deloitte_saas enabled hr transformation march 2011 final
TRANSCRIPT
Reviewing How SaaS Can Add Value to Your HR Transformation?
Presenters:
John Malikowski, Principal, Deloitte Consulting LLPJannine Zucker, Senior Manger, Deloitte Consulting LLP
March 15, 2011
Copyright © 2010 Deloitte Development LLC. All rights reserved.2
Setting the stage – Cloud and SaaS
Trends in HR Transformation (HRT)
Value drivers in SaaS-enabled HRT
Business case and roadmap considerations
Next-generation SaaS-enabled HRT
Agenda
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Cloud –Evolution or Revolution?
• Cloud computing technologies are a natural step for distributed systems –the convergence of virtualization, automation and large-scale IT Service Management. But it’s not revolutionary –it’s evolutionary
• The real revolution is happening in the business, where expectations for agility and flexibility in business operations are in demand. Cloud services create the possibility of rapid business model innovation, improved service levels and new ways of controlling costs
• But there’s even more at stake than being able to do current things faster, better and cheaper. Cloud services can also enable organizations to do entirely new things. Helping companies transform into powerful federations that can compete on a global scale. Enabling supplier and customer networks with unprecedented knowledge sharing. Turning traditional models of transaction processing into value-added services
Some think cloud computing is the next big disruptive technology. Others argue it’s simply the natural evolution of distributed computing capabilities
Though the technology itself is evolutionary, its business implications are nothing short of revolutionary
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To cloud or not to cloud?
Does the business problem or technology solution require all of the following?
1. End-user self service – automating customer subscription and provisioning
2. Location independence and multi-tenancy for service provisioning and delivery
3. IP ubiquity – enabling access anytime and anyplace there is a network connection
4. Elastic performance and load – the ability to scale both up and down by period
5. Elastic pricing and contract terms – the ability to subscribe services “by the drink”
What set (or sets) of the 3 dimensions of Cloud are required for the solution?
Business Model
Cloud Service Subscriber
Cloud Service Broker
Cloud Service Provider
Cloud Service Enabler
Service Type
Business-as-a-Service
Software-as-a-Service
Platform-as-a-Service
Infrastructure-as-a-Service
Cloud Computing is one choice in how businesses purchase, deploy, and support IT services. It’s a complex topic. How do you get an actionable discussion?
Service Source
Public cloud
Virtual Private Cloud
Private cloud Hyb
rid
Clo
ud
Co
mm
un
ity
Clo
ud
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Typical Characteristics of a SaaS Solution
What is Software-as-a-Service (SaaS)?
• Modern, web-based architecture
• Application and data resides in the “cloud”
• Applications are managed by 3rd party service provider
• Billing based on per-user basis
• Reduced internal IT support
• Updates are distributed on a rapid release schedule
Service Type
Business-as-a-Service
Software-as-a-Service
Platform-as-a-Service
Infrastructure-as-a-Service
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Evolution of HR and business needs and technology maturity are converging to create a unique moment in the history of HR Transformation
Convergence of key trends
Busines
s Leaders Recognize
Need for Improve
d HR Delivery Models to
Enable
Busines
s Decision
s and Growth
SaaS
solution’
s Functional
Depth
and Integration
Capabilities are Maturin
g
Increased
opportunity to implement a
different technology enabled HR
Transformation
• During the downturn HR often came up short
• Imperative for HR to drive the investments to enable business growth
• Functionality has significantly advanced in the last 24 months
• New technology adoption continues to grow at rapid pace
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HR transformation business impactHR transformation was a movement focused on shifting HR from a largely administrative organization to a more strategic organization. That new work quickly evolved into a broad initiative to transform all HR services.
Revenue Growth
Operational Excellence
Talent Strategies
• Workforce Planning• Succession
Management• Workforce
Development • Job & Work
Redesign• Global Sourcing &
Mobility
• Standardized Operations & Technology
• Workforce Intelligence
• HR Policy • Global Compliance• Culture &
Communications
• Merger, Acquisitions & Divestitures
• Business Transformation
• Organizational Restructuring
• Globalization• New Markets• Innovation
HR transformation provides opportunities for operational excellence, but is also enabling HR to focus and deliver value to important business areas:
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A survey of 150+ of our biggest clients revealed the following:
What is the market telling us?
