Author of the Time & Attendance Consultants Guides Series
The SAAS Promise
Ever since Software as A Service (SAAS) products became available, there has been an ongoing debate regarding the cost-effectiveness when compared to in-house server or workstation-based products.
Of course, vendors promoting SAAS products quote savings in the upfront capital required, infrastructure maintenance and the off-balance sheet advantages for those companies who are measured by their return on investment. SAAS products are also, by their very nature, an excellent method of delivering a product given that an internet browser is all that is required to access the software.
Certainly, there are advantages in SAAS products. No argument from me there but, those advantages can be quickly eclipsed by the deficiencies and the cost, depending on the software being delivered.
The SAAS Reality
Payroll software is an excellent example of the perfect application for a SAAS product. This is because all the practices used in accounting are standardised. There are not two methods of basic accounting. There is the double-entry bookkeeping method and no other. There are standard methods of depreciation, company and individual tax etc and no company gets to make up their own rules because accounting practices are standardised and regulated.
This suits the SAAS method because it is basically a single software application shared by many organisations. As long as everybody is using the same processes, then it is a breeze for the product developers to implement and maintain.
Any subtle changes the user may want to make, such as using their own numbering system for the general ledger accounts or omitting certain items from reports can be made by that end-user. Tis means that there is no investment in time required by the SAAS provider, so it is easy to provide a no-obligation trial and then offer a pay by the month plan with no locked-in contracts.
Now let's apply this to time and attendance.
Unfortunately, even though there are award and workplace agreements, these rarely define all the rules around employee attendance. The rules around grace times, rounding and balancing are often arbitrarily set by the company and dealing with these is often outside the capabilities of a SAAS attendance product.
Let's just say for the purpose of accurate pricing comparisons that your attendance rules were within the capabilities of a SAAS attendance system. Let's also say that you have 50 employees. A typical SAAS solution for time and attendance would cost you $5 per month per employee, so that equates to $3,000 per year. Over five years, the total cost would be $15,000.
By comparison, an entry-level, software-based attendance system with the same functionality as a SAAS system would cost perhaps $3,000 with a yearly support cost of $550 for a total of $5,200 over five years.
A SAAS product would need to save you significant infrastructure costs to make it worthwhile when all a software-based time and attendance system needs is a PC which you already have anyway?
Now it is true that cloud-based systems offer excellent visibility through many devices and provide phone apps as an alternative method for employee clocking events. This was certainly an advantage they had over software-based product for many years but times change, and these features are now available in software-based attendance solutions.
If your company is wedded to the idea that cloud applications are the way to go, the latest software solutions can also be hosted in the cloud to provide the same SAAS experience at a much-reduced cost.
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Time & Attendance Consultant