As HRMS solutions have evolved to meet the increasingly complex requirements of HR and Payroll managers, so has the complexity of maintaining and supporting these applications. Traditional ‘on premise’ or ‘installed’ software has often fallen short providing the Return on Investment (ROI) that many organizations have expected due to upfront fees and efforts plus the ongoing maintenance and upgrade costs. In response, alternative, internet based delivery models have emerged. The initial ‘hosted’ or Application Service Providers’ (ASP) offerings essentially transferred the IT responsibilities to a vendor as the software was managed by a third party, and not always by the software vendor. Although these early attempts were a step towards ensuring ROI to HRMS customers, lack of standardization in the applications (custom versions of software) and integration with other HR and Payroll applications lead to many failures for both organizations and vendors. The SaaS model favors HRMS applications that can accommodate organizations’ unique requirements through configuration rules while avoiding customizing the software . This ensures a vendor can gain efficiencies of scale across multiple clients while clients gain a cost predicative HR delivery model with configured software to meet their requirements. SaaS is not a new delivery model, rather an evolution to meet the demands of the industry.
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