Andrey Shabanov: Services of outsourcing and SaaS cause synergy effect

Tell how long you in the Russian HRM market? What number of clients is used today by SaaS-систему Quinyx in Russia and in the world?

Andrey Shabanov: Our company for the first time appeared in the Russian market in the early nineties of the last century. Long time we provided to clients services of outsourcing of payroll calculation and personnel office-work. It is quite logical that we tried to automate personnel and financial processes to lower own costs and to increase competitiveness of our company.

It became soon obvious that internal practices of UCMS Group allow to create the replicated HRM system with powerful and, at the same time, flexible functionality. Quite so the idea of creation of the Quinyx platform which was implemented in 2005 was born. Conceiving Quinyx in 2004, we initially were guided by the SaaS model. At that time in the market two main premises of such approach were observed. On the one hand, we did not want to offer the market one more traditional HRM system – at it so there were already not less than 15 vendors. And at the same time, we had a clear view of SaaS perspectives as this model is really economic.

I consider that the movement towards SaaS is the most significant trend of the modern market of software in general. In the last two years we observe this trend and in Russia. Financial shocks of the 2008th only strengthened it. The domestic companies began to optimize budgets on service projects and expenses on business automation. In such conditions the flexibility, adaptability, the low and predicted cost of the SaaS model becomes important advantage of our Quinyx system. I also want to note that Quinyx differs from the majority of the western HRM solutions in proximity to the Russian clients. The central R&D-офис UCMS Group is located in Moscow. Our system is created by the Russian team of developers for this reason Quinyx completely corresponds to the current Russian legislation and also the Russian specifics of accounting and management.

In end of the short story about the company, I will give several digits. At the moment more than 100 thousand users in the world work at the Quinyx platform, and 10% from them fall on Russia and the CIS countries. One of the most large-scale projects on implementation of Quinyx was implemented in network of Mc'Donalds restaurants - in Sweden, Denmark and Great Britain. Key Russian implementation of Quinyx can be considered the project in Perfetti vanMelle company.

You told that use of SaaS is more profitable, than application of a traditional HRM system. And than specific more profitable?

Andrey Shabanov: For the answer to this question it is necessary to give definition of the SaaS model. In UCMS Group company the term SaaS is understood as model of providing software within which a system is installed on the platform of provider of services or in the Data processing center, and the customer pays lease of his use, getting access to a system through the Internet. In fact SaaS is nothing else as outsourcing of placement and management of software on the third-party platform.

Selecting a traditional HRM system, the customer purchases licenses for each workstation, and in case of use of the SaaS model – pays once a month lease payments on a system. In the short-term period (up to several years) the sure gain as cumulative lease payments are much lower than the cost of the license turns out.

In the long term it is necessary to add to already mentioned expenses on acquisition of the license of a traditional HRM system costs for its placement (selection of server capacities), installation and support, costs for information security and upgrade of a system. Our practice shows that the amount of these expenses is almost always higher than cumulative lease payments during all system lifecycle.

It is not less important that the SaaS model minimizes financial and tax risks of the customer, shifting questions of compliance of settings of a system to the changing legislation to the supplier. In case of use of the in-house system the customer assumes these risks and tests financial damage, in case of implementation of these threats. Logic of the concept of SaaS just in transfer of risks on shoulders of the supplier who bears a financial responsibility if there is any problem.

The third advantage of SaaS is a speed of implementation and also almost total absence of initial investments. If the traditional scheme of implementation assumes large-scale preproject preparation, then to start work within SaaS it is enough to get access to a system and to load there information. I will note that customers of SaaS do not need by time to buy a large batch of licenses - and in the conditions of crisis and liquidity deficit this circumstance essentially.

At last, the last advantage of SaaS is connected with the clearness and predictability of payments. The customer monthly pays a fixed amount only for those SaaS service which he really applies in work.

You said that you transfer to yourself risks of clients. How this process is organized?

Andrey Shabanov: Everything is rather transparent – we sign the Agreement on the level of service (Service Level Agreement, SLA). In principle, conditions of SLA can change a little, however usually we guarantee smooth operation of a system and access to it 24 hours a day, 7 days a week and 365 days in a year.

Naturally, we have a technical support team in which it is possible to address in case of questions or problems. Critical errors are corrected within 1-2 hours, the errors significantly limiting functionality of a system - within 4-8 hours. At the same time we always try to find and offer other mode of work with a system while we correct such error. The agreement provides a certain level of our liability for failure to follow of obligations by us.

What guarantees of data protection do you provide to clients?

Andrey Shabanov: First, all client information is stored in the large data processing centers (DPC) where there is a full range of control facilities of physical and programming access to servers. Reservation of data is performed at once in several ways, including replication of files, daily, weekly and monthly copying on several sets of the external carriers which are stored both in DPC and beyond its limits.

And secondly, remote access to a system is provided through the protected Internet connection.

Many customers really have concerns for confidentiality and safety of data storage. The matter is that at SaaS provider much more opportunities to ensure safety and fault tolerance of a system as, in our case, it is on a centralized basis placed in world-class large DPC together with installations of other customers where there are ampler opportunities on security, than for the organization customer which uses in-house a HRM system. I will add that in UCMS Group company the quality management system according to ISO 9001-2008 in which accurate procedures of data management and information security are registered is implemented.

