Whitepaper Multi-Tenancy HRO Solution

Transcription

1 Hexaware Technologies. All rights reserved.

2 Table of Contents 1. INTRODUCTION 2. WHAT IS MULTI-TENANCY? 3. HOW IT IS DELIVERED? 4. WHAT IS THE MARKET FOR MTP? 5. BPO EVOLUTION IMPACT ON THE ERP PLAYERS 6. THE MTP PROVIDER LANDSCAPE IN MAJOR BENEFITS OF MTP 8. ARE THERE OTHER BENEFITS OF MTP 9. REPUBLIC 10. ABOUT HEXAWARE Hexaware Technologies. All rights reserved. 2

3 1. INTRODUCTION Outsourcing of the Human Resource function has come full circle. HRO has come from the old bureau service model, has seen large multi-process-multi-country deals amounting up to billion dollars, has passed a phase of discrete single process deals, and now the industry is moving back towards shared delivery platforms. Until recently, it has been common practice for providers to perform traditional systems integration on SAP, PeopleSoft or Oracle with selected bolt-on best-of-breed applications and customized front-ends. All of the application landscape used to be dedicated to a single client with zero re-usability. Over the past decade most organizations now realize and accept that their HR processes are unlikely to be significantly different from any other organization. At the same time, Per Employee Per Month (PEPM) pricing has become the industry standard mechanism of charging for HR services. As a result of these two developments, now the same logic is being extended to technology and a new concept of shared HRIT solutions has evolved. Buyers want a complete solution with minimal upfront investment for technology, with the flexibility to scale up the scope according to requirements. Thus, there is increasing demand for re-usable or shared multi-client HR process & technology solutions, generally termed as Multi-Tenant Platform 2. WHAT IS MULTI-TENANCY? In simple terms, a multi-tenanted platform is one which has preconfigured processes, rules and data objects in a core system. As each new client is signed up, a copy or clone of the core system is taken and the essential rules and processes specific to the new client are configured only in the new clients database. An application which is architected to support multi-tenancy allows configuration and data objects to be tagged as either common or specific to a client. This allows for efficient and automatic routing of changes, fixes, patches to the relevant environments and not to others. In practice, this and the do it once not several times approach means improved economies of scale and higher reusability or sharing of infrastructure and support and maintenance resources. All of these results in a lower Total Cost of Ownership (TCO) than single tenanted architectures. An additional benefit is that because MTP solutions are preconfigured, implementation times and costs are less than half a traditional Greenfield Oracle, SAP or PeopleSoft. 3. HOW IT IS DELIVERED? Delivered on a Software-as-a-Service (SaaS) model, the technology platform is hosted and maintained by the service provider the software licenses are available on a Per Employee Per Month (PEPM) basis for the buyer. The solution provider typically delivers a MTP solution through an interactive web-based portal enabling employees to manage their self-service functions and liberate HR professional s time for more productive tasks. An MTP solution is pre-configured to provid most of the HR functionality which is compliant for the countries in scope and maintained as a core system. Client-specific functionality can be configured and maintained on a copy of the core system for each new organization subscribing to the multi-tenancy model. This model offers integrated solution for the entire spectrum of HR services workforce management, payroll, compensation, benefits, talent management, recruiting & learning. Hexaware Technologies. All rights reserved. 3

