Software-as-a-Service for Workforce and Expense Management

An Economical Alternative to Enterprise-class Solutions: How SaaS Makes an Automated Workforce & Expense Management Solution Easier & More Affordable than Ever Before

As businesses strive to contain costs and improve performance in this climate of economic uncertainty, a Workforce and Expense Management solution delivered via Software-as-a-Service (SaaS) provides the advantages of enterprise-class technology and the deep functionality of a best-of-breed solution without expensive upfront capital costs and the hassle of ongoing software maintenance requirements.

SaaS Makes Automated Workforce & Expense Management Solutions Easier & More Affordable than Ever Before

As businesses strive to contain costs and improve performance in this climate of economic uncertainty, a Workforce and Expense management solution delivered via Software-as-a-Service (SaaS) provides the advantages of enterprise-class technology and the deep functionality of a best-of-breed solution without expensive upfront capital costs and the hassle of ongoing software maintenance requirements. By adopting automated workforce and expense software in a SaaS delivery model, organizations can take a best practice approach that offers faster time to value and lower cost of ownership while enabling the business to focus on its core requirements plus improve payroll accuracy. This approach ensures that organizations can leverage their existing workforces to maximize productivity and gain significant returns on investment by automating the complexities of expense management, time and attendance, scheduling and optimization and absence management.

Using technology to optimize the deployment and management of a workforce will result in streamlined business processes and workflows, increased workforce productivity and overall cost reductions. Yet, a recent survey from the American Payroll Association (APA) revealed that although maintaining accurate time, attendance and payroll records are top-of-mind for payroll professionals, the majority of survey respondents are still using antiquated methods of recording time.

Of those payroll professionals surveyed, nearly 20 percent said they experienced errors in a typical payroll cycle (citing human error as the leading cause followed by other payroll miscues such as lost or missing time sheets and payroll data), and that between one and five percent of paychecks in a cycle contain inaccuracies.2 In these turbulent economic times when every dollar counts, organizations that rely on manual processes instead of workforce management software are missing out on the opportunity to effectively manage and deploy their workforce to support business objectives and maximize profits.

A workforce and expense management solution is a mission-critical application that improves staff deployment and productivity, increases accuracy of decision-making, and ensures payroll accuracy (while reducing the need for error correction). It also ensures adherence to pay, work and union rules and policies, fosters compliance and reduces operating costs.

Facts That Speak For Themselves

To further illustrate, if we consider employees with an average annual salary of $35,000, a company with 2,000 employees will probably spend $70M a year in gross payroll. The APA estimates that a workforce management application can return six percent of gross payroll due to the reduction of errors, proper scheduling, management of overtime and other administrative costs. Even at a two percent return on investment, the company could save $1.4 million per year.

Adopting automated workforce software can help organizations better manage time and attendance processes, eliminate human errors, increase staff productivity and dramatically impact the bottom line. Some organizations, particularly small-to-medium sized businesses, have previously hesitated to adopt a workforce and expense management solution because of the capital cost and management complexity associated with traditional software license agreements. A workforce and expense management solution offered through SaaS eliminates the infrastructure technology and investment challenges associated with traditional license agreements, making it easier for these organizations to also take a best practice approach to managing their workforce.

Organizations everywhere are tightening expenditures and asking employees to do more with less. A best-practice Expense Management software solution allowing for the management of the entire business expense process from pre-trip authorizations through reimbursements and analysis, maximize productivity and manage business policies while gaining a significant ROI.

A recent research report by PayStream Advisors on Travel & Expense Management reveals that T&E processing costs can be slashed by up to 80 percent through automation due to the reduction of errors, time to process the reports, the number of people required to process the reports and other administrative costs. Ironically, this climate of economic restrictions on capital spending may preclude many organizations from purchasing the very solution they need most - Expense Management software.

As one example, let's consider a company that processes 500 expense reports a month at a cost of $35.00 per report or $17,500 per month or $210,000 per year. PayStream estimates that an expense management application can reduce processing costs by up to 80%. The cost of automation using an automated expense management solution in a SaaS model for a company with 500 expense reports per month is typically $7.00 per report. Following our example, with a solution, this company would spend $42,000, realizing a savings of $168,000.

