SaaS Whitepaper

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The Top Four Reasons Why So Many Companies Are Selecting SaaS for the Most Efficient and Convenient Human Capital Management

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SaaS Whitepaper

  1. 1. Software-as-a-Service The Top Four Reasons Why So Many Companies Are Selecting SaaS for the Most Efficient and Convenient Human Capital Management WWW.ULTIMATESOFTWARE.COM
  2. 2. ©2008 Ultimate Software Group, Inc. All rights reserved. The information contained in this document is proprietary and confidential to The Ultimate Software Group, Inc. No part of this document may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying and recording, for any purpose without the express written permission of The Ultimate Software Group, Inc. No part of this document may be extracted and/or used out of the context of the full published document for any reason. This document is for informational purposes only and is subject to change without notice. Ultimate Software makes no warranties, express or implied, with respect to this document or any statements contained therein and specifically disclaims any warranties including but not limited to those for a particular purpose. This document contains or may contain statements of future direction concerning possible functionality for Ultimate Software’s products and technology. Ultimate Software disclaims any express or implied commitment to deliver functionality or software unless or until actual shipment of the functionality or software occurs. UltiPro is a registered trademark of The Ultimate Software Group, Inc. All other trademarks referenced are the property of their respective owners. Revised January 2010. 2000 Ultimate Way Weston, FL 33326 1 800-432-1729 www.ultimatesoftware.com i
  3. 3. Table of Contents Introduction ....................................................................................................... 1 What Is Software-as-a-Service (SaaS)? ........................................................... 2 SaaS: How It Works .......................................................................................... 3 For Every Company, Large and Small .............................................................. 5 Benefits and Business Value for Entire Organization ....................................... 6 Sample Feature Sets of UltiPro through SaaS ................................................. 7 Top Benefits In-House Control with Outsourced Convenience ...................................... 8 Return on Investment ................................................................................. 9 Best-in-Class Technology with Peace-of-Mind Security........................... 11 Award-Winning, Expert Service ................................................................ 13 Summary ......................................................................................................... 14 Ultimate Software Proprietary and Confidential ii
  4. 4. Introduction A December 2008 survey by From payroll to benefits to more complex HR compliance, managing human resources Gartner found that the nearly is a multi-faceted responsibility—and more and more crucial in the competition for 90% of organizations are hiring and retaining good employees. planning to maintain or increase their usage of SaaS solutions More than ever before, human resources professionals need to streamline HR for the following reasons: functions and channel more energy into developing and retaining top talent. To stay 1) More cost-effective from competitive, they need superior systems and strategies already proven to positively a TCO standpoint than impact business success. on-premise solutions 2) Easier and/or faster to deploy Today, the most organized, efficient, strategic, and cost-effective approach to HR, than on-premise solutions payroll, and talent management is Software-as-a-Service (SaaS), a means of delivering 3) Lack of IT resources a software solution online. necessary to implement an on-premise solution In addition to the competition for top talent, the contemporary workplace is changing. Of the companies selected for Fortune magazine’s 100 Best Companies to Work For Gartner Report 2009 list, 82 allow employees to telecommute or work at home at least 20% of the time, User Survey Analysis: Software as a a trend that is gaining steady momentum since 1998 when the list had only 18 Service, Enterprise Application Markets, Worldwide, 2008 companies allowing employees to telecommute. Top talent will seek similar options December 2008 when comparing and considering a workplace. The increased focus on results-based work and the mobility of employees due to travel and remote work, plus the need to provide the best tools for employee satisfaction, necessitate convenient, flexible workforce management tools that can be accessed anytime and anywhere. Gartner expects the SaaS Ultimate Software, a leading provider of HR, payroll, and talent management solutions market to grow at average provides Web-based, on-demand SaaS for UltiPro—Ultimate’s human capital annual rates of 19.4% through management (HCM) solution. 2013—far above the 5.2% growth for the overall business As an industry leader in SaaS-delivered HCM, Ultimate Software explains in this paper management software market. why more and more companies are choosing SaaS as the most advanced, yet easy and highly efficient, approach to managing HR, payroll, and talent management. Gartner.com Market Trends: Software as a Service, Worldwide, 2008-2013 May 2009 IDC states the percentage of U.S. firms which plan to spend at least 25% of their IT budgets on SaaS applications will increase from 23% in 2008 to nearly 45% in 2010. IDC Study Economic Crisis Response: Worldwide Software as a Service Forecast Update November 2008 Ultimate Software Proprietary and Confidential 1
