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Micah Fairchild SaaS Succession Management, New Options For an Old Challenge

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 By Micah Fairchild

Succession Management on a Shoestring: Using SaaS to Spend Less and See More

Economists are finally starting to paint rosier colors these days, but with the way many companies are acting, that rosy color might as well be blood in the water. The game is on and forward-thinking organizations are realizing that strategic initiatives like succession management (SM) can give the competitive edge with a global talent shortage on the horizon. In fact, fully two-thirds of respondents indicated in a 2010 SHRM report, The Post-Recession Workplace: Competitive Business Strategies for Recovery and Beyond, that pending business strategies would be revolving around Succession Management.

Case in point, a 2010 poll (of 1,300+ companies in 60 countries) by Korn/Ferry Intl. had 98% of respondents agreeing that succession planning was essential given current workforce statistics. Expounding on these figures, Hal Johnson of Korn/Ferry says "the number one concern is the [leadership] pipeline and succession." Indeed, dwindling worker supply coupled with increased demand (especially in the key skill areas of engineering, accounting, skilled trades, sales and executive/management functions according to Manpower Inc.'s Supply/Demand: 2010 Talent Shortage report), has companies clamoring for solutions and increasingly turning to technology—especially Software as a Service (SaaS)—to help stem the tide.

As it relates to succession management software, both SaaS delivery and traditional on-premises models can be successful given the fact that succession management implicitly relies on other talent management system data. Foundational information in the form of competency models, position descriptions, and talent summaries are tied to feedback mechanisms which in turn drive succession management outputs. Regardless of the model chosen though, in order for succession management to truly be successful, the process must:

  1. Link strategic decisions with decisions that involve the workforce;
  2. Identify and cultivate key performance indicators (KPIs) required to support strategic decisions;
  3. Determine what gaps exist between current and future states for all key organizational areas (not just executive positions);
  4. Identify where talent will come from; and
  5. Identify the development strategies for succession talent.

In short, effective succession management allows for a seamless merger of employee capability and organizational strategy. Interestingly enough however, each of the above points is accomplished through phased roll-out, meaning it could take months or even years to move past say…strategic decision linkage. So… if your organization won't be using a specific system component right away, why pay for it until you're ready?

Subscription services like SaaS mean growing usage as you need it, as in the case of succession management. Given that the entire basis of SM is getting the right staff with the right skill-sets in the right place at the right time, it's no surprise that organizations are trying to harness SaaS capabilities to achieve these goals. Chief among those goals is "talent mobility" says the 2010 Bersin & Associates' The Important Role of Talent Mobility in Business Performance report. Creating mobility (upward, diagonal, lateral, and downward) enables the organization to respond to market changes by strategically placing employees where needed (AKA: the point of succession management). As such, tools such as SaaS tend to provide the greatest leverage due to the inherent flexibility and scalability SaaS HR solutions deliver.

Organizations choosing to adopt a SaaS HR model can therefore theoretically implement succession management on a shoestring budget, embracing the benefits of low entry costs and initial investments coupled with implementation time that is strikingly fast when compared to on-premises solutions. That being said, SaaS HR solutions are not necessarily less costly than installed software; however, the benefit of cost-shifting from major initial outlays to steadier subscription expenses often winds up being a perfect match for succession management software implementations.

For example, Halogen Software, Inc.'s eSuccession module or Taleo Corporation's Taleo Succession can both be purchased and implemented separately, allowing for as-needed scalability and later-date integration with other products. Given that SaaS HR is a faster, more cost-effective (at least initially) road to succession management application delivery than on-premises software, it should come as no surprise that estimates of just less than 70% of integrated talent management systems (which include SM modules) were delivered via SaaS according to Bersins' Talent Management Systems 2010.

Still, it's only prudent when considering an succession management SaaS solution to understand the organizational and operational impact before you adopt. Even though HR software can be turned on and baseline configurations can be set up rather quickly with SaaS, managing integration, software customization, change, and executive buy-in must all be done by the organization (not the vendor)—which could delay the "true" implementation and payback.

A shoestring HR software implementation is possible with SaaS, but it will not be the best fix for all organizations, especially larger companies already significantly invested in their on-site IT infrastructure. Organizations considering HR SaaS for succession management should carefully calculate whether the long-term cost is worth it. If so, then know you're taking one step of many that is ultimately beneficial to you, your employees, and your organization. End

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Succession management software solutions are most often rolled out in phases. Choosing to a SaaS HR model can avoid purchasing software modules before you need them, and contribute to implementing succession management on a shoestring budget, by embracing the benefits of low entry costs and initial investments coupled with implementation time that is strikingly fast when compared to on-premises solutions.


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