Benefit Solutions & “The Cloud” - Expert Advice on Risk Framework

 Benefit Solutions & “The Cloud” - Expert Advice on Risk Framework

We’ve all heard about the big-name data breach scandals (Target, Home Depot, Premera Blue Cross, etc.). Culminating to make most of us more than a little antsy about putting our most valuable asset: sensitive data, off-site, and online.

But as the landscape continues to shift towards SaaS (Software as a Service) dependency, moving to “The Cloud” is becoming increasingly inevitable. 

So how do we do it well? How do we keep our data secure?

 Luckily, BusinesSolver recently partnered up with Employee Benefits News & Employee Benefits Advisor to help answer that question. They assembled a brilliant panel of well-seasoned Benefits Administration and HR executives to give us their much-needed insight on what is takes to create this new, cloud-based risk framework.

Their just-under-an-hour webinar is well worth listening to (there are also great slides).

But meanwhile, here are our takeaways in 3 parts. Below is Part 1, which explains how the game is changing and why HR teams are ditching traditional ERP in favor of outsourcing. Stay tuned for Part II and Part III.


Ready or Not, Cloud, Here We Come

Traditional Employee Resource Planning (ERP) systems, is software that your company owns and operates “on-prem” (on your physical property). ERP has long been considered 'standard,' but as Benefits Administration and HR technology changes, it’s increasingly losing traction.

Benefit Solutions & “The Cloud” - Expert Advice on Risk Framework

More and more people are looking for lower-maintenance, 3rd party options. During the webinar, Matthew Kaiser (Vice President, Director of Technology Solutions at Lockton Benefit) stated: 

“Overwhelmingly people are looking for hosted options…They want to buy the service, not all the care and responsibility.”

 This 'hosted option' is the infamous SaaS (Software as a Service). Think of SaaS as anything you run but don’t actually install on your computer (you don’t have physical access to it). These SaaS providers use virtual data storage commonly known as 'The Cloud.'

So Why the Move to SaaS & The Cloud?

What's inspiring this crossover? Kaiser described 2 typical scenarios that incite companies to try SaaS:

 

#1 Need for Versatile type of infrastructure.

An average sized company needs an average sized “pipe” to handle their employee benefits needs (life events changes, new hires, etc.) But then the “crush of open-enrollment comes.” And instantly, "the size of the pipe needed to carry those transactions is suddenly bigger.”

That company has two options:

A: build a really big pipe that, for most of the year, will only get a “trickle.”
B: work with a cloud-based vendor to increase capacity when needed. 

Not surprisingly, more and more Benefit Solutions providers are choosing SaaS for that additional flexibility, and shifting their application maintenance and security to a third party administrator (TPA).

 

#2 Need to Get Back to “Core Business.”

The second case Kaiser described is when HR & IT teams get pressure from higher-ups to “free up internal resources so we can get back to the core business.” Meaning: delegate the “non-value-add tasks.”

That's why one of SaaS biggest value proposition is less administration. Similar to renting a home, bug fixes and updates are the responsibility of the owner (provider). 

“We walk into a lot of shops where the first thing they talk about is how out of date their ERP system is, how many updates they are behind. How the cost of keeping up is insurmountable to them,” says Kaiser.

Automation is one of SaaS’s greatest selling points for a C-suite.
 

 

Conclusion

There’s no end-all to the ERP vs. SaaS debate. But clearly, (ready or not), more and more Benefit Administration systems are moving to the cloud.
The big upside of SaaS is that it creates more time for higher-value work.

The big downside is having to delegate a critical responsibility to someone else. 

And because SaaS has such a low barrier to entry, it’s absolutely essential that you evaluate vendors effectively and make investing in those partnerships a top priority. 


Stay tuned for more Benefit Solutions & “The Cloud” - Expert Advice. In Parts 2 & 3, we'll recap the Webinar's key vendor evaluation categories, for creating this new cloud-based risk framework.

 

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*Image Credits: Anna Spady (via Canva)