How HR can overcome the SaaS challenge

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According to a recent survey administered by the HR Shared Services Institute, 60% of organizations with 50,000 or more employees use a cloud HRMS platform, like Workday, SAP/SuccessFactors, Oracle Cloud and others.

This is notable because, while software-as-a-service providers initially considered mid-size organizations to be their primary market, very large organizations have jumped onto the bandwagon in even greater numbers.

This unexpected development has presented vendors with a classic “good problem.” On one hand, the adoption of SaaS by large organizations has greatly increased SaaS subscription revenues. The challenge, however, is that SaaS vendors have been thrust into the realm of large scale complexity for which multi-tenant SaaS products were not initially envisioned.

This begs a question: How does a platform that by definition prohibits customization meet the complex needs of large global organizations?

Configuration enhancements accelerated by frequent update cycles have helped SaaS vendors fill encountered functionality gaps, as confirmed by the prevalence of data. But it also stands to reason that large, complex organizations will push the limits of delivered features.

Faced with this challenge, organizations have a few basic options:

  • Adapt current processes and policies to fit the SaaS vendor’s configuration options.
  • Exclude non-conforming processes from the SaaS implementation’s scope and leverage other solutions to satisfy the unique requirements.
  • Fill gaps by developing custom functionality using the SaaS vendor’s platform-as-a-service (PaaS) offering, which allows for the development of custom functionality on the vendor’s platform.
  • Attempt to influence the SaaS vendor’s development road map to accommodate desired functionality in a future update cycle. Rather than devote this post to comparing the options above, which could take a while, I’ll focus on a method that’s useful in all cases.

The Genie Method

Imagine that in place of an HR function your company had a genie on staff. I’m talking about the magic variety that appears from a lantern in a puff of smoke. With a genie on staff, instead of HR administering benefits open enrollment, the boss might simply say, “Genie, please enroll employees in benefits.” Poof, employees are enrolled. But if you think about it, such a request would be silly, since genies don’t do anything. Rather, they make things be. So a more appropriate request would be “Genie, I wish for employees to be actively enrolled in their benefit programs of choice.” Poof.

Enrolling employees is an activity, whereas employees being enrolled is an outcome. This may seem like a pin-sharpening exercise, since genies obviously aren’t real. But understanding the subtle distinction between activities and outcomes is what the Genie Method is all about. The Genie Method entails translating activities into outcomes so as to express pure value.

Deriving statements of value that are distinct from the activities that produce them is a discipline which, while simple on the surface, is deceptively difficult. Most of us can remember as kids arguing about what three wishes we should make if we had a genie. As adults, we can look back in amusement at how small our childish wishes were; mine typically included things like a million dollars and a super-sonic jet that could land in my backyard.

Likewise, in creating outcome statements we tend to fall into the same trap as the boss who asks the genie to perform the activity of enrolling employees rather than the outcome of employees being enrolled. Our worlds are so activity oriented that we have difficulty expressing outcomes that are not restatements of activity. Yet, if we are to create expressions of pure value, this is precisely what we must do. We must apply the genie test. The remainder of this post explains how.

Using the Genie Method

The process of resolving fit-gap discrepancies typically begins with an inventory of current-state functionality that the SaaS platform doesn’t deliver out of the box. The items on the list might include descriptions like:

  • (The system) displays link to company policy and requires user to check agreement box before initiating request.
  • (The system) automatically limits user to a specified range of merit increase percentages based on the employee’s position tenure and performance rating.
  • (The system) generates a PDF statement of data change to be printed and mailed to the employee for verification purposes.
    (Note: Never mind that a given tool might actually deliver this functionality out of the box. The point here is merely to illustrate the Genie Method.)

Notice that the examples above contain verbs — displays, limits, generates. Verbs are used because the statements describe actions performed by the tool. Using verbs naturally leads to the question: How can these same actions be performed in the absence of the existing functionality?

But this is the wrong starting point. The Genie Method starts with restating functional requirements as customer-valued outcome(s) produced by the functionality in question. Here’s how the functionality statements above might look as customer-valued outcomes.

· Action-oriented statement: Display link to company policy and require user to check agreement box before initiating request
· Customer-valued outcome: Work-from-home policy compliance
· Action-oriented statement: Automatically limit user to a specified range of merit increase percentages based on the employee’s position tenure and performance rating
· Customer-valued outcome: Performance-driven merit increases
· Action-oriented statement: Generate a custom PDF statement of data change to be printed and mailed to the employee for verification purposes
· Customer-valued outcome: Accurate and properly approved employee data updates
You can immediately see that expressing functionality (activities) as outcomes paves the way to considering wider array of solution options, including but not limited to:

  • Is the existing functionality actually accomplishing the stated outcome? If not, why replicate it?
  • Can the program or policy be modified to achieve the outcome without the existing functionality?
  • Can a different approach be used to achieve the same purpose, perhaps even more effectively?
  • If custom functionality is deemed necessary, what is the simplest, most optimal design to achieve the stated outcome?
    Don’t get me wrong. After all is said and done best answer might be to replicate the existing functionality. The Genie Method at least helps ensure that the full range of options is considered while guaranteeing that whatever solution is chosen it is based on the most important factor of all — value to the business.
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Benefit management SaaS HR Technology Benefit strategies Benefit plan design