  5. 5. What Is Software-as-a-Service? “Coming from a service Software-as-a-Service is a method of providing comprehensive software applications bureau environment, we through a secure Internet browser. Rather than buying and owning the software, which believe that SaaS makes a lot requires up-front capital, in-house IT resources and maintenance, and often complex of sense for us from a business training, a company uses the software for a subscription fee, while the applications and standpoint. With SaaS, we can resulting data are stored and protected by a secure, remote host. experience the control, flexibility, and functionality of There are many different SaaS systems in use today that companies rely upon to drive an in-house solution, without mission-critical functions, such as customer relationship management, customer tapping into our internal ordering, accounting/finance, supply chain management and, the focus of this report, resources for a new workforce HR systems, which includes, for example, employee data, payroll processing, benefits management solution.” administration, recruiting, performance management, time and attendance, strategic workforce analysis, and organizational planning. Laurie Leblanc Assistant Director of Compensation According to Stamford, CT-based research firm Gartner Inc., the global SaaS market is and Benefits Harvard Business School expected to grow to $19.3 billion by 2011, tripling in size from the $6.3 billion it was in Publishing 2006. Ultimate Software developed its SaaS model to deliver the best in convenience, affordability, and efficiency to customers. In 2008, more than 70% of Ultimate Software’s new customers chose SaaS as the preferred method of using UltiPro to manage HR and payroll. Companies previously using traditional in-house methods or external service bureaus for their HR functions cite a host of benefits in progressing to UltiPro via SaaS: “UltiPro’s benefits-enrollment • Convenience and 24-7 Web-access from anywhere feature set has shaved two to • Expert system maintenance, management, and upgrades without three weeks off of our open dedicated in-house IT resources and complex training enrollment process because • Greater functionality than licensed software or service bureau there are no mailings to prepare • Greater responsiveness and control in managing employee data and or massive amounts of data for processes us to enter by hand. Conducting • Improved strategic planning and decision making our annual benefits enrollment • Freedom from following specific service bureau schedules online is also great because we • Instant, current data analysis and reports—anywhere, anytime have hundreds of employees in • Cost savings and measurable return on investment remote locations.” • More efficient, leaving more time to focus on a company’s core business objectives Kathy George • Proven security and confidentiality of employee data Payroll Manager • Ability to leverage and use latest technologies without having to support Nikon, Inc. them internally Ultimate Software Proprietary and Confidential 2
  6. 6. Software-as-a-Service: How It Works “With SaaS, Ultimate Software oversees the tape backups, Anytime/Anywhere Access. With UltiPro’s SaaS, HR administrators have every HR necessary testing, and other IT function organized into one application, accessible anytime, 24-7, from anywhere there elements that companies are is an Internet connection—office , home, or on the road. But the efficiency, expected to have to stay in convenience and benefits of SaaS-delivered UltiPro extend beyond the HR compliance with Sarbanes- department. Oxley. It made sense from a resource perspective for us to Managers and employees—any designated user—can access the self-service features give Ultimate Software those of UltiPro. Tasks once administered by an HR team, like updating employee responsibilities than for us to information, logging paid time off, changing benefits data, reviewing compensation or make additional investments.” performance review history, or running reports and analytics, are self-administered through SaaS. Managers and employees can access UltiPro with the same around-the- Vince Pepenelli Senior Manager of HR clock convenience. They gain greater control, and HR staff recovers hundreds of hours Constar once spent updating and inputting information and answering employee and manager inquiries. Licensed software resides on a company’s in-house server and requires in-house hardware, maintenance, and support. With SaaS, Ultimate Software houses the technology and applications in its secure, hardened data center and provides 24-7 service, support, maintenance, upgrades, and safe data storage. There’s no large, up-front capital expenditure, and companies lacking technical infrastructure or investment dollars can get the same leading-edge technology and HR management tools as larger firms. It’s the most business value at the most affordable price. With two hardened, secure, SAS70-compliant facilities—an FEMA Class 1-rated facility in Miami, built to withstand fires, natural disasters, power outages, sabotage, and theft, and a center in Atlanta with 24-7 security and N+1 Redundancy on all critical systems—SaaS customers benefit from advanced disaster protection and recovery. Below is a high-level view of how Ultimate’s SaaS works. See a detailed security diagram on page 12. Because hundreds of companies, many with thousands of employees, trust Ultimate Software to manage their most confidential data, the company has mastered and practices all proactive security steps and procedures to assure seamless, worry-free user performance. Ultimate Software: Ultimate Software Proprietary and Confidential 3
