The document discusses the business case and lessons learned for moving an organization's HR systems to a consolidated SaaS/cloud solution. It notes that many companies have a mix of legacy on-premise systems and various standalone modules that need to be consolidated. Adopting a consolidated SaaS model can help achieve unified global HR processes, lower IT costs, and allow the HR department to focus on strategic initiatives rather than system maintenance. The document outlines considerations for the implementation process and governance of cloud solutions to ensure security, data privacy, and regulatory compliance.

1. business case
lessons learned
HRIS AND SAAS/CLOUD
FREDRIK REXHAMMAR
HTTPS:// W W W . LI N KE DI N.C OM/ PR OF I LE/ P U B LI C -P R OFI L E - S E T TI N G S? T R K=P R OF - ED I T-E DI T -
PUBLIC _P ROF I LE

2. Business
drivers from
HR and IT
perspective
2014-08-20 2
BUSINESS CASE

3. Business needs Relevance
Life cycle management of old legacy
HR systems including local payroll and
local HR systems
Common situation in many companies. BPO is a viable option but not
self-evident.
ERP system without consolidated
functionality for talent management
Common variant of this which includes that an ERP system which is
in place but lacks consolidated functionality for talent management
Need for unified and global HR
processes which are mutually
reinforcing.
Common situation in companies where stand alone solutions have
been implemented.
Need for all HR processes to interact and feed each other and use
core data.
For example - compensation management uses core people data and
feeds into performance which in turn is the foundation for talent and
succession.
Consolidate IT systems in HR i.e. lower
IT costs and more efficient IT
management
3
BUSINESS AND IT MANAGEMENT NEEDS
-TOGETHER ACT AS DRIVERS TOWARDS CONSOLIDATED SAAS SOLUTIONS

4. Core HR system
•Master register for employees
•Basic data /Manager team structure
•Basic HR processes
Payroll including time, travel & expenses
•Local vendors due to law requirements
•Local due to integration with payroll
Recruitment
•Recruitment portal
•CV database
Performance
Management
•Goals
•Performance review
Learning
•Training admin
•Self service catalogue
•e-learning portal
•Certifications
•Learning history
One or more
standalone talent
modules
Core HR
People information
(master) and basic
people processes
Country based
(laws and
regulations
EXAMPLE HRIS ECOSYSTEM
- ONE OR MORE NON CONSOLIDATED ISLANDS
One or more stand
alone talent modules
Local country based payroll
Talent/Succession
• Talent review
• Succession
planning
…Global ERP system
Compensation
• Salary revision
• Job grading
One or more local HR
systems …. OR …

5. EXAMPLE CONSOLIDATED SAAS ARCHITECTURE
EXAMPLE VENDOR X WITH BOTH GLOBAL HR AND TALENT INTEGRATED WITH LOCAL PAYROLL
Compensation management
Global Core HR
Consolidated view of all
employees and organization
•Provides access to all talent
modules for all managers
and employees
Performance
and Goals
Succession
Talent review
Learning Recruitment
Local payroll for different countries
Access

6. Phase 1 Phase 2 Phase 3 Phase 4 Phase 5
Business
value
Compensation
management
New core HR
system with
basic people
processes
Performance
management,
talent review and
succession
planning
Learning Recruitment
STEP BY STEP PROJECT DESIGN POSSIBLE WITH MODULAR SYSTEM DESIGN
Ongoing launch and training initiatives

7. SAAS SOLUTIONS IN HR
-REQUIREMENTS AND POSSIBILITIES
7
 Can be part of CIO strategy where HR is a possible area for SaaS IT
delivery
 HR is not core business in terms of IT solutions
 Compare with on premise costs
 Mature and proven SaaS solutions are available today
 Internal IT has problems with building and maintaining competence for
small specialized areas such as HR
 Less strain on internal IT resources with SaaS
 Competence shift necessary in IT when we go for new internal platforms in lifecycle
management
 HR preparedness to adapt to best practice processes and rely on
standard application configuration
 Business case should focus on business value as well as lower TCO for
HRIS

8. 20/01/2015 8
TOTAL COST OF OWNERSHIP ON PREMISE
-IN THEORYInitiallicenceinvestment
22%support
22%support
22%support
22%support
22%support
Upgradeproject
every3:rdyear
Unit price TCO 5

9. 20/01/2015 9
TOTAL COST OF OWNERSHIP ON PREMISE
– IN PRACTICEInitiallicenceinvestment
22%support
22%support
22%support
22%support
22%support
Lack of internal IT resources
specialized in HRIS requires
consultant support to use the
vendors support correctly
Consultant
support
Consultant
support
Consultant
support
Consultant
support
Consultant
support
There are often more major releases
but the business cannot always
manage projects for all versions.
Frustration for the business to lag in
functionality creates an upgrade
pressure. In this case 2 major upgrades
over a 5 year period.
2majorupgrades
over5years
2majorupgrades
over5years
Unit price TCO 5
Internal
SLA
Internal
SLA
Internal
SLA
Internal
SLA
Internal
SLA

10. 20/01/2015 10
SAAS DELIVERY REWARDS CONSOLIDATION
- THE MARGIN COST OF ADDING A MODULE IS LOWSaaSfeeforcore/first
modulewhichincludes
infrastructure
(highpriceapprox70%)
Add-on
module1
(5-15%)
Add-on
module2
(5-15%)
Margin cost for adding a new
module is low. Alternative cost
for Add-on module 2 is a new
SaaS service provider
relationship and possibly
integration.
AlternativeSaaS
solutionforAdd-on
module2(70%)
Integration
cost