Employee expenses are no longer limited to travel and entertainment costs paid by the employee and reimbursed by the company, but also include expenses and payment options from the entire range of employee discretionary expenses including office supplies, mobile phones, meetings, MRO, p-cards, corporate payment cards, fleet cards, direct vendor billing and more. Expense Management Automation soutions give companies the power to attack the high cost of expense processing at its source: the employee's "point of spend." These solutions allow automation of the entire expense reporting cycle from pre-trip authorization, expense report pre-population, and workflow approval and report creation through to travel booking integration, audit, reimbursement, receipts management and post-payment reporting and analysis.

More Benefits from SaaS

Workforce and expense management solutions delivered in a SaaS environment are:

• Cost effective and eliminates the need for upfront capital costs and resource investments because it offers a pay-as-you-go model based on consumption. Historically, organizations that considered workforce and expense management software had to rely on on-premise, licensed applications, which require substantial cost outlays and resource investments. SaaS is a cost-effective deployment method where an application is hosted as a service and provided to customers over the Internet.
• Flexible and can accommodate evolving business strategies by providing the choice between an in-house or on demand SaaS model. An application that is architected to deliver the identical solution in either deployment model enables organizations to seamlessly migrate from a SaaS environment to an in-house model, if needed.
• Simple to administer and maintain because it eliminates ongoing management and upgrade challenges. A Software-as-a-Service delivery option doesn’t require internal resources to manage yet another system or make additional hardware investments.
• Extendable to customers and partners, enabling them to take advantage of an enterprise-class solution. Workforce and expense management solutions delivered in a SaaS environment can expand an organization’s business potential and deliver added value to organizations who otherwise couldn’t afford an enterprise-class solution.
• Safe and secure management of data when in compliance with the American Institute of Certified Public Accountants' (AICPA) Statement on Auditing Standards (SAS) and the Canadian Institute of Chartered Accountants (CICA). Software that demonstrates completion of the comprehensive SAS 70 Type II and CICA audits on an on-going basis demonstrates the quality and effectiveness of operational procedures, controls, security architecture and IT infrastructure.

This paper explores the advantages of a Software-as-a-Service deployment option for automated workforce and expense management solutions.

The SaaS Value Drivers

According to analysts at Forrester Research, an independent technology and market research company, SaaS adoption is being driven by improving software flexibility, independence from internal IT, and relief from software upgrades. Rather than expensive on-premise implementations that require additional hardware, dedicated resources and expensive upgrades, a SaaS deployment of workforce management software offers a cost-effective alternative that helps organizations better manage their largest variable expense - labor costs - improve their processes, and maintain accurate time, attendance and payroll records.

Although managing the complexity of business rules is still a challenge with which to contend when implementing a workforce and/or expense management system, the adoption of a SaaS delivery model makes it easier than ever before for organizations to take advantage of an automated solution. SaaS as a software delivery model offers a variety of pay-as-you-go licensing options; vendor managed hosting, maintenance and application updates, configurations and multi-tenancy (so that a single program serves multiple customers).

Forrester's research reveals that 46 percent of enterprise class organizations are interested in or planning to pilot a SaaS solution and that SaaS adoption is higher in human resource applications than any other application area – and is accelerating.5 One reason behind this growth is that SaaS has advanced to a maturity point where a broader variety of business applications such as payroll solutions are readily available.

Bringing in systems such as workforce and/or expense management software solutions in a SaaS environment delivers a wide array of benefits (beyond improved time and attendance, scheduling and payroll or accounts payable processes) that range from cost control, reduced requirements on internal IT staff and lower infrastructure costs including reduced spending on servers, storage and other IT equipment. SaaS also enables faster implementation, more comprehensive support and greater scalability.

Why is SaaS a better alternative than traditional on-premise license software agreements? Consider the following:

Lower cash outlays. Rather than a single expense at the time of purchase, SaaS pricing consists of an initial set up fee and a recurring subscription stream, with hosting and maintenance charges typically paid monthly. SaaS changes the economic model from a typically large capital expenditure to a manageable monthly expense.

