SAP, TCS in pact to provide HR software solutions
February 19, 2007

SAP, the enterprise software solutions major, and Tata Consultancy Services (TCS) have formed an alliance to provide HR and payroll software solutions 'on the fly' to the government, public and private sector companies.

TCS has set up a business process outsourcing (BPO) venture which will service the software needs of HR of private enterprises, government and public sector units, and run a HR data centre on behalf of the customers.

Nagaraj L Bhargava, vice-president, maketing and sales operations at SAP India, said: "It's our software, and we have entered into an agreement with TCS, who will host the software on its server to provide services to companies which are not willing to buy the software but ready to pay as per their use."

The pay and use software business model known as "software on demand" or "software as services" has become popular among the small and medium enterprises. The advantage for the enterprises is that they don't have to own the whole package but they can use the modules of the software by accessing the service provider's, in this case TCS server, whenever it is required.

As the software and the data are hosted and managed by a third party server, the total cost of ownership of a software (HR in this case) comes down for the enterprises.

The acceptability of this model has already been recognised by SAP as it is offering customer relationship management (CRM) solution on demand.

"We think there can be a demand from public sector companies to adopt this kind of software model when it comes to managing HR issues," said Bhargava.

According to Alan Sedghi, the president and chief executive officer, SAP Indian subcontinent, 'software on demand' is becoming an attractive model for small and medium enterprises. "But we should remember that on-demand application is not a huge market in India. Corporates, especially belonging to the SME sector, are interested to adopt this model but for many it's just a transition phase before they own the whole software."

Sedghi said in the next two years, SAP may launch billing software for the utility segment and supply relationship management (SRM) in the 'software as services' space besides the two existing applications ---CRM and HR.