HRT Market is Strong
• 84% are either transforming or planning to transform HR
Business Events Trigger HRT
• 25% cited a new Head of HR or a CEO as a key trigger
CHROs are the Buyers
• 71% of HRT initiatives are sponsored by the CHRO
Efficiency and Effectiveness Drive the Case for HRT
• 85% cited cost savings as a key driver
• 75% cited building more effective services as a key
HR Leaders are Addressing Business Issues
• 40% cited training next generation of leaders
• 33% cited building and managing a global workforce
• 31% cited supporting mergers and acquisitions
Deloitte Human
Resource Transformation
Study2009
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SaaS market penetration in the HR space
• SaaS is one of the fastest-growing deployment models. SaaS subscriptions' revenue currently accounts for significant percentage of total software revenue in HR/human capital management (HCM) applications.
• Subscription revenues in the HR/HCM market were ~$1.5 billion of the approximately $6 billion overall market (software revenues, consisting of licenses, maintenance, and subscriptions). The subscriptions category is growing two to three times versus low single digit growth for on-premise maintenance and licenses.
• SaaS is the leading model for Talent Management technology solutions. Software as a Service (SaaS) vendors are supporting some of the largest, most complex organizations and their talent strategies. In 2009, The SaaS talent management market was estimated to be over $2.0 billion and was one of the fastest growing areas over the previous year.
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• Increasing number of customers are leveraging SaaS as a key HR Transformation enabler
• Competitiveness of point solutions has put pressure on traditional solutions to overhaul their Talent modules
• A number of these products are focusing on getting Talent capabilities into the hands of customers as simply and quickly as possible
• Entrance of SaaS unified HCM to the market now enables organizations to get the depth of functionality – reducing need for point-solutions
• We anticipate we will see a shift in the numbers of companies selecting integrated solutions over point technologies as they continue to see the value of true integration
Trends in HR SaaS technology
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Value: How companies get more out of HR transformations enabled by SaaS
• Shorter delivery time
• Quicker value to COEs, HR Business Partners, Employees, Manager, HR organization
• Faster deployment of improved, flexible, and more intuitive tools to the end users
• Reduced Implementation costs
• Lower on-going costs (TCO)
• Cash flow (subscribe vs. buy)
• Faster realization of transformation benefits
• Faster timeframe to address talent areas
• Frequent talent feature / functionality updates
• Faster deployment of talent management solutions(e.g. performance, compensation, succession)
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HR SaaS business case considerations
Traditionalon-premise model
SaaS BasedHR SolutionAreas to Address
Software RelatedInitial purchase plus annual maintenance
(capital purchase)
Subscription based (operating expense – typically
multi-tenant model)
Hardware RelatedInitial purchase plus annual maintenance
(capital purchase)
Included in subscription
Upgrade / Update(features & functionality)
Patches and ultimate upgrade
Frequent updates for all clients
Enhancement /Modifications
Customizations typically allowed on
client’s instance
Configuration usage only (all clients running same
version)
Speed to DeliverLonger to implement
compared to SaaS
Faster to implementdue to less areas that
can be changed by client
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Prepare for Cloud Computing by looking at economics, technical feasibility, and risk – for internal, external, and hybrid cloud computing models
Benefits and areas to consider when migrating to a HR SaaS solution
IT Services Portfolio
Risk & ControlTechnical Feasibility
Economic Return
Economic Fit
Transition Cost
Benefit Analysis
Architecture Readiness
Vendor Capability
Migration Complexity
Data Control Governance
Vendor Compliance
Security & Privacy
Integration Complexity
On-GoingOperations
Greatest Value in Shortest Time
SaaS / Cloud Strategy
Replace
ExtendConsolidate
10987654321
SaaS is changing the traditional IT procurement models for the enterprise by offering alternatives to existing vendor channels.
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• SaaS has significant potential to transform IT and enterprises from traditional structures to more nimble, flexible, and affordable architectures
• Enterprises should recognize these emerging capabilities and prepare to take advantage of new service offerings, aligned with their operational environments and risk profiles
• Enterprises need to navigate the options, assess the opportunities and risks, and migrate to a SaaS environment that meets their needs, while positioning for future adoption of additional capabilities
SaaS is a significant advance, presenting major opportunities now and in the future SaaS / Cloud computing is creating a shift in the economics of IT, and will have a major impact in HR Transformations and HR service delivery
The real power of HR SaaS and cloud computing is in the potential to re-think and re-design HR delivery and IT
architectures at a fundamental level.
Copyright © 2010 Deloitte Development LLC. All rights reserved.15
John Malikowski
Principal, Deloitte Consulting LLP
Jannine Zucker
Senior Manager, Deloitte Consulting LLP
Contact info
Copyright © 2010 Deloitte Development LLC. All rights reserved.16
This presentation contains general information only and is based on the experiences and research of Deloitte practitioners. Deloitte is not, by means of this presentation, rendering business, financial, investment, or other professional advice or services. This presentation is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte, its affiliates, and related entities shall not be responsible for any loss sustained by any person who relies on this presentation.
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