Evaluating the Cloud: What is Driving User Adoption?

2014_coverIn the last blog, I said we would be looking at whether it’s better to upgrade your on-premise system or move to the Cloud/SaaS. I’m pushing that subject back a bit, in order to address some readers’ questions about one of the findings from our annual HR Systems Survey. (The most recent results are online for you to download. This is the complete report and it is free.)

Sierra-Cedar’s 17th Annual HR Systems Survey White Paper provides detailed HR technology data and presents unbiased results—as Joe Friday from Dragnet said, “Just the facts Ma’am.” Several readers asked about one of the Survey findings, “… are organizations moving to the Cloud for improved end user experience?”

The answer seems to be “yes.” HR professionals, IT professionals, and Executives all told us that improved end-user experience is the most compelling factor considered when looking at a move to a SaaS HRMS (core HR). While I’m thinking that the functions and capabilities of a system should be the first consideration, these users likely make the assumption that the functionality for all considered systems would meet their requirements, and thus for them, end-user experience was the top priority.

Regarding the Survey questions about their HRMS (i.e., how long it takes to implement, the FTEs to run the system, and what HRMS they have now vs. what they are thinking about moving to), respondents told us a SaaS HRMS takes less time to implement, takes fewer people to run, and system updates are shorter but more frequent than many on-premise systems—all powerful reasons to consider SaaS. The Survey findings this year show organizations are assessing SaaS, and some have moved to a SaaS HRMS.

To further support the importance of the user experience, the Survey asks another set of questions that are used to calculate a net promoter score (NPS). The question specifically asks, “How likely are you to recommend your primary HRMS vendor in use today to a colleague or friend?” The NPS score is then calculated by subtracting system detractors from promoters. In general, end users say they are more likely to recommend SaaS systems than on-premise systems. I think this is a softer reason than those mentioned above. However, if employees and HR and IT professionals prefer a SaaS system to an on-premise system, there certainly is significance here. In summary, the Survey finds that SaaS systems have better user experiences scores, provide practical savings in time and resources, and overall have a more positive perception from the HR and IT communities.

Maybe an analogy will help us understand the user experience/adoption drive. Amazon has made it easy to shop for many things—from books to Aardvark hot sauce to Zebra lava lamps. They’ve grown by improving the user experience, making buying easier and/or less expensive. SaaS systems were built with a similar idea in mind: to make it simple for a user to get information or input information into the system. This makes good business sense. When something has the potential to meet all of my requirements, is easier to use, and also requires less of my time, it definitely merits consideration. For any system, adoption levels go up when a system is easy to use and adds more immediate value.

There are also concerns about moving to SaaS, see Figure 23 in the Survey White Paper. Due diligence must be exercised when considering a change that will affect everyone in the organization. This includes determining if the system meets your requirements; making sure the level of service and support are adequate for your organization’s size and scale; understanding the organization’s approach to data security and ownership; and finally comparing the total cost of ownership (TCO) for the systems on your short list, including integration costs. There are more factors for sure, but considering SaaS should be in your strategic plan.

Next week I will get back to the pros and cons on whether it is better to upgrade your on-premise system or move to SaaS. Remember to send me a note at Cloud@Sierra-Cedar.com with your comments, questions, or disagreements. I look forward to hearing from you as we continue to evaluate the Cloud.

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