Interest levels among SME businesses in the Software as a Service (SaaS) model for payroll applications is rising but some management concerns are holding back a potentially high conversion rate.

"I have no doubt in my mind that SaaS is coming to the fore; it is happening already and will gather momentum as more and more technology-savvy people enter management positions in the workplace," says Softline Pastel Payroll MD Grant Lloyd.
"SaaS brings cost savings, scalability, simplification and streamlined administration and I believe it is really just a matter of time before SaaS becomes widely accepted."
Lloyd adds that the business environment will be more favourable for SaaS solutions within the next 12 months because the cost and speed of bandwidth is currently under the spotlight and is being addressed.
While the adoption of SaaS by SMEs has not yet reached significant proportions, Lloyd believes this caution is probably influenced by fears of security and confidentiality, bandwidth limitations and costs as well as other costs in the current web infrastructure.
"Payroll outsourcing is gathering momentum and SaaS applications are ideal for this. Costs are curtailed by streamlining and simplifying the processes. There is great potential for providing payroll solutions via SaaS because the application is well suited to Internet deployment, particularly in companies that have head office and decentralised environments. It is easy for sales representatives to submit travel reimbursement applications or leave applications on line without delaying the payroll process, from anywhere in the world."
Very positive impacts of SaaS include its scalability and availability 24 hours a day, as well as its capability to strip out the structural costs that are attached to desktop/server applications. Lloyd adds that SaaS vendors have also taken steps to ensure their customers' data is protected within secure data environments. With the SaaS model companies no longer have to download software patches or wait for software update CDs because all SaaS updates are done in real time and require no installation actions from users.
Fears relating to unauthorised database access and the perceived threat of confidential financial data falling into the wrong hands have been among the factors that have led to SME management caution on making the move to SaaS. But Lloyd says the security aspects of SaaS are improving continuously to allay these fears.
"Look at the success of the South African banking industry in providing online services that have achieved high levels of security assisted by thorough and ongoing customer education regarding "phishing" and other scam tactics to ensure their security within the services. CRM applications have also been highly successful in the SaaS space. Taking into account the pace at which technology is advancing, I have no doubt that SaaS solutions will be totally appropriate sooner rather than later."