  7. 7. 1. Became the first HR/payroll Software-as-a-Service provider to be awarded the ISO/IEC 27001:2005 Certification in January 2008. This certification validates that Ultimate Software implemented a sound and secure information security management system for the SaaS environment. 2. Completed SAS-70 Type II audits. This stringent annual procedure ensures that a SaaS provider has been scrutinized carefully by independent auditors and is following all proper security processes. 3. Earned a Safe Harbor certificate from the Department of Commerce. This published privacy policy ensures the team has employed pre-defined procedures around privacy and is adhering to good business standards. 4. Extensive security experience. Ultimate Software’s enduring security history is the reason SaaS is far superior to almost any in-house system. A seasoned SaaS provider with numerous corporate clients has a proven track record of overseeing and administering system protection for a variety and multitude of applications. Ultimate Software conducts Network Penetration Testing (NPT) regularly. These tests by third-party auditors assess security in every component of a SaaS network by testing and identifying potential vulnerabilities. The company has road tested and perfected many times over all of the significant security functions. As experts with so many corporate clients trusting them to safeguard and protect data around the clock, without fail, they are at the forefront of leading-edge security practices. Ultimate Software employs a full-time staff of security experts, accredited as Certified Information Security Professionals (CISSP). “CISSP” indicates rigorous industry testing and signifies a more elevated skill set in information-security and related best practices. The structurally hardened and reinforced buildings for storing the UltiPro databases have: • Securely locked enclosures where the servers are located • Fully redundant power, cooling, and communication systems • Technologies such as bio-metric security systems • Video surveillance and a dedicated 24-7 security staff In addition, a nightly back up of all of your HR, benefits, and payroll data, including all employee records and historical data, is encrypted, put on tape, and sent to an off-site storage facility. This can be used to restore your UltiPro system to another facility, further ensuring business continuity. In 2007, Ultimate Software’s IT team received the first-place Best IT Team award from the America Business Awards. With UltiPro through SaaS, you have peace of mind knowing that your solution is in the most experienced hands and remains protected. Ultimate Software Proprietary and Confidential 4
  8. 8. For Every Company, Large and Small “With the service bureau, we Depending upon the size of your company, the number of employees, the available had a small window of time resources and capital, the presence or lack of a dedicated human resources team, and to submit our payroll data your knowledge of available human resources management systems, you may and even less time to ensure currently manage your human resources in a number of ways. The most basic and its accuracy. With all of the traditional means is completely in-house, with or without the advantage of an HR manual effort that used to be software application for some or most of your processes. required, payroll used to take me a whole week and now it In the absence of an HCM software solution, you may be compiling data in takes a half day.” spreadsheets, or even manually with forms and paper filing systems. Recording and transferring data accurately into usable reports by either of these means is a labor- Tom Short intensive and time-consuming endeavor. Staying HR-compliant, processing payroll, Payroll Specialist Oncology and Hematology Care and administering benefits in this manner can tie up valuable HR administrative hours that could be better spent developing and retaining top talent or contributing higher- level strategizing to your leadership team. Additionally, more strategic talent management functions, such as recruiting, employee “UltiPro’s functionality for development, and evaluating performance and compensation, are becoming mission- performance management is critical in the rapidly growing competition for skilled people and are nearly impossible to becoming a key component of manage effectively with the above out-dated method. our talent management strategy. The solution is empowering us You may outsource part of your processes, such as payroll, through a service bureau. with the ability to streamline Or perhaps you outsource several processes to