Reduced technology investment. It doesn’t take a lot of upfront investment to use the software. There is no need to purchase additional servers, storage devices or other IT equipment. Fewer requirements from internal IT resources. SaaS vendors provide entire application lifecycle involvement, from initial implementation through ongoing support and maintenance. They are responsible for performance, uptime, security, reliability and scalability, freeing internal IT resources to focus on other payroll-specific projects.

Multi-tenant approach. Multi-tenant applications share the same physical instance and version of an application and are designed so that one instance of the application serves multiple companies and multiple users at each company. This enables organizations to deploy the application across different workgroups and empowers them to offer cost-effective valued-added solutions to their partners and customers. For example, a company that chooses to deploy an automated workforce and expense management solution can extend the same solution and functionality to their customers who might otherwise not be able to afford enterprise-class technology.

Shared risks and single-source accountability. In a SaaS deployment model, the vendor is responsible for the technology, hardware and ongoing support services while the customer is responsible for the pay-as-you-go investment based upon the pre-defined service level agreement. The SaaS vendor also has the breadth and depth of experience from multiple client implementations to deliver fluid integration with other business systems creating the strategic value of a single, integrated enterprise-wide system.

Improved application performance. When a software solution is delivered via SaaS, companies can expect a predictable quality of service, which translates to better reliability and availability of the application.

Lower cost of ownership in the first three to four years. On-premise applications require a hardware and software purchase at the time of implementation and dedicated support staff to maintain the solution and ensure availability. Organizations without sufficient internal resources or on-staff technical knowledge may need to hire additional staff. SaaS eliminates the need for these investments thereby lowering the cost of ownership.

Organizations that continue with manual time and attendance or business expense processes are missing out on an opportunity to improve productivity, control costs and gain strategic insight into their workforce movements and metrics. By taking advantage of SaaS, organizations can derive the benefits of workforce and/or expense management solutions with lower upfront costs and without additional IT challenges.

What to Consider When Evaluating a SaaS Solution

Prior to making any technology purchase, ensure the business needs are clearly defined so that the implementation and services can be tailored to individual company requirements. By carefully examining internal requirements and resources, companies will be able to gauge if SaaS is the right delivery model for their organization.

When evaluating SaaS vendors, be sure to look at their operational practices, security and system architectures. Is the vendor compliant with SAS 70 Type II and Canadian CICA 5970 auditing standards and Sarbanes-Oxley? Having these controls in place mitigates compliance risks factors and ensures the security of business critical applications.

Make certain to ask and understand what support levels the vendor provides. In many cases, there are service level agreements (SLAs) that cannot be set up internally, but can be required of a SaaS vendor. Whereas the internal IT department has a multitude of responsibilities that may result in ever-shifting business priorities, the SaaS vendor has both the technical knowledge and application expertise and is contractually bound to provide high levels of availability and superior performance.

Undecided if SaaS is the right delivery model for your organization? Look for a vendor that offers flexibility in their delivery. Can the same solution feature set be delivered in a hosted environment or SaaS? Ask if it is the identical solution. If yes, and if the application can be personalized, it will be easier for the end users.

Also check if the application is easy to integrate with other applications. A solution built on Service- Oriented Architecture (SOA) allows for greater interoperability with other applications. Be sure to investigate if the application can be personalized to accommodate business rules and meet your organization’s unique requirements.

Is Your Organization Ready For an Automated Solution?

Considering that the workforce represents 35 to 70 percent of organizational costs, how employees are deployed and how their time is managed directly impacts an organization’s ability to achieve its business goals and maximize profits.6 Workforce and Expense management software enables an organization to leverage its existing workforce to maximize productivity and gain a significant return on investment by automating time and attendance, absence and leave management, scheduling and optimization and expense report processing.

By adopting automated workforce and expense management software in a SaaS delivery model, organizations can take a best practice approach that offers faster time to value, and lower cost of ownership while enabling the business to focus on their core requirements and improve payroll accuracy.