If you are planning to invest and introduce a new Recruitment Process Automation system, it is not uncommon for you to get hassled about comparing features, advantages, quality, benefits, and prices. Immaterial of selection, your new software will play a major role in the Total Cost of Ownership (TCO) and your Return on Investment (ROI).

How would you decide on the best recruitment software solution for your organization? In this article we will discuss the advantages and disadvantages of two renowned software deployment methods, which will assist you in taking the right decision on this critical subject.

Self-hosting Software Deployment:

 Article by Laurie McCabe

What is an App Store?

An app store, which offers a lot more than just mobile apps, is a Web site that aggregates software solutions for business or personal use. App stores, also known as an applications marketplace, are typically created and built by a “marquee” vendor, such as Adobe, Apple, Google, Intuit or Salesforce.com, that serves as the anchor tenant for the marketplace. App stores serve as a hub where you can discover, search for, purchase and deploy integrated third-party applications.

The marquee vendors that run the marketplaces typically have a strong brand and a large customer base -- but no one vendor will ever have the time or expertise to build every possible application that a customer might want. But marquee vendors can attract developers to build complementary applications to sell to their large customer bases.

The developer gets a new sales channel, and the marquee vendor can offer customers a bigger, more diverse array of applications than it could possibly provide on its own. In many cases, developers must also build their applications on the marquee vendor’s platform so that they will integrate with other applications in the marketplace.

Companies looking for ways to save on long-term costs often consider cloud services, specifically software as a service. SaaS offers creative ways to address how companies use technology, which lets them focus on what matters most:their core business objectives. For IT organizations that deal with complex, expensive maintenance chores, the SaaS model promises to ease the burden and reduce costs and complexity.

Although SaaS sounds like an ideal technology solution, it is not a cure-all for everything that ails IT, and it doesn’t always make a significant impact on long-term costs and resource use.

That’s why it’s important for companies to consider a wide range of variables when determining what the cost savings from using SaaS might be, including hardware, storage and management. At Avanade, we’ve developed a cost-modeling tool that uses more than 120 real-world variables to measure the true impact of one enterprise SaaS offering—Microsoft’s Business Productivity Online Suite (BPOS)—on capital expenses, operating costs, energy use and carbon footprint.

When the economy takes a downward turn, company IT budgets are usually one of the first casualties.  This is the case with the current recession, as evidenced by an October 2008 CIO Magazine survey in which 40 percent of 234 IT chiefs surveyed said they are cutting spending, essentially freezing new IT initiatives, if not scrapping them altogether.

However, technology is a critical element of business, and despite the current economic climate, the need for reliable IT remains the same—especially when it comes to IT Maintenance or fundamental business applications such as email or customer relationship management (CRM). As companies across all industries face tough decisions about where to put their limited funds, here are three key reasons why the hosted or “software as a service” (SaaS) model makes a great deal of sense.

Financing

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1. Compile a list of needs. You may want to start out by spending some time preparing a list of features you are looking for in an product. For example, this can be a specific timesheet format, support of external time collection devices, reporting, or any other functionality needed by your organization. Try to envision any future uses as your team needs evolve and be sure to discuss these with your prospective vendors.

2. Request a Demo to gain a better understanding of workflow and to determine if the solution matches your needs. If you need the software to interface with your existing payroll – now is a good time to ask. What is the specific package you will be getting?

As you move through your evaluation process make sure you are asking all the right questions. Sometimes the sales representative will not always remember to cover the little details, so we have created this list of nine questions to help you make sure your evaluation process is complete.

1.  Who are the provider’s existing customers?
It is important to check the credentials of a solution provider. Finding out how many customers they currently have and the size of these customers can be a good way to gauge the experience of the provider. Another way of finding this information is by looking at their testimonials. If and when you reach the point where you are comfortable with the technology to move forward, you may want to ask for a customer reference to speak with. This should only be done if you are truly serious and ready to purchase the solution, as the provider is not likely to give you the information otherwise.

2.  Is the solution provider financially sound?
In today’s new economy you can never be too sure how long a company will be around. It is good to find out how your solution provider is funded and where their main source of revenue is coming from. Is the company public or private? Are they profitable or are they a start-up funded by private investors like venture capitalists? You need to know that your data is always going to be available. Determine the risk for yourself, but remember… SaaS is fairly new and a lot of the companies you come across may be start-ups that have not yet reached profitability – this is okay.

3.  What is the service renewal rate?
You may get a good idea of how many customers a company has by reading their website or asking a customer representative, but, what you do not know is how many customers decide to cancel their service; we call this the attrition rate. The attrition rate will tell you a lot about the provider’s customer service and the quality of their product.
There are a few sub-questions that need to be asked here:
•    How much will it cost you to keep your subscription once the term of your agreement matures? Is there a renewal fee to continue with the service? Does the service fee stay the same when you renew? It is important to know that your costs will not increase in the future.

4.  Are there training programs for the software?
Since software-as-a-service requires no large upfront cost or investment to get started, there is a higher chance that customers may become distracted or uninterested in the service if no formal training is done. In SaaS comprehensive training, it is critical for any new application to be a successful. It is good to understand what type of training is included with your package, do not be surprised if there are no onsite training meetings offered. Remember this is SaaS, the providers are trying to keep costs down so you can have an affordable business tool. Removing onsite services from the menu adds to that lower cost. Try to find out if training costs are included with your package, if they are not, you will need to fully understand what support the vendor will provide to get your staff up to speed with the new service.