multiple vendors. Although outsourcing our employee review process, can relieve some of the pressure of HR management, it has its limitations and better identify employee drawbacks, including the strict adherence to a service bureau’s deadlines and competencies, analyze areas requirements and time lags and restrictions in running reports with up-to-the-minute where we need employee data. development, and improve overall satisfaction.” Regardless of your industry type, its size, whether your employees are in one central location or dispersed in multiple areas, or whatever your method today for managing Carol Summersgill HR functions, advancing to UltiPro’s SaaS will give you an award-winning, Vice President of Human Resources comprehensive, convenient, easy, and efficient system for managing every aspect of Therma-Tru Doors HR for the complete employee life cycle, from recruitment to retirement, while maximizing time and resources for greater corporate success. You’ll have all of your processes managed under one umbrella with a single-point of contact. You’ll have all the advantages of an in-house system—and more! You’ll control when and where you use the system, with 24-7 access and support. You’ll manage your HR functions instantly online while reducing administrative tasks and paper work, but you’ll be free from service bureau restrictions and limitations. And you won’t need in-house technical equipment, support, or service. Instead, your company can pour its saved time and technology resources and expertise into accomplishing your core business objectives. Ultimate Software Proprietary and Confidential 5
  9. 9. Benefits for Your Entire Organization “Reporting is so much faster and relevant now that we have UltiPro through SaaS will greatly enhance your HR management. But the UltiPro. Previously, the reports benefits are much more far reaching as they touch everyone in your organization from the service bureau were and the company as a whole. often outdated and weren’t always correlated with the data Examples of company-wide benefits include: from our HR system, so we had to compare the results and reconcile them, UltiPro’s Top-Level Executives/Line and Department Managers reporting is point-in-time and • Evaluate metrics and business intelligence for workforce trends very flexible, so I can quickly get • Convenient 24/7, anytime/anywhere self-service access—at the office, at home, or on the road what I need. I used to spend • Empowered through self-service and decreased reliance on HR more than two months putting • Instant, easy-to-use, up-to-date reporting and analytics • Easy, efficient administration of performance reviews together benefits statements for • Approve staff requests employees. UltiPro has been a • Manage paid time off life-saver for me—I can run very • Monitor and forecast staffing levels complete total compensation • Access and evaluate headcount reports reports for employees in less than a day.” Candy Scranton HR Administrators HRIS Manager • Convenient 24-7, anytime/anywhere access—at the office, at home, or on the road Spirit Mountain Gaming • Easy, efficient, comprehensive, state-of-the-art HR management under one umbrella • Manage HR functions for unlimited employees in any location • Efficient online benefits administration • Instant, uncomplicated, up-to-date reporting • Management and distribution of thousands of resumes easily online “We are experiencing an • Hours of saved time in answering manager and employee inquiries • Award-winning service and technical support from application and HR experts annual cost savings in excess • Increased time for higher-level strategizing and recruiting, hiring, and developing employees of $500,000 through the • Improved workflow for form-intensive processes with approvals elimination of service bureau • Monitor and assure HR compliance fees, increased HR and payroll productivity, and faster and Employees more efficient reporting.” • Empowered through self-service and greater control of personal information • Convenient 24/7, anytime/anywhere self-service access—at the office, at home, or on the road Dave Mahler • Instant information and updates without assistance from HR Vice President and Treasurer • Improved company-wide communication Genmar Holding Company • Organized information in one place • Less paperwork • Improved training and development tracking and planning • Increased efficiency, time, and productivity focused on core responsibilities Entire Organization • Improved efficiencies and paperless workflow • Improved company-wide communication • Greater employee satisfaction • Minimal up-front capital expense • Same HR management advantages of Fortune 1000 firms without up-front investment • Improved ability to recruit, hire, train, and retain top talent • Ability to better leverage in-house IT to accomplish core business objectives • Greater ROI in time and money Ultimate Software Proprietary and Confidential 6
