Although organizations are attracted to in-house solutions with broad-based functionality, the reality is that many do not implement all the modules. According to the 2003 findings, approximately 30 percent of purchased HR functionality goes unused and much of this falls in the Human Capital Management (HCM) category. So it seems organizations often end up using their in-house HR systems as data repositories rather than strategic tools. Unused functionality becomes costly "shelfware" which, even though not implemented, contributes to ongoing license and maintenance fees. In contrast, outsourcing allows organizations to pay only for what they use, thereby eliminating carrying costs.

In addition, the 2004 study showed that the synergies between integrated ADP systems result in greater savings and efficiency for clients. A lower TCO was achieved when an ADP payroll system was paired with an automated ADP Time and Labor Management system. According to the study, organizations using non-ADP TLM systems did see slight savings, but ADP clients using both services saw an additional 6% savings, or over 60 cents per paycheck. Additionally, fully integrated systems allow smoother data flow and easier access to decision-making information.

• Approximately 30% of HR functionality purchased with in-house systems goes unused.
• Outsourcing allows organizations to purchase new functionality as needed, eliminated carrying costs.
• Synergies between integrated ADP solutions result in greater savings and smoother operations.

 

Is your system being used strategically?

For more information on this please request the PwC White Paper here