The HR software market is a crowded and confusing one – and if you haven’t looked at it for some time, you will find there have been significant changes to both what’s on offer and how it is delivered.

So, what do you need to know about the latest technological developments and what are the questions you should ask to ensure a new HR software system delivers what you need and provides best value for money?

1. What is the technology platform?

The advent of The Cloud has revolutionised the way HR software is delivered. Software-as-a-Service (SaaS), which allows vendors to deliver HR solutions online, in the Cloud, has become the buzzword with suppliers keen to promote the cost and time-saving advantages of this new approach. There is no longer a need to buy extra hardware or software, purchase expensive up-front licence fees or involve internal IT resource. Everything clients need to keep their systems secure and running smoothly can be managed remotely by the vendor.

It’s important to understand, however, that many products which describe themselves as SaaS or Cloud are really just old solutions, rebranded and hosted somewhere different.

The real progress has been the development of multi-tenanted solutions. The best way to describe these is to use the analogy of an apartment block, where you have your own secure space which you can decorate any way you like, but you share common facilities, like the lifts, the lobby and the security guards, with others. So with multi-tenanted systems, clients benefit from the cost savings that come with ‘sharing’ the same infrastructure with others – and the supplier can focus all of their efforts on developing and delivering new features. Everyone benefits from regular upgrades and new functionality that is added to the system. Vendors are not always open about the distinction between systems that are just hosted, and those designed for this new way of delivering and updating software, so if you’re in the market for a new system, make sure you know exactly what it is you are buying.

2. Can it be used from any device?

Today’s employees expect to be able to connect to their work applications as easily at home or on the move from their Mac, laptop, tablet or smart phone, as they do from their work PC. Simple as that sounds, the reality is that many systems haven’t made the leap to either embrace native mobile apps, or the kind of responsive design that makes HR software workable and enjoyable across tablets of every shape and size. If involving your workforce in updating their own information is important, check how well your vendors supports the devices they prefer before you commit. Read about HTML5.

3. What are the contract terms?

In the not too distant past, complex, multi-year contracts, which were very difficult and costly to get out of, were common. In today’s more flexible market, however, there is no need for expensive up front licence fees and long contracts. With business and employee expectations changing fast, and technological change accelerating too, it may make sense to pick suppliers that offer short-term contracts. Not just because it gives you the flexibility to move on, but because the vendor has to work harder at keeping you happy!

4. How much will the system cost us over 2, 3 or 5 years?

Subscription and set up fees – like contracts – should be transparent. If it’s not immediately clear from a company’s website what a system will cost, make sure you ask the right questions. Will you suddenly be hit with extra fees, for example, if you exceed a certain number of users or upload too many documents? Are updates provided free of charge as part of the contract, or will there be an additional charge for this? Are getting started services and ongoing support an integral part of the agreement or an added extra? How much does training, or system set up and configuration cost?

Make sure you are not paying for capacity you don’t need or won’t use right now. It shouldn’t be too difficult to find a vendor whose model centres around monthly billing and who adjusts fees upwards or downwards based on the number of employees being managed through the system at any one time – as well as on the number of modules you are using.

5. How are updates delivered?

The answer should be seamlessly, at the weekend, so they are ready for you to use on the Monday morning.

Truthfully, not everyone has reached that stage yet. If down time is required while a new feature is installed and configured, or a bug fixed, how much will that impact your day-to-day HR processes? As importantly, does an update mean you’ll lose any of the configurations or customisations you’ve previously made and will have to start again?

6. Does the system do what I need right now – and will it grow with us?

Your new HR system has to have the features you need today, but it’s also important that you find the balance between an older system that has all the bells and whistles, and one that is based on new technologies, that may not be as complete, but it is agile enough to grow alongside you.

How easy will it be for you to add new users, change reporting relationships, adopt new processes, cope with overseas expansion, or any of the other scenarios your business is likely to face in the next few years?

Getting clear about the answers to these six questions will help ensure you opt for an HR software solution that meets your needs. Any supplier worth their salt will also be happy to run demos for you and to put you in touch with existing clients who can talk about how the system works for them.

One action to take this week: Get up on the new SaaS solutions. Make sure you understand what true SaaS solutions can really deliver.