  10. 10. Sample Features of UltiPro® through SaaS CORE SOLUTIONS Human Resources • Track employment history and performance, time and attendance, job, salary, and organization information • Streamline processes for performance reviews, competency assessments, succession planning, training, and development • Record key government compliance and reporting including COBRA, HIPAA, OSHA and Workers’ Compensation, and EEO Compliance • Meet Social Security and HIPAA confidentiality compliance Benefits • Set up and administer all health and welfare benefits plans, including Section 125 plans, deferred Administration compensation and all voluntary and optional benefits programs • Allow employees to check benefits options and coverage online and update beneficiary information Payroll • Process payroll from start to finish in a few steps, including calculating gross-to-net pay, overtime pay Administration rates, shift premiums, garnishments, and levy calculations • Generate NACHA files, check/direct deposit advises, and general ledger files • Generate off-cycle checks and voiding payments on demand • Track payroll progress online with checks and balances for streamlined auditing and reconciliation Portal for • Save hours of time answering calls and inquiries by granting employees instant, security-protected Employee access to their paycheck details, benefits summaries, frequently used forms, and company information Self-Service • Enable employees to update personal data, change direct deposit accounts, update dependents/beneficiaries information, and request paid time off Portal for • Enable executives and managers to access analytical reports, headcounts, open positions, job history, Manager and skills and certification inventory, compensation information, etc. Executive Self-Service Standard • Run, without support from central HR/payroll or IT, hundreds of reports and analytics, including and Ad hoc reviews, headcount reports, average salary reports, government compliance, general ledger reporting Reports and other real-time business intelligence, plus BI tools for ad hoc reporting and analytics ADDITIONAL FEATURES Enhanced • Manage every aspect of recruitment Talent – Automate entire recruiting and applicant tracking process –management team, recruiters, HR Management staff can track and manage tasks such as posting open jobs, reviewing resumes, screening Capabilities candidates, scheduling interviews, and more • Administer performance evaluations efficiently and easily • Organize and manage learning and development • Facilitate time and labor management IT Support • Cut costs and free in-house IT support from server installation and management, software upgrades, log-in management, hardware maintenance, backup and recovery management, capacity planning, application performance tuning, inventory management, server monitoring and management, technology refresh, and DBA support Scalability/ • Have peace of mind knowing applications have been rigorously tested and can withstand two key Reliability stresses: (1) single-user, high-volume functions (a huge payroll or check run) and (2) high-frequency, simultaneous-user demand, (thousands of employees needing W-2s, enrollment information or other data at the same time) Enterprise • Interface easily with third-party applications such as general ledger, point-of-sale, etc. Integration Ultimate Software Proprietary and Confidential 7
  11. 11. While there are numerous advantages in using UltiPro, there are four primary benefits that lead companies to choose UltiPro through SaaS for managing human resources: in-house control with outsourced convenience, return on investment, best-in- class technology with peace-of-mind security, and award-winning and expert “SaaS provides us with control service. of our data, without the hassles of server storage, system maintenance and upgrades… In-House Control with Outsourced Convenience It’s enhancing our employee- centric culture, increasing Whether currently using an external service bureau or an on-premise system, there overall productivity levels, are advantages in moving to SaaS. Companies switching from a service bureau to and reducing both hard and SaaS-delivered UltiPro, experience the same maintenance-free, worry-free support a soft costs.” service bureau offers but with far more efficiency and hands-on control over all processes, schedules, and report access. On the other hand, those already using in- Claudine Tudgay house systems retain in-house control with the bonus of eliminating in-house IT support Payroll Director and equipment and the associated expense. The Container Store SaaS is a more advanced form of outsourcing. There are no rigid payroll schedules or deadlines with SaaS like those often imposed by service bureaus. Users decide how often and when to process payroll, assuring accuracy and speed, yet more flexibility. “Before UltiPro, our IT team was Software functions and reporting are immediately available, self-controlled, processed, extremely busy, so we had to and ready in just a click or two. wait in line for things like having them install UltiPro’s quarterly Ultimate’s SaaS assures higher functionality and control than outsourced processes, tax updates, causing some real and elimination of hardware, updates, maintenance, and tech support demands issues. UltiPro delivered associated with on-premise solutions. By relying on Ultimate Software to manage all through SaaS has addressed system responsibilities, time can be better spent using data to drive new business this problem. Now Ultimate efficiencies, programs, or initiatives, as opposed to all the time typically devoted to Software performs our upgrades managing and maintaining systems. for us and maintains the hardware, so we can all focus All subscribers experience is worry-free performance because behind the scenes, on other projects. I like knowing