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Author's profile photo Sven Ringling

The Red Button Test for the Cloud HRIS Market

This is a hypothetical test – or a thought experiment as physicists might call it – I came up with, when HR SaaS started to become popular – indeed popular enough to make it a taboo to speak out against it as a consultancy / systems integrator. It is probably as relevant in other parts of the cloud market, but they follow different time-lines and anyway: I want to stick to my guns. It’s a fun piece, but I daresay it also does have a core of truth worth remembering.

At the time in, say, 2010, it was quite obvious that most large players except for the vendors hated HR SaaS. Their business models were based on getting a small(ish) group of consultants in followed by an army of technical people from system architects to technical analysts to programmers and testers. A new breed of systems that would embrace standardisation, quick deployment, easy upgrades and – yes – leave little room for change requests must have given their CFOs sleepless nights. Yet, SaaS / cloud was acknowledged to be the future already at the time and as a large technology service firm you couldn’t be seen not embracing the future. And for better or worse, if the change didn’t go away they would at least have to maximise their share of the smaller cake (or cake growing at a slower than anticipated pace).

So, this is where the red button test comes in – I asked (first myself and then others):
Imagine the bosses of the 5 biggest IT consultancies / System integrators of the world sitting around a table. In the centre of the table: a large red button. A fairy appears on the table pointing to the button: “If you press this button really, really hard, HR SaaS will go away never to come back again and organisations will use on-premise HR systems until the end of time. And nobody will ever know, what happened at this table.”.

What would happen?

Back in 2010 I was convinced (in agreement with most people I talked to) that it would result in 4 badly broken hands as each of the 5 would hit that button as fast and forcefully as possible. Translated into plain English, this means the biggest players in the industry, when providing services for SaaS deployment, where doing something they hated. This resonated with many customers’ experience regarding system integrators’ approach to SaaS. And this was by no means the case with large players only. Many small and medium players where in exactly the same position – although some of them where taking on the SaaS niche happily and others decided to stick to on-premise, their bosses hoping it would take them through to retirement.

So, what do you think would happen today around that secret, hidden table?

I have to admit I’m in two minds about it. Some large players seem to be embracing the opportunities for new types of services coming out of SaaS, some managed to apply SaaS deployment models burning almost as many resources as old on-prem models. Do they still hate it and wish it away?

Please continue the story of the 5 IT services bosses in that secret room in the comment section…

<to be taken with a pinch of salt>

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      Author's profile photo Luke Marson
      Luke Marson

      Good thoughts Sven. I doubt the scenario would be any different now as it was then. Even though some of the bigger consultancies charge much more than they should for a cloud HR project, the revenues are still pittance compared to a comparable on-premise HR implementation. Any big company would rather see high revenues and if they could make Cloud HR go away I am sure that they would...

      That said, I don't want to comment on behalf of those companies but I do reserve my right to speculate!

      Author's profile photo Sven Ringling
      Sven Ringling
      Blog Post Author

      Thanks Luke.
      Of course - it's all speculation and with a large chunk of tongue in cheek 😛

      I just liked that mental picture of the red button and the five hands back then 🙂

      Author's profile photo Christopher Solomon
      Christopher Solomon

      As much as I would like to say I see that red button being slammed through the 3 inch thick table faster than you can say "HANA", I think any of those "large IT consultancies / System integrators" (unless headed up my Millennials) surely have long memories to know/understand that this is all cyclical. This "all in one box with little/no customization" will surely be replaced with another phase of "super custom, modularized, best-of-breed" solutions all integrated together with some new "X" interface technology (remember when XML was like the coming of the savior for systems integration? haha). Companies are smart enough to know how to manage through the "lean" times (shift more focus to the fun stuff like "strategic consulting" and "change management services") and wait to take advantage of the "fat" times later. It all comes back around. At the same time, any "good" company in this day and age must ALWAYS be prepared for change and disruption.

      Author's profile photo Sven Ringling
      Sven Ringling
      Blog Post Author

      Hi Chris,

      An insightful optopessimostic view.

      Optimistic: CEOs do indeed think long term, even beyond their LTIP. I hope you are right 🙂

      Pessimistic: we will, albeit on a new tech level, customise our system into a mess again until we need a new Alexander The Great to come along and cut the Gordian knot. So, same story as witj the "lean and easy to maintain" client server based ERP?

      I hope you are wrong here.

      Best wishes and thanks for popping in

      Author's profile photo Jarret Pazahanick
      Jarret Pazahanick

      Great blog and my take is they hit the red button even while shouting out "the cloud is the future"  🙂

      Author's profile photo Former Member
      Former Member

      I agree with Jarret that they would hit the red button though shouting out the Cloud is the future . But saying that some of the large system integrators already started thier cloud journey when they realised vendors like SAP & Oracle itself were embarking on it  . Thier  other thoughts sitting around the table  must be how to sugar coat these implementations with the stuff they usually do with  on premise solutions like risk management, change management strategy, data strategy, Test strategy , advisory services etc etc which obviously brought in a lot of revenue and also had them justify highly billable senior management on the project.

      Good post Sven! Made me compare a Large scale on premise  HCM implementation i did for a client some years back and recently got  involved in a  Saas implementation for the same client. Clients know exactly what they want in the current cloud scenario.

      Author's profile photo Robert Moeller
      Robert Moeller

      I am not in the consulting business so I may be naïve on this topic.  However, I want to propose this question.  Even though, in most cases, each implementation might not take the same amount of resources – don’t you think there are a lot more projects going on because of the SaaS migration than there would have been otherwise?  If everything holds course, just considering the SAP world, there will be thousands more migrating and all will need some level of service.  You know you will have to spend some time talking them into the standard solution, redesigning their processes to fit the standard, and/or extending the solution because they inevitably want it to work like the old one.  It might be that we are simply cutting the pizza in more pieces or it might even be that extra pizza is there for the taking.  You might need to get used to a new flavor, but hey, its pizza!  🙂

      Author's profile photo Sven Ringling
      Sven Ringling
      Blog Post Author

      Agreed: the migrations create a lot of extra work. Though, methinks, if those customers would migrate to on-prem S/4HANA instead, there would be even more work.

      Oops - hold on a minute. I forgot that that's "simple". So, maybe not 😉