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Considerations for ERP and SaaS

systematicHR Avatar

Jason Averbrook over at the Knowledge Infuser recently wrote:

Many of our customers are currently in the process of implementing best of breed “OnDemand” HR/HCM/Talent Management technology solutions for business processes such as Goal Alignment, Compensation Planning, Performance Management, Learning Management, and Recruiting.  All of our customers are implementing these solutions on top of HCM foundation systems like PeopleSoft, Oracle, SAP, Lawson, etc….   ((Averbrook, Jason, January 9, 2007.  “Redefining the Implementation Process for On-Demand.”  Retrieved from on February 25, 2007.))

Take a look at Jason’s recommendations for implementing and planning for on-demand here.

I’d say that the trend over the last few years has certainly been to implement point solutions and especially those that are set up with multi-tenant and SaaS architectures have benefited.  The time to live and the ability for a vendor to make updates to client installations without long upgrade cycles is a definite advantage.    Jason however, makes an excellent point that the planning for these implementations can’t be short-cutted.  Quicker implementation cycles does not mean one can speed up the planning and evaluation process.

However, reading his article made me think of something else.  First, ERP’s are certainly making a comeback with new and improved functionality.  Some of the modules that would directly compete with point solutions that I’ve seen in the last year have been as good and sometimes better than the point solutions.  The inclusion of SOA into core architectures is nice for the point solutions, but in reality the capability of integration is a couple years away.

The trend is there, but how does one make a decision as to which option is better, or if ERP is still even viable.  Here are a few factors that I think might be important:

  • How critical is integration?
  • Will the point solutions update the functions you want them to? Or will you need more control?
  • Are you a fairly standard organization, or do you have many programs that need special effort?
  • How important is cost to the decision?
  • How agile does your workforce need to be and which type of solution better provides that?

I’m not sure there is a definite winner here, and ERP components still fit in a wide variety of configurations.

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10 responses to “Considerations for ERP and SaaS”

  1. Considerations for ERP and SaaS Many of our customers are currently in the process of implementing best of breed “OnDemand” HR /HCM/Talent Management technology solutions for business processes such as Goal Alignment, Compensation Planning, Performance Management, … [

  2. SystematicHRI work for a company that delivers on speed of implementation. RealLife HR is a point solution provider – technology platform and services for Benefits Administration, Onboarding, Manager Desktop and a few other things.

  3. Lexy Martin Avatar

    What we see with our ERP implementation work is a strong return to SAP or PeopleSoft, for example, particularly with the latter’s Candidate Gateway and Talent Acquisition Manager and also to Performance Management. An example is an organization that had 5 PM solutions done in individual business units — now the organization is moving to a single integrated PM solution. We are doing an org-wide business process standardization. The end result is actually a lower total cost of ownership (less integration effort, fewer dollars out the door to the SaaS, increased value from the already sunk costs of PS), plus the organization now has a standard PM process with all business units aligned. Not easy to do, with lots of communication and collaboration needed, but beneficial to have all on the same page.
    The best of breed, on demand, serve to meet some immediate needs usually, but the longer term solution is the return to a single integrated system, and more importantly common processes and alignment.

  4. systematicHR Avatar

    I agree Lexy. Huge move by the market to implement the new recruiting stuff in PS 8.9. SAP is also generally making a lot of ground over the last couple of years from what I can see.

  5. Martin Snyder Avatar

    Naturally I have a vested interest in SaaS / best of breed (in Recruitment) being a better value than PS 8.9.

    Like the old saying that “a lie can make it halfway around the world before the truth has it’s pants on”, a good SaaS (or self-hosted web app for that matter) can be installed, trained, and running before PS can sign a contract for an update and consultants can scope the job. It’s that speed and nearly non-material level of resource to get it done that keeps attracting corp. HR to outside vendors.

    Until corporate IT starts giving HR the attention, service, and respect that low cost vendors do, there will always be vectors for ‘infection’ by the likes of us. And once we are in and doing a good job, we can be hard to eradicate.

    In addition, our integration skills and tools grow more useful daily, as do ecosystems that offer a spectrum of value to HR buyers that ERP vendors may be hard pressed to match.

    So it’s a race; an interesting one, and certainly not one with clear leaders right now. Add in the notion of TMS vendors and BI / integration vendors nipping at ERP too, and its even more interesting.

  6. systematicHR Avatar

    Thanks Martin. You make great points. I’d play devil’s advocate and argue that much of it depends on scale and the inherent capability of the selected ERP application. A few years ago, nobody would have chosen the PeopleSoft eRecruit tool over a point solution. Today, their revamped tool is creating quite a stir. Integration is still important, and as you climb the ladder to more complex organizations with complex requirements, time should not be as important as getting everything right. A quick implementation is only as good as the base requirements definition.

    Then again, you have Oracle and SAP moving towards SOA architectures. Basically to me, that’s an open admission that SaaS is the future of technology.

  7. Martin Snyder Avatar

    DD good points also. Funny thing about scale- some HUGE global orgs are decentralized and act like medium firms, while some smallish (still large in an everyday sense) firms are very tight in terms of standards and intergrated IT practices. That range makes scale less than precise as a measure of sales potential for vendors like us.

    Another point that I have to keep driving at is that SOA and web-apps in general are NOT bound to be SaaS, even though thats where the buzz is today.

    As firms find the sweet spots for either SaaS or self-host, they will select the right mode- where the webserver / data sits does not mean all that much to the technology (assuming that vendors are motivated to provide licensed versions, which some will be, as firms demand the option).

  8. Tom O'Brien Avatar

    Lots of good points above. Since I make my living in the SaaS/best of breed type vendor, I have a particular perspective.

    Like Martin, I think one of the biggest issues for HR Users is their ability to get resources from IT. They can usually get the big implementation done, but after that it is slim pickings.

    Arguing with Lexy, the future is not in a single integrated system (see internet vs. mainframe) but in the ability to easily interconnect multiple systems using a common language and set of objects. (My Yahoo homepage presents email, youtube, blogs, salesforce, corporate applications, windsurfing forums, newsreaders, etc. I don’t know or care where they live or what their architecture is.)

    One thing I want to emphasize on the speed to go live issue. Implementing quickly is not a virtue in and of itself. We implement quickly b/c we have an architecture that enables us to implement quickly. It is a by-product – not the product. It is also the tip of the iceberg in terms of the benefits of having a configurable, multi-tenant SaaS architecture.

    Tom O’Brien

  9. Lexy Martin Avatar

    Since CedarCrestone mostly makes its living with the integrated system from PeopleSoft, I have another perspective.

    From the user perspective, you are absolutely correct that the ideal is the easy interconnection of multiple systems with your homepage, email, you tube, etc. etc. From the organizational perspective, however, the interconnection of organization services (simple stuff like employee self service, benefit services, online paystubs, job listings, or manager services, job reqs, performance reviews, etc.), there is a need to keep expenses down and the single integrated “back end” system such as that from the ERP vendor providing many of these services, is easier and cheaper than if multiple best of breed services must also be integrated.