4 4. WHAT IS THE MARKET FOR MTP? A popular myth was that MTP platforms were only of interest to small and mid-market enterprises i.e. Companies with up to employees. It was believed that large companies with employee strength of over 50,000 would prefer to build and support their own HRIT systems. But the facts have proven this to be false; even larger clients such as Cadbury (50,000), BNP Paribas (65,000), Astra Zeneca (70,000), IKEA (67,000), Philips (110,000) etc. have implemented their HR systems on a multi-tenanted model. In the first 5 years of this decade many clients embarked on HR outsourcing initiatives as a means of financing a new global HR system from the operational savings to be gleaned from the HR department. The business case for these kinds of deals no longer flies for traditional single tenancy enterprise implementations. However, MTP platforms do still offer a route to getting that economically elusive and functionally rich SAP or Oracle HR platform and a number of recent deals have been won primarily on this factor. 5. BPO EVOLUTION IMPACT ON THE ERP PLAYERS Both SAP and Oracle have had to adjust their licensing model to respond to the impact of the BPO evolution and the growing demand of clients for subscription or PEPM pricing for everything BPO services, IT infrastructure, applications support and licenses. SAP reacted first in 20 by creating a new sales force focused on selling BPO or subscription based licensing; this approach was later replicated by Oracle. Both organizations have experienced some interesting internal dynamics to develop processes and incentives which stimulate the right behavior. For example, both organizations were keen to avoid cannibalizing their perpetual license business and chose to only offer subscription-based licensing if there were BPO services in scope. This stance has been continuously challenged by sheer client demand for PEPM licensing whether or not there are any BPO services in scope, to the point where SAP now openly allow their partners to offer their On-Demand Talent management functionality as a SaaS-only service. Oracle will inevitably follow suit. 6. THE MTP PROVIDER LANDSCAPE IN 2010 The traditional implementers- These are the traditional systems integrators who prefer large, upfront ERP implementation projects or to take over and enhance a client s own HR systems landscape. By now they have developed re-usable front ends like a common look and feel employee portal which they integrate on top of each new client s HR applications. But they rarely if ever reuse the engine room HR functional applications across multiple clients the licensing relationship which is typically between the client and the software author actually forbids this. The players- These are the service providers who actually have a multi-tenanted (= multi-client) platform or who have one under construction. There aren t many of them! The virtual providers- A number of HR services providers have made big press splashes to launch MTP platforms when in reality there is no evidence that their platforms exist or are even under construction. Many renowned HRIT technology industry luminaries are also somewhat critical of the decision to build these solutions on a PeopleSoft platform, which they state as not architected to support multi-tenancy, unlike SAP and Oracle. The Emerging SaaS Players - A number of software providers are developing web-based, online HR technology platforms. Today these platforms offer single country compliant solutions and are available as Software as a Service only but it is expected that in next 2-3 years they will grow to add more countries and offer BPO services on top of the SaaS. These solutions are likely to be more 100% fixed than the actual MTP platforms which allow for typically 20% localization. Hexaware Technologies. All rights reserved. 4

5 7. MAJOR BENEFITS OF MTP No upfront and recurring costs for technology and associated BPO services low Total Cost of Ownership for managing both HR operations and HR technology Pay-as-you-use pricing model for technology and processes outsourced Employees can manage their self-service functions thus liberating HR professional s time for more productive tasks. Pre-configured functionalities ensure short deployment time Flexibility & Scalability that allows for functionalities and modules to be added to meet HR challenges of future 8. ARE THERE OTHER BENEFITS OF MTP Yes there can be. MTP-based HR service solution anticipates and bakes into the cost and therefore pricing structure includes all known HR and IT costs which would be expected to arise within a typical 7 year HR services contract. One example is a built-in Disaster Recovery (DR) solution in the form of back-up or mirrored duplicate HR systems and databases. Over a typical 7 year HR services contract one may expect at least one, maybe two, major software upgrades and a hardware refresh. The costs of these will also be included in the upfront quoted price. With traditional enterprise implementations upgrades, refreshes and DR solutions are likely to be extra and may not even be quoted or even flagged at the outset. 9. REPUBLIC Republic is Hexaware BPS s proprietary HR services platform. It is designed based on best practices and neutral HR processes, on Oracle EBS application, pre-configured to provide approximately standard HR functionality. To know more about Republic, you can write to us at republic@hexaware.com 10. ABOUT HEXAWARE Hexaware Technologies is a leading global provider of IT & BPO services and consulting. Founded in 1990, the company has grown to over employees worldwide, its driving philosophy of "YOUR SUCCESS IS OUR FOCUS" helping clients achieve competitive advantage by combining their IT staff with offshore resources and co-developing innovative IT capabilities. Having achieved the rare distinction of SEI CMMI Level 5, ISO 9001 and SAS 70 Type II certifications, the company's core expertise spans development support, integration, implementation and testing services across all major enterprise software systems such as PeopleSoft, Oracle, SAP and Microsoft. With development centers and sales offices throughout the world, Hexaware is headquartered in Mumbai, India and has regional headquarters in New Jersey, London and Singapore. To learn more, visit Cranbury South River Road, Suite 10, Jamesburg, NJ Main: Fax: Disclaimer Contents of this whitepaper are the exclusive property of Hexaware Technologies and may not be reproduced in any form without the prior written consent of Hexaware Technologies. Hexaware Technologies. All rights reserved. 5