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Is Your Server Serving You? Al Doran, CHRP

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1 Is Your Server Serving You? Al Doran, CHRP

2 What is the new Technology in HR? 24/7 Access Access by both Managers and Employees – Those who need it Seamless – integrated with other Business Applications

3 Why Technology? Reduce Costs HR Metrics – Headcount Instant Access – Real Time Business Decisions and Communications Global Economy

4 Key Findings Recent CedarCrestone Survey Workforce technologies and service delivery approaches growth enable HR transformation – All workforce technologies use continue to grow – Outsourcing usage is growing – Organizations blend high-touch and high-tech service delivery Results are significant – Transaction and compliance cost reductions of 25% to 75% Success factors – A solid business case – Business process improvement – Change management

5 CedarCrestone HCM Blueprint Self Service Transactions Native ERP Third-party Vendors Self Service Transactions Native ERP Third-party Vendors HR Knowledgebase Portal Framework Identity Management Single Sign-on Identity Management Single Sign-on Help Desk Call Tracking Case Management Help Desk Call Tracking Case Management Strategic HCM Apps Recruiting Competency Mgmt Learning Mgmt Compensation Mgmt Performance Mgmt Strategic HCM Apps Recruiting Competency Mgmt Learning Mgmt Compensation Mgmt Performance Mgmt SCM CRM FIN Core HRMS/ERP foundation Data for Roles, Personalization, Position Mgmt Core HRMS/ERP foundation Data for Roles, Personalization, Position Mgmt Data Warehouse Analytics Performance Excellence Service Delivery Excellence Administrative Excellence #8: CedarCrestone HCM Blueprint

6 All Applications Grow In Use Many Up 50% or More

7 * = Gartner estimates Source: Gartner (February 2008) Figure 1. Licensed Customer Share for Companies With More Than 10,000 Employees * = Gartner estimates Source: Gartner (February 2008)

8 Years to Achieve Payback Faster than Expected with Most Solutions Source: CedarCrestone 2005 Workforce Technologies/Service Delivery Approaches Survey Years Achieved Years toNot YetWhen Years inROI Achieve AchievedPayback is Place%PaybackROIExpected Years Achieved Years toNot YetWhen Years inROI Achieve AchievedPayback is Place%PaybackROIExpected Core HR Record Keeping System HR Management System HRMS Upgrade Service Delivery Solutions and Applications Call Center Technologies Employee Self Service Manager Self Service Time and Attendance Strategic HR Applications Web-based Recruiting Web-based Learning Management (excludes content) Performance Management (appraisals, goal alignment) Succession Planning Compensation Management Measurement Solutions and Applications Data Warehouse (for HR) Workforce Analytics (including scorecard) 6.6 1.8 3.4 2.7 2.3 5.5 2.4 3.9 2.5 3.3 3.5 1.4 35% 24% 16% 42% 31% 36% 22% 15% 28% 9% 24% 29% 11% 3.1 1.1 1.3 1.2 1.6 2.5 1.6 1.0 1.7 2.1 0.6 22% 27% 18% 20% 31% 18% 24% 18% 17% 18% 20% 21% 4.1 2.4 1.9 2.3 2.4 1.2 1.8 5.0 4.0 3.0 3.3 2.9 3.0 #33: In-house Solutions: Payback Achieved/ Payback Expected – Worldwide

9 What does the Future Hold? Dramatic shift away from Data Input and Maintenance toward data interpretation. Shift to technology applications for most employee needs and questions Increased outsourcing Call Centre operations And more…

10 More on the Future More demands on Human Resources – Shorter time frames – Clients will expect Metrics – Instant access to data by management HR will be champion of change

11 Evolution -Application Technology Mainframe Applications Mainframe Applications Client-Server Applications Client-Server Applications Internet Applications Internet Applications Service Oriented Applications

12 Typical Web Based Application

13 Typical Webserver Interface

14 Typical Security Architecture

15 Web Based Systems As an HR Professional: – Do you really care how this all works? – Or, are you more interested in that it works?

16 Does your HRMS do what you want it to do? Does it maintain the records on all your employees? Does it provide you with the management reports you need to do your job?

