What Are Companies Looking for in SaaS Vendors?

The Institute for Corporate Productivity (i4cp) surveyed users of SaaS human capital management (HCM) applications in early 2012. The survey focused on both core human resource systems as well as talent management systems, and the goal was to ascertain how satisfied users are of the various SaaS systems as well as the components that make them up.

These were some findings:
• Very few SaaS vendors meet or exceed their customer’s expectations.
• Dissatisfaction was highest in two key areas: robust reporting/analytics and integration tools. The lack of these two deliverables affects both talent management strategies and organizational effectiveness.
• While the most mundane of the applications measured — payroll — came out highest in satisfaction, one of the most critical — talent acquisition — came out the lowest.

SaaS Application Ratings
Rating Scale: 1 – Very unsatisfied, 2 – Unsatisfied, 3 – Neither satisfied nor unsatisfied, 4 – Satisfied, 5 – Very satisfied

Expectations placed on vendors are very high — higher than one would normally expect with a relatively new industry and a new delivery mode. The industry is still relatively new in many perspectives, including features, functions, integration, delivery methods, etc.

But this isn’t deterring new buyers from selecting SaaS over on-premise solutions, and the survey showed why SaaS has become the preferred HCM delivery mode. The desire for a better user experience rated number one for all organizations, with 75 percent of respondents citing this to a high or very high extent overall. Deeper functionality and faster times to implement also topped the list.

Criteria for Selecting HCM SaaS Applications
To what extent were the following criteria important when choosing an SaaS product?
Percentage of respondents answering “high” or “very high” extent

The study suggests there are some tips for buyers of human capital software to keep in mind moving forward, including:
1. Buyers of SaaS applications owned by larger vendors such as SAP, Oracle and IBM should get visibility to the long-term development and integration plans of the vendor prior to signing a contract.
2. Buyers should also have a detailed service level agreement that allows an organization some compensation for lack of performance.
3. Focus first on standardizing processes and data across the organization before introducing technology.

Kevin Oakes is the CEO of the Institute for Corporate Productivity (i4cp). He can be reached at editor@talentmgt.com.