HR Information Systems Buyer's Guide

Locally-hosted software vs. ASP

Another important decision to make when choosing HRIS software is whether you want to run the software locally or use a hosted version that you access via the Internet.

Locally-hosted software
Traditional software is locally hosted — the program runs on your computers and stores data on your hard drive or a network server in your office. Sometimes called a client-server configuration, this setup keeps all your data in-house but requires technical expertise. Your IT staff will have to maintain the servers, as well as create daily backups and secure the system against hackers and viruses.

If you choose a client-server system, the majority of your costs will be tied to the upfront purchase and installation fee, and new hardware if needed. You may also pay smaller ongoing fees for support and access to upgrades.

ASP-based solutions
In contrast to locally-hosted systems, application service providers (ASPs) host both the application and your data on their servers. Your staff accesses the service via the Internet using a web browser.

The main advantage is that an ASP system is maintained by IT professionals at the vendor's office. They provide airtight security, backup power, and regular backups to ensure that your data is always there when you need it.

The provider can't guarantee that your Internet connection always works, though. The biggest drawback of ASP solutions is that a network problem can prevent you from accessing your HR information. It's not common, but it's possible.

Payment for ASP solutions is based on a smaller setup fee and ongoing monthly payments.

Which is right for you?
Locally-hosted software is more familiar to many users. However, the ASP model is gaining popularity, particularly among smaller firms. Here are some areas you should consider when deciding between ASP and client-server HRIS software solutions:

• IT staff — If your IT staff has the time and expertise, an in-house solution might be right for you. Smaller companies with little to no IT expertise are probably better off with an ASP solution.
• Budget — While ASP systems require a much smaller up-front investment, the ongoing costs will usually surpass locally hosted versions in the long run.
• Remote access — ASP solutions make it easy for off-site employees to access the software. Accomplishing this with locally-hosted solutions may be expensive and require significant extra setup work.

You can also start off with a hosted service then move to an in-house solution: ASPs should offer a seamless migration path that allows you to easily export your data. Some vendors offer both hosted and in-house systems, making the transition smooth. This approach can be an easy way to get started without committing fully to either option.

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