17 Does your HRMS have? Real time communications w/ employees Newsletters Job postings Training Employee data to managers Sign up events, training, etc Polls and surveys Policies online Forms Benefits enrollment

18 Comprehensive data – Single source of employee data – Staffing issues (vacancy, approvals, hiring dates) – Sharing of data – Reporting – Data access – Skillset tracking – Applicant tracking – Data analysis Better, faster, more accurate data Data security Feeds to finance, budget, payroll, security, etc Customized reports

19 HR System Payroll Time Management HR Data Warehouse/Mart Legacy Systems Components Of e - HR HR Communities Of Interest Middleware Web Recruiting Corporate Portal HR Portal MSS ESS Web Training Outsourced HR Functions Position Mgmt Third Party Reporting Workflow & Business Rules Directory Transactions & Information Flows Within a TCP/IP Web Environment

20 So what are our options in 2008? Traditional – Web based – Hosted internally Need IT support around the clock You own the servers Ongoing cycle of major upgrades And,

21 New Options Not on your servers – ASP – SaaS – Hosted

22 ASP – Application Service Privider ASP: Long Gone or just re named? – a third-party entity that manages and distributes software-based services and solutions to customers across a wide network. – ASPs are a way for companies to outsource some or almost all aspects of their information technology needs. They may be commercial ventures that cater to customers

23 ASP continued (Application Service Provider) Hosted software contractor. An ASP operates software at its data center, which customers access online under a service contract. The first wave of ASPs were application outsourcers, who hosted software packages from established enterprise software vendors such as SAP, Peoplesoft and Oracle. They are being superceded by a larger group of 'web-native' or 'net-native' ASPs, who have developed their own software, often using open-source platforms such as Linux, Apache and Perl, specifically for delivery as a hosted service.

24 More on ASP "Application service provider" is remote software that you access through a web browser. Instead of installing megabytes of software on your local C drive, you simply rent the use of some ASP software that exists elsewhere on the Internet. You never really own ASP software, you borrow it for a fee. Hotmail is often used as an example of an ASP.

25 SaaS 1.0 Hosted / ASP-based applications The first generation of SaaS witnessed the meteoric rise and catastrophic demise of the ASP (Application Service Provider) market. The early hosting/ASP models were based on the ASP purchasing a restricted use perpetual license from the software vendor and then providing subscription-based offerings to their end customers. ASPs offered primarily packaged applications targeted at SMB market.

26 SaaS 2.0 “Pure” SaaS Applications is reaching a stage of maturity. This version of SaaS offers a complete range of functional and departmental applications such as CRM, ERP, Financials, HR and more. The applications are mostly developed for SaaS (“ground up”/Web native). These apps typically have a shared code base and a one-to-many delivery model. The pricing is driven by a lower cost subscription, which includes support, rapid deployment, and easy-to-use functionality. Thus our SaaS model creates economies of scale for software vendors and also enables rapid growth.

27 SaaS 3.0 Hybrid SaaS Applications SaaS 2.0 focused on the small and mid-sized business markets. SaaS 3.0 is emerging with the adoption by Enterprise clients of the SaaS capability.

28 SaaS Growth By 2010, Gartner predicts that 30 percent of new software will be delivered via the SAAS model. In a report in March 2007, Gartner Inc. estimated that the global Software as a Service (SaaS) market will grow to $19.3 billion by 2011, tripling in size from the $6.3 billion it was in 2006.

29 What is SaaS? Software as a service (SaaS) is a model of software delivery where the software company provides maintenance, daily technical operation, and support for the software provided to their client. SaaS is a model of software delivery rather than a market segment; it assumes the software is delivered over the internet. Software can be delivered using this method to any market segment, from home consumers to corporations. The term "SaaS" was coined by John Koenig for the SDForum Software-as-a-Service Conference in March of 2005 and has become the industry adopted reference term, clarifying and replacing the earlier terms "On-Demand" and ASP (Application Service Provider).

30 How does SaaS differ from ASP? The reason for moving away from the term ASP or application service provider is that the ASP generation was merely traditional client-server applications with HTML front-ends added as an afterthought. These applications were hosted by third-parties who ordinarily did not have application expertise, but were only managing servers. Because the applications were not written as net-native applications, performance was poor and application updates were no better than self managed applications..

31 ASP to SaaS continued By comparison, current net-native SaaS applications or independent portions are updated regularly, many daily. The focus in SaaS is more on what the customer wants rather than what the vendor could give as was the case in an ASP.

32 Continued Early SaaS approaches were application service providers (ASPs) who ran a turnkey application on behalf of their clients. But ASPs generally did not build the application themselves; rather, they took an off-the-shelf application (such as HRMS).

33 Drivers for SaaS Everyone has a computer Applications are standardized Many SaaS providers allow a wide range of customization within a basic set of functions. A specialized software provider can target a global market Web systems are reliable enough Security is sufficiently well trusted and transparent

34 Drivers continued Availability of enablement technology Wide Area Network's bandwidth has grown drastically Lower total cost of ownership Focus on core business and not IT

35 SaaS – Gartner Definition The application is owned, delivered, and managed remotely by one or more providers The application is based on single set of common code and data definitions which are consumed in a one-to-many model by all contracted customers at any time. The application is licensed on pay-per-use or subscription basis

36 Gartner on SaaS With the SaaS approach, the client is responsible for the business process, but the provider is responsible for the technology and its support. As discussed above, the application runs at the provider's facility and is based on common set of code and data definitions consumed by customers in a one- to-many model. In addition, SaaS providers use a subscription revenue model.