Ultimate Software expertly manages every system detail, including hardware that our data resides safely and purchases, software installations, quarterly federal and state employment legislative securely in Ultimate’s state-of- updates, software versioning upgrades to keep speed and performance optimized, and the-art data center, and I can leading-edge security and monitoring tools for ultimate protection. quickly access that data any time I need to.” Unlike on-premise IT departments often hampered by multiple priorities and limited resources, Ultimate Software’s staff can devote 100% of its energies to ensuring that a Barbara Cuttino system remains optimized, security-protected, up-to-date, and problem-free. Who HRIS and Payroll Manager better to support and maintain UltiPro than the experts who created it? They have Alfa Laval seasoned experience on their side from performing hundreds upon hundreds of installations and upgrades routinely—many for companies with thousands of employees and very complex needs. Their awareness of minute details and knowledge of every component and proper execution save clients time and frustration. Fewer components…far more space. Because bulky servers and other hardware components are housed off-site, SaaS frees up an organization’s valuable data center space that can be used for other services. A decrease in hardware and the space to house it translates to an increase in capital for other core business line items. Ultimate Software Proprietary and Confidential 8
  12. 12. Return on Investment With shareholders and management demanding greater ROI accountability at every level, most HR leaders are actively seeking ways to maximize resources to meet competitive market conditions. Ultimate’s SaaS has conclusively shown strong ROI rewards by helping boost a company’s productivity and reduce both hard and soft costs. “Our reduction in costs exceeds $200,000 per year Return-on-Investment Rewards with SaaS …Everyone is functioning Frees up capital and cash flow Matches monthly service bureau affordability, but more productively and Every dollar a company saves on non-productive with higher productivity and efficiency strategically.” system costs can be funneled back into core More hands-on control; 24-7 flexibility; wider competencies to drive greater profit. With minimal up- functionality; deeper, customized reporting Kathy Milligan front costs, no licensing fees, no in-house equipment, intelligence; and better security protection all lead to Vice President of Human Resources and many more productivity and efficiency tools than tangible dollar savings. General Investment Development service bureaus offer, savings can be significant in relatively short time. Leverages Fortune1000 business intelligence Enables flexibility without huge upfront costs advantages without steep costs UltiPro through SaaS can be as robust or as SaaS levels the playing field for smaller-to-medium streamlined as desired, depending upon a company’s “We are anticipating a savings sized firms benefiting from many of the same powerful size, processes and expected growth. The integration of $400,000 over a five-year tools and controls the larger corporations use to of all HRMS/HCM initiatives, resulting in deeper period. UltiPro’s predictable manage and maximize their workforce potential, functionality, is another benefit of SaaS. per-employee, per-month without the staggering IT investments these bigger pricing has erased the sticker firms have made. shock we had at month’s end Prevents high costs of obsolescence Reduces training time and turnover costs with our previous provider.” With technology lifecycles now measured in months, SaaS eliminates costly training of new hires or existing not years, SaaS shields against the significant financial teams whenever the software changes. With IT Sonny Ramdeo costs of upgrading outdated technology or software. worker-replacement costs at roughly 1.5 to 2 times the Director of Payroll and Workforce annual salary, plus double-digit placement fees, sign- Systems on bonuses for in-demand skills, relocation costs, and Promise Healthcare higher-than-average annual increases, in-house system costs mount rapidly. Drives sharper decision-making Frees up office space The real-time speed and in-depth analytics assure Without cumbersome system hardware and servers, faster, more confident decisions on staffing, budgeting, companies gain more usable workspace for and funding, all of which directly impact a company’s employees. bottom line. Frees up talent and time Enhances autonomy, results, and satisfaction Rather than losing hundreds, even thousands of While a service bureau can only process specific employee hours installing, managing and payroll and benefits functions, SaaS capabilities can troubleshooting systems, SaaS users can focus more actually elevate a team’s total productivity far beyond on greater company efficiencies and profits. the specific tasks themselves. Increases productive time Empowers employees SaaS frees up entire work days by reducing or Equipped with best-in-class operating systems, eliminating time-intensive tasks like manual printing software, reporting tools and processes, employees and distribution of direct deposit information. HR not only reduce their job frustrations and increase their professionals save hours of time answering capabilities, but also boost their confidence and self- employees’ telephone and email queries about payroll reliance. That in turn increases job satisfaction, and benefits information. With SaaS, all employees innovative thinking and professional growth—potential access their up-to-date information online. benefits to the bottom line. Eliminates cost of internal disaster recovery Delivers top-notch security with no added cost On-premise disaster recovery systems are very Most companies would find it cost-prohibitive to match expensive to maintain. With SaaS, Ultimate Software the functionality of Ultimate’s SaaS security. provides and maintains a first-class disaster recovery system, relieving businesses of this cost. Ultimate Software Proprietary and Confidential 9