5.  Is there a clear presence of customer support?
To make the transition to a SaaS application painless it is important that the vendor has a complete customer support package to offer. Depending on the needs of your organization, this may include having support staff local to your business, or at least support staff that are accessible during your working hours (especially important if your company is global). The support must fully understand the software and have the ability to solve any issues to a wide variety of people, not just IT experts. The importance here is making sure that the vendor treats your company with the same importance that you do.

6.  Can the vendor perform to the agreed service level?
As the data is stored on the vendors servers, it is vital that they always keep the data available to you. The service level agreement is the minimum performance that the vendor should perform to. You need to know what they actually promise, how realistic these promises are and what the penalties are if they do not keep to the agreed level of service.

7.  What are the integration capabilities?
From the outset you need to know what is it going to take to integrate the SaaS software with the rest of your environment and how it will work with your existing systems.  This is important, as you need to know how much support you will have in getting the systems working together.

8.  What are the options to customise the SaaS application?
To make sure the application functions to your needs it may need to be optimised. This can be vital for the software to be a success in your business environment. The vendor must be asked what sort of options they offer and at what cost.

9.  When and how often if the application Updated?
Technologies are constantly changing and you need to make sure that you will not be stuck with a static piece of software that cannot adapt to these changes. Therefore, you need to know how often the software is likely to be updated and what sorts of things can be modified. Another key point to discuss is the process that will take place when you have a suggestion.

With the SaaS market growing rapidly each quarter, it is becoming harder and harder to distinguish good providers or what we like to call true SaaS Solutions from “want to be’s.” It is important to understand the difference between true SaaS and ASP solutions – there is a big difference.

True SaaS solutions are developed on a multi-tenant platform where as ASPs are usually solutions that were once install based and have moved to a hosted model to compete with the newer more streamlined multi-tenant solutions. So what is the difference anyway?

•    Multi-Tenant SaaS
Pioneered by Salesforce.com, a multi-tenant system uses one instance of the software across all users and companies utilizing the product. This means that one software application is used by all, reducing the cost of maintenance and updates.  The overall cost of operating the system is a whole lot lower than your ASP solutions, enabling the provider to scale faster to a larger customer base.  Although multi-tenant systems have their benefits, there are some downfalls.  Since one instance of the software is used, all customers or users see the same features and functionality.  Therefore, if a customer wants custom features added, everyone will see them. In an ASP model, each customer is running a separate instance and features can be controlled per instance. There are two keywords to keep in mind when evaluating solutions, the first is Configurable and the second is Customizable.  True SaaS or multi-tenant models are usually configurable and ASP models are customizable. When evaluating make sure to ask your representative which bucket they fit into.

•    ASP SaaS
These are the companies that have been around longer than SaaS it’s self and made the late switch or change to the hosted service model to stay competitive in today’s low cost software market. The ASP model is best explained as a single or multiple server model with an instance deployed for each company or customer using the software. This means that each new customer will need to wait while the solution provider patricians the server and installs the new instance specifically designed for that customer. The downside is that the costs of operating this model are higher and upgrades are time consuming and expensive due to the fact that each system maintenance and upgrade needs to be rolled out to each server and instance separately as opposed to a single rollout across one instance. Now the good…. ASP solutions are great for larger enterprises that require special functionality and requirements because they can easily be tailored to fit the needs without impacting the other instances on the server.

Speed and Reliability of the Service

The speed and reliability of your provider’s servers will depend on several factors: the quality of their connection to the internet, bandwidth, and the availability of back-up systems. At a high level you want to make sure that the provider has redundant servers as well as a daily tape backup routine.

It is vital that the solution provider offer up information about their back end information as well as a sound disaster recovery plan because whatever changes or disruptions happen will have a direct affect on your business operations. This section is designed to give you a reference point when researching the backend portion of your proposed SaaS purchase:

•    Service Level Agreements
A service level agreement is defined as a minimum performance measure at which the service delivered is considered acceptable. This means that the provider must keep to the performance level offered in the service agreement. Since SaaS is an online service it is more than vital that the provider be available via system runtime and support to ensure your data is accessible. Most providers will boast a 99.99% uptime in service, this in most cases is not realistic. Anything from 95%-100% uptime is very reasonable for any service provider. Service may go down every once in a while, meaning once a year due to Internet bandwidth isssues or server errors. This is usually corrected in a 30 minute time frame, but make sure you review your service level agreement to see what their guaranteed recovery time is. It is also a good practice to find out what compensation will be offered if the agreement is broken.

•    Compatibility with Existing Software & Systems
If your organization is running in an all Windows or Mac environment it is good to find out if the solution is supported for your current system. Just because a system is web-based does not mean that it works perfectly across all operating systems and browsers. So ask and find out.

•    Experience and Expertise
When partnering with a SaaS provider it is good to do a little background check and learn the history of the company. How much experience do they have delivering software-as-a-service? What are their current customers saying about the service level and the quality of the product? The best way to do this is to go to the provider’s website and read customer testimonials, also do a Google search on the company and its founders to see what information comes up.

•    Cost Effective and Easy-To-Use Solutions
The benefit of SaaS is that it is cost effective and generally easy-to-use. If you find that the solution seems over priced and not so user friendly, it’s probably not true SaaS and therefore probably not right for your business. Also, the solution should not require additional IT staff or infrastructure, and the service plan should be tailored to your companies needs offering an affordable option with service plan structures that suit your requirements. That being said, providers package service plans to be pretty standard in order to keep their costs down and provide you with an affordable solution.