One of the first decisions you need to make with regards to HR software is hosted or purchase. This articles explains basic pros and cons of each. If you purchase your Human Resource Information System (HRIS) products you will maintain your data on your own servers. An ASP system allows the customer to maintain their information on the provider's server and access that data remotely.

Advantages of ASP HR Software Products:

Contingency Planning

I live in Tampa, Florida. In 2004 our state was hit by four hurricanes. I have had a number of customers ask about contingency plans in case of a storm. This is one of the advantages an ASP system can offer; the data is not on your server, so as long as you have Internet access your data will be available to you.

No IT Involvement

Other advantages are automatic updates and freed server space at your location. Your IT staff won't have to maintain or house the data with an ASP system. They won't have to install updates either, since the provider maintains all such details.

Lower Up-Front Costs

With ASP applications you will usually pay some type of minimal setup cost, but once the system is live you will pay a monthly amount per employee. Costs range from $2 to $5 per employee per month. So the up front costs is less but over time (usually a couple of years) you end up spending more for an ASP solution than if you purchased the product outright. With that in mind you need to weigh the importance of the other benefits.

Advantages of Purchasing Your HR Software Product

The disadvantage of ASP systems is that, over the long term, they can be expensive when compared to purchasing a system outright. If your company plans to use the HRIS solution you pick for at least five years, it will be far more cost-effective to actually purchase the application. And if your company is looking to lower the up front investment and pay over time, remember that most companies will offer a lease to own option on the software.