  13. 13. Return on Investment “…application hosting The first recognizable financial benefit in selecting UltiPro via SaaS is the savings in (Software-as-a-Service) capital expenditures. Because Ultimate’s SaaS is an affordable, pay-as-you-go customers have measured subscription model paid per-employee-per-month, minimal up-front cash is necessary, significant bottom line benefits which frees capital for other investments to grow your business. There is no cost for …more than half interviewed expensive in-house technical equipment or the personnel to maintain it, like with on- experienced an ROI greater than premise systems. You get state-of-the-art, robust strategic HR tools and increased 100%. efficiencies without investing huge amounts of money. This is consistent with IDC case SaaS also eliminates large start-up expenses and the cost of hardware and application studies conducted with three upgrades, which reduces operating costs that would otherwise exist with an on-premise Ultimate Software customers system. reporting ROI percentages ranging as high as 188%.” Additional ROI over time occurs with increased efficiencies in processes, resulting in savings of time and improved productivity Karen Moser Senior Research Analyst In cases taken from Ultimate Software’s client files, measurable SaaS results clearly International Data Corporation (IDC) show the substantial ROI and rapid payback times: “By switching to SaaS, we’ve found the information on both the functionality and cost Total ROI Payback Analyst Company effectiveness to be true, and Employees Results Time: Source: expect to recoup most of our initial investment within the first National Gypsum 2,700 157% 1.01 years IDC, 2006 two years of using SaaS, and then start achieving major savings very quickly. We IntelliRisk 4,275 778% 1.8 months IDC, 2006 Management anticipate saving approximately $850,000 in a five-year period.” Waterloo Industries 1,100 214% 6 months IDC, 2006 David Ochoa HRMS Manager National Gypsum Genmar Holdings, Inc. 3,341 80% 1.6 years Nucleus Research, Inc., 2004 Ultimate Software Proprietary and Confidential 10
  14. 14. Best-in-Class Technology/Peace-of-Mind Security Better technology…fewer worries. Ultimate Software invests in top-grade systems to serve a multitude of corporate clients. As a result, the huge buying power, leading-edge security monitoring systems, and expert staff mean subscribers utilize elite-level hardware, software, and IT support services few companies could ever afford in-house. With rapid changes in technology, most companies could not afford to continually update hardware for maximum performance. Because Ultimate Software’s business is UltiPro and hosting the applications on secure, state-of-the-art IT equipment, the expense of costly upgrades to prevent obsolescence falls to Ultimate Software and not to your company. You continue to save in capital investments over time but keep receiving the most up-to-date functionality. Software upgrades, too, are done for you by Ultimate Software’s technology and UltiPro experts. You get all of the advantages of product and system upgrades immediately upon availability but none of the hassles of installing and maintaining them. Ultimate Software safeguards the confidential employee data systems and processes via SaaS for hundreds of corporations, some with thousands of members all networked across global locations. Each company’s data is housed in a physically separate data base. Only company personnel with access rights and secured passwords can see their specific company data, and the software itself is rigorously tested to ensure security integrity. Recalling an 8-day power loss at The only thing shared is the application itself. Sharing a SaaS application is much like corporate offices: how millions of corporate users safely share Windows or Microsoft Office applications and online updates, yet they maintain a totally unique and separate database and “During a weeklong power usage. Ultimate’s SaaS includes many layers of embedded protection designed to outage, my team could access safeguard the integrity and privacy of human resources data. These layers are our HR/payroll over the incorporated through application, database, and web-level security built into the Internet, so we had no software. downtime with our human resources and payroll system. To protect data in transit Ultimate Software’s security safeguards include layers of We were very impressed with redundancy, duplicate network operations control centers, and encrypted Ultimate’s capabilities.” transmissions. Louis Nault Director of Finance All data is hosted at a secure site, backed up regularly, and frequently checked for Elizabeth