37 Gartner on Hosted/ASP With this option, the client is still responsible for the business process, but the provider is responsible for the technology and technology support. In this option, the provider implements a separate instance of the application for each customer. There are several different economic arrangements possible ranging from subscription pricing to the client licensing the application from the software provider and contracting with the ASP provider just for hosting services.

38 The History and Philosophy of SaaS ASP to SaaS, a summary: SaaS is an outgrowth of the application service provider (ASP) business model from the late 90's. However, SaaS is more web-native and less client-server oriented (see below). SaaS is generally associated with business software, while technically similar, consumer oriented, software is known as web 2.0. Often, the two overlap (for example, Google Apps hosted office and collaboration suite is available for both individual users and business domains. SaaS vendors often market their product as an alternative to standard boxed software, without the upfront price and the technical infrastructure and expertise required to install, configure, and manage traditional software.

39 Time for some examples

40 Workday model On-Demand On-demand is quickly becoming recognized as the delivery model of choice for business applications. There is no hardware, software, middleware, database or business intelligence tool to buy, install, maintain, and upgrade. IT resources can be redeployed to focus on business innovation and value rather than customization and maintenance.

41 Benefits Faster time to implementation Gone are the elongated implementation and re-implementation cycles of the past. Workday will have you up and running in weeks, not the standard months or even years you may be used to with on-premise applications.

42 More benefits Seamless updates and upgrades With traditional on-premise applications, companies were forced to update and upgrade their software on their own dime, often falling drastically behind release schedules. With Workday, all system updates and upgrades are made on an ongoing basis, which means our customers are always on the most current version of our service

43 More… Greater economies of scale Multi-tenancy (the ability for multiple customers to share one physical instance of the Workday solution without ever seeing each other's application data) is a key feature of Workday. Workday accomplishes this through the use of the Workday Object Management Server™ (OMS). Workday's multi- tenancy model reduces the costs associated with supporting our customers, and we pass that cost- savings directly on to you.

44 Key difference between SaaS and traditional on-site applications Software-as-an-application User pays up-front for a perpetual license, usually based on the “potential use” of a server (as measured by MIPS, for example), the numbers of users, plus ongoing maintenance fees. A dedicated instance of the software is installed on a PC or server (or those of the user’s hosting provider). Users are responsible for deployment, operation, and maintenance of the IT infrastructure required for the application. Users are responsible for upgrading the software as vendors issue new releases. Users are responsible for ensuring the software will continue to operate as their computing environment changes. Users are responsible for configuring software to meet specific vertical or other business Software-as-a-Service Users’ fees are “pay-as-you-go” based on appropriate metrics, such as: per seat per month per transaction per software module other metrics and/or combination of the above The software is managed and maintained by the SaaS provider (or the vendor’s hosting partner). For SaaS users the “hoster” is responsible for the IT infrastructure. SaaS vendors upgrade the software automatically as new features and functionality are developed. SaaS vendors (or hosting partners) manage changes to the computing environment. SaaS applications are highly configurable and are designed to integrate with existing applications and infrastructure.

45 Workday!

46 Another Example

47 1. Traditional License Option Client has a perpetual license to operate the software, based on a group of modules and a fixed employee headcount. Expectations: Client provides hardware (servers) and self-hosts Client installs software and future upgrades Client IT department performs backups and recovery services Clients purchase and administer SQL licenses Additional annual software maintenance contract required for product support Benefits: Cost efficient; multiple module discounts; Clients have on-site control of hardware and data; most flexibility

48 2. Subscription (ASP) Option Client “rents” hardware/software for a per employee, per month fee, based on a group of modules and “active” employees. Expectations: NuView provides hardware (servers) and application through our datacenter NuView installs software and future upgrades NuView performs daily backups and provides recovery services NuView purchases and administers required SQL licenses Software maintenance and support included in monthly fee

49 3. Blended (Hybrid) Option Client has a perpetual license to operate the software, based on a group of modules and a fixed employee headcount, but the system is hosted in the NuView datacenter for an additional monthly fee. Expectations: Client licenses a group of modules, at a fixed employee headcount NuView provides hardware (servers) and application through our datacenter NuView installs software and future upgrades NuView performs daily backups and provides recovery services NuView purchases and administers required SQL licenses Additional annual software maintenance contract required for product support Additional per employee, per month fee for hosting Benefits: Most flexible option that provides the best of both worlds – cost efficiencies of a perpetual license, but no investment in hardware or IT resources is needed. Our datacenter provides security, reliability and disaster recovery peace of mind.

