Software as a Service (SaaS) is Not Really Service

When it comes to HR solutions for midsize to larger businesses, any experienced HR manager will admit that the right tools and technology are essential. Software tools help streamline transactions, reduce burdensome paperwork, and reduce the likelihood of human error. From analytics to tools that facilitate shared data between departments, HR software allows decision makers in a company to ask better questions, see relevant trends, and respond quickly to small problems before they become big ones.


But software has its limits and finding them usually doesn’t take too long once you are using it in the real world Smart business practice involves recognizing nuances, and such nuances are lost when technology replaces HR management completely. Humans still have three qualities that software can’t replace – flexibility, and creativity, and the ability to provide personalized service. Consider for a moment how much of all three is needed in the process of managing people.

The lesson that Mercedes-Benz learned


A recent article in Bloomberg Technology news highlights an announcement made by Mercedes-Benz that they were in the process of ‘firing’ their assembly line robots. Why? It turns out that the company’s outdated automation was unable to be flexible enough to meet consumer demand for choices and customization in their products, nor was it able to compensate for the unpredictability of the factory floor. Without the ability to adapt to complex situations, the technology was ineffective without human collaboration.


The same is true of SaaS (software as a service) tools, which are sold as HR solutions with the promise of handling the difficult functions involved with managing employees. From payroll to time keeping to paperless onboarding, these software packages boast a lot of functions to support human resources management.


But when discussing ‘service,’ especially when that service requires customization to unique circumstances and needs, there is only so much a computer program can do. It can’t advise best practices in a changing regulatory landscape and it can’t use years of HR management knowledge and expertise to help businesses find the answers to complex HR problems it might face.


Technology + Humans = The perfect formula


Just as Mercedes-Benz discovered, when customers want customization and a product that fits their unique needs, the best combination is software plus people. Those people will be the ones to provide the expertise and strategic guidance needed when problems arise. No software can replace the role of seasoned experts.


Whether it’s payroll, benefits, retirement, or regulatory compliance, simple mistakes can have far-reaching results. When you combine the human element with software, the result is effective technology managed by expert decision makers who know the potential pitfalls before they occur. While a software program can analyze data, it can’t offer guidance on regulatory questions, solve complex problems, help you hire the right people, or provide the level of service needed to ensure a company is set for present and future success.


There are solutions beyond SaaS and they involve people -- adaptable, expert, well-informed, creative people -- who can guide your HR practices and responsibilities based on what works in the real world. SaaS still requires the proverbial Rube Goldberg machine of internal staff and all that comes with it (e.g., attendance, vacations, turnover, management headaches, unpredictable expense, and overall management attention that could be more effectively focused on making widgets or providing customer service). A superior solution is one where a company gets all the benefits of robust HR technology along with a streamlined HR organization and the cost advantages that come with it.


To make that work, it is imperative that HR managers and C-suite partner with a proven firm that doesn't compromise on the three elements of flexibility, creativity, and personalized service. Adams Keegan is the leader of a very small group of firms that meets these standards.