Arden viruses using secure-network connections to ensure privacy of data. Unlike many company servers, Ultimate Software’s hosted servers are protected against fires, natural disasters, power outages, sabotage and theft. SaaS provides better protection, security, and confidentiality than many on-premise systems. In January 2008, Ultimate Software became the first HR/payroll Software-as-a-Service provider to be awarded the ISO/IEC 27001:2005 Certification for its SaaS environment. ISO/IEC 27001 is a global industry standard created by the International Organization for Standardization and the International Electrotechnical Commission that validates organizations that have implemented a sound and secure information security management system. On the next page is a diagram that outlines the multiple layers of security in Ultimate’s SaaS delivery model. Ultimate Software Proprietary and Confidential 11
  15. 15. Ultimate’s SaaS Security The following diagram illustrates the multiple layers of security in the SaaS delivery model. Ultimate Software Proprietary and Confidential 12
  16. 16. Award-Winning, Expert Service With Ultimate Software’s SaaS, you receive total accountability with fewer points of contact. When questions or concerns arise about hardware, software, networks, operating systems, security or any other related issue, you have an expert single point of contact immediately, 24-7, as opposed to having an in-house system with many parts and different vendors or a service bureau unable to help with anything but the bureau’s specific processes or reports. All customers have a named service representative assigned to their account for personal, prompt attention to their needs and inquiries. Comprehensive, single-point-of-contact service from experts frees users from serving as systems integrator or troubleshooter, dramatically reduces phone calls and meetings, and protects budgets from steep and unexpected technical support fees should problems occur. You focus on the most critical aspects of HR management, while the technology behind it is taken care of for you. Ultimate Software’s national support team is staffed by professionals with average industry experience of more than 12 years. Many support team members are Certified Payroll Professionals (CPP), and all staff are encouraged and rewarded if they receive CPP certification, in addition to other industry certification. The company has earned rigorous Support Center Practices (SCP) certification for eight consecutive years along with a first-place STAR service ranking by the Services and Support Professional Association and numerous other customer service, employee, and performance awards. Ultimate Software was positioned as the sole Leader “SaaS is reliable and never in Forrester Research, Inc.'s 2008 U.S. Mid-Market down. We are very pleased with HR solutions Wave ranking, identified in the Leaders Ultimate’s customer support.” quadrant of Gartner, Inc.’s “Magic Quadrant for U.S. Midmarket Human Resource Management Systems, Tom Short 2006,” and named the 2005 Payroll Provider of the Payroll Specialist Oncology and Hematology Care Year by the Human Resources Outsourcing Association. Ultimate Software Proprietary and Confidential 13
  17. 17. Summary Organization leaders know that their company’s success is dependent upon their people. As baby boomers leave the workforce, college graduates have greater employment options, and employer loyalty declines, finding and keeping good employees is one of the greatest challenges companies face today. They cannot afford not to make HR management a key business objective—if they want to hire and retain the best employees and further the growth of their companies. To stay ahead of the competition, companies need a strategic, integrated, and comprehensive solution for pro active talent management—one that leverages state-of- the-art technology to reduce time-consuming administrative tasks and one that is efficient, accessible anywhere at anytime, reliable, affordable, continuously developed and upgraded, and worry-free. SaaS-delivered UltiPro manages every facet of human resources, from recruitment through retirement, through one easily accessible Web portal. It delivers optimal convenience and functionality with best-in-class technology, security, and star-quality service for a significantly measurable return on investment. With UltiPro and SaaS, you spend more time strategizing and positioning your human resources efforts to hire and retain top talent and bring greater HR value to your company and its bottom line while Ultimate Software works behind the scenes to take care of the details and run all processes smoothly and efficiently. In 2009, Ultimate Software was ranked the #1 best medium-sized company to work for in America by The Great Place to Work® Institute for the second consecutive year. Ultimate Software ranked #3 on the list in 2006 and 2007. As a public company in the business of human resources, Ultimate Software realizes the high value of recruiting top talent and maintaining a passionate workforce. The same high-performance team and the passionate, people-oriented culture that make the company one of the best places to work in America drive the quality of UltiPro delivered through SaaS and the award-winning service behind it. Ultimate Software Proprietary and Confidential 14

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