50 HRWARE in Canada NuView partner HRWARE SaaS™ provides your business with 24 X 7 global access to your HRW@RE application and data via Verizon’s award winning global network. The Verizon Business data network includes more than 446,000 route miles, spanning six continents and operates in more than 2,700 cities and 150 countries. Via 16 high-speed IP POP’s, 2 Premium Data Centers, 4 Hosting Co-location Centers and 4 GDL/PIP Nodes all connected with redundant backbone OC-48 and OC-12 circuits, HRWARE offers you award winning, world class, highly secure hosting services

51 ADP ADP (Automated Data Processing, Inc.) announcedADP (Automated Data Processing, Inc.) announced that is acquiring Employease, a 10-year-old company that provides SaaS HR, payroll and benefits services for 1,500 clients, with more than one million client records under management. the blurring of business services with application services. ADP is not a software vendor, even though it uses a lot of software and computer power to run its service offerings. No one ought to start calling ADP a software-as-a-service vendor as a result of this acquisition. It hasn’t become a software vendor, it’s merely extending into new areas of automated business services

52 Oracle

53 Oracle – Larry Ellison SaaS is all the rage these days. Cloud computing and SaaS are new paradigms and are one of the fastest growing segments on the web operations side. However, Larry Ellison, the founder and CEO of Oracle has said that his company hasn’t participated in the software-as-a-service trend because there’s no money to be made there.

54 Larry really means… What Ellison is saying, essentially, is that SaaS stinks because customers would pay so much less to Oracle. There’s less consulting fees, integration fees, and no big up-front license fees. Ellison called subscription-based software “very interesting, but so far no one has figured out how to make any money at it.” Oracle’s plan is to keep selling to big companies, pitching them on vertical applications once they’ve filled up on databases, middleware, and general ERP. It offers Siebel CRM On Demand, and has said it’s willing to host software for customers, but Oracle, by far, is primarily an on-premise software company, according to Information Week.according

55 SAP hires SaaS Guru from RightNow SAP SaaS ERP release for the midmarket SAP's rocky road to on-demand

56 Ultimate Software Intersourcing is the pay-as-you-go hosted HR/payroll service that enables you to enjoy all of the flexibility and control over your own business processes while someone else worries about managing and supporting the HR/payroll system. You don’t incur the expense of running an ever- expanding IT department or have the headaches associated with playing the role of a systems integrator. You can spend time doing what you do best—moving your business forward.

57 SuccessFactors New Research Shows Superior Revenue Growth Achieved Through SaaS-Based Human Capital Management Usage

58 Benefits of new tools such as SaaS Software as a Service (SaaS) for Payroll and HR Management Allows users Internet access to management tools online -- without warehousing and manual retrieval Guaranteed 98 percent up-time Remote disaster recovery centers Compliance with all federal/state laws and regulations hosting to eliminate expensive servers, licensing and technical allocations

59 Benefits Benefit to the Client For the client, there are low upfront costs. Executive teams, and Company Boards, desire to outsource critical functions that are not deemed part of the organizations’ “core business” address the corporate need to focus on core business. In particular for the HR space the perception of HR as a “cost center”, rather than a strategic partner in the organization – and makes a contrary vote all the more difficult.

60 Benefits.. Pricing is based on subscription / value based Hence the customer need not pay any upfront license cost and rather align his cost with his annual budgets. Less impact in IT: As there are no deployment and implementation needs, there is less impact in the IT infrastructure and support.. Quick and Reliable implementation No lock-in - Customers have the option of breaking the relationship and moving to a different vendor. Since there is no upfront cost and the cost is primarily subscription based, if they find a better service or low cost they can always move No need to pay for bugs in the application – traditionally the customers after paying for the software, also pays for the bugs in the software in terms of maintenance and support fees. In the new model the cost of hosting, maintenance and licensing are not separated, customer only pays a fixed subscription fees. This new model has created a level playing field, in which the software tools which were traditionally available only to big players (reason being huge License cost, lack of IT support and infrastructure) is now available for SMB’s too

61 Outsourcing Will Increase

62 Process Outsourcing Varies Widely

63 Trends in SaaS – October 2008 The use of software as a service (SaaS) among small-to-medium businesses is on the rise, according to a report by Access Market International Partners (AMI-Partners). The market intelligence firm surveyed various businesses, defining small businesses as having one to 99 employees and medium ones at 100 to 999 employees. The study, covering the year 2007, found that 21 percent of small businesses (SBs) and 31 percent of medium businesses (MBs) use SaaS, which are double the rates found in 2004. Adoption of SaaS was spurred by cost factors and ease of use, according to the report. Moreover, businesses are requiring software solutions that are easy to implement and maintain. The lack of infrastructure costs enabled by a SaaS solution can be a benefit too. MBs were the largest adopters of SaaS, spending six times as much as SBs

64 Questions?

65 Some HRMS Web Sites HRMS KnowledgeInfusion

66 Further questions: Al Doran 416-505-6204

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