what does SaaS mean?

Software as a Service simply means a software that is hosted and made available to the customers by the vendor over the Internet.

Software as a Service simply means a software that the vendor has hosted on cloud and lets you use it over the Internet, so in a way you rent a software hosted on the vendor’s infrastructure instead of buying the software and then installing and hosting it on your servers as in traditional software models. Along with you many other users/organisations also avail of the same software and use it without bumping into each other’s space, think of a mail service like Gmail or Yahoo! (but with a fee), you do not download or install anything, just type in the URL, create an account for yourself and get started. And in the case of traditional software when the vendor rolls out a new version of the application, it is up to the customer to work and upgrade to the newer version but in the case of a SaaS application, the vendor upgrades the application hosted on his cloud and the new version is rolled out to all subscribing customers.

When you implement an On Premise software application (another name for traditional software models) you buy the software license and then pay an Annual Maintenance Cost i.e. AMC to retain rights to use the software, in an On Demand software (another name for SaaS) you pay a monthly fee and a fee for any services that you may avail of from the vendor.

An On Premise software can be customised to a large extent by your development or consulting teams depending on your business needs whereas On Demand software cannot be customised by you as you are renting the software and this software is owned by the vendor and shared by many others, so the customisation route is not possible here. So you have to adapt to the functionality offered by the SaaS tool and you cannot adapt it to suit your business needs.

As you can see there are tradeoffs against both the models.

Bhuvanapriya RaoA busy productive day keeps me upbeat and happy. – Bhuvana Rao

Source: SaaS HCM and Traditional HCM – HCM SIMPLIFIED

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