11. Functional area Consolidated SaaS solution Standalone solutions
Consolidated solution X yearly SaaS fee N/A
HR Core Included in consolidated solution X yearly SLA
Payroll 0,5 X yearly SLA 0,5 X yearly SLA
Compensation management Included in consolidated solution 0,5 X yearly SLA
Performance Included in consolidated solution Manual process or 0,5 X for
extra licenses in standalone
solution.
Talent review and succession Included in consolidated solution Manual process or 0,5 X for
extra licenses in standalone
solution.
Learning Included in consolidated solution Manual process or 0,5 X for
extra licenses in standalone
solution.
Potential yearly IT costs for HR 1,5 X 2 – 3,5 X
20/01/2015 11
BUSINESS CASE TCO POTENTIAL

12. Effect Quantifiable Values
Controlled workflow for managers and HR
The manual excel based process is replaced with a controlled workflow with
monitoring and audit trail capabilities.
X
less hours spent
Quality
Lower risk
Efficient administration X less FTE Effectiveness
Improved reporting X less FTE Effectiveness
Quality
Common process which avoid risk of extra costs due to process inefficiency
for example: salary increases due to local, non-aligned manual processes with
lack of decision support..
X
Potential
less cost increase
Effectiveness
Quality
20/01/2015 12
OTHER BUSINESS CASE EFFECTS

13. DON’T FORGET TO BENCHMARK WITH BPO
- ESPECIALLY FOR PAYROLL
On premise internal IT solution

14. Setting up
SaaS based IT
management
2014-08-20 14
LESSONS LEARNED

15. INTERNAL SLA FOR CLOUD
15
 Internally more generic IT services not specialized HRIS competence is still
needed in an internal SLA
 Integrations and file transfer
 Network
 Security
 Technical application management (i.e. deeper technical knowledge about Fusion
configuration)
 Make the most of the SLA with the SaaS vendor i.e. set up efficient system
administration
 Vendor support portal
 Named account manager for ongoing dialogue
 Customer networks both supported by vendor and bi-lateral
 Customer advisory board
 SaaS does not remove the need for internal system specialists and experts
 On the contrary! In-house specialist who can reconfigure and adapt business process
configuration creates capability to respond to business needs and drive HR process
alignment.
 Secure support from third party application consultants when needed

16. THE SELECTION AND EVALUATION PARADOX
16
Current
solution
Proposed
solution
Theoretical
ideal
We spend to much comparing this
• Data privacy
• Disaster recovery
• Service availability
• Integrations
• etc.
Legal requirements
...when we should consider this

17. Security
 Architectural review
 Penetration tests
 Rights to perform
penetration tests
 Regular third party
test reports
 ”Large vendor
advantage”
 Process audit
reports
 Rights to inspect
premises
17
Data privacy
 No data outside EU
including disaster
recovery
 Named data centre
 List of sub-contractor
entities
 Bound by same
conditions as Vendor
 Use EU model clauses
for data management
outside EU
 Vendor should comply
to all local legislation
as a contract clause
 Adherence agreements
between company and
other legal entities
CLOUD – SECURITY – DATA PRIVACY
Data
processing
agreement
External part
Company
Other legal unit
Adherence
agreement
Data
processing
agreement
Sub-contractor

18. GOVERNANCE/REVIEW MATRIX
18
What Who How When
Penetration tests Third party or internal department Separate agreement with vendor
is always required
On suspicion or major
architectural changes.
Review third party security
reports
Third party conducts test. Vendor delivers tests to
customers for review
Regular basis i.e. yearly
Review third party process
audit reports
Third party conducts audit. Vendor delivers audit report to
customers for review
Regular basis i.e. yearly
List of sub-contractor entities Vendor keeps an updated list and
report changes to customer.
When changes occur
Inspect premises Customer staff or third party Visit datacentres
Follow legislation on personal
data integrity
Customer and vendor´s joint
responsibility
Follow updates and proposals for
changes in legislation. Prepare
actions within customer
organization or vendor delivery.
Continuous
Vendor follow up Customer vendor management Vendor meetings to inform and
possibly align strategies

19.  Quick implementation
possibilities in system
requires flexible
implementation
partners…with
 ….step-by-step approach
with agile thinking and
successive deliveries
 “Large vendor
advantage” i.e. they can
deliver on extensive
security and data
processing
requirements.
 Competence build up in
business necessary to
keep up with new
features and versions
19
 Plenty of initial bugs in
new systems
 Secure
configuration/admin
services directly via
support without large
implementation project.
 Have vendors align with
partners so customers
can have solution SLA:s
and knowledge about
co-existence and
integrations.
 Make sure best practice
processes are in place
– not just a bunch of
functionality
 You select a vendor not
only a solution…trust on
that vendors ambition
and capability to be in
the frontline.
 Internal support
 Top management
support
 IT strategy support
 Cooperation with risk,
legal and compliance
etc.
 Lack of understanding
and resistance in some
parts of IT can exist
even with management
support
THINGS TO CONSIDER

20.  Fredrik Rexhammar
 https://www.linkedin.com/profile/public-profile-settings?trk=prof-
edit-edit-public_profile
1/20/2015 20
WANT TO KNOW MORE?