Anyone working in SAP HCM today will certainly be interested in the terms Cloud Computing and SaaS (software-as-a-service). It is no secret that the interest has only grown exponentially with the acquisition of Success Factors by SAP. The fact that SAP paid $3.4 B for this acquisition only underlines how significant this area of technology is.
As an SAP HCM functional consultant I had started hearing about terms like SoA (service oriented architecture) followed by SaaS back in 2004/05, however for a long time this remained a purely academic term for me. This was primarily because I could not understand how to apply these new fangled approaches to what I did, which is help customers implement SAP HCM and its various components.
So recently I started reading more about cloud computing in order to understand what this means to me. Here, I have to admit that I am no early bird and there is plenty of information available in this forum and outside on this subject. So what’s the point of writing this?
The reason I am writing this is because I feel that like me there are many others who are not as aware and would probably like to understand more about terms like On premise, cloud, SaaS, mobile apps , multi tenancy, etc. Moreover there are a few questions I have of my own and I would like to see if we can get some answers or additional information on those.
So what’s the difference between ON-PREMISE versus Cloud or SaaS?
If I were to explain it in the context of an SAP implementation, then all traditional implementations where the customer bought the hardware and software are deemed as On premise. The customer owns the infrastructureit and is responsible for its maintenance and security.
Cloud on the other hand offers the opportunity where the software and the hardware is hosted by a vendor and provided to a customer as a service based on a subscription charge. This takes away the huge initial cost involved in purchasing the software and hardware.
More often than not cloud and Saas maybe talked about in the same breath however cloud computing offers much more than just software as in Saas.
So what’s unique about SaaS?
The key points that stand out about SaaS are
Is SaaS the future for HCM applications?
Honestly, I am no expert at predicting if SaaS is the best way of implementing an ERP however one thing I am definitely sure of is that SaaS seems to be the way forward. There has been a lot of activity and interest in the world of HCM software being hosted on a cloud.
SAP has stated clearly that Success Factors Employee Central will be the go forward core HR solution in the cloud (http://www.sap.com/news-reader/index.epx?articleID=18363) . In terms of its Talent management suite which involves E-recruitment, Succession Planning, Compensation management, Performance Mangement, Learning Solution, the solutions offered by Success Factors will be the key offering in the future.
Workday which has been founded by the same people who brought Peoplesoft to us, is gaining prominence very rapidly as a provider of HCM software in the cloud..
Success Factors itself acquired Jobs2web – another cloud based software company- for $110 million in order to strengthen its offering in the E-recruiting space.
Oracle has responded to SAP’s acquisition of Success factors in Dec 2011 by buying Taleo – another cloud based HCM software company - in Feb 2012 for $1.9B .
Cloud based software providers are providing easier integration with mobile apps and adapting to change rather quickly.
So is the world going to be all rosy with SaaS?
As more and more organisations look to cut their costs, SaaS definitely provides an option to most CIO’s to reduce their IT infrastructure and deployment costs by adopting a SaaS model. Its also provides for faster deployment and quicker updates.
It however also raises a few questions.
Most SaaS providers will defend this and claim that the inability to customize software cannot be an impediment for adopting the SaaS model. On the contrary they advice that customisations lead to an increase in cost and complexity. The benefits will definitely appeal to small and medium businesses but are large corporations, with presence in multiple countries with varied requirements ready for this journey?
An obvious concern for most organisations will be the security of the data residing in the cloud. Most SaaS providers confirm with industry standard security norms and certifications but will it be an easy decision for organisations to not have direct ownership of the systems which hold their sensitive data?
While SAP is working on providing integration between its on premise and cloud offerings, it will be some time before it become seamless.
Do I need to worry?
It seems there is a lot of paranoia amongst a lot of people that they will lose their skills and specialisations to new technology offered in the cloud. My personal opinion is that we are working in a knowledge based industry and we need to be able to adapt to new technology and changes easily. How often have we ourselves told the customer about managing change appropriately? Now it’s our turn.
Moreover the software is just a means to an end. In my view there will always be a requirement for enablers who can help enterprises meet their business needs by using different softwares.
I hope you find this article useful. As I am a novice myself in this area I will be happy for you and thought leaders to share their views.
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