What Is SaaS & Why Should HR and Payroll Departments Use This Model?

What Is SaaS & Why Should HR and Payroll Departments Use This Model?

While many people have seen or heard of the term ‘SaaS payroll‘, some don’t understand exactly what it entails. Cloud computing is relatively new and is steadily gaining acceptance worldwide, and the key to greater adoption is a better understanding of how it works and the advantages it brings to those in the payroll and human resources departments.

What Exactly Is SaaS?

To understand SaaS (which stands for Software-as-a-Service), it is first important to understand how software has traditionally been distributed. During the 1980s, 1990s and early 2000s, those that wanted to purchase a software program for their computer would go to a local electronics store, buy it off the shelf and then take it home and install it, or they would place an order through the mail and install it after receiving it. By the late 1990s and 2000s, a growing number of people were downloading software from websites and installing it onto their computers.

The introduction and expansion of the internet altered this software distribution model. Faster and more reliable internet connections combined with increasing computer processing power led to a world where software could be delivered over the internet in the form of a service, without the need to go into a store, order software through mail or even download and install from a website. With SaaS, after purchasing a software program, you will sign into the service and begin using it, and the service is accessible from any electronic device that can access the internet and use web browser.

Benefits of SaaS

There are a number of exceptional benefits to be gained from SaaS. First, the software is immediately made available from vendors to anyone who is willing to pay and who has access to the internet. There is no need to drive to the local computer store or wait days or weeks for it to arrive via mail order. SaaS is indispensable for payroll and HR departments because it gives them streamlined and more efficient ways to manage, record and process employee records. However, because this model is new, it is critical for software vendors to provide superior customer service.

While the ability to download and install software directly from websites was a quantum leap, the downside to this method is software compatibility and system requirement issues. This model provides software creators with a significant increase in savings, as they no longer have to pay for packaging or detail with the distribution and warehousing costs which are necessary for retail outlets.

Challenges Of SaaS

However, SaaS faces some challenges. Chief among these is integration. Because the industry is new, it doesn’t have the extensive customer support network that already exists for traditional software distribution models, and the need to have a steady internet connection can be problematic in areas where internet service is unreliable. Another challenge that SaaS vendors face is security. The Human Resources department, in particular, must handle sensitive employee data, and because it is an online service, if it is compromised by cyber criminals, the consequences would be disastrous. While SaaS shows tremendous potential, it must provide superb customer service and its security must be second to none.