How does typical process of migration of the company Quinyx nasaas-service look?

Andrey Shabanov: Process of migration of Quinyx is conceptually similar to implementation of a traditional HRM system, however he demands a smaller amount of time as a system already includes the preconfigured elements. At first our employee makes technical specifications for setup of a system where includes information on charges and deduction, creates the list and samples of standard and managerial reports, defines forms of standard internal documents. As the majority of forms and algorithms is regulated by the legislation, preparation of technical specifications takes no more than two weeks. Then within 5-7 days there is a setup of a system on our resource.

Separate and rather labor-consuming stage is a data transfer from the existing system in Quinyx. Duration of this stage, of course, depends on system type and also amounts of data. We accumulated wealth of experience on data transfer from the majority of the HRM systems which are present at the Russian market and therefore process is very well fulfilled.

At the final stage of process of migration we make test calculation in one month then we put a system into operation to the customer. Thus, the general project duration usually does not exceed one and a half months, and in most cases we cope even quicker.

I will add that some customers continue to use together with Quinyx one more, as a rule, a corporate HRM system. Such situation is especially characteristic of the international companies which have the all-organizational standard and cannot refuse it. Quinyx task in this case – to provide processing of HR data and payroll calculation according to the Russian legislation and to prepare information for loading in a corporate HRM system.

Whether integration of service with ERP-or other corporate system of the customer is possible?

Andrey Shabanov: Yes, such integration is possible, and we rather often implement it. As a rule, accounting entries in a format of that system (for example, SAP, Scala, 1C, etc.) which costs at the customer ask to create us. More compound integration arises when the customer already has the payroll system, and services in outsourcing of this calculation are required for him. But such we can also implement integration.

At the same time the Quinyx system has no technological limits, and from the customer is required to be defined only what information should get from Quinyx to ERP and vice versa.

You offer SaaS service together with outsourcing services. And whether there is a sense to use these services at the same time?

Andrey Shabanov: Above I already noted that outsourcing of payroll calculation and personnel office-work is a core business of UCMS Group. Our company works at the Russian outsourcing market more than 14 years and has one of the biggest portfolios of successful outsourcing projects.

At the same time, for already 4 years we develop the software for management of personnel and financial business processes, being one of the leading European solution providers of this in the area.

In this sense, we cardinally differ from most of the suppliers competing with us who are the IT companies "ground" on software development and from the companies providing only services of outsourcing. We are much closer to clients we understand better their requirements as when implementing outsourcing projects we use own SaaS - the focused program developments.

Besides, services of outsourcing and SaaS services perfectly supplement each other and cause considerable synergy effect. The main advantage of a sheaf is the possibility of the choice. The customer can give us on outsourcing some of the routine personnel or financial processes, and to be engaged in other processes independently and to manage them using our system. De facto he can try both options and select from them the most optimal, at once without investing in the project of essential means.

In this sense, SaaS is also the excellent mechanism of control of the outsourcer. It is psychologically simpler to some customers to give processes to us when they can look at any time at what stage there is this or that process and also to keep track of efficiency of its execution.

Recently UCMS Group started the HRMS for 100 rubles program. Tell what the program and what companies it is expected is?

Andrey Shabanov: The initiative of "HRMS for 100 rubles" is a new view on purchase of HRM systems in Russia. Representing this initiative, we want to destroy the myth that the HRM system of the class "A" is a solution only for big and very rich customers.

Within an initiative we offer the special prices on SaaS to customers from medium and small business. To participate in an action it is enough to subscribe on SaaS and to timely pay a subscription fee – from 100 rubles for one user a month. The customer receives a full-function personnel management system which is at one step with expensive SAP products or Oracle for this money. I will remind that according to the results of the last research of TAdviser, only the systems of SAP, Oracle and Quinyx were carried to the highest functional class "And +".

At the moment we see that the market positively apprehended our initiative, and many companies already managed to use it. It seems to me that an opportunity to try complex HRM for 100 rubles is a unique opportunity for the Russian market which yet nobody ever offered.

It is no secret that availability of the broadband Internet in Russian regions is still far from an ideal. How significant share in expenses of the customer expenses on payment of Internet traffic when using Quinyx can occupy? What requirements are imposed by a system to Internet connection width?

Andrey Shabanov: The Quinyx system is constructed by the principle of "zerofootprint" i.e. based on web architecture of not requiring installation of the software at the local level. For work with the program it is enough to user of Quinyx to have on the computer only the web browser. Actually, on Internet channels only server requests for execution of operations and also results of these transactions are transferred. In practice, Quinyx does not require large volumes of traffic.

Speaking about use of a system by the customers working in regions, I would also pay attention to importance of existence of reliable connection. Unfortunately, not all regional providers are capable to guarantee uninterrupted connection throughout a progressive tense. At the moment, it is a problem which limits applicability of SaaS model at the regional